Sapugaskanda project will be Sri Lanka’s biggest to date – Gammanpila

By Thameenah Razeek | Published: 12:22 AM Jun 4 2021
News Sapugaskanda project will be Sri Lanka’s biggest to date – Gammanpila

By Thameenah Razeek

Minister of Energy, Udaya Gammanpila claimed Sri Lanka’s adversaries are trying to derail its largest project in history by misrepresenting a Cabinet paper submitted by him and spreading rumours that the Government is trying to privatise the Ceylon Petroleum Corporation (CPC).

He noted the Sapugaskanda Oil Refinery, which opened in 1969, is Sri Lanka's only refinery and successive administrations had tried unsuccessfully to develop a new refinery since 1983. Addressing the Media at the Energy Ministry yesterday (3), he said a feasibility study is being done on raising capacity of the present refinery from 38,000 to 45,000 barrels per day and constructing a new refinery with a capacity of 100,000 barrels at Sapugaskanda. 

“The project is expected to cost approximately USD 3 billion, or Rs 600 billion. As a result, this will be the largest project in Sri Lanka's history. The Hambantota Port cost only USD 1,350 million and the Norochcholai power plant cost only USD 900 million. The Hambantota Port, Norochcholai Power Plant, Mattala Airport, and Katunayake Expressway are the four greatest projects, costing a total of USD 2,916 million," he said. According to him, the project is Sri Lanka's first large-scale bidding initiative. 

All significant projects in Sri Lanka have been completed without competitive bidding to date. He went on to say that neither the Government nor the CPC could acquire a loan for such a large sum of money, thus the project is being implemented as a BOT project. "To put it another way, the investor who constructs the refinery should sell it to the CPC after recouping his investment and making a profit. At present the CPC has a monopoly on the operation of an oil refinery in Sri Lanka. 

As a result, the Petroleum Corporation Act No. 28 of 1961 must be amended in order to grant another investor the authority to refine oil," he noted. In conclusion, he stated the project will bring in USD 3 billion and save the Government USD 300 million per year in domestic oil refining costs.

By Thameenah Razeek | Published: 12:22 AM Jun 4 2021

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