Colombo Port (Financ into action
All set to sign Tripartite Agreement on August 16 for ambitious new port city
Last Monday, the Cabinet of Ministers formally approved the ambitious Colombo Port City Project, perceived as Sri Lanka’s model of the future for business, leisure and offshore banking. This venture with the People’s Republic of China was initiated by the previous Mahinda Rajapaksa administration. It became the object of bitter criticism by the United National Party (UNP) and the Sri Lanka Freedom Party (SLFP) – pro Sirisena faction – both during the presidential and parliamentary elections last year. Speakers on almost every platform charged that it raised environmental issues and compromised Sri Lanka’s sovereignty. Some even alleged that there was corruption over this unsolicited proposal.
Since coming to office, Foreign Minister Mangala Samaraweera raised eye-brows in diplomatic circles by saying, in Beijing itself, that the new Government had to review this project because of unsavoury issues connected to it. However, the tide turned. One of the causes was the complaint, not without substance, that western powers which sought a regime change in Sri Lanka, did only just that. They left the new Government high and dry, finan- cially speaking. There was no substantial help to resuscitate an economy that was battered by war, widespread corruption and mass scale mismanagement. Some western diplomats explained privately that it was not their responsibility to keep pouring dollars, sterling pounds or euros to keep the Government machinery moving and the people content. They had their own problems to deal with. It was for the new Government to make its plans and seek help where required. Manna did not fall from heaven for those who ousted the Rajapaksa regime.
Paradoxically, the United National Front (UNF) Government which sought to lean on the West, and restrict China’s expanding role in the economy, did just the opposite. It opened the doors much wider to Beijing than former President Mahinda Rajapaksa. China was quick to respond. Its President was to tell visiting Sri Lankan leaders that China does not support individuals, but nations -- a clear signal that China was ready to do business with the new Government. Many projects running into millions of dollars with China have been concluded and others are on the pipeline. From helping projects in Hambantota, China was now prepared to help in projects in Polonnaruwa too.
Yet, unlike the previous regime which won greater endorsement, China is moving more business-like in its approach with the new Government. It appears to have a two-fold objective. The first is to forge a closer commercial relationship with the UNF Government. Compared to trade relations with other countries, Sri Lanka was literally a drop in the ocean for China’s enormous financial resources. There was also the strategic importance of Sri Lanka in the Indian Ocean to China’s fast growing blue water Navy. Not so long ago, under the previous regime, Chinese submarines docked in Colombo’s newly built container terminal, and this caused ripples in the neighbourhood.
The second, perhaps more importantly, is not spelt out. It is to deliver a message to Sri Lanka’s friends who did not help – that China was there at the hour of need. This heavy tilt towards Beijing by the UNF Government is naturally a cause for concern for India, significantly to its security interests, despite diplomatic pronouncements by both Colombo and Beijing that there was no cause for concern over relations with a third country. If Mahinda Rajapaksa was the man behind close ties earlier, this time it is Minister Malik Samarawickrema, who launched his ministerial career barely a year ago. He is now responsible for the rapprochement with the support and guidance of his classmate and friend, Premier Wickremesinghe. Arguably, this reflects a foreign policy turnaround for Sri Lanka.
On March 9 last year, three months after the presidential election, the Cabinet of Ministers had decided to resume construction of the Colombo Port City Project. They appointed a Committee of Ministry Secretaries to discuss with the Project Company – CHEC Port City Colombo (Pvt.) Ltd. – the concerns of the Government and matters of policy. This company, registered locally, is a tie-up between China Harbour Engineering Company (CHEC) and the Sri Lanka Ports Authority (SLPA). The latter has since been dropped on legal advice.
Nearly six months later, the landscape of the multimillion dollar venture has changed considerably. Plans are afoot to sign a Tripartite Agreement that will cover the Government of Sri Lanka (GOSL) – represented by the Secretaryto the Ministry of Megapolis and Western Development, the Urban Development Authority (UDA) and the Project Company on August 16. The SLPA has been left out of the project on the advice of the Attorney General. On this day, Premier Wickremesinghe, who is due to leave for Beijing in the coming week, is most likely to sign a Memorandum of Understanding (MoU) with his Chinese counterpart Li Keqiang.
Wickremesinghe submitted to the Cabinet of Ministers three different memoranda on the Colombo Port City Project. They were (1) Withdrawal of compensation claims by the Colombo Port City Project Company, (2) Commercial issues and (3) Policy, Administration and legal issues. The contents of all three memoranda were revealed exclusively in the Sunday Times (Political Commentary) last Sunday.
They were first taken up for discussion at the ministerial meeting on Tuesday (July 26). Some of the SLFP ministers wanted time to carefully study the three documents since they felt it related to an important matter of national interest. There was a moment when President Sirisena had to intervene when there was an exchange between Premier Wickremesinghe and Minister Faiszer Musthapha. The Premier was so exasperated that he warned angrily that he may be compelled to drop the Chinese funded project. Sirisena prevailed.
Wickremesinghe, who enjoys a more commanding position now with the decision to extend the joint alliance’s term to five years in the light of the Opposition’s protest march, said the matter could be discussed at the next ministerial meeting. Since he was leaving for Indonesia, it was fixed for 8 a.m. on Monday (August 1). He was to attend the ministerial meeting and leave for the airport for his flight