Published: Wed, February 03, 2021

Japan regrets Sri Lanka scrapping 2019 deal with New Delhi, Tokyo

Japan regrets Sri Lanka scrapping 2019 deal with New Delhi, Tokyo

Sri Lankan Prime Minister, Mahinda Rajapaksa, has caved to nationalist demands against Indian involvement in the East Container Terminal (ECT), promising trade unions that it would be 100 per cent by Sri Lankan Port Authority. The Hindu, reporting on the development, had noted an Indian government source as saying about the possibility of Sri Lanka reneging on the 2019 Memorandum of Understanding: "We would hope that Sri Lanka does not unilaterally decide on this matter, as there is a tripartite agreement on it".

ReutersLast week, Sri Lankan President, Gotabaya Rajapaksa on Thursday thanked Prime Minister Modi for providing 500,000 COVID-19 vaccines to the island nation.

The decision comes less than a month after a visit by Indian Foreign Minister S Jaishankar to Colombo to shore up support for the 2019 deal, that also involved Japan and India's Adani Group.

Sri Lanka had previously agreed to develop the strategic East Container Terminal at the Colombo port with India and Japan.

At a meeting with port trade unions in January, Sri Lanka's President Gotabaya Rajapaksa had said the plan was aimed at developing the ECT as an investment project.

"The commitment of the Government of Sri Lanka. has been conveyed several times in the recent past, including at the leadership level", a spokesman for India's embassy in Colombo said in an emailed statement on Tuesday.

Two days after Sri Lanka chose to scrap a 2019 agreement with India and Japan for operating the East Coast Terminal (ECT), Japan says the decision was "unilateral and regrettable".

According to estimates, over 70 per cent of business at Colombo port is from ships in transit to the Indian coast, making it important for Sri Lanka, too. Both India and Japan were taken by surprise, given the negotiations thus far, and given that almost 70% of the transhipment business through ECT is linked to India.

In a possible bid to make amends - the Rajapaksa government has offered the West Container Terminal (WCT) of Colombo Port on a 35-year agreement to India and Japan instead, but officials have thus far been cold to the offer.

Meanwhile, in the aftermath of the development, Japanese envoy to Colombo Akira Sugiyama met with Sri Lankan Foreign Minister Dinesh Gunawardena on Wednesday to discuss a "range of matters relevant to the bilateral partnership between Sri Lanka and Japan", a tweet from Sri Lankan MFA said.

The decision marks a u-turn from the statement made by Rajapaksa over two weeks ago, when he said the project would go ahead, citing "regional geo-political concerns".

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