Sri Lanka Cancels Colombo Port Container Terminal Agreement With India And Japan
Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator.
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By Sunil Garodia
First publised on 2021-02-05 07:02:49
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Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator.
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After prevaricating for nearly two years, Sri Lanka has finally pulled out of the agreement with India and Japan for jointly developing and operating a container terminal (ECT) at the Colombo Port. This is a huge setback for India and Indian diplomacy as nearly two-thirds of the operations were linked to India. The Sri Lankan decision rankles all the more because the reason given was that the situation in the country did not favour foreign investment in the project. The Sri Lankan government has said that the Sri Lankan Port Authority (SLPA) will develop the ECT. But the SLPA is strapped for funds and is not in a position to do so independently. It would be interesting to see which foreign investors it takes on board to develop the project. With China having unbridled access to developing and operating projects in the island country (in fact it runs the Colombo International Container Terminal at a site just next to where the new terminal with India and Japan was to come up), the decision to pull out of a project with India citing resistance to foreign investment shows unfortunate bias which will have a negative impact upon the relation between the two countries.
But India has to tread carefully and must not make too much out of the cancellation of the project. This is because its relations with Sri Lanka are broad based, more so with the large Tamil population in the country, and cover a lot of vital areas. With China making deep inroads in Sri Lanka and with the current regime perceived to be inclined towards China, India has to handle the situation with maturity. The Sri Lankan cabinet has already approved a proposal to jointly develop the West terminal of the Colombo Port with India and Japan. India has not said whether it will accept the new proposal, which is largely a compensation measure from the Lankans. India has helped the Lankans in the past by providing a $400 million currency swap in 2020. There is the Trincomalee tank farm which is to be developed. Further, there are other issues related to the political rights of the Tamils, as enshrined in the 13th amendment of the Sri Lankan constitution, which need to be settled. India needs to convince the Lankans that it is a better and more trustworthy partner for the development of the country and it needs to trust it in all spheres. It needs to convince the Lankans that if they see India as the bad Big Brother, China will be worse in the long term.
