|Thursday, 29 May 2003|
India to consolidate Lanka's economic initiatives - Ram Naik
By Ravi Laduwahetty
India will look forward to consolidating the new economic initiatives of the Government of Sri Lanka, visiting Indian Petroleum and Natural Gas Minister Ram Naik told the Daily News in an interview at the Hotel Taj Samudra yesterday.
This will mean that India will be taking some far reaching measures to participate in Sri Lanka's economy which will be outside the sphere of petroleum and lubricants which has made giant inroads in recent times, the Minister said.
In addition to participating in Sri Lanka's petroleum sector, India will be participating in the development of Sri Lanka's economy through agriculture, infrastructure development with special emphasis on highways and railways, power generation and also in the automobile industry, he said.
"We will be able to supply our expertise to Sri Lanka in the sphere of Information Technology in which we have made giant inroads, he said, and added that India was exporting software and scientists to the United States."
Asked whether it will be through a Government to Government deal that Indian participation in Sri Lanka's economy would be facilitated, he said that it will be through private-sector led initiatives. The fact that over 100 Indian companies participated in the on-going 'Made In India' show bears eloquent testimony to the enthusiasm of the Indian corporate sector in participating in Sri Lanka's economy, he said. He said that the Free Trade Agreement between the two countries has been instrumental in increasing Sri Lanka's exports to India by 250 percent from the $ 70 million in 2001 to $ 167 million in 2002.
He said that the Indian Oil Corporation would upgrade the storage facilities at the Trincomalee tank farm which when completed, will have a capacity of over a million tonnes per annum, which will not only ensure the energy security of Sri Lanka, but also will be able to supply ships. Trincomalee will be developed into a major regional petroleum hub, he said.
Asked to comment on the new thinking of the Atal Beharee Vajpayee Government into the petroleum sector of which he is considered to be a pioneer, Naik said that India has been making equity investments into performing oil fields in other parts of the world such as Sudan, Vietnam and Russia.
The problem is that we have to import over 70 percent of our domestic requirements as we have only 30 percent of the domestic supplies. He explained that his Government, through the Oil and Natural Gas Corporation of India has made Indian Rupees 36 billion investment in a performing oil field in Sudan, which accounts for 25 percent of its equity. This oil field has a refining capacity of 12 million tonnes. There is also another investment into a gas field in Vietnam where the investment is Rs. 9 billion. The investment in Russia is Indian Rupees 81 billion and the venue of the refinery is Sakhaitan which has a capacity of five million tonnes.
This is the method by which India is ensuring the uninterrupted domestic supply of petroleum through the import of these finished products, Naik said. Commenting further on the Indian domestic market, he said that the Government has liberalised the petroleum sector, inviting private players such as Shell and other Indian petroleum brand leaders such as Reliance and SR to enter the market.
Asked to comment on the proposed pipeline that IOC was to construct between Madurai and Colombo to slash transit times, as specified by Lanka IOC, Managing Director Mahadevan Nageswaran (Daily News - December 19, 2002), Naik said that the feasibility and the economies of scale had to be worked out. Laying a pipeline under the sea is no easy task and that the commercial viability has to be worked out.
India's refining capacity is 116 million tonnes per annum in contrast to Sri Lanka's two million tonnes. India's consumption is 104 million tonnes while Sri Lanka's consumption is 3.5 million tonnes.
India has 20,000 petrol sheds while Sri Lanka has 1,080, of which IOC has purchased 100 now and will be increasing this to 250 with the purchase of the private dealers' sheds in future.
He thanked Prime Minister Ranil Wickremesinghe for the import of Tata jeeps through the $ 100 million Indian line of credit.
Produced by Lake House