South Asia

Sri Lanka Clears Adani Venture to Develop Colombo Port Terminal, Says India 'Approved' Firm

Lankan government decision is also seen as tied to concerns about ensuring Indian support on war crimes resolution at the UN Human Rights Council.

New Delhi: A month after India and Japan were banished from developing Colombo port’s strategic east container terminal, Sri Lanka on Tuesday approved a joint venture with the Adani group to build and operate Colombo Port’s West Container Terminal (WCT) for 35 years.

The Sri Lankan cabinet announced that it had approved a proposal made by Adani Ports and Special Economic Zone Limited to develop the WCT as a public-private partnership project with the Sri Lanka Ports Authority. 

The approval comes a month after Sri Lanka decided that the East Container Terminal (ECT) should be run entirely by the state-owned Sri Lanka Ports Authority. Under pressure from trade unions, Colombo had effectively pushed out India and Japan despite having signed a memorandum of cooperation with the SLPA to develop the ECT in May 2019.

The Sri Lankan government press release stated the cabinet-appointed negotiation committee had requested the Indian high commission and Japanese embassy to nominate investors for the West Container Terminal (WCT) project.

Japan did not name any investor, but the Sri Lankan government implied that India did. “The Proposal presented by Adani Ports and Special Economic Zone Limited (APSEZ Consortium) has been approved by the Indian High Commission,” Sri Lanka’s government information department said in an official communique that is likely to revive allegations in India of the Modi government favouring the Adani group.

While Indian officials speaking under the cover of anonymity told The Wire that the Sri Lankan government’s claim that the Indian high commission had green-lighted the Adani proposal was incorrect, they were not prepared to say this on the record. However, they insist that the Indian government has not been talking to Sri Lanka about the WCT project.

According to the Sri Lankan media, the cabinet paper mentions that the WCT investment plan would be similar to the Colombo International Container Terminal. China Merchant Port Holdings Company Limited has an 85% stake in the CICT project. The WCT project includes the establishment of two floating liquefied natural gas storage facilities.

Last month, following the cabinet announcement on February 1, the Indian high commission spokesperson had asserted that India expected the “expeditious implementation” of the trilateral pact signed between India, Japan and Sri Lanka for developing the ECT.

“Sri Lanka’s Cabinet also took a decision three months ago to implement the project with foreign investors. All sides should continue to abide by the existing understandings and commitment,” the spokesperson added.

There has been no official reaction from the Indian high commission after the latest Sri Lankan cabinet decision.

The Sri Lankan government’s quick turnaround to approve a joint venture of India’s Adani Group in the WCT project has certainly raised eyebrows.

The announcement came in the run-up to the negotiations leading up to voting on a resolution critical of Sri Lanka’s alleged lack of accountability in punishing war crimes at the Geneva-based United Nations Human Rights Council. 

At an interactive discussion on the UN human rights commissioner’s report on Sri Lanka, India had signalled that New Delhi was not yet ready to pull its diplomatic weight in opposing the resolution. Two rounds of informal consultations of council members over the draft resolution have already taken place in Geneva, but no changes have been made to the text. Voting on the resolution will take place in the third week of March.

At the cabinet media briefing on Tuesday, co-cabinet spokesperson Keheliya Rambukwella expressed gratitude to China and Russia for speaking against foreign intervention in Sri Lanka at the UN Human Rights Council. “We think that our neighbouring friend India will not be a part of that injustice because we have presented many facts about it,” he said.

As per media reports, Rambukwella was asked whether the rejection of the tripartite agreement of the East Container Terminal project would have swayed India’s position at the Council. The Sri Lankan minister disagreed, stating that India made no mention of the ECT project in the Council. “We don’t think that they will take up these commercial issues when it comes to international relations,” he said.

Within hours of the cabinet announcement, some Sri Lankan politicians and trade unions opposed the WCT project being given to an Indian company.

Sri Lanka Freedom Party general secretary and state minister Dayasri Jayasekara announced that he disagreed with the government’s decision to develop the West Container Terminal with foreign involvement. He reportedly stated that the container terminals were a national asset, and using them to build foreign relationships would result in loss of investment for the country.

Sri Lanka’s opposition leader Sajith Premadasa said that “national resources” were being “sold” in an auction. “They said that they will not give the East Container Terminal, but will give the West Container Terminal…Did the government get a mandate from 6.9 million people to auction off the country,” he told reporters.