Context: Sri Lanka to sign Trincomalee oil tank farm deal with India in a month.

• If the deal is finalised and signed next month, it will give shape to a proposal envisaged 35 years ago, in the Indo-Lanka Accord.

Background:

• During the Second World War, the British built the Trincomalee oil tank farms to serve as a refuelling station, adjacent to the Trincomalee port, an enviable natural harbour.
• The nearly century-old oil tanks need to be refurbished — at the cost of millions of dollars — if they are to be fit for use again.

About the project:

• The work of restoring and operating the Trincomalee oil tank farm will be undertaken as a joint venture between India and Sri Lanka.
• The facility, is located in ‘China Bay’, has 99 storage tanks with a capacity of 12,000 kilolitres each, spread across the Upper Tank Farm and the Lower Tank Farm.
• This deal is part of the “four-pronged approach” that India has adopted to help Sri Lanka mitigate its current economic crisis.

Four-pillar initiative

• It comprising lines of credit for food, medicines and fuel purchases granted by India
• A currency swap agreement to deal with Sri lanka’s balance of payment issues
• An “early” modernisation project of the Trinco oil farms that India has been pursuing for several years, and
• A Sri Lankan commitment to facilitate Indian investments in various sectors.

SWOT Analysis of India-Sri Lanka relations

https://www.thehindu.com/news/international/sri-lanka-to-sign-trincomalee-oil-tank-farm-deal-with-india-in-a-month-says-minister/article38044183.ece

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