Persian carpet welcome for President

by Rohan Mathes

President Mahinda Rajapaksa set foot on Persian soil by our own national airliner 'Mihin Lanka', notwithstanding the pressures and diverse opinions from several quarters.

While further consolidating the existing bi-lateral relations between the two friendly countries of Sri Lanka and Iran, this recent epoch-making official visit to the Islamic Republic of Iran, is destined to open new annals of development in our island nation.

We as citizens of the resplendent but yet developing isle of Sri Lanka, and domiciled therein, inevitably confronts the daunting challenges of frequent price hikes and the spiralling 'cost of living' burden. Very often than not, it is the constantly varying and ever-increasing world oil prices that caused untold misery and hardship to many. In this backdrop, we Sri Lankans, would have obviously opted for concessionary rates in the purchase of crude oil from an oilrich, friendly gulf country as Iran.

Nevertheless, as per the normal practices and the formalities of the Organisation of Petroleum Exporting Countries (OPEC) in which Iran too holds membership in, does not permit any concessionary or discounted purchasing by friend or foe and developed or developing country. It is in this scenario that Iran has spontaneously offered their assistance to friendly Sri Lanka in an alternative manner.

They have now pledged by inking eight Memorandums of Understanding (MoUs) to extend their able and active support, financially as well as by the provision of technical know-how and expertise, quantitatively amounting to around US dollars 1.9 billion.

These MoUs are in the areas of power generation, irrigation, the expansion of the Sapugaskanda Oil Refinery, the enhancement of co-operation in the spheres of customs, merchant shipping and the promotion of tourism between the two countries.

The enhancement of trade, commerce and the private sector business co-operation are also envisaged by the two MoUs signed with the Iran Chamber of Commerce, Industry and Mines, and the Federation of Chambers of Commerce and Industry of Sri Lanka and the National Chamber of Commerce of Sri Lanka.

In an exclusive interview to the Daily News in Teheran, our Sri Lankan Envoy in Iran M.M. Zuhair said that based on these MoUs, Sri Lanka would obtain around US Dollars 1750 million as long-term loans.

This money would be utilised to expand and revamp the Sapugaskanda Oil Refinery and for the 150 MW Uma Oya Hydro power project. "Iran is prepared to help us in a people-oriented manner, and do the project on our behalf", he added. Ambassador Zuhair underscored the importance of the Uma Oya irrigation project for which Iran has pledged a loan of around US Dollars 450 million, at a concessionary rate of interest, very much less than the going international rate, with a pay-back period of around 15 years.

"The Uma Oya project would be of immense help and value to the poorer sections of the society, who are deprived of a proper and adequate supply of water, in the arid and desolate lands of the Uva basin and the Southern Province.

The expansion of the Sapugaskanda Oil refinery is a prudent step forward to minimise investment in the finished products. Although 100,000 barrels per day will be sufficient for Sri Lanka, based on expert advice, they will opt for 120,000 barrels. However, the refinery will be open to refine any type of oil, sans being restricted only to Iranian oil.

There would be employment generation and the manufacture of by-products too such as bitumen and chemicals in the process. The estimated costs for the refinery would be around US Dollars 700 million, subject however to a feasibility study", he noted.

Furthermore he said, Sri Lanka purchases around US Dollars 750 million worth of oil from Iran per year. Under the agreements signed, Sri Lanka will not pay any interest for around seven months. It would be an on-going process and in essence, it would reflect as a long-term loan. Zuhair noted that Iran was also providing an outright Grant of Rupees 165 million (US Dollars 1.5 million), as a gesture of Goodwill for the construction of around 500 houses. Therefore the total benefits aggregates to around US Dollars 1.9 billion.

He said that all this was achieved through the relentless efforts of our Ministers Rohitha Bogollagamma, A.H.M. Fowzie, John Senevirathna, Jeyaraj Fernandopulle, Milinda Moragoda and Kumar Welgama and the Finance Ministry Secretary Dr. P.B. Jayasundera, who had visited Iran and held several meetings with the relevant high-level Iranian officials.

Zuhair opined that as a developing country, we need the assistance of all friendly countries.

"We have no particular friend nor enemy. We as a leading non-aligned nation, seek to work on the premise of having cordial relations with all countries, and would be immensely happy if Sri Lanka could benefit from the deal', he added.

Ambassador Zuhair categorically said, "however, the arrival of our President Mahinda Rajapaksa was the key turning point, as without his presence here to do the finishing touches, we would never have achieved all this. Therefore, all credit should go to President Rajapaksa.

We should also be thankful to the Iranian President Ahmadinejad, the Supreme Leader Ayatollah Ali Khamenei and a host of Iranian Ministers and officials who were closely involved in the MoUs".

"I am very happy that I had the opportunity of being a part of this whole transaction, within my short tenure of around a year in office as the Sri Lankan Ambassador in Iran", Zuhair reiterated.

Apart from all this, President Rajapaksa had also visited the largest known vehicle manufacturing plant in the Middle East and the 18th in the world, the Kjhodro Vehicle Manufacturing Plant in Iran. President Rajapaksa had invited the manufacturing company to establish a Plant in Sri Lanka, on the understanding that a part of the raw materials utilised in the manufacturing process, would be from Sri Lanka.

At the prestigious 'Business Forum' in Teheran, in which President Rajapaksa also actively participated to brief the prospective Iranian investors, it had been suggested that the state financial giant, the Bank of Ceylon, could open up a branch in Teheran, to facilitate the trade transactions and the relationship between the two countries. In a nutshell, President Rajapaksa's official visit to Iran whose country resembles a perfect harmony between modern democracy and Islam, had evolved into a key political visit of paramount importance both to Sri Lanka and the Islamic Republic of Iran.