Category: News

China is strengthening its grip on Colombo port after securing an agreement to build, operate, and transfer a warehousing hub within the port. The China Merchants Port Holdings Company (CMPH) will have an 85 percent stake in the warehouse facility and will operate it for 50 years. The Sri Lankan government assigned the $392 million project to CMPH, a Chinese state-owned enterprise, without open tendering.

The CMPH already has an 85 percent stake in the Colombo International Container Terminal (CICT), a star performer among Sri Lankan and South Asian terminals. The CMPH also controls Hambantota port in southern Sri Lanka, in which it has an 85 percent stake and enjoys a 99- year lease. According to CMPH chairman Miao Jianmin, the latest deal will bring its total investments in Sri Lanka to over $2 billion, making the company the single largest foreign investor in the island nation.

Another Chinese company, China Harbor Engineering Company (CHEC), is partnering with Access Engineering Ltd. of Sri Lanka and the Sri Lanka Ports Authority (SLPA) to build the Eastern Container Terminal in Colombo port. The CHEC is also the builder of Colombo Port City, which is designed to be an international financial hub.

A ‘Done and Dusted’ Deal

Shipping sources in Colombo said that they had advocated for the government to award the Colombo port warehousing project on the basis of an open tender. Instead, the government unilaterally gave the project to the CMPH, according to these sources. No other Sri Lankan or foreign party had raised this issue; as a result, the deal “is done and dusted,” as Rohan Masakorala, CEO of Shippers’ Academy in Colombo, put it.

For the purpose of setting up the warehouse, to be called the South Asia Commercial and Logistics Hub, the CMPH has set up a fully-owned subsidiary, Fortune Centre Group Limited (FCGL).

The FCGL gets the rights to name the chairman and managing director/chief executive officer, as well as appoint five directors to the project company. Access Engineering, a Sri Lankan construction company, and the SLPA, the two local collaborators, can name one director each.

The issued share capital of the FCGL will be $84 million. FCGL agreed to contribute, in cash, $58.8 million, representing 70 percent of the total. Access Engineering and SLPA each agreed to contribute $12.6 million (15 percent of the total).

Under the agreement, SLPA is not allowed “to grant any third party the right to carry out port-related logistics or warehousing services at the Port of Colombo at a rate lower than the royalty fees payable by the project company,” filings by China Merchants Port show, according to Sri Lanka’s The Sunday Times.

At the end of 50 years, the hub company “shall hand back” the leased site and “transfer all assets of the logistics center to SLPA,” the Sunday Times reported.

China Merchants Port called its stake in the logistics complex “a giant leap forward’’ for its influence in South Asia.

Geopolitical Implications

The warehousing project has an international strategic dimension, especially for India. After the Mahinda Rajapaksa government gave the CICT project to China in September 2011, India felt a pressing need to have a foothold in Colombo port because of its strategic and economic interest in the Sri Lankan port.

Colombo port handles 60 percent of India’s transshipment cargo and India-linked cargo, in turn, accounts for 70 percent of Colombo port’s total transshipment volume.

Since India views Sri Lanka as “an unsinkable aircraft carrier 14 miles off [India’s] coast” as the Indian diplomat Shivshankar Menon put it, India is wary about a strong Chinese presence in Colombo port. In fact, the India-Sri Lanka Accord of 1987 had anticipated a foreign presence in the ports of Sri Lanka decades ago. The accord made Sri Lanka promise that it would not allow its ports to be used by forces inimical to India. India did not have China in mind at that time, however; the bugbear then was the United States.

Following the entry of China as the principal infrastructure builder in Sri Lanka from 2011 onwards, India woke up to the need to keep China away from its doorstep. Along with its Quad ally, Japan, India fought hard to secure the contract to build and operate the East Container Terminal (ECT) in Colombo port to balance the Chinese presence there.

But the government of Gotabaya Rajapaksa reneged on an earlier promise to hand over the project to India and Japan. Gotabaya cited an electoral commitment not to give the ECT away to foreign entities and wriggled out of the pledge.

However, due to mounting pressure from India to make up for the loss of ECT, the government gave the West Container Terminal (WCT) project to the Adani Group of India. But Adani was allowed only a 51 percent stake, and not 85 percent as in the case of China Merchant Port’s stake in the CICT.

India did not hide its discomfort over the burgeoning influence of China in Sri Lanka under the stewardship of former President Mahinda Rajapaksa, who was perceived in New Delhi as anti-India and pro-China.

In July 2014, the Sunday Times reported that the Rajapaksa government had approved a proposal for the state-owned China National Aero Technology Import-Export Corporation (CATIC) to set up an aircraft base maintenance center in Trincomalee to repair and maintain Chinese-built aircraft in the Sri Lankan Air Force. It was to be built at a cost of $40.3 billion.

But apparently after India raised objections, Colombo reversed course. Then-Foreign Minister G. L. Peiris told Parliament: “No such decision has been taken to permit the establishment of an aircraft base maintenance center in Trincomalee.”

China’s control of ports in Sri Lanka is a particularly sensitive issue for India due to the potential for the facilities to be used by military vessels. In November 2014, a Chinese submarine and warship docked in Colombo. Seven weeks earlier, a Chinese submarine, a long-range deployment patrol vessel, had called at the same port ahead of a visit to Sri Lanka by Chinese President Xi Jinping. Both times India expressed serious objections.

The Colombo High Court has permitted the Attorney General to amend the charge sheet filed against Garnia Bannister Francis, a local employee of the Swiss Embassy in Colombo who was allegedly abducted in 2019.

The court order was issued by Colombo High Court Judge Namal Walalle when the case was taken up in court this morning (03 May).

Accordingly, Judge Walalle had approved the Attorney General’s request to amend the charge sheet filed against Francis, after which it was decided that the case would be heard on 15 June.

On 16 December 2019, Francis was arrested by the Criminal Investigation Department (CID) and produced before the Colombo Chief Magistrate’s Court on the directions of the Attorney General, after she was named a suspect for a case of exciting disaffection against the Government and fabricating false evidence to be used in a future judicial proceeding.

She was later released on bail under two personal bonds of Rs. 500,000 each on 30 December.

Francis was accused of filing a false complaint at the Cinnamon Gardens Police in 2019, claiming that she had been abducted near St. Bridget’s Convent in Colombo and sexually harassed on 25 November, by an armed group who arrived in a white van.

Sri Lankan President Ranil Wickremesinghe said he hoped to reach “a mutually agreeable solution” on the island nation’s long-pending ethnic problem by the end of the year, renewing an old promise.

“My intention is to address the ethnic problem in the country while implementing the agreement with the International Monetary Fund. We are currently in discussions, and I hope to reach a mutually agreeable solution by the end of this year,” he said in his May Day address, of his talks with the Tamil political parties. “It is important for us to move forward while respecting and protecting the rights of all communities including the majority Sinhalese, Tamil, Muslim, and Burgher minorities without marginalising anyone. We are all committed to achieving this goal,” he said.

This is the second time that Mr. Wickremesinghe has made the pledge after his ascent to Presidency last year. He had promised to resolve the country’s persisting ethnic problem by February 4 this year, when Sri Lanka marked its 75 th year of Independence, but failed to meet the deadline he set for himself.

The Tamil National Alliance (TNA), the main parliamentary grouping of legislators from the north and east, participated in the talks with the President, despite initial reservations stemming from past attempts. The TNA also presented a set of five actionable points to the President, pertaining to land and police powers, and devolving more administrative powers to the provincial councils, and is awaiting action for months now.

Fourteen years after the end of a devastating civil war, Sri Lanka is still faced with the problem that drove the country into decades-long strife. Apart from their historic struggle for self-determination, and their persisting demand for truth and justice for war-time civilian deaths and disappearances, Sri Lanka’s Tamil community continues to battle several challenges, including an escalating attack on their lands.

Political call

Meanwhile, President Wickremesinghe is mulling early presidential polls next year and has reportedly reached out to different Tamil and Muslim parties, seeking their support, Opposition legislator Mano Ganesan told The Hinduin a recent interview.

In his May Day address, Mr. Wickremesinghe also underscored the need to “move forward with a new Constitution that reflects our shared values and aspirations.” Although Tamil parties have voiced scepticism over the President’s outreach, he said: “To the Tamil parties, I say that it is futile to distance oneself from this endeavour. If we are to address the issues faced by the Tamil community in this country, let us collaborate within this system, particularly in the Parliament as part of the government.”

Source:The Hindu

Chief of Air Staff, Air Chief Marshal V R Chaudhari on Tuesday met Sri Lanka’s top military leaders and exchanged views on several matters of bilateral importance, while recalling the longstanding friendship between the two countries, amid China’s growing influence in the island nation.

Air Chief Marshal Chaudhari, who arrived here on Monday on a four-day official visit to Sri Lanka, called on the Commander of the Sri Lankan Air Force (SLAF), Air Marshal Sudarshana Pathirana at Air Force Headquarters here.

As part of India’s commitment towards capacity building of Sri Lanka Armed Forces, Chief of Air Staff of the Indian Air Force presented AN-32 propellers to ensure high operational readiness of the aircraft held with Sri Lanka Air Force.

“Air Chief Marshal VR Chaudhari #CAS @IAF_MCC donated AN-32 propellers to Commander @airforcelk at Katunayake Air Base on behalf of Government of India. Highlights India’s resolute commitment towards capacity building of SriLanka Armed Forces,” the the Indian High Commission in Colombo tweeted.

The Chief of the Air Staff is visiting Sri Lanka at the invitation of Air Marshal Pathirana. He was received upon arrival by the Commanding Officer SLAF Station Colombo, Air Commodore Suresh Fernando, and was presented a Guard of Honour which was conferred by the Colour Squadron of the SLAF, Sri Lanka’s News 1st channel reported.

He also met with the Commander of the Sri Lanka Navy, Vice Admiral Priyantha Perera at the Navy Headquarters, Colombo.

Upon his arrival, he was welcomed at the portals of the Navy Headquarters in compliance with naval tradition.

“Visit of Air Chief Marshal VR Chaudhari #CAS @IAF_MCC to Sri Lanka: Day 2 engagements in the morning. Meeting with Air Marshal Sudarshana Pathirana, Commander @airforcelk. Meeting with Vice Admiral Priyantha Perera, Commander @srilanka_navy,” the Indian mission tweeted.

Air Chief Marshal Chaudhari also met with Maj. Gen Senarath Yapa, Commandant National Defence College, Sri Lanka and delivered a talk on the transformation of the Indian Air Force to the senior Sri Lankan Armed Forces officers attending the College, it added.

He also gifted books worth 10 million Sri Lankan Rs to the prestigious.

During the discussions, the two sides exchanged views on several matters of bilateral importance, whilst recalling the longstanding friendship between the two countries.

After his arrival here on Monday, Air Chief Marshal Chaudhari sought the blessings of Lord Buddha at the sacred Gangaramaya Temple in Colombo.

The visit will enhance the existing professional ties and bonds of mutual cooperation between both nations, an official statement said.

“The visit symbolises strong relations and close cooperation between the two friendly neighbours, with Sri Lanka being accorded the status of ‘Priority One’ partner by India. Underlining the strong bonds of friendship between the two services,” the Indian mission said in a statement Monday.

“The visit of Chief of Air Staff, Indian Air Force would strengthen the existing relations between the two countries and facilitate discussions on common security challenges and enhancing capacity and capability building initiatives towards ensuring Security And Growth for All in the Region (SAGAR), as propounded by Prime Minister Narendra Modi,” the statement said.

In February 2021, at the invitation of the Commander, Sri Lanka Air Force, a 22 aircraft contingent of the Indian Air Force participated in the 70th anniversary celebrations

In addition, the Indian Air Force was the first responder by deploying its assets expeditiously for providing 12T medical supplies in May 2020 and 100T nano fertilisers in November 2021.

In August last year, Vice Chief of Indian Navy Vice Admiral S N Ghormade paid a two-day visit to Sri Lanka and handed over a Dornier maritime surveillance aircraft to the island nation’s Navy to further boost bilateral defence partnership.

Sri Lankan President Ranil Wickremesinghe was present at the handover ceremony which took place as India celebrated the 75th anniversary of its independence. The ceremony to hand over the aircraft also happened a day before Yuan Wang 5, a Chinese missile and satellite tracking ship docked at Sri Lanka’s Hambantota port.

India’s concerns come amidst China’s growing influence in Sri Lanka – which is currently struggling to come out of a severe economic crisis.

Beijing has loaned billions of dollars to Sri Lanka as part of its Belt and Road Initiative (BRI) to build infrastructure in Asia. However, some of the infrastructure projects under the BRI have not worked in Sri Lanka’s favour.

In 2017, for example, China Merchants Port Holdings took a majority share with a 99-year lease in Hambantota port – where the Yuan Wang 5 was docked – after Colombo struggled to repay the debt incurred to build it.

Source – PTI

Minister of Foreign Ali Sabry says a request was made from the Asian Development Bank to reclassify (reverse graduation) Sri Lanka enabling the country to get access to greater concessional financial facilities.

The request was made during a meeting between Foreign Minister Ali Sabry and Vice-President-Operations of the Asian Development Bank Shixin Chen in Seoul, South Korea.

Last December, the World Bank approved Sri Lanka’s request to access concessional financing from the International Development Association.

The IDA financing, which is offered at low interest rates, enabled Sri Lanka to implement a government-led reform program to stabilize the economy and protect the livelihood of people facing poverty and hunger.

The request was a result of Sri Lanka’s sustained deterioration in economic and social conditions, which reduced income levels, reversed poverty gains, and affected its access to financial markets.

Through IDA support, the World Bank provides concessional financing, technical assistance, and policy advice as Sri Lanka implements reforms to drive recovery and enhance the country’s economic prospects, especially measures directed towards the poor.