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Unilateral scrapping of trilateral pact on ECT upsets India and Japan




Our Special Correspondent

NEW DELHI, February 6:

The unilateral scrapping by Sri Lanka of the trilateral agreement on developing the strategic East Container Terminal (ECT) at the Colombo Port has upset both India and Japan.

Last week, Sri Lanka unilaterally pulled out of the 2019 agreement with India and Japan after as many as 223 Sri Lankan trade unions and civil societies groups backed the Sri Lanka port trade unions demand to cancel the ECT agreement.

Said a top Indian source: “The ECT pact was a trilateral government-to-government agreement between the Government of Sri Lanka and the Governments of India and Japan. If Sri Lanka pulls out of such a G2G agreement unilaterally, what message will it convey to other governments and private investors? Will it not shake their confidence in the Sri Lankan Government’s ability to honour signed agreements? Who will want to invest in a country whose government is not able to honour a multi-billion dollar G2G agreement?”

After the Sri Lankan decision reneging on the 2019 agreement, the country’s cabinet has approved a proposal to develop the West Container Terminal (WCT) of the Colombo port as a Public Private Partnership with Japan and India. Two top sources in the Sri Lankan government said Indian response to the compensatory offer was “ambiguous” and “almost rejecting.” But Indian officials said there was no formal communication about WCT till Tuesday noon.

The Indian Express quoted an unidentified Sri Lankan official as saying: “Commercially, the West Terminal offer is better for India as it gives 85% stake for developers of the West Terminal against the 49% in ECT. Even if this is the better deal for the investor (including Adani), the final decision has to come from the Indian government. And geopolitically too, West Terminal is almost the same if they consider the security aspect and the necessity to have a port terminal in Sri Lanka.”

He went on: “And the West Terminal is no smaller in size or depth compared to the East Terminal… If Indian response remains uncertain to this proposal, I am sure it was not communicated (from the Sri Lankan side) properly to India. There is no difference between East and West Terminals except for the fact that development of the ECT is partially completed while the development of the West Terminal has to start from scratch.”

In 2019, India and Sri Lanka signed a memorandum of understanding for “co-operation on economic projects”. The development and operation of the container terminal was one of the projects in the MoU: “A Container Terminal in Colombo Port as a Joint Venture, which includes Indian investments considering that majority of transshipment in Colombo Port is related to India. GOSL will announce the award of the contract…by end May 2017”.

The MoU did not mention the Eastern Container Terminal, but India and Sri Lanka had already been in discussion for its development and operation.

xAlthough India and Sri Lanka have seemingly friendly ties and much cultural affinity and people-to-people contact, the relationship is complex — and the majority Sinhala-Buddhist public opinion is layered with the memory of Indian intervention in the ethnic conflict in the late 1980s.

Unlike Chinese projects, big projects by India have always faced opposition in Sri Lanka. Sinhala-Buddhist politicians either ride such opposition opportunistically when it suits them, sometimes using this as a pretext over the real reason, or are reluctant to go counter to the public sentiment for fear of being attacked for surrendering to “big brother India”.

This was perhaps why India had invited Japan to work with it in at least two of the projects listed in the MoU: the ECT, and an LNG Terminal/Floating Storage Regasification Unit (FSRU) in Kerawalapitiya/Colombo with a piped gas distribution system along with retail outlets for CNG etc. The expectation was that this would ensure that the projects come through. Japan was the biggest donor to Sri Lanka through the years of conflict. The Geoffrey Bawa-built Sri Lankan Parliament, which came up at the height of the conflict, was funded by Japan. It continues to give Sri Lanka substantial financial support even now.

However, the old relationship between Sri Lanka and Japan has undergone changes as China’s footprint over Colombo has grown. Late last year, the Rajapaksa government unilaterally cancelled a Japanese project for a commuter rail in Colombo.

As per a Memorandum of Co-operation (MoC) signed by the previous Maithripala Sirisena-Ranil Wickremesinghe administration, the Sri Lanka Ports Authority (SLPA) would have 100 per cent ownership of the ECT. The Terminal Operations Company (TOC) conducting all East Container Terminal operations was to be jointly owned, with Sri Lanka retaining a 51% stake, and the joint venture partners 49%, according to a statement by the Ports and Shipping Ministry at the time. A 40-year loan at an interest rate of 0.1% from Japan was expected to fund the development of the ECT.

“The envisaged Japanese loan carries one of the best loan terms Sri Lanka has obtained. The 51% stake is also one of the best in SLPA joint ownership endeavours. SLPA’s majority ownership in the new TOC represents a significant step in prioritising national interests,” the statement had said.

The Sri Lankan side believes it can persuade India and Japan that the West terminal is strategically no different from the East, and commercially even better. One official told the Indian Express that the developers could hold as much as 85 per cent stake in the West terminal as opposed to just 49 per cent in ECT. It would be a much better option for Adani, he said.

For New Delhi, the ECT deal is important as between 60 and 70 per cent of transshipment that takes place through it is India-linked. The ECT is also considered more strategic than any other in Colombo Port. It is located next to the Colombo International Container Terminal (CICT) project, a joint venture between China Merchants Port Holdings Company Ltd. and SLPA.

India had been offered the Western Container Terminal earlier, but had refused. The ECT is already operational, while the WCT has to be built from scratch.

There are reports circulating in diplomatic circles that China had played a role in instigating port unions’ protest against India’s interest. New Delhi and Tokyo have desisted from commenting on such reports. But an Indian source quipped: “The Sri Lankan Government has done nothing so far to deny such reports.”

A senior SLPP minister said: “Gota (President Gotabya Rajapaksa) is a man who never changes his word. But he had to agree to cancel the ECT agreement as it was almost reaching up to the level of shaking his Presidential chair.”

Will there be similar protests and crises if India and Japan accept the West Terminal offer?

The Sri Lanka government sources rules out chances of any further trouble on the cabinet-proposed West Terminal offer.

“There were talks held at this point and the Sri Lanka government authorities received the feedback that John Keells Holding PLC (JKH), largest public listed conglomerate in Sri Lanka, and India’s Adani group may agree with WTC offer as a compromise formula with a promise that the private stake will be 85% in WTC instead of 49% at ECT,” said a top Sri Lanka Ports Authority (SLPA) official.

The Sri Lanka government also got the written consent of unions in this regard. Out of 23 unions, 22 signed and gave a letter agreeing to support the government in its plans to develop the West Terminal with private investment. The consent letter of unions said: “We will support a good investment decision that the government would take in future in relation to the West Terminal.”

Viyath Maga (Professionals for a Better Future), a network of academics, professionals and entrepreneurs, had played a key role in the final round of negotiations between the unions and the government, which had led to the latest WTC proposal.

Nalaka Godahewa of Viyath Maga, who was the former chairman of SLPA and the current state minister of Urban Development, told the Indian Express in a telephone interview that Sri Lanka is not pushing India away from the deal. “Instead, we being professionals, we volunteered to talk and find an agreeable ground through dialogues ensuring that it would respect the Indian interests as well. It is a win-win solution now,” he said.

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Aircraftsman sets swimming record with flying colours



Leading Aircraftman Roshan Abeysundara of the Air Force yesterday set a new Asian record by swimming from Talaimannar to Dhanushkody in Rameshwaram. During his preparation for the event, Abeysundara renewed the national open water swimming record twice. He has also created a new record by swimming a 25 km distance from Matara to Koggala on 03 Jan, clocking 10 hours and 37 minutes, and went on to surpass the record by swimming a distance of 49Km from Matara to Hikkaduwa and back to Unawatuna on Feb 27 in 23 hours and 10 minutes.

He started swimming from Talaimannar at 2 am on Saturday and reached Dhanushkody and returned to Talaimannar around 7 am yesterday by completing 59.3 km in 28 hours 19 minutes and 43 seconds, breaking a 50-year-old Asian record set in 1971 by V.S. Kumar Anandan’s, who took 51 hours to swim across the Palk Strait. Abeysundara also set a new Lankan record by swimming from Talaimannar to Dhanushkody in 19 hours and 31 minutes.

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JVP women raise fears about cost and safety of food for New Year



By Saman Indrajith

The JVP women’s wing led by Women for Rights says that exorbitant prices of food and fears over their safety will make the forthcoming Sinhala and Tamil New Year a miserable affair.

“The prices of essential food items are at unprecedented highs. In addition, there are fears in the minds of the people about the quality and safety of food items being sold in the market. There were no such fears and doubts whether the food items in the market were fit for human consumption in the past as it is now,” Secretary of the WFR Samanmalee Gunasinghe said addressing a press conference held at the party headquarters in Pelawatte Friday.

Gunasinghe said that all those issues with regard to food prices and their standards and safety were about food security of the country. “Food security is a prerequisite for national security which this government promised to achieve. Food security no longer exists in this country and, worse, people are worrying about food safety.”

She said that social media was full of posts expressing people’s concerns about food safety.

“They are afraid because the government is putting their lives in danger not only by permitting coconut oil imports with high levels of aflatoxin but also allowing the adulteration of other food items. Some months ago, they brought down container loads of canned fish past shelf life and released them to the market. There are fears that milk, chilli powder and packaged food items contain various toxins. Scientists make statements to the effect that the fertilizers being used for paddy cultivation contain huge amounts of arsenic.”

President of the WFR Saroja Savithri Paulraj said that children of the country had not been able to celebrate the last Sinhala and Tamil New Year because of the COVID pandemic and now the people were gripped by fear of toxic food and their prices. Price of kilo of green grams is now Rs 850-1000, cowpea Rs 1,200, Undu (urid) Rs 1,700, chicken Rs 800, Chillies nearly Rs 1,000.

“This government has no answers for the problems created by the Easter Sunday terror attacks even after two years. The forests are being cleared and no responsible action is taken to prevent them. Women who become victims of micro-credit schemes are staging protests. Farmers staging protests in various places in the country. It is with those problems that people this time are compelled to mark the Sinhala and Tamil New Year.”

Exco member of WFR Prabhashini Wickramasinghe also addressed the media.



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Govt. claims SLPP-SLFP relations remain strong



… admits Easter Sunday carnage a contentious issue

By Shamindra Ferdinando

The Sri Lanka Podujana Peramuna (SLPP) yesterday (11) strongly denied reports that a section of the ruling party coalition, led by the Sri Lanka Freedom Party (SLFP), was on a collision course with it. Agriculture Minister Mahindananda Aluthgamage insisted that in spite of some minor disagreements among coalition members there was absolutely no threat to the government.

Participating in a newly launched live SLBC programme, the Kandy District MP accused the bankrupt Opposition, that was struggling both in and outside Parliament of propagating lies.

Acknowledging that a section of SLPP lawmakers had met at the SLFP Office at Darley Road, under former President Maithripala Sirisena’s chairmanship last Thursday (8), Minister Aluthgamage said that members of a coalition administration could hold diverse positions on a particular issue.

The Minister was responding to interviewers, Himananda Rajapaksa and Inusha Weebedde on ‘Kannadiya’ produced by Sudarmika Wijeratne. Rupavahini and The Island were represented by Vijaya Dissanayake and Shamindra Ferdinando, respectively.

Referring to what he called a contradictory position taken by National Freedom Front (NFF) leader and Minister Wimal Weerawansa in respect of some contentious issues, Minister Aluthgamage said that the stand taken by the former JVPer on the East Container Terminal (ECT) proved right. Minister Aluthgamage appreciated the cancellation of the proposed agreement on the ECT following protests by a section of the government. Earlier the government announced plans to transfer ECT’s controlling shares to India’s Adani Group.

The minister said that the consensus on the ECT should be compared with the previous administration handing over the controlling shares of the strategic Hambantota port to China.

Minister Aluthgamage also dismissed claims that the SLFP led group was planning to conduct a separate May Day rally. The minister insisted the coalition was still strong regardless of issues – a situation experienced by coalition administrations in the past. Aluthgamage asserted that divergent views among coalition members were helpful in facilitating a better stand on a particular issue.

The programme was told difficulties experienced by the government should be examined against the backdrop of former President Maithripala, one of those named by the Presidential Commission of Inquiry on the Easter Sunday carnage now being a member of the SLPP led government.  The SLMC and the ACMC flayed over the Easter Sunday massacre switched their allegiance from UNP leader Ranil Wickremesinghe to Sajith Premadasa, the leader of the breakaway UNP faction recognized as the Samagi Jana Balavegaya (SJB).

It was also told that the break-up of the coalition was unlikely though in political turmoil.

Top SLFP spokesman and Minister Mahinda Amaraweera confirmed the stand taken by his ministerial colleague, Aluthgamage. Declaring the role played by the SLFP in helping wartime Defence Secretary Gotabaya Rajapaksa win the 2019 presidential election, Minister Amaraweera reiterated their commitment to the government.

The SLFP group in the government consisted of 14 lawmakers. The government parliamentary group comprised 145 members.

Media Minister Keheliya Rambukwella, Aviation Minister Prasanna Ranatunga and Public Security Minister Rear Admiral (ret.) Sarath Weerasekera explained how President Gotabaya Rajapaksa’s government handled the Easter Sunday issue.

Attorney-at-Law Harigupta Rohanadeera, Presidential Secretariat Director General – Legal Affairs said that the government’s response was three-fold. “We provided relief, punishment to those responsible and remedial measures to prevent similar attacks,” Rohanadeera said.

Dismissing accusations as regards the ongoing investigations/process, Rohanadeera pointed out that President Gotabaya Rajapaksa having consulted the Archbishop of Colombo Malcolm Cardinal Ranjith retained the Commission of Inquiry (CoI) appointed by the then President Maithripala Sirisena.  The lawyer underscored the government determination to implement the CoI report along with the recommendations of the Sectoral Defence Oversight Committee.

The Presidential aide explained the need to address issues without being diverted by political factors. The official rejected assertions that the CoI was meant to delay justice to those killed and their families.

The interviewers raised issue over SLFP General Secretary Dayasiri Jayasekera reiterating concerns that the person recently named as the mastermind wasn’t so and there were other powerful interested parties bent on destabilizing the country.  The programme was reminded of former UNP lawmaker and one-time Justice Minister Dr. Wijeyadasa Rajapakse, PC, warning of Western destabilization projects as long as the Hambantota port remained in Chinese hands.

The previous UNP led government finalized the deal on Hambantota port in 2017.

The programme was told the high-profile Western intervention at the Geneva-based United Nations Human Rights Council (UNHRC) largely influenced by the ongoing battle for supremacy between the US and China. However, almost all political parties represented in parliament had been in one way or another implicated in the Easter Sunday violence.

Near simultaneous Easter suicide attacks claimed the lives of 270. Over 500 received injuries.

The mystery of India infiltrating the National Thowheed Jamaat (NTJ), too, was raised though there was consensus Sri Lanka should be grateful for intelligence provided by India in the run-up to Easter blasts. The interview was asked of the need to be wary of foreign intelligence services operating in Colombo.



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