Tuesday, 26 August 2008 15:38
A loss amounting to millions of rupees will be incurred after the government yesterday (August 25th) signed a pact with an Iranian company to improve and expand the oil refinery in Sapugaskanda, said sources at the Ministry of Petroleum and Petroleum Resources Development.
At initial discussions, the Sapugaskanda Refinery quality enhancement and expansion project was estimated to cost nearly US $ 700 million.
However, according to the agreement signed yesterday, the estimated cost of the project was US $ 1,500 million, an official of the Petroleum Ministry told ‘Lanka Dissent’.
The pact also demands that the Sri Lankan government should invest 30 per cent of the estimated sum to initiate the project, he added.
Noting that an enhancement project of a refinery would cost around $ 700 - 800, the ministry official said that spending such a huge sum was unacceptable.
He further said that the project has not even received approval of the cabinet.
Iranian Deputy Oil Minister Mohammed Reza Nematzadeh was in Sri Lanka recently to finalize the oil and petrochemical agreements between the two countries.
He met Petroleum Minister A.H.M. Fowzie and President Mahinda Rajapaksa at Temple Trees on August 23rd.
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