The Ceylon Petroleum Corporation (CPC) has decided to call for proposals to lease 29 oil tanks at the Trincomalee Oil Tank Complex to investors on a long-term basis, according to reports.

CPC Managing Director Mayura Neththakumara said that 29 of the 61 oil tanks owned by Trinco Petroleum Terminal Ltd. are planned to be leased under the program.He said the main objective of the initiative is to establish a regional hub in Trincomalee for fuel storage, supply and re-export.Meanwhile, Mr Neththakumara said rehabilitation work has already begun on two more oil tanks directly controlled by the CPC.

An oil tank complex with a history spanning decades

The Trincomalee China Bay Oil Tank Complex is considered a strategically important fuel storage facility not only in Sri Lanka but also in the region.The oil tank complex was constructed during British rule in the 1930s and was used as a particularly important fuel storage facility during the Second World War.One of the tanks was destroyed in a Japanese air raid in 1942, while various development and leasing proposals were subsequently put forward for the remaining tanks. Control of the facility was transferred to Sri Lanka in the 1960s, and from 1964, the Ceylon Petroleum Corporation took over its management and operations.

Following the 1987 Indo-Sri Lanka Accord, an exchange of letters proposed the joint development of the Trincomalee Oil Tank Complex by Sri Lanka and India.

All 99 tanks leased to LIOC in 2003

Under an agreement reached on 7 February 2003 between the Government of Sri Lanka, the Ceylon Petroleum Corporation and Lanka IOC, all 99 oil tanks in Trincomalee were leased to Lanka IOC for a period of 35 years.However, the arrangement subsequently came under heavy criticism, with the majority of the tanks reportedly left unused and neglected.

In 2017, Sri Lanka and India resumed discussions on developing all the tanks on a long-term lease, but the plans also sparked political and economic debate.