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Unilateral scrapping of trilateral pact on ECT upsets India and Japan

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BY S VENKAT NARAYAN

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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Govt. will implement PCoI recommendations, but won’t ban BBS

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By Shamindra Ferdinando

SLPP Chairman Prof. G.L. Peiris yesterday (8) ruled out the possibility of proscribing the Bodu Bala Sena (BBS) as recommended by the Presidential Commission of Inquiry (PCoI) that probed the 2019 Easter Sunday attacks.

Addressing the regular weekly SLPP briefing at the Waters Edge, Prof. Peiris, who is also the minister of education, emphasized that the particular recommendation wasn’t acceptable to the government. He described it as a difficult recommendation.

Declaring that the proscription of the BBS wouldn’t do any good, Prof. Peiris said implementation of PCoI recommendations would be the prerogative of the government.

Prof. Peiris assured that the government would implement the remaining recommendations.

Chairman of the PCoI, Supreme Court judge Janak de Silva handed over its report to President Gotabaya Rajapaksa on Feb 1, 2021. Other members of the PCoI were Court of Appeal judge Nissanka Bandula Karunaratne, retired Supreme Court judges Nihal Sunil Rajapaksha and A. L. Bandula Kumara Atapattu and former Secretary to the Ministry of Justice W.M.M.R. Adhikari. H. M. P. Buwaneka Herath functioned as Secretary to the PCoI.

Prof. Peiris said that the Opposition could raise any issue related to the Easter Sunday carnage during the three-day debate scheduled to commence tomorrow (10).

Minister Peiris that the incumbent government would ensure a no holds barred investigation into suicide bombing spree that claimed the lives of 270 and wounded 500 others.

Alleging that the majority of those who had been severely critical of the PCoI hadn’t perused it, Prof. Peiris said that a careful examination of the dossier revealed some critically important factors pertaining to the attacks blamed on the National Thowheed Jamaat (NTJ).

 Prof. Peiris said that many inquired about the alleged involvement of a foreign hand in the NTJ terror project. Against the backdrop of the release of PCoI report many condemned the report claiming it didn’t address contentious issues such as possible foreign hand in the Easter Sunday carnage, Prof. Peiris said.

The SLPP Chairman said that the PCoI had made a revelation about a certain foreign organization. He declined to name the organization.

However, inquiries made by The Island revealed that FETO (Fetullah Terrorist Organization) aka the Gulen Movement

had been named by the PCoI. During PCoI proceedings, it transpired how the previous yahapalana administration had received specific information from Turkey but it chose to ignore the dire warnings. Turkey blamed July 2016 coup attempt on FETO and its US based leader Gulen.

Referring to January 2019 explosives recovery at Wanathavilluwa, Prof. Peiris said that the PCoI emphasized the need to further investigate that particular detection. The PCoI also pointed out how further interrogation of three persons already in custody in connection with the Easter Sunday carnage could help investigators to establish the truth.

Dismissing accusations that the PCoI hadn’t served any useful purpose, Prof. Peiris pointed out that some persons arrested in Qatar were now in Australia. Prof. Peiris said that the attention of the Australian authorities were on them. The Education Minister refrained from going to further details.

Quoting the PCoI, Prof. Peiris also referred to a person, whom he called a leader of an extremist organization responsible for making an alleged attempt to cause massive death and destruction in the wake of the Easter Sunday attacks. Prof. Peiris said that the PCoI had recommended punitive measures against this person in terms of the relevant law.

Commenting on specific recommendations issued in respect of the Easter Sunday carnage, Prof. Peiris said that the police, CID, TID, AG and CIABOC had received those instructions. The PCoI had created a solid framework for relevant authorities to take tangible measures.

Prof. Peiris declined to comment on queries based on various assumptions meant to divert public attention. He emphasized that whatever the breakaway UNP faction, the Samagi Jana Balavegaya (SJB) said the public however was aware they were all part of that utterly pathetic government that failed to thwart the NTJ in spite of having advanced intelligence.

Prof. Peiris called Opposition Leader Sajith Premadasa’s vow to hang all those responsible as nothing but a joke.

Responding to another query, Prof. Peiris said that the previous regime caused mayhem by lifting restrictions in place to prevent undesirable persons entering the country. During Gotabaya Rajapaksa’s tenure as Secretary Defence visas were denied to the majority of those who sought opportunity to address religious issues. The yahapalana lot simply did away with restrictions and essentially failed to take precautions fearing what Prof. Peiris called political repercussions.

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Only reason for vesting Muthurajawela under the UDA

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By Ifham Nizam

The government had decided to conserve the Muthurajawela wetland under the Urban Development Authority as the Wildlife Ministry and Department could not afford to pay for the immediate acquisition of some of the land, Urban Development State Minister Nalaka Godahewa said.

Godahewa said that his Ministry had both institutions with the relevant technology and capability to conserve the ecosystem.

He said Muthurajawela would be handed over to the Ministry of Wildlife after being conserved as a Ramsar wetland.

He said so participating at the Inter-ministerial discussion on sustainable environment development. Environment Minister Mahinda Amaraweera was also present.

Muthurajawela, which encompassed 3,064 hectares in 1990, had now shrunk to 1,200 hectares due to encroachment, the Minister said.

Minister Godahewa added that although a private company had acquired part of the wetland for some projects, steps would be taken to acquire the entire extent and make it part of the Muthurajawela Wetland Zone.

Environment Minister Mahinda Amaraweera said that although the private company had planned to set up golf courses, hotels and even a helicopter yard, none of them would be allowed.

The company posed a danger to the Muthurajawela wetland, the Minister said, adding that the 700 acres acquired by it would be taken back. Therefore, no new constructions would be allowed to be carried out in the Muthurajawela wetland and it was the position of the government to conserve what remained of the eco-sensitive region and pass it on to the next generation, he said.

The Ministers emphasised that the city of Colombo was named as the first Ramsar Wetland City in the world due to the measures taken by the President during his tenure as the Defence Secretary to develop the city of Colombo under a green city concept.

The inter-ministerial coordination programme was launched last week at the Ministry of Environment to address the issues related to the environment.

A Cabinet memorandum submitted by the Minister of Environment Amaraweera to establish an Inter-Ministerial Committee on monitoring environmental issues in January was approved by the Cabinet.

The inter-ministerial coordination programme involves the Ministry of Environment, the Ministry of Wildlife and Forest Conservation, the Ministry of Water Supply, Wildlife Conservation, the construction of elephant fences and ditches. Relevant Ministers Mahinda Amaraweera, Dr. Nalaka Godahewa, Vasudeva Nanayakkara and Wimalaweera Dissanayake, Secretaries to the Ministries Dr. Anil Jasinghe and Bandula Harischandra also participated. Among the issues discussed at the meeting were the recent media reports of deforestation, especially the Muthurajawela Wetland Conservation Programme.

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Ranil predicts worst economic shocks by year end

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UNP leader and former Prime Minister Ranil Wickremesinghe said that the government was printing money like printing newspapers.

Speaking at a meeting held at Borella on Sunday with the youth of the Green Blood organisation, affiliated to the party, Wickremesinghe said that managing the economy was not an easy task and it would take a decade for the Sri Lankan economy to bounce back.

The former PM said that the present government had printed three times the amount of money printed during the past 10 years during the tenure of President Mahinda Rajapaksa in 2010 and of UNP rule in 2015.

Wickremesinghe said that the government had slashed taxes and reduced the country’s income by giving concessions to companies and big businesses; the general public did not get the benefit of such tax cuts. “The country’s revenue had decreased even before the arrival of Covid,” he said.

“The government prints money like printing newspapers because it has no revenue. We saved $ 7.5 billion as reserves. Now, it is down to $ 4.5 billion. We built the economy despite criticism. We allocated money for health.

They opposed when we planned to give tabs to students. If tabs had been given, children would have benefited during the pandemic,” the UNP leader said.

The former Prime Minister said that no development was taking place and investors were leaving the country. He added that the government had requested a loan of US $ 2 billion from India and China but it would be disappointed.

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