Sri Lanka scraps Hambantota Oil refinery project agreement

COLOMBO (News 1st); Sri Lanka's Cabinet of Ministers has decided to terminate the agreement with Hambantota Oil refinery (Pvt.) Ltd.

The agreement was earlier approved by the Cabinet in 2019.

News 1st repeatedly highlighted a plethora of issues surrounding the project, however, the then-government disregarded those concerns and entered into an agreement for the project, and even laid the foundation stone for it. 

"1200 acres of land was allocated on a 50-year long-term lease basis for the implementation of the project. But the project proponent has not acquired the relevant land on lease basis and the project has not been implemented till now.  The project proponent has been informed several times in writing regarding the implementation of the project, but he has not responded. The project proponent has not acted according to the provisions of the agreement reached between the two parties. For this reason, the Cabinet of Ministers approved the proposal presented by the President in his capacity as the Minister of Investment Promotion to cancel the said agreement for this reason," said a statement from the Department of Government Information, detailing the decision to terminate the agreement.

In 2019, Singapore's Silver Park International (Private) Limited came forward to build an oil refinery in Hambantota as a joint project with Oman.

Ever since the project proposal was made available, News 1st highlighted the issues that marred this project. 

The project investment was a whopping US $ 3.85 Billion. 

There were concerns and doubts over the Oman partnership in the project from the very beginning.

Later it was revealed that India's Accord Group has a staken in the Singapore registered company Silver Park International Private Ltd.

Accord Group is owned by Former Tamil Nadu DMK Minister S. Jagathrakshakan.

Three of the four directors in the Singapore-based company that was to invest in building an oil refinery  in Sri Lanka, are son, daughter & wife of Jagathrakshakan.

Transparency International Sri Lanka (TISL) said at the time, that it believes the controversy surrounding the proposed USD 3.85 billion oil refinery in Mirijjawila, Hambantota, could have a negative impact on Sri Lanka’s efforts to remove itself from the Financial Action Task Force’s (FATF) ‘Grey List’ of countries vulnerable to money laundering and terrorism financing. 

Despite all these concerns, the construction on the Hambantota Mirrijiwela Oil Refinery, began on the 24th of March 2019 with major celebrations.

The Cabinet of Ministers approved proposal presented by the President in his capacity as the Minister of Investment Promotion to cancel the agreement for this project.