Energy Minister Kumara Jayakody refutes MP Lakmali Hemachandra’s claim that Sinopec’s billion-dollar investment took place under the current government, clarifying that the project was initiated in 2022 through a formal procurement process.
Minister of Power and Energy Kumara Jayakody has dismissed National People’s Power MP Lakmali Hemachandra’s recent claim that Sinopec’s investment is the largest foreign direct investment in Sri Lanka’s history and that it took place during her party’s tenure.
Speaking on Derana TV, the minister responded to remarks Lakmali made two weeks earlier, where she alleged that the agreement was signed under the current administration and not by anyone else. The minister countered that this statement was factually incorrect, stressing that the project’s origins date back to 2022.
According to Jayakody, Sinopec’s entry into Sri Lanka was not the result of a simple Memorandum of Understanding (MOU) but rather a formal procurement process. An Expression of Interest (EOI) was called in 2022, followed by bid submissions. Seven companies initially competed, with Sinopec and Vitol emerging as finalists. After Vitol withdrew, Sinopec was selected. The minister noted that his ministry is committed to correctly continuing any properly initiated process, regardless of who started it.
During the discussion, journalist Kalidu Karunaratne highlighted that several of Sinopec’s demands conflicted with the Board of Investment’s conditions, making them challenging to meet under the current IMF-led economic framework. Reportedly, Sinopec sought Foreign Direct Investment (FDI) status, tax concessions, and over 50% market share goals that Jayakody admitted were difficult to grant in full.
The minister assured that while Sri Lanka values its relationship with China and welcomes productive foreign investments, the government will only approve terms within the legal and policy boundaries of the country. He confirmed that concessions have been granted to Sinopec within the maximum limits allowed under BOI rules but stressed that it is premature to declare the project the largest in history as discussions are still ongoing.
One outstanding issue involves water supply for Sinopec’s operations. Jayakody said the company has submitted a proposal to resolve it, with discussions currently underway with the Irrigation Department. A resolution is expected within one to one and a half months.
Although Sinopec is the world’s largest oil company, Jayakody reiterated that in Sri Lanka, it must operate within national policies and respect local interests.
