Sri Lanka's Cabinet has authorized construction of three new fuel storage tanks at the Muthurajawela terminal following environmental clearance, with the project valued at over US$3 million and Rs. 2.796 billion.
The Cabinet has approved a contract worth US$3.04 million and Rs. 2.796 billion, excluding VAT, for the construction of three additional fuel storage tanks at the Muthurajawela terminal. The Ceylon Petroleum Storage Terminals Limited will fund the initiative, which includes building two tanks with 15,000-cubic-metre capacity each and one tank with 10,000-cubic-metre capacity.
The project received initial Cabinet approval in June 2025, but a subsequent decision in July 2026 required consultations with stakeholders to address environmental, legal, and other regulatory concerns before moving forward. The Ministry of Energy and Ministry of Environment have now confirmed that conditions set by the Central Environmental Authority have been incorporated into the procurement contract, and the implementation will comply with wildlife and flora protection provisions.
Following an international competitive bidding process, the contract was awarded to a joint venture between Indo-East Engineering & Construction (Lanka) (Private) Limited and Ceylex Engineering (Private) Limited, which was identified as the lowest substantially responsive bidder by the High-Level Procurement Committee. The approval represents the Cabinet's decision to proceed with the project after addressing environmental safeguards.
