China Petroleum Pipeline Engineering Company Limited has won a contract worth US$40.84 million and Rs. 8,548.75 million to build a new aviation fuel storage and distribution facility at Muthurajawela, together with a dedicated pipeline carrying jet fuel directly to Bandaranaike International Airport.
The Cabinet approved the award on the recommendation of the High Level Procurement Committee, following an international competitive procurement process that drew three bids, the Daily Mirror reported.
What is being built
The project has three components, described identically by all three outlets:
- An aviation fuel storage tank complex of 92,000 cubic metres and associated facilities at Muthurajawela
- A dedicated fuel pipeline running from the storage complex to the refuelling terminal at Bandaranaike International Airport
- Modernisation of the existing Muthurajawela fuel terminal
Hiru News reported that the procurement followed a “hybrid” competitive process. EconomyNext put the project’s value at $40.84 million plus Rs. 8,548.75 million inclusive of applicable taxes.
Two years from approval to award
Cabinet granted in-principle approval for the project on 29 July 2024. Formal clearance to award the contract came only after bid evaluation concluded — a gap of close to 26 months between the decision to build and the decision on who builds it.
Why a pipeline
Jet fuel for BIA is currently trucked from the Muthurajawela terminal, roughly 15 kilometres south of the airport at Katunayake. A dedicated pipeline removes that road movement from the route.
The Muthurajawela terminal has been the subject of repeated capacity decisions: Cabinet cleared seven new oil tanks at the site in July, and the complex featured in an August package of energy contracts.
Not reported
None of the three reports states how the contract splits between the dollar and rupee components, the construction timeline or completion date, how the project is financed, who the other two bidders were, or what the tank farm’s capacity represents against current BIA uptake. Nor do they say whether the storage is for the Ceylon Petroleum Corporation, a joint venture, or another operator.
