Is India Still Interested In Developing Trincomalee Port In Sri Lanka?

By N Sathiya Moorthy*

At the annual Raisina Dialogue held in New Delhi from January 17-19, 2017, Sri Lanka’s Resettlement Minister Field Marshal Sarath Fonseka said the two nations would soon commence negotiations for an accord for India to develop the eastern Trincomalee port in his country. In July last, Fonseka’s Prime Minister Ranil Wickremesinghe said a Singaporean company, Surbana Jurong, was to undertake the assignment. Sri Lanka and Surbana Jurong, an infrastructure major, had signed an MoU a month earlier, though the MoU was confined to preparing a master-plan for Trincomalee development.

More recently, there have been reports that the Sri Lankan Government has been talking to India and Japan for developing Trincomallee, as an industry zone. Earlier, when the Rajapaksa regime was around, a high-power industry team from India visited the country, a decision was announced for developing a ‘pharma hub’ in the East. But no forward movement has been reported, yet.

There is also nothing to conclude that the ‘choice’ for an overseas partner, if any, and especially of India for developing the strategically important Trincomallee town and port, had been made. For developing the town as an industrial zone implies the simultaneous development of the port. More importantly, there is nothing official to show that India has since accepted it. If anything, the New Indian Express has since claimed that India was not interested in the offer. Whether or not there was/is a communication gap within the Sri Lankan government — that too on a sensitive issue involving an equally sensitive Indian neighbour — neither government has since denied the New Indian Express’ claims.

In Beijing, Sri Lankan Ambassador Karunasena Kodittuvakku said on the nation’s Independence Day, on 4 February, that there was no question of allowing Chinese military to operate in the southern port city’s China-funded industry zone. Despite reservations, including those from President Maithiripala Sirisena and the entire political Opposition and also from ruling front partners, the Government of Prime Minister Ranil Wickremesinghe has been going ahead with the transfer of 85 per cent stakes in the Hambantota port to the Chinese construction firm.

The implication is that even Trincomallee town and port, and other industrial zones could be developed only without any license for the investor-country’s military or other security agencies to be around. The same could be – and should be – the case in the case of Trincomallee, whoever be the investor-country. The reverse should be truer, and be seen as being so.

Independent of what Minister Fonseka or PM Wickremesinghe has said, or whether India is interested or not, there are elements in the Indo-Sri Lanka Accord of 1987 that confers a special status on Trincomalee. Any Sri Lankan initiative to develop the Trincomalee port would hinge on it. Alternatively, Sri Lanka would have to (unilaterally) rescind it.

‘Appendix B’ to the Accord, signed between Sri Lanka’s then President J.R. Jayewardane and Indian Prime Minister Rajiv Gandhi is a document titled “Exchange of letters between the President of Sri Lanka and the Prime Minister of India”. Initiated by Rajiv Gandhi and acknowledged by Jayawardene, Para 2 of the letter begins by saying that they had agreed that they “will reach an early understanding about the relevance and employment of foreign military and intelligence personnel with a view to ensuring that such presences will not prejudice Indo-Sri Lanka relations”.

But in the specific context of Sri Lanka’s eastern port, Para 2 (II) has this to say: “Trincomalee or any other ports in Sri Lanka will not be made available for military use by any country in a manner prejudicial to India’s interests.” Para 2 (III) continues in a near-similar vein, but specific to the World War vintage Trincomalee oil tank farm: “The work of restoring and operating the Trincomalee Oil Tank will be undertaken as a joint operation between India and Sri Lanka.”

The oil tank farm got a mention in Annexure B letter after reports indicated that Sri Lanka was planning to lease it out to a firm, supposedly acting as a front for the US at the height of the ‘Cold War’. India-Sri Lanka-US relations were some kind of a love-triangle then, just as the India-Sri Lanka-China relations are seen now.

The issues need to be contextualised to India-US relations and mutual suspicions after the Bangladesh War, especially in the light of the US sending out the Seventh Fleet to try and stalemate the war, which India won even before USS Enterprise entered the Indian waters. More importantly, it flowed even more from Sri Lanka’s suspicions and fears about India, after the latter had caused the division of another larger neighbour, Pakistan, and the creation of a new nation, Bangladesh.

Earlier reports at the time had said that Sri Lanka was leasing out land and licensing Voice of America (VoA) Radio to set up transmission towers in the country. Some Indian strategic thinkers said that it was aimed at eves-dropping on India, post-Bangladesh War, after the US learnt that Diego Garcia, not far away from the Sri Lankan coast in the Indian Ocean, was not enough.

In context, Para 2 (IV) of the Rajiv-Jayewardene stated underscored “Sri Lanka’s agreement with foreign broadcasting organisations will be reviewed to ensure that any facilities set up by them in Sri Lanka are used solely as public broadcasting facilities and not for any military or intelligence purposes”. More recent news reports have claimed since that VoA is winding up shop in Sri Lanka as it was found to be economically unviable (possibly because the tastes of GenX listeners have changed).

Reading between the lines, it follows that either India develops Trincomalee if Sri Lanka so desires, or should let the latter go elsewhere for the same. It also implies that involving third nations (whether the US then, or China now, or anyone else later on) even in developmental projects would require an evaluation of India’s concerns, if any, on the security front.

It’s thus that Sri Lanka offered the Hambantota Port first to India, under Presidents Chandrika Bandaranaike-Kumaratunga and successor Mahinda Rajapaksa. Sri Lanka went to China only after India showed disinterest in the port project, after finding it to be wholly uneconomical.

Did it imply that while evaluating the Hambantota Port project for economic viability, India also had the opportunity to assess security risks, if any, if the project went to any third-nation, especially a historic adversary such as China? If it was so, how was it conveyed to Sri Lanka, and what alternatives did India have to offer then now that it was not interested in the Hambantota Port project for the host-nation to develop and grow?

Alternatively, what guarantees would India have required for a third-nation engagement of the development kind in Sri Lanka, then and now? It’s not clear if India had found the answers, or even addressed the query in a more realistic way, without tying down Sri Lanka’s growth and development to its own interest and funding capabilities in third-nation projects of the kind?

The same applies to Sri Lanka’s Colombo Port City project, where China’s role and share (for land) were whittled down to an extent after India expressed ‘concerns’. But the very same coalition government of President Maithiripala Sirisena and Prime Minister Ranil Wickremesinghe looked the other way while deciding to sell 85 per cent of the stakes in the original Hambantota Port project, including 15,000 acres of land (as free-holding or with free-access) to the Chinese builder and funding agency.

If today the sale of Hambantota land to the Chinese agency is stalled, it would be either due to the Rajapaksa-centric public protests against the proposal, or to the internal bickering between President Sirisena and PM Wickremesinghe, or both. It won’t be because of India and Indian concerns, expressed in whatever form(s) or otherwise.

Likewise, if Sri Lanka’s Ports Minister and ex-cricketer Arjuna Ranatunga now wants the government to have decisive stakes in the Colombo Port terminal project (different from Colombo Port City) — and not the Chinese — it again should be due to non-India reasons. Ranatunga was among the first to back the Hambnantota sale proposal, but modified his stand to promise that the Sri Lanka Navy (SLN) would be in charge of port security, and Sri Lanka would have the majority stakes.

The question thus narrows down to either India funding Sri Lanka’s development projects that it considered economically unviable or let Sri Lanka find other financial/construction partners. If nothing else, India cannot stand in the way nor be seen as doing so, citing its own ‘security concerns’ that are valid and justified otherwise.

It’s acknowledged that 70 per cent of all traffic in Colombo Port is because of south India’s high seas trade. In the context of China entering Sri Lanka in a very big way as a development partner, the question arose if India needed to create alternatives for its high seas trade. The fact remains that the Rajapaksa government did not offer the Colombo Terminal Project to India, or any other, and made it a China-only proposal/project, for reasons best known (only) to it.

But could India have thought ahead about the ongoing works for developing high-sea ports at Vizhinjam (Kerala) and Enayam (Tamil Nadu), at a distance of merely 37 km, and put in the moneys in Colombo terminal project, instead? If it’s a question of viability, whether in the case of Hambantota or now in Trincomalee, then there are also reported issues about Enayam project, for instance.

Alternatively, is there a way, India should reconsider the Enayam project, for instance, see if equal/equitable economic viability could be bestowed, for instance, on Trincomalee, rather than cry wolf later on – and to no avail ? The issue is simple. Either India gives Sri Lanka what it wants (modified, however, to whatever way possible, to ensure fiscal sense), even if it meant loss, or not complain.

Now, India may also have to study the Chinese proposals and projects more closely to see if their development plans for third-nation investments around India make fiscal and economic sense over the long- than medium-term, or if they are giving greater weight to their own ‘geo-strategic’ and security concerns in the Indian Ocean? In context, India also needs to consider if making tit-for-tat investments, including on maritime security, of Vietnam, for instance, to try and check China would have made greater sense after it had won over neighbours, instead — rather than the other way round?

Whoever is in power, there seems a clear but unspelt out national consensus in Sri Lanka about its own development projects and security. They would not want to do anything to upset the Indian neighbour on the security front — accord or no accord. It’s because they also share the same concerns. But they are not going to wait endlessly for India to be ready (financially and politically) to be able to make massive development investments in their country.

It’s only in the way that a Rajapaksa here or a Wickremesinghe there says it, and works on it, or works around it — and expresses it – that differs. Whether it’s Hambantota Port earlier, or Trincomalee now (or reportedly so), India is seen as taking the decision not to invest time, money and energy on the development part — and purportedly putting fiscal costs ahead of security concerns.

Unsaid, the Sri Lankan one-liner is simple: “India cannot have the cake and eat it too.” Expanded, it means that whoever is the ruler, Sri Lankans are more worried about their own immediate priorities of development, job-creation, income-generation and growth, than India’s distant security concerns. In the post-war era, Sri Lankan rulers are also under domestic compulsion to show the people that they are going in the right direction, and not just on the ethnic and war-crimes probe fronts, but more so in making every-day life and livelihood more comfortable and aspiration-driven.

To them all, India or China, the US or Russia, is only a means to an end — but not an end in itself. In the process, if they do not care about the price that Sri Lanka as a nation would have to pay for the economically unviable decision that their rulers take, it’s their decision — and not that of India. It’s though unclear if they have at all evaluated the costs — fiscal and economic, political and security-wise — over the medium- and long terms (which is what the Hambantota land-sale is also about).

*N Sathiya Moorthy is Director, Chennai Chapter, of the Observer Research Foundation, New Delhi. Comments and suggestions on this article can be sent to editor@spsindia.in