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Multi-billion rupee project in the pipeline to push up SL’s fuel buffer stock to 3 months

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BY SURESH PERERA

Sri Lanka has embarked on an ambitious multi-billion rupee initiative to significantly improve the country’s Strategic Petroleum Reserve (SPR) under an ongoing long-term plan to push up the buffer stock to approximately three months from the existing 21 days.

As a crucial element of the strategy, a new oil farm will be built at Muthurajawala, while enhancing the holding capacity at the Kolonnawa storage terminal in the backdrop of continuing talks with the Indian government to reclaim 84 unused tanks in the upper section of the Trincomalee oil farm.

The operation of the 99-tank Trincomalee oil farm complex was given to Lanka Indian Oil Company (LIOC), a subsidiary of Indian state-owned IOC, under a long-term lease in 2003. However, at present, only 15 tanks in the lower section of the gigantic British built WW2 era facility are being used by the Indian company.

“The minister is in talks with the Indian government to explore the possibility of using the 84 oil storage tanks now lying idle”, says M. Uvais Mohamed, Chairman/Managing Director, Ceylon Petroleum Storage Terminals Limited (CPSTL).

“We need to prioritize our focus on enhancing the available storage capacity as the national demand for fuel climbs by 5% per annum”, he said in an interview with The Sunday Island in his office at the sprawling, six-acre Kolonnawa oil terminal.

Sri Lanka’s annual import of fuel amounts to two million metric tons of crude oil and three million metric tons of refined oil.

The Chairman said that 50 acres were sought for the proposed Muthurajawala oil storage project (adjoining the existing CPSTL facility of 29 tanks) but only 25 acres were released. If the outright purchase of the land is considered too costly, a lease arrangement will be worked out.

“The idea is to build bigger oil storage tanks at the new Muthurajawala complex because they are more efficient and easy to maintain”, he explained.

Referring to the proposed storage capacity expansion at the Kolonnawa terminal, he outlined that the construction of nine new oil tanks are on the cards at a cost of Rs. 3 billion.

International tenders were called to build four 15,000MT, four 7,000MT and one 5,000MT oil tanks at the Kolonnawa complex, and bids were awarded to an Indian company to construct six of them, while the other three will be undertaken by a Sri Lankan enterprise using 100% local labor, Mohamed continued.

“One oil tank at Kolonnawa, which is unusable as it’s around 50 to 60 years old, will be demolished, while another with its bottom deck corroded can be repaired. We can do it for Rs. 50 million rather than spend Rs. 500 million to build a new one”, he said.

The Chairman stressed that Muthurajawala was earmarked for the new oil farm as Kolonnawa is a densely populated, cosmopolitan area with inadequate land resources for such a mega project.

“What is important is to enhance energy security by improving the country’s oil reserves to meet any contingency. That’s why we are looking at a three months’ buffer stock in the long run. This is a fair target because even a big country like the US maintains three to six months in oil reserves”, he noted.

Q: When do you expect to achieve the target of enhancing storage capacity under the ‘long-term plan?’

Within the next two to four years, we will be able to increase storage capacity by 100,000MT. The refurbishment of tanks, which are either not in use or cannot be used to their full capacity, is being undertaken. As a result, in another six months, we will be able to enhance capacity by 20,000MT. We are expediting the whole process. These are concrete plans, not wishes. Energy security is of paramount importance.

Q: You referred to talks with India on using 84 tanks in the Trincomalee oil farm. Has there been any headway?

The Minister is holding discussions on the matter, and as we maintain cordial relations with India, I think we will be able to work it out. This was government-owned land that was leased out to the IOC. The Sri Lanka government will decide on it. We should work together to make it viable and beneficial to the country.

Q: The CPSTL is largely dependent on the private sector bowsers for the distribution of fuel island-wide. Don’t you agree that CPSTL should have its own fleet of vehicles for this purpose in the event of a contingency?

At present, 88% of daily distribution of fuel is done by bowsers belonging to both the CPSTL and private owners. However, CPSTL owns only 158 bowsers, while around one thousand others are hired from private owners. I agree that we need to enhance our fleet to strike a balance. Though we have a good understanding with the private bowser owners, it is imperative that we have our own in sufficient numbers in case of an emergency.

We need to reduce costs and enhance efficiency through rail transport of fuel. We have added 27 more wagons to our fleet with the support of the CGR (Ceylon Government Railway). We maintain a bulk storage facility in Anuradhapura for distribution to the North. We have now procured six acres of land at Kankesanthurai for a proposed bulk storage facility to supply fuel to the North.

As the “bloodline of the nation”, it is our responsibility to ensure fuel supplies to all key segments of the economy, whether it is shipping, aviation, transport, power generation or industries. All of them depend on our service. We have to render an efficient and effective service to the nation to realize the President’s vision to make Sri Lanka prosperous.

Bringing greater efficiency to this sector even by a small percentage translates into a saving on the country’s foreign exchange reserves. It also has an impact on the trade balance and the economy as a whole.

Q: Was CPSTL able to achieve its target in terms of profits for 2020?

We were looking at a target of Rs. 1.6 billion, but even with the Covid-19 pandemic, we are optimistic of achieving Rs. 1.6 – Rs. 2 billion.

During the height of the Covid outbreak, we distributed hand and floor sanitizers free of charge to the police, armed services, health authorities and other key segments. During the general election, the Election Department made a big saving as we supplied the requirement of hand/floor sanitizers to polling booths.

At 42 years, Uvais Mohamed is the youngest Chairman to be appointed to the CPSTL. The brother of Justice Minister Ali Sabry, he is a management accountant with work experience in the United Kingdom, India and Bangladesh.



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Court of Appeal dismisses Ex-IGP’s writ petition

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The Court of Appeal this [17] morning  dismissed the writ petition filed by former Inspector General of Police (IGP) Deshabandu Tennakoon, seeking an interim injunction to prevent the execution of the arrest order issued by the Matara Magistrate’s Court against him.

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Project to distribute smart boards for 1,000 schools with the goal of enhancing education has completely failed to meet its objectives and the investment of LKR 1.7 billion has been underutilized -PM

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Prime Minister Dr. Harini Amarasuriya stated that the project to distribute smart boards for 1,000 schools with the goal of enhancing education has completely failed to meet its objectives and the investment of LKR 1.7 billion has been underutilized.

The Minister of Education, Higher Education and Vocational Education, Prime Minister Dr. Harini Amarasuriya made these remarks in the Parliament complex on Saturday [March 15, 2025] while discussing the project to establish networked classrooms by facilitating smart boards to the school system.

The Cabinet Memorandum No. AMP/24/0385/601/027 and the Cabinet decision dated March 4, 2024 has been presented for the approval of the provision of digital smart boards and other related equipment to 1,000 selected schools, with the objective of enhancing education through the establishment of a systematic network of smart classrooms within the school system funded by the Sri Lanka Telecommunications Regulatory Commission (TRCSL).

Subsequently, an additional Cabinet Memorandum, No. AMP/24/0978/630/009, dated May 14, 2024, was presented, proposing the implementation of this project in alignment with the project proposed by Chinese government for digitalizing Schools. Under this Chinese-funded project, plans were made to establish a centralized control center and a studio facility, along with the provision of an additional 500 smart boards. Accordingly, the integration of both projects was proposed to create a network of smart classrooms across 1,500 schools.

The cabinet decision has been presented requiring Sri Lankan Government to purchase smart boards with specifications identical to the smart boards which were proposed to be distributed by the Chinese Government.

In line with the Cabinet decision of May 14, 2024, the procurement for the 1,000 smart boards began in July 2024. However, at the time of purchase, the project proposed by the Chinese Government was still at the discussion stage, and no official agreement had been reached regarding the technical specifications of the smart boards.

However, the procurement was carried out through the Sri Lanka State Trading (General) Corporation without a competitive bidding process, relying on price quotations obtained from a single supplier based on unclear sources that were not officially verified by the Chinese government. The Sri Lanka Telecommunications Regulatory Commission incurred the full cost of LKR 1.7 billion, with an additional LKR 430 million allocated for services and installation.

The aforementioned procurement appears to have been conducted at an unusually accelerated pace when compared to the standard procedure typically followed for high-value procurements. Specifically, price quotations were requested on July 5, 2024, opened on July 15, 2024, and by July 16, 2024, the Technical Evaluation Committee had completed and submitted the report. Subsequently, the report was reviewed by the Standing Procurement Committee appointed by the Cabinet on July 17 and 18, 2024, with recommendations being provided on the same day. These recommendations were then submitted to the Cabinet on July 23, 2024, and approval was granted on July 30, 2024. Followed by this, the purchase requisition was issued to the supplier on August 5, 2024. Accordingly, the entire procurement process was completed within a span of one month.

As part of this procurement, a Letter of Credit was opened to facilitate the payment of USD 3,135,392.50 for 1,000 smart boards to Intelligent Express Limited Hong Kong, which has been identified as a representative of Huawei. While the relevant Cabinet paper indicated Huawei as the designated manufacturer supplying the smart boards under the Chinese funding project, the Chinese government has not yet confirmed the selection of such a supplier for this project.

According to aforementioned purchase requisition, the purchased smart boards and related equipment were delivered to the Ministry of Education in October 2024 and are currently stored at Pattala Gedara Teacher’s Training College. Although the procurement of the aforementioned Smart boards by the Sri Lankan Government has been finalized, the relevant project, which was intended to be implemented under the funding of Chinese government, has not yet commenced and a final agreement regarding its implementation has not been reached.

Prior to reaching a final agreement on the network integration facilities and centralized system proposed by the Chinese government, the procurement of these smart boards has resulted in the inability to utilize the equipment for the intended purpose. It is expected that the Chinese aid project is at the discussion stage, and the implementation may extend until the end of this year. Further, no official decision has been made regarding the selection of a supplier for the project.

Given this situation, if the 1,000 smart boards and other equipment currently stored in warehouses are to be distributed to schools, school principals must be provided with clear instructions on their proper use. However, due to the delay in implementing the project under the funding of the Chinese government, specific guidelines on the installation and utilization of the equipment cannot yet be issued.

Since network integration cannot be carried out at this stage, these smart boards can only be used as standalone classroom units. As a result, the objectives of the project will not be met, and the investment of LKR 1.7 billion made might be considered to be underutilized.

A formal investigation has been initiated to determine whether financial and procedural irregularities have occurred in this procurement. Additionally, discussions are currently continued with the Chinese government, and efforts are being made to secure the proposed facilities from China at the earliest convenience.

[Prime Minister’s Media Division]

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LG polls: Sajith spurns UNP’s March 20 deadline

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SLPP rebel group distances itself from RW

By Shamindra Ferdinando

Samagi Jana Balawegaya (SJB) leader Sajith Premadasa yesterday (16) said that his party wouldn’t allow its agenda and timetable to be decided by political parties that weren’t even represented in Parliament.

Lawmaker Premadasa, who is also the Opposition Leader, said so when The Island sought his response to the UNP setting March 20 deadline for the SJB to declare its intention to join forces to contest the upcoming Colombo Municipal Council election. The main Opposition SJB parliamentary group consists of 40, whereas the UNP doesn’t have a single seat in the current Parliament. In the previous Parliament, the UNP was limited to just one national List MP.

The UNP also declared its readiness to expand the alliance to contest the local elections in other parts of the country. Nominations are scheduled to close at 12 noon on March 20th.

Colombo District parliamentarian Premadasa emphasized that they had decided to contest under the SJB’s telephone symbol. Members of the SJB-led coalition were also contesting under the telephone symbol, the SJB Leader said. The SJBer indicated that there was neither space no time for negotiations with the UNP.

Elections are to be held to 336 local bodies. The 336 LG bodies consist of 28 Municipal Councils, 36 Urban Councils and 272 Pradeshiya Sabhas. However, the Kalmunai Municipal Council, Dehiattakandiya Pradeshiya Sabha (Ampara District), Mannar Pradeshiya Sabha (Mannar District), Punakari Pradeshiya Sabha (Kilinochchi District), and Elpitiya Pradeshiya Sabha (Galle District) are excluded from the forthcoming election.

The last LG polls were held on Feb. 10, 2018. Former SLPP Minister Dr. Ramesh Pathirana told The Island that their efforts to somehow unite various warring factions, ahead of the LG polls, weren’t successful. Dr. Pathirana had been among the group of dissident SLPP MPs who contested/backed the New Democratic Front (NDF) led by Ranil Wickremesinghe at the last general election.

Dr. Pathirana said that they would be fielding independent groups for selected LG bodies, while some returned to the SLPP, and the rest got back to the SLFP. At the time of last general election, the group, represented by Dr. Pathirana, consisted of about 60 SLPP MPs.

Dr. Pathirana indicated that their group had completely distanced themselves from Wickremesinghe-led political grouping that backed the UNP leader’s candidature at the presidential election and contested the general election under the NDF’s Swan symbol.

Dr. Pathirana stressed that they couldn’t pose a proper challenge to the National People’s Power (NPP) at the LG polls unless various SLPP factions rejoined. The SLPP secured 145 seats at the 2020 general election and at the next it was reduced to just three.

Opposition sources said that due to the much deteriorated status of the UNP it would find it extremely difficult to field fully fledged teams at LG polls. Sources confirmed that no political party represented in Parliament had shown any interest in joining forces, let alone the main Opposition party.

The UNP didn’t even contest the Elpitiya LG polls held soon after the last parliamentary polls in late Nov. last year.

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