Saturday, June 15, 2024

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Cabinet Cancels Agreement for Hambantota Petroleum Refinery Construction, Citing Non-Implementation

In a significant move, the Cabinet of Ministers has decided to terminate the agreement between the Board of Investment (BoI) and Hambantota Oil Refinery (Pvt) Limited pertaining to the construction of a petroleum refinery. This decision was conveyed by Cabinet Spokesman and Mass Media Minister, Dr. Bandula Gunawardhana.

The agreement in question was forged between the BoI and Hambantota Oil Refinery (Pvt) Limited for the establishment of a petroleum refinery with a substantial capacity of 420,000 barrels per day in Hambantota. This ambitious venture was solely intended for the export market.

A sizable land area of approximately 1,200 acres was designated for the project, granted under a long-term lease spanning 50 years. However, despite these commitments, the actual implementation of the project has failed to materialize, as the project proponent did not proceed with acquiring the leased land and no tangible progress has been observed.

Minister Gunawardhana emphasized, “Numerous written communications were dispatched to the project proponent, urging them to initiate the project in accordance with the established agreement. Unfortunately, no response or actions were forthcoming from the proponent, resulting in a breach of the mutually agreed provisions.”

Taking these circumstances into account, the Cabinet of Ministers endorsed a proposal put forth by President Ranil Wickremesinghe, who also serves as the Investment Promotion Minister. This proposal seeks to annul the agreement that had been established between the two parties.

This decision underscores the government’s commitment to responsible and effective governance, ensuring that agreements entered into are upheld and that projects of national importance are executed with dedication and integrity.

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