It is reported that all arrangements have been made to set up a new company and hand over the 98 oil tanks located in China Bay in Trincomalee to the Indian Oil Company (LIOC) for a period of 50 years.
The new subsidiary will also be called Trinco Petroleum Terminal Limited.
It is said that the Minister in charge of the subject has instructed the Chairman of the Petroleum Corporation in writing to expedite the establishment of this company.
Meanwhile, the President of the Ceylon Petroleum Corporation General Employees Union Ashoka Ranwala has told the media that it has been ordered to set up a new company before preparing cabinet papers and submitting them to the Cabinet.
Accordingly, the ownership of all valuable resources including the oil landing jetty, machinery and bunkering sector at the China Bay premises is in danger of being transferred to India for fifty years, he said.
He also said that it would be similar to the move by the then Prime Minister Ranil Wickremesinghe establishing the Petroleum Storage Terminal Company in 2002. The monopoly of oil trade in Sri Lanka would be vested in India after the establishment of a new company related to the tanks and resources at the China Bay premises.
The unions claim that a Memorandum of Understanding (MoU) signed between the Indian Oil Company and the government during the then United National Party (UNP) rule in 2002 led to a 35-year joint development project.
But other unions say the agreement was not an agreement but an understanding, and that if a new agreement is signed, the country will lose ownership of the joint development project for another 50 years, which will end in 2038.
According to the new agreement to be signed, 24 of the 85 tanks in the upper yard will be owned by the Ceylon Petroleum Corporation and the other 61 tanks will be subjected to a joint development project.
Accordingly, it has been reported that an agreement has been reached to give 51 percent of the project in the upper yard to the Ceylon Petroleum Corporation and the remaining 49 percent to the Indian Oil Company.
The unions also say that the agreement regarding the oil tanks in the China Bay area will be signed on the condition of a loan of US $ 500 million to be given to Sri Lanka by the Indian government.
He also said that the 24 tanks to be handed over to the Ceylon Petroleum Corporation out of the tanks in the upper yard have a number of shortcomings making them unusable.
He said that the corporation could not rectify the shortcomings as it did not have the funds to repair them.
He said the China Bay was one of the most militarily strategic points in the region in Asia and that it was an utterly decisive move to give India the ownership of these tanks for 50 years, built by Lord Mountbatten during World War II.
However, a crucial discussion between the Government of Sri Lanka and the Government of India is scheduled for next Monday (27).
Oil trade union leaders say the long-term handing over of oil tanks and resources of the China Bay premises to the Indian company could pose a threat to national security and that security forces of that country could enter the premises once it’s under their control.