Sri Lanka will “re-acquire” the World War-era oil tanks in the eastern city of Trincomalee that were leased out to an Indian Oil Corporation (IOC) subsidiary in 2003, Sri Lanka’s Minister of Energy Udaya Gammanpila has said.

“I am proud to announce that the oil tanks the use of which had been denied to us since 2003 will be soon ours,” Mr. Gammanpila was quoted as saying by news agencies on Wednesday.

The Minister was speaking at an event held in a northern suburb of Colombo, when he referred to a recent discussion with the Indian High Commissioner to Sri Lanka. The Indian side has agreed to “leave aside” the terms negotiated by the former Maithripala Sirisena – Ranil Wickremesinghe administration in 2017, Mr. Gammanpila said.

In 2003, Sri Lanka leased out the oil tank farm to India, for the upgradation and commissioning of 99 tanks in it in a 35 year-period. The project did not proceed as was envisaged. Over a decade later, the two countries renewed discussions during PM Narendra Modi’s visit to Sri Lanka in 2015 and got closer to a “roadmap” in 2017, that included a joint venture to execute the project, but could not finalise the deal amid protests from oil workers unions.

Minister Gammanpila indicated that discussions had recommenced, on new terms set by Sri Lanka that included retrieving the tanks that remain under lease, but mostly unused. The harbour in Trincomalee is considered one of the finest deep-sea, natural harbours, in a strategically coveted spot, on Sri Lanka’s north-eastern coast.

A spokesman of the Indian High Commission told the media that India and Sri Lanka have identified energy partnership as one of the “priority dimensions” of their cooperation, and that India was “committed to working together with Sri Lanka” for the island’s energy security. “In this context, consultation and discussions have been undertaken to promote mutually beneficial cooperation for development and operation of the Upper Oil Tank Farms in Trincomalee. We look forward to continuing our productive engagement with Sri Lanka in this regard,” he said.

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