Sri Lanka Cannot Pay Says Ministry
By Indika Sri Aravinda
The Petroleum Resources Ministry says it was compelled to rethink a Memorandum of Understanding (MOU) signed with Iran to expand the Sapugaskanda oil refinery owing to lack of funds.
Iran and Sri Lanka inked the MOU in 2008 but Sri Lanka was recently accused of violating the agreement forcing Iran to suspend the project.
The US dollars 1800 million MOU was to see Iran invest 70 percent of the funds for the project while Sri Lanka had to invest the rest.
Under the MOU Sri Lanka had to spend US dollars 525 million and the foundation stone was also laid in 2008 for the expansion project.
When The Sunday Leader contacted Petroleum Resources Ministry Secretary Mrs. Sandya Wijeybandara, she said that Sri Lanka was unable to meet the financial commitments for the project.
She said that it was a huge burden on the economy and as a result the project had to be put on hold. However Petroleum Resources Trade Union Alliance Secretary Ananda Palitha said that one of the reasons Sri Lanka could not meet the financial commitment for the project was because the government had violated the hedging deal and foreign banks subsequently refused to lend Sri Lanka funds.
He added that the government could however have looked at alternatives but was using its funds for other purposes.
WOW – we spent hoe many millions on parties, junket travels and such (in the name of Hambantota 2018)?
What about the money spent on bidding for commonwealth games ?
How many millions are wasted on personal glory and ‘bull’ projects while the priorities are put on hold for ‘huge burden ‘ on the economy !!
When will the politicians put country before self.
It is pathetic that the govt is so inactive and wasting all our resources.
This is the first default by the SL bankrupt Government. More to follow. With all respectable international bodies not giving loans and foreign Govts other than China, reducing or cutting off all the foreign aid only way out for the SL Govt is to borrow at 7% per annum or more from China. That too with a string attached to the loan where we have to use Chinese Labour when SL unemployment rate is one of the highest in the world, that too after so called 8% growth rate. In the west even a private small business does not borrow at 7% per annum, why should SL borrow at 7% plus per annum? To pay the debt they have to borrow more at higher rates or beg for charity. If this stops then how are we going to pay all the debt? At the end we will be like Greece! Get ready SL voters who give their votes to the Govt.