The Sri Lanka government's decision to scrap the 2019 trilateral agreement between Colombo, New Delhi and Tokyo to develop Colombo Port's east container terminal has come as a setback to India and its plans to develop strategic infrastructure projects in other nations. A few months ago, Iran had sidelined India from the project to develop the railway link from Chabahar to Zahedan, despite the agreement being inked during Prime Minister Narendr Modi's visit to Tehran in 2016.
India's high commissioner to Colombo Gopal Baglay has been in hectic talks with Colombo's leadership ever since the scrapping of the deal was announced. Prime Minister Mahinda Rajapaksa had to bow down to pressure from trade unionists, who were against the privatisation of the project. While Japan called Colombo's decision unilateral and regrettable, India has urged the neighbouring country to abide by its commitment.
“Our high commissioner in Colombo is in discussion with the government of Sri Lanka, including on the importance of adhering to international commitments,'' said Anurag Srivastava, spokesperson for the ministry of external affairs.
The terminal project was a big achievement for India, which is seeking to counter the Chinese influence, especially in the Indian Ocean region, which it considers as its area of influence. China, however, has been strategically developing its string of pearls in the region, ensuring free movement for its ships. The bulk of fuel to China is supplied though vessels plying across the Indian Ocean.
The East Container Terminal project entailed that 49 per cent of the shares of the project would be owned by India and Japan, the rest with the Sri Lankan Ports Authority. Rajapaksa's Sri Lanka People's Party had made the privatisation of the port an election agenda. There was pressure from several unions, affiliated to the party, to scrap the deal. President Gotabaya Rajapasksa was for the project, however, the prime minister had to buckle under pressure. Observers say this is a case of politics bowing before developmental needs. They say unless Sri Lanka augments its port capacities, the country could lose business to other competitive ports in the region. Also, now that Sri Lanka has decided to develop the terminal by itself, it will have to find the USD 650 million for it. Sri Lanka has already fallen in the Chinese debt trap with several infrastructure projects, including the Hambantota Port. China also operates another deep berth terminal at the Colombo Port.
It is reported that Sri Lanka has now offered India the West Container Terminal. Srivastava, however, refused to comment on this. He also did not reply to the query on whether Sri Lanka's decision would have an impact on other development projects that India is doing, or is keen on acquiring, in the island country. He, however, said that “We sincerely believe that the development of infrastructure in Sri Lanka, in areas such as ports and energy, with foreign investment from India and Japan will be a mutually beneficial proposition.''
Meanwhile, India is still trying to salvage the rail deal with Iran. V. Muraleedharan, minister of state for external affairs, in reply to a question in parliament on Wednesday, said that India remains “engaged'' with Tehran on the Chabahar Zahedan project.
