Two mega projects get green light

Colombo and Teheran are expected to finalise next week the dates of the visit of Iranian President Mahamoud Ahamadinejad to Sri Lanka during the second half of this month during which foundation stones are to be laid for at least two multi-billion rupee projects to be financed by Iran.

Foreign Affairs Deputy Minister Hussein Bhaila told The Sunday Times yesterday that arrangements have been made for the laying of the foundation stone by President Ahamedinejad for the Uma Oya hydro power project, and officials of the two countries were in the process of working out the technicalities of doubling the refining capacity of the Sapugaskanda oil refinery from the current 50,000 barrels per day to 100,000 barrels.

According to reports Treasury Secretary P.B. Jayasundera and Petroleum Corporation Chairman Ashantha de Mel are in Teheran this weekend in connection with the Sapugaskanda project and also to renew a contract to buy crude oil from Iran, the country’s main supplier of crude. Iranian experts have already begun a feasibility study on the project.

Sources said the foundation stone for the Uma Oya project will be laid, like in the case of the Weerawila Airport in November 2006, without a feasibility study or an Environmental Impact Assessment approval. Therefore the Iranians will initially finance the feasibility study for the Uma Oya project after President Ahamedinejad’s visit.

Due to there being no final feasibility studies carried out up to now, the Uma Oya project has been variously estimated to produce between 88 MW and 150 MW. The estimated costs too have varied from US$ 120 million to US$450 million. Experts, however, agree that this is yet another indispensable project to meet the twin objectives of overcoming power shortages and also diverting water to arid regions, in this instance to Wellawaya in the Moneragala district.

The costliest component in this project is the very long tunnel to divert water from Welimada via Bandarawela to the eastern slopes.Though the West and especially the United States have been frowning on Sri Lanka over these enhanced dealings with Teheran, whom the Washington neo-conservatives have dubbed as part of the ‘axis of evil’, sources said these Western critics on the other hand were very tight-fisted in coming to the aid of countries like Sri Lanka reeling from ever rising oil prices.