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Lanka, Iran work out deal on huge oil bill
Two billion rupees in unpaid fuel bills to Iran will be diverted to fund the Teheran-aided Uma Oya Project, Irrigation and Water Resources Management Ministry Secretary Ivan de Silva said yesterday.
This is in the light of Sri Lanka’s inability to remit the funds to Iran due to current sanctions imposed by the United States.
Mr. de Silva told the Sunday Times the money spent by the Government would be set off from funds Iran would provide for the project.
“Because of the US sanctions there is a delay in transferring funds from Iran to Sri Lanka but both governments have decided to use the money which is to be paid off for the fuel we bought from that country to go ahead with the project,” he said.
The secretary said an estimated two billion rupees due to Iran for fuel purchases was with the Sri Lankan Government. The estimated cost of the Uma Oya project is US$ 529 million with the Iranian Government agreeing to pay US$ 450 million of it while the balance will be met by the Sri Lankan Government.
Under the Uma Oya project, two dams would be constructed across two main tributaries of the Oya at Welimada and Dyraaba and an underground hydropower plant with 134 MW capacity would be constructed at Randenigala along with a 23 km long underground tunnel, he said.
The secretary said that although the main objective was to divert water from the Uma Oya to the Southern Province, farmers of Moneragala, Badulla and Ampara districts would also be benefited by this project.
The agreement to provide financial aid for the project was signed by the Iranian President Mahmoud Ahmadinejad in 2008, during his visit to Sri Lanka and the project would be completed by Nov 15, 2015, Project Director Sunil de Silva said.
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