Did Sri Lanka stops India’s project, stirred by Rajapaksa’s statement
A year ago, the then Sri Lankan government signed an agreement with India and Japan to build the East Container Terminal (ECT) in Colombo.
Now Sri Lankan Prime Minister Mahinda Rajapaksa has said that the final decision has not yet been taken on this project. This news has been published prominently by the English newspaper The Hindu.
Rajapaksa said, “This agreement was between the then President of Sri Lanka Maithripala Sirisena and the Prime Minister of India, Narendra Modi. But we have not decided on it yet.
It is clear from the Prime Minister’s statement that the strategic port near which India was interested in this project, it seems to be getting out of hand.
India talked about it on a bilateral level. There is a dispute in Sri Lanka regarding the ECT project. Sri Lankan nationalist groups are opposing any ‘foreign involvement’ in it.
Sri Lanka, Japan and India reached the MoU of this project after a long round of talks in May 2019. The project with an estimated cost of $ 700 million was agreed upon. In this, Japan had 51 percent share in the project and 49 percent share of India. However, it would remain owned by the Sri Lanka Ports Authority. 70% of the business from ECT would have been from India.
The Adani Group is in talks with Sri Lankan company John Niels Holdings for a partnership in the project.
The controversy over the ECT project is not new. There was a dispute between the erstwhile Sri Lankan President Sirisena and Prime Minister Wickremesinghe over the development of this terminal. Wickramasinghe believed that this terminal would help make Sri Lanka a shipping hub while Sirisena did not want any foreign investment in it.
ECT is near the Colombo International Container Terminal. Colombo International Container is formed by China Merchants Port Holdings Company Limited and Ports Authority.
The Chinese company holds 85 percent of the shares in it. There is talk of rivalry over the presence of India and China in Sri Lanka. Although there are talks about India’s project in Sri Lanka, but China is successful in taking it to its end.
For the past few days, port workers have been protesting against India on the whole matter. When Prime Minister Mahinda Rajapaksa spoke of reviewing this project, the porters withdrew their protest.
The leftist faction of Sri Lanka is also opposing India’s involvement in this project. Sri Lanka’s economic condition is not good. He is struggling with heavy foreign debts. The total foreign debt on Sri Lanka is around $ 55 billion and it is 80 percent of Sri Lanka’s GDP. China and Asian Development Bank have 14 percent share in this debt. Japan has 12 per cent, World Bank 11 per cent and India two per cent.
Earlier, Sri Lankan Prime Minister Mahinda Rajapaksa had personally urged Indian Prime Minister Narendra Modi that in view of the economic crisis, he would give more time to Sri Lanka to repay the loan. The Prime Minister’s Office of Sri Lanka says that Sri Lanka has appealed to all borrowers to grant deferment to repay the debt and this includes India.
Sri Lanka’s foreign exchange reserves are already empty. Sri Lanka is simultaneously facing economic problems on many fronts. The Hindu wrote that the terrorist attack on Easter last year and the subsequent corona virus epidemic broke the back of Sri Lankan business. Sri Lanka receives foreign exchange mainly from tea, textiles, Sri Lankan labourers working abroad and tourism sector, but all these sectors have been badly affected due to Corona.
Sri Lanka has to pay $ 2.9 billion of the total foreign debt this year. In this regard, Sri Lanka has twice requested India to increase the indebtedness and to facilitate exchange of currency.
