COLOMBO: Sri Lankan Prime Minister Ranil Wickremasinghe is expected to clinch a deal with the Indian government to lease out the oil tank farm in the north-eastern port town Trincomalee, when the premier arrives in New Delhi next month, the local media said on Sunday.


The government is expected this week to approve the proposal to lease out the tanks to Indian Oil and Wickremasinghe expects to sign the lease agreement when he visits India, the Sunday Leader newspaper said.


"This decision was taken by Prime Minister Ranil Wickremasinghe after extensive talks with India, both personally as well as through Economic Reforms Minister Milinda Moragoda," the paper said.


An Indian team of experts were in Sri Lanka last week to study the viability of leasing out a section of the 1000 acre tank farm in China Bay in Trincomalee.
The Ceylon Petrolium Corporation (CPC) has 99 tanks with a capacity of 12,100 metric tons each in China Bay but only 15 of them are currently being used.


The Chairman of CPC Daham Wimalasena was quoted in the local Sunday Times newspaper as saying that proper discussions between India and Sri Lanka on the matter had not been held so far though the Indian Oil Corporation is carrying out some studies.
The talk of leasing the part of the tank farm was propelled when Indian High Commissioner Gopal Krishna Gandhi visited the facility last month.


The Sri Lankan government is keen to have some foreign presence in the volatile north-eastern city that is partly under rebel control, in the hope that it would provide some stability to the entire area. The lease would also help boost economic activity in the war-torn north and east.