PM's visit to India to open series of economic benefits | Sunday Observer

PM's visit to India to open series of economic benefits

30 April, 2017
Ranil Wickremesinghe and Narendra Modi  at "Hyderabad House"
Ranil Wickremesinghe and Narendra Modi at "Hyderabad House"

With the joint development of Trincomalee port high on the agenda, Prime Minister Ranil Wickremesinghe and his Indian counterpart Narendra Modi last week witnessed the signing of an MoU for cooperation in economic projects in Sri Lanka. The MoU outlines the agenda for bilateral economic cooperation in the near future, according to India’s External Affairs Ministry.

Giving details of the MoU on Thursday, India´s External Affairs ministry spokesperson Gopal Baglay stressed that it was part of the Indian government’s vision of joint economic development in the neighbourhood.

He listed the following projects as part of the scope of the bilateral pact –

* A re-gasified Liquefied Natural Gas fired 500 MW capacity LNG Power Plant

* An LNG Terminal /Floating Storage Regasification Unit in Colombo/Kerawalapitiya

* A 50 MW Solar Power Plant in Sampur

* Upper tank farm in Trincomalee will be jointly developed by India and Sri Lanka

* Port, petroleum refinery and other industries in Trincomalee

* Industrial Zones/Special Economic Zones in identified locations in Sri Lanka

* Development of road segments Mannar-Jaffna, Mannar-Trincomalee and Dambulla-Trincomale Expressways under Indian investments

* Railway sector development in Sri Lanka including new projects for track upgradation and purchase of rolling stock

* Container Terminal in Colombo Port as a joint venture

* Agricultural sector and livestock development in Sri Lanka

During the meeting of the PMs, India extended its continued support for the vision of the Sri Lankan leadership for a stable, peaceful, and prosperous Sri Lanka.

Apart from the meeting with Prime Minister Modi, PM Wickremesinghe also met Minister of External Affairs Sushma Swaraj, Home Affairs Minister Rajnath Singh, and Road, Transport, Highways and Shipping Minister Nitin Gadkari. Opposition Congress Party President Sonia Gandhi and former Prime Minister Dr Manmohan Singh also met with him.

A tweet by Minister Gadkari immediately after his meeting with PM Wickremesinghe revealed that India will be pushing for a road link between Sri Lanka and India. Gadkari initially proposed this in October 2016 with the Press Trust of India reporting it as “an ambitious USD 5.19 billion road project to connect India and Sri Lanka with a sea-bridge and an underwater tunnel is believed to have been discussed by Union Minister Nitin Gadkari during his talks with visiting Sri Lankan Prime Minister Ranil Wickremesinghe.

Gadkari discussed construction of a sea bridge and an underwater tunnel linking the 22-km stretch between Talaimannar in the island nation and Dhanushkodi in India, official sources said."

This will be part of India´s effort to negate China´s “Silk Route Initiative” and the “String of Pearls” initiative where China is building a series of ports surrounding India. PTI quoted an unnamed source saying “”Multi-lateral funding agency ADB, which has already agreed to finance infrastructure projects worth about USD 8 billion for Bangladesh, Bhutan, India and Nepal (BBIN) region, has also shown keen interest in financing the USD 5.19 billion India-Sri Lanka proposed project.”

According to parties involved in some of the discussions, Gadkari is also keen to string a high tension cable along the proposed link highway to supply power to Sri Lanka. Sources said, given India´s current energy oversupply situation, India could well supply electricity at less than Rs 8 per unit, the cheapest alternative energy source that Sri Lanka has obtained in recent times.

Northern corridor

Sri Lanka has also invited India to take up development of three major stretches of the road—Jaffna-to-Mannar, Mannar-to-Vavuniya and Dambulla-to-Tricomalee, for which India has agreed to cooperate in developing world-class road infrastructure in the Jaffna region of the island nation.

Gadkari has apparently told PM Wickremesinghe that taking up all these stretches for development may only be possible if Sri Lankan agencies manage to get local clearances and acquire land, as without (land) acquisition and other clearances in place, it will be difficult to complete the project in time. A proposal for a financial model to develop these roads has also been discussed according to Indian officials. India expects to appoint an international consultant to prepare a detailed project report on receiving a final formal proposal from Sri Lanka.

While India has extended its support to play a major role in the Sri Lankan development sector, back at home, the members of the Joint Opposition couldn’t wait without trying to destabilise the government.

The apprehensions of the Joint Opposition on the Trincomalee oil Tank farm deal with India are largely unfounded, and they have now dropped the anti-India slogan after realizing the truth.

The architect behind the operation is JO’s new found firebrand Udaya Gammanpila who issues statements to the media more often than other leaders without weighing the gravity of the situation, in a bid to gain cheap political gain over issues which are more important to the country economically and to maintain a degree of popularity among the unsuspecting masses.

Needless to say, the majority of the populace are gullible and prepared to swallow the political gibberish handed down by the opposition from time to time.

The most paramount of all is that the country should move forward despite pronouncements by these political apparatchiks of the Joint Opposition.

Prime Minister Ranil Wickremesinghe gave an undertaking to the Trade Union Consortium of the Petroleum Corporation, the other day that the MoU he was poised to sign during his visit to India was more of a political nature and all legal documents pertaining to the agreement with India would be forwarded to the TU leaders for their perusal before entering into a legal agreement.

The Oil Tank Farm, built by the British during the Second World War was a subject of intense discussion when the Indo- Lanka agreement was signed between then Indian Prime Minister Rajiv Gandhi and Sri Lankan President J R Jayewardene. India was keen to hold on to the Oil Tanks due to security concerns and Sri Lanka agreed not to do anything detrimental to Indian interests in the Trincomalee port and the area encompassing the Oil Tanks.

In 2003, under the UPFA government, Sri lanka transferred all 99 tanks and the land on which they stood, to the Lanka Indian Oil Corporation (LIOC), on a 35-year lease for an annual payment of $ 100,000. Following the transfer, India refurbished 15 tanks in the Lower Tank Farm and built two more, at a cost of over $ 15 million. While President Mahinda Rajapaksa wanted to annul the deal in 2013, his government backed out of the move when the Indian government strongly objected and pointed out that the agreement made in 2003 cannot be annulled unilaterally.

In February 2017, after the Parliamentary Committee on Public Enterprises (COPE) said that the land lease agreement has not been signed since 2003 even though the framework agreement had said it needs to be signed within six months, Petroleum Minister Chandima Weerakkody proposed that 30 tanks be jointly developed by LIOC and CPC.

India is now keen to develop the Trincomalee Port in a tripartite arrangement between India, Japan and Sri Lanka. India is possibly comfortable with Japan and their common interest is to see China retreats from the Indian Ocean, and on the part of Sri Lanka, the government needs to balance off the Chinese influence which comes via loans and investments.

The paradox of the whole issue is that China is the biggest trading partner of India and on top of this there are also huge Chinese investments in India, but the Indians insist there are no loans from China as in the case of other countries.

In the circumstances, the role of the Trade Unions in this issue is more baffling than any other. It's true there is unconstrained freedom under the unity government for TU activities, more than under the previous government of which vehement disapproval was quite obtrusive in many ways.

The TUs should also know their limits not to thwart the economic progress of the country by resorting to extraneous trade union action. The SAITM matter is also something uncalled for, for the TUs to go into action, since it appears more political than a matter nurturing good governance for the betterment of the people. The SAITM formula presented by the government by far is acceptable unless these TUs have a vested interest in the matter, especially, the Government Medical Officers' Association.

The more visible anti-social elements and the harm they were determined to unleash from time to time to cripple the government apparatus was the subject of discussion by the members of Cabinet last week. They insisted the need to instill a sense of discipline in society and pointed out necessary action to be taken in this regard. The President who chaired the meeting spontaneously turned towards Minister Sarath Fonseka implying that he was the man for the job.

Hot topic

This suggestion became a hot topic over the next few days. Cabinet Spokesman Rajitha Senaratne said, the job offer was made to Fonseka during Tuesday's cabinet meeting, with all ministers endorsing the proposal with a view to dealing with the seemingly unending protests across the island. And, Field Marshal has responded positively saying, he is willing to take on any duty for the country’s sake.

However, looking at the comments made by some of the Ministers on different occasions, it appears that the Cabinet Ministers are confused about the comment made by the President and are ‘not in favour of this suggestion’.

Social Empowerment and Welfare Minister S. B. Dissanayake said, the President was not speaking seriously and was only joking about it; however, he said, he personally admired appointing Field Marshal Sarath Fonseka for the post. Minister Vijith Wijayamuni Zoysa is of the opinion that the request should be treated as a serious matter. “Several underhand forces are in operation to hinder the development of the country, so that there should be special forces to suppress them,” he said.

Whatever the Cabinet's views, it is paramount that the government takes proper initiatives to re-establish overall the systems and streamline the process so that TU issues could be sorted out before getting to a boiling point. Putting emphasis on disciplines in every sector is necessary as it would directly help increase investor confidence, at a time the country needs to attract more investors, investments and expand business areas, especially, when the country is expecting to get GSP Plus concessions; the so called protests have already disrupted the daily life of the common people and the businesses to a great extent.

When the TUs were busy issuing press announcements last week, over the Fonseka issue, Sri Lanka witnessed another crucial win in Europe, as the motion to deny the country of the GSP Plus concession was defeated at the European parliament. A motion to deny the restoration of GSP Plus free trade benefits to Sri Lanka was defeated by 436 votes to 119 at the EU parliament, on Thursday.

Having announced this win, although it needs to be signed by the European Council of Ministers to become official, Deputy Foreign Minister Harsha de Silva, told journalists that it is time businesses get ready to invest and expand their factories. “The vote of confidence at the European parliament shows that free trade benefits will be restored to the country,” he said.

To this, the business community reacted positively. When the Sunday Observer spoke with some of the key representatives in the apparel industry, they were enthusiastic about getting another step closer to restoring GSP Plus and commended the government’s negotiation efforts, in the past two years.

GSP + and beyond

The concession will allow exporters to export 6,600 products free of tax. However, the business community also pointed out, apart from GSP Plus, they want the government to successfully negotiate with economic giants such as, India, China and Japan to get trade access in a positive manner.

De Silva said, the formal vote to restore the benefits would take place by May 15, and he was confident of getting it.

May being the sacred month of Vesak which ushers in renewed hope through the teachings of the noble Buddha, is also a time for us to reflect on the positive side of life. As the sacred Bo tree offered solace and shelter to the meditating Buddha we can anticipate that the desired economic relations with India will cast its shade of comfort.

As the radiant light of Vesak spells darkness the visit of PM Modi will further strengthen the bonds of the nations and accentuate Vesak celebrations in Sri Lanka.

Indian Prime Minister Narendra Modi and the Nepali President, Bidya Devi Bhandari have confirmed their participation at the United Nations Day of Vesak in Sri Lanka. The United Nations Day of Vesak which will be celebrated in Sri Lanka for the first time this year will attract a large gathering of foreign delegates from around the world. The three day celebration will begin on May 12 in Colombo and the closing ceremony will be held in Kandy.

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