Controversy surrounds the Indian role in Trincomalee oil tank farm and the stealthy US investment in the energy sector. Sri Lanka seems to be utterly disorganised in its dealings with foreign powers as well as investors.
by Shamindra Ferdinando
Against the backdrop of escalating tensions between the US and China, Chief of Army Staff General Manoj Mukund Naravane arrived in Colombo on Oct 12 on a five-day visit. The Indian Army website announced the visit on Oct 12. The announcement headlined ‘CHIEF OF ARMY STAFF PROCEEDS ON A VISIT TO SRI LANKA’ dealt with the former IPKF (Indian Peace Keeping Force) member’s first visit here as the Chief of Army Staff.
General Naravane’s visit coincided with the second phase of Malabar exercise in the Bay of Bengal off Visakhapatnam. The 25th edition of the exercise involved navies of the US, India, Japan and Australia. It was the 25th edition of the naval exercise, which began as a bilateral exercise between India and the U.S. way back in 1992, two years after the IPKF quit Sri Lanka. The first phase of Malabar exercise was held in August near Guam. The US Navy hosted it. Japan joined the Malabar exercise in 2015 and Australia followed in 2020.
Quadrilateral Security Dialogue aka Quad consists of those countries participating in the Malabar exercise. It would be pertinent to mention that Quad suffered quite a serious setback at the beginning. Australia quit the alliance during Premier Kevin Rudd’s tenure (Dec 2007 to June 2010) though Australia returned to the US-led grouping with the change of government in 2010. Australia joined the Malabar exercise much later.
General Naravane’s visit here should be studied taking into consideration Quad alliance’s overall interest in Sri Lanka vis-a-vis much stronger China-Sri Lanka relations. In spite of Sri Lanka repeatedly vowing neutrality in its foreign policy, the Quad is seriously concerned about Chinese intentions here. Chinese strategy remains on track regardless of hindrance caused by the yahapalana administration. The finalisation of 99-year-lease on the Hambantota port in 2017 at the expense of Sri Lanka’s national interest underscored the Chinese capacity to turn even die- hard pro-western governments.
Mahinda Samarasinghe, who signed the controversial agreement on the Hambantota port, in his then capacity as Ports and Shipping Minister (SLFP) on behalf of the then yahapalana government recently received appointment as the country’s top envoy in Washington.
Samarasinghe gave up his Kalutara district parliamentary seat to replace career diplomat Ravinatha Aryasinghe, who retired from service. Samarasinghe’s predecessor, Arjuna Ranatunge quit the ministerial post as he didn’t want to sign the Hambantota agreement which he called a sellout. Interestingly, another former minister Milinda Moragoda recently received appointment as Sri Lanka’s High Commissioner in New Delhi. President Gotabaya Rajapaksa went ahead with Moragoda’s appointment with a rather unusual ministerial rank, regardless of strong opposition from some of those who had backed him and the SLPP at the 2019 and 2020 presidential and parliamentary polls, respectively. Some of those opposed to Moragoda went to the extent of complaining to the Parliamentary High Posts Committee chaired by Speaker Mahinda Yapa Abeywardena. Their protests were ignored. Moragoda, who had served both Presidents Chandrika Bandaranaike Kumaratunga and Mahinda Rajapaksa governments as a Cabinet minister, entered active politics from the UNP.
Quad is determined to keep Sri Lanka under its influence. High level visits from New Delhi are part of their overall strategy. Struggling to cope up with a range of domestic issues, including unprecedented increase in prices of essential items and services, in addition to a serious balance of payments crisis, Sri Lanka is vulnerable to foreign interventions. Recent disclosure of offshore financial dealings of former parliamentarian Nirupama Rajapaksa and her husband, Thirikumar Nadesan, has not made things easier for the Rajapaksa administration.
Visitors from New Delhi
Indian Foreign Secretary Harsh Vardhan Shringla undertook an official visit to Colombo from Oct 2-5. The Defence Attaché of the German Embassy in New Delhi, accredited to Sri Lanka, Captain Gerald Koch, called on the Commander of the Navy Vice Admiral Nishantha Ulugetenne, at the Navy Headquarters, on Oct 05. Deputy Ambassador of the German Embassy in Colombo, Olaf Malchow, Deputy Defence Attaché of the German Embassy in New Delhi, Lieutenant Colonel Jan Cihar and Political and Protocol Officer at the German Embassy in Colombo Ms. Dharini Daluwatte, accompanied them. The Defence Attaché of the Israeli Embassy in New Delhi, and accredited to Sri Lanka, Colonel Assaf Mahler, called on the Commander of the Navy, VA Ulugetenne at the Navy Headquarters on Oct 06. The Defence Attaché of the French Embassy in New Delhi and accredited to Sri Lanka, Captain Yves LE CORRE paid a courtesy call on Navy Commander Ulugetenne at the Navy Headquarters also on Oct 06. Deputy Head of Mission, Aurélien Maillet at the French Embassy in Colombo, Deputy Defence Attaché of the French Embassy in New Delhi, Group Captain Norbert GAINE, Navy Commissioner, Roberto LEMOS and Mr. Jean Baptiste TROUCHE from the French Ministry of Foreign Affairs and Defence Attachés’ Assistant, Adjutant Cedric FOURNIER were also present on the occasion.
Two Japanese Maritime Self-Defence Force (JMSDF) ships, helicopter carrier JS Kaga with a planned conversion into an aircraft carrier and destroyer JS Murasame visited the Colombo harbour on their way to join the Malabar exercise in the Bay of Bengal. The statement issued by the Japanese Embassy in Colombo regarding the ship visits didn’t mention their participation in the US-led exercise. The Japanese vessels left Colombo on Oct 4. Since Sri Lanka and Japan entered into a Comprehensive Partnership on Oct 1, 2015, there had been over 30 Japanese ship visits to the Colombo and Trincomalee harbours. Japanese Defence Minister Itsunori Onodera during an unprecedented visit in August 2018, declared in spite of the leasing of Hambantota port there was an agreement that the port remains free of military activities. Onedera was quoted as having said this after meeting President Sirisena and Premier Wickremesinghe. Onedera said he raised the Chinese issue with Sri Lanka. President Gotabaya Rajapaksa held a teleconference with Japanese Defence Minister Kishi Nobuo in July this year.
While Gen Naravane paid floral tribute to the IPKF war memorial at Pelawatte, Battaramulla, and subsequently observed joint exercise ‘Mitra Shakthi VIII’ at the Maduru Oya Special Forces Training School (SFTS) grounds, Chief of Naval Staff, Indian Navy, Admiral Karambir Singh interacted with the US Navy in the Bay of Bengal. Chief of US Naval Operations Admiral Michael Gilday hosted Admiral Karambir Singh and 11 other senior military officials aboard the nuclear-powered Nimitz-class aircraft carrier Carl Vinson in the Bay of Bengal.
“This visit to Carl Vinson during Malabar was an important opportunity to see first-hand the integration between our two navies at-sea,” Adm Gilday said in a statement issued by the U.S. Navy. “By our navies continuing to exercise together, as we are doing right now alongside Japanese and Australian naval forces, there is no doubt our partnership will only continue to grow. Cooperation, when applied with naval power, promotes freedom and peace, and prevents coercion, intimidation and aggression.”
At Maduru Oya an all arms contingent of 120 Jawans and an equal number of Vijayabahu Infantry Regiment concluded the exercise on Oct 15 that commenced on Oct.3
During the deployment of the IPKF (July 1987-March 1990), the then Captain Naravane had served in Trincomalee. The Indian Army website merely stated that Naravane, commissioned in The Sikh Light Infantry Regiment in Jun 1980, had been part of the IPKF in Sri Lanka.
The detections made by the Navy in the seas off Point Pedro and Vettilaikerni during Gen. Naravane’s visit highlighted the problems caused by Indian fishers brazenly invading Sri Lankan waters. The detections led to the arrest of 23 Indian poachers along with two fishing vessels engaged in bottom trawling on Oct 13, the day after General Naravane’s arrival. Quad member India has the wherewithal to thwart large scale crossings across the Indo-Lanka maritime boundary though it continues to turn a blind eye.
The threat posed by Covid-19 gave the Indian fishing fleet an opportunity to poach quite freely in Sri Lankan waters. The Navy apprehended five fishing vessels along with 54 Indian poachers on March 24, 2021. That was the detection made prior to it limiting operations due to the Covid threat.
Fisheries Minister Douglas Devananda, during a meeting he had with Indian FS Shringla, raised the contentious issue of large scale destructive poaching on an industrial scale. Interestingly, statements issued by both India and Sri Lanka conveniently refrained from commenting on the issue at hand. However, Fisheries Ministry briefed the media regarding the problem of large scale poaching by Indian fishermen affecting the livelihoods of their counterparts here. Minister Devananda should receive the appreciation of all Sri Lankans for taking up the issue at hand. During his meeting with Shringla, Devananda, who had been among those who received terrorist training, courtesy India in the early 80s, complained about massive continuing destruction caused by the Indian fishing fleet, particularly through bottom trawling, a practice banned world over. Devananda has explained the immeasurable losses caused by destructive methods adopted by the Indian fishing fleet in Sri Lankan territorial waters. In spite of a series of talks between India and Sri Lanka, industrial scale poaching continues unabated much to the disappointment of the Northern and Eastern Province Tamil speaking community. About a week after his meeting with Shringla, Devananda took up the issue with the visiting senior BJP politician Subramanian Swamy. Devananda subsequently told the media Swamy, who serves as a nominated Member of Parliament in Rajya Sabha, the upper house of the Indian Parliament acknowledged the need to curb Indian poaching.
Focus on energy security
Two other issues that had received much media attention were the future of the Trincomalee oil tank farm, with the Samagi Jana Balavegaya (SJB) and Energy Minister Udaya Gammanpila trading accusations over the status of the strategic assets and the controversial agreement with US-based New Fortress Energy Inc. The company has declared that it struck a deal with Sri Lanka to supply 1.2 million gallons of liquefied natural gas to supply a plant it is planning to buy a stake in and others. In a statement dated Sept 21, New Fortress said they had executed a ‘definitive agreement’ to invest in West Coast Power Ltd, a firm in which the government has a controlling stake, but operations and maintenance is done by a private company.
Controversy surrounds the Indian role in Trincomalee oil tank farm and the stealthy US investment in the energy sector. Sri Lanka seems to be utterly disorganised in its dealings with foreign powers as well as investors. A glaring case in point is the Trincomalee oil tank farm. Gammanpila insisted that in terms of an agreement the then UNP-led UNF signed on Feb.07, 2003 those 99 oil tanks had been handed over to India, whereas SJB lawmaker Kabir Hashim says only 15 were handed over and they, too, would be returned to Sri Lanka in 2023. The Finance Ministry should set the record straight. Lawmaker Hashim, one-time Chairman of the UNP is on record as having claimed their government only signed a Memorandum of Understanding (MoU) in respect of 15 oil tanks, while Gammanpila demanded in Parliament that MoU be presented. Gammanpila believes Indian agents and their puppets are working overtime to thwart his plans to regain the oil tank farm.
Shringla, accompanied by Indian High Commissioner in Colombo Gopal Baglay, visited the Lanka IOC facility. It was Baglay’s second visit there this year. Eldos Mathew Punnoose, Head – Press, Information and Development Cooperation at the Indian High Commission in Colombo, dealt with a range of issues taken up during the high profile visit. Referring to Shringla’s visits to Kandy, Trincomalee and Jaffna, signifying their cultural, economic and historical importance, respectively, the Indian HC spokesperson said: “In Kandy, the visiting Foreign Secretary offered prayers at the Sri Dalada Maligawa. In Trincomalee, the Foreign Secretary visited the Oil Tank Farms, a symbol of the potential and strong energy partnership between the two countries, where LIOC briefed him about the development undertaken by it at the Lower Tank Farms and its advantages to Sri Lanka’s economy. During his visit to Jaffna, the Foreign Secretary inspected the Jaffna Cultural Centre and interacted with the Governor of the Northern Province, several Members of Parliament, academicians and business leaders.”
The Federation of National Organisation (FNO) recently complained to the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) against the agreement with New Fortress. The FNO that backed the SLPP at the 2019 presidential and 2020 parliamentary election called for an investigation into the conduct of the Treasury Secretary S.R. Attygalle. The civil society organisation questioned the responsibility on the part of the Cabinet of ministers in signing the agreement with New Fortress. Having lodged a complaint with the CIABOC, FNO convener Dr. Gunadasa Amarasekera told the media, waiting outside, that the US energy deal should be examined against the backdrop of continuing ‘confrontation’ between Quad and China. Malcolm Cardinal Ranjith and Ven Elle Gunawansa moving the Supreme Court against the New Fortress deal must have surprised the government.
US Ambassador to Sri Lanka and the Maldives, Alaina Teplitz in April this year warned Sri Lanka of unplanned consequences of nefarious actors, who may try to misuse a China-funded Colombo Port City’s easy business rules as a permissive money laundering haven amid concerns of tax leaks. Any legislation relating to the Port City has to be considered very carefully for its economic impact, Teplitz told a selected group of journalists in an online discussion. And, of course among those unintended consequences could be creating a haven for money launderers and other sorts of nefarious actors to take advantage of what was perceived as a permissive business environment for activities that would actually be illegal.
In spite of on and off protests/opposition, both in and out of Parliament, India and China have quite successfully pursued their strategies. The recently concluded agreement on the proposed Colombo Port’s Western Container Terminal (WCT) can be cited as an example of the successful Indian strategy. After intense protests derailed previous plans to invest in the East Container Terminal (ECT), India’s Adani Group late last month sealed a deal with the Sri Lanka Ports Authority (SLPA) to build, develop and run the proposed WCT.
India is the second foreign port operator in Sri Lanka. China secured a terminal at the Colombo port during Mahinda Rajapaksa’s tenure as the President. Colombo International Container Terminals Ltd., (CICT) is a joint venture Company between China Merchants Port Holdings Co., Ltd. (CMPort) and the SLPA. China holds 85% of the partnership whereas the balance 15% is held by SLPA. At the Hambantota port, too, China took 85% while the SLPA retained 15%. Now the agreement with Adani Group, too, has been finalised on the same lines with the SLPA given 15 % while Adani Group and its local agent John Keells Holdings shared the remaining stake 51 % and 34%, respectively.
This should be examined against the backdrop of the SLPA signing a memorandum of cooperation in May 2019 with India and Japan to develop the ECT during the previous Sirisena government. The Colombo Port trade unions opposed that proposal to give investors from India and Japan 49 % stake in the ETC and Sri Lanka to hold 51%. They demanded the ECT to remain 100 percent owned by the SLPA as opposed to the 51 percent. Now, the SLPA has ended up with just 15% at the WCT.
It would be relevant to stress that John Keells Holdings is among the consortium of companies that own the successful SAGT (South Asia Gateway Terminal) , the first shipping sector PPP (Public Private Partnership) established in 1999 during the Kumaratunga presidency. The primary stakeholders are Danish A.P. Moller Group and John Keells Holdings. Now, John Keells Holdings has expanded its influence by joining Adani Group in the proposed WCT project. Like at CICT and Hambantota projects, SLPA has received 15% of shares.
Time has come for the country to review the entire gamut of issues in respect of foreign investments and related matters. Examination of existing agreements prove that whoever in power had struck agreements in a way severely inimical to the national interest, but to the benefit of those responsible and accountable for ensuring the country’s best interest. Parliament should wake up.
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