COLOMBO, 3 February, 2021 (TON): Indian High Commissioner, Gopal Baglay met the Sri Lankan President Gotabaya Rajapaksa, Prime Minister Mahinda Rajapaksa, and Foreign Minister Dinesh Gunawardena on Tuesday as the East Container Terminal (ECT) deal falls through.

As Colombo’s decision to pull out of the agreement with India and Japan to develop ECT at the Colombo Port meetings have been going on.

The Indian envoy’s message to the Sri Lankan leadership was that Colombo must adhere to its commitments in the tripartite agreement of May 2019, to jointly develop the strategic terminal with the Sri Lanka Ports Authority (SLPA) holding 51 % stakes, and India and Japan, holding 49 % together. The Adani Group from India, along with Japanese companies, was to invest in the project expected to cost up to $700 million, as per official estimates.

The Indian side, it is learned, conveyed that the signals emanating from Sri Lanka should boost the confidence of potential investors. President Gotabaya Rajapaksa has pledged to draw foreign direct investments to the country, rather than take loans.

Sri Lanka reversing an agreement on a large infrastructure project for the second time that has involved Japan. The government scrapped the $1.5 billion and Japan-funded Light Rail Transit system last year.

According to the diplomats, the recent development has sparked alarm in India and Japan, who said Sri Lanka had neither conveyed its decision nor offered the alternative proposal to either of the partners.

They were also surprised by Prime Minister Mahinda Rajapaksa’s statement to port unions on Monday that the “foreign company” did not agree with the proposals put forward by the negotiating committee from the Sri Lankan side, as discussions had commenced only last week.

The unions subsequently called off their protests.

It is observed that India’s geostrategic interest in the project is evident.

Moreover, SLPA’s joint venture Colombo International Container Terminal holds Chinese merchants and 85% of China’s stakes.