India foreign secretary Harsh Vardhan Shringla is likely to visit Sri Lanka early October, India’s The Hindu reported, amid strained ties and ahead of a groundbreaking ceremony at the China-backed Port City for what will be the first building to go up on the reclaimed land.
The Port City is expected to play a vital role in China’s multi-billion-dollar Belt and Road Initiative (BRI) which has raised security concerns for India in the Indian Ocean region, diplomats have said.
“Harsh Vardhan Shringla is likely to inaugurate some key bilateral projects,” The Hindu said on its website.
Shringla’s visit comes as the diplomatic relations between the two neighbours was severed after Prime Minister Mahinda Rajapaksa unilaterally cancelled a 500 million US dollar tripartite East Container Terminal (ECT) deal in February this year citing trade union pressure.
Instead, Colombo gave the West Container Terminal to India’s privately owned Adani group which has tied up with Sri Lanka’s John Keells Holdings to accomplish the 700 million US dollar project.
The ECT deal was signed among the governments of India, Japan, and Sri Lanka. The deal was originally signed under former Prime Minister Ranil Wickremesinghe.
Diplomats have told EconomyNext that both President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapaksa have committed to go ahead with the ECT deal and a liquefied natural gas (LNG) deal.
The ruling Sri Lanka Podujana Peremuna (SLPP) has opposed Indian projects and has vowed to cancel them. The Rajapaksa government also cancelled a 293 million dollar Mattala Airport project which was to be given to India.
The strained ties between the two countries come at a time when China is leap frogging in investing in Sri Lanka and financing for the island nation’s infrastructure projects.
Sri Lanka’s parliament has already passed the Port City Bill, creating the country’s first Special Economic Zone amid controversy and complaints around sovereignty issues.
The Port City was to start its groundbreaking for the first high rise building in the Colombo International Financial City (CIFC) on Sept. 17, coinciding with the seventh anniversary of the project which was personally launched by Chinese President Xi Jinping.
The groundbreaking ceremony at the Colombo International Financial City (CIFC) of the Port City of was postponed amid both the president and prime minister being on foreign trips. The ceremony is expected to take before the end of this year.