As New Delhi works on a financial aid package to lift Sri Lanka out of the economic crisis, the government of President Gotabaya Rajapaksa in Colombo has approved a proposed deal with India to develop most of the oil storage tanks of World War II in Trincomalee. on the northeast coast of the island nation.

The long-awaited breakthrough in the New Delhi-Colombo talks came just days before Chinese Foreign Minister Wang Yi’s proposed visit to Sri Lanka. The Indian Ocean island is one of the nations where China has tried to oust India to expand its geopolitical influence.

New Delhi is considering a proposal from Colombo to provide two lines of credit to Sri Lanka – one for $ 1 billion to help the island nation import food, medicine and other essentials and another for $ 500 million. dollars for the importation of petroleum products from India. In addition, New Delhi is also considering an additional $ 400 million currency swap facility to help Sri Lanka weather the economic crisis caused by restrictions imposed to contain the Covid-19 pandemic.

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In addition to approving the proposed deal on oil storage tanks, the government led by Rajapaksa and his brother and Prime Minister Mahinda Rajapaksa also approved the purchase of 750 jeeps for the Sri Lankan police, including 150 jeeps. for the Special Police Task Force, Mahindra and Mahindra Company of India. The jeeps will be purchased using a line of credit that India had previously extended to Sri Lanka. In addition, the purchase of 500 32-seater buses from the Indian company Ashok Leyland was also approved by the Cabinet of Ministers of the neighboring nation. The buses will also be purchased using a loan grant that India had previously offered to Sri Lanka.

The new agreement between India and Sri Lanka for the joint development of oil storage tanks, which were built by the British government during World War II, is based on three existing covenants between the two nations. The Sri Lankan Cabinet of Ministers approved the proposal to allocate 14 oil tanks from the lower oil tank complex already in use by Lanka Indian Oil Corporation, a subsidiary of the Indian Oil Corporation, for the company’s business activities. . It also approved the allocation of the 61 reservoirs to the joint venture Trinco Petroleum Terminal Private Limited, 51% owned by Ceylon Petroleum Corporation and 49% by Lanka IOC. In addition, 24 of the 99 reservoirs in total will be awarded to the Ceylon Petroleum Corporation.

The breakthrough in New Delhi-Colombo talks for the joint development of oil storage reservoirs came just days before Sri Lankan Finance Minister Basil Rajapaksa was likely to attend the Vibrant Gujarat meeting in India. He had previously visited New Delhi and met with Finance Minister Nirmala Sitharaman and Foreign Minister S Jaishankar to discuss India’s financial aid.

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