Sri Lanka ink a deal with China on the 30th anniversary of Indo-Lanka Accord


On 29 July 1987, Sri Lankan President J.R. Jayewardene and Indian Prime Minister Rajiv Gandhi sat together at old Parliament building (now Presidential Secretariat) facing Galle Face Green to ink the Indo-Lanka Peace Accord with the objective of resolving the Sri Lankan War by enabling the 13th Amendment to the Constitution of Sri Lanka and the Provincial Councils Act of 1987.

The unspoken objective at the time however, was keeping America away from gaining a foothold in Sri Lanka. Those who were involved in active politics and well-versed in political history say when J.R. Jayewardene asked J.N. Dixit (Indian envoy in Colombo at the time) to be specific about India’s concern, J.N.Dixit said that Sri Lanka should assure India reduction and Mphasing out of foreign military and intelligence personnel in Sri Lanka from western countries and Pakistan.

Sri Lanka reorganizing its foreign and defence policies reducing its involvement with USA, Pakistan, China, Israel and South Africa; Sri Lanka giving an assurance that its seaports and airports would not be utilized by foreign powers which were antagonistic towards India and which affected India’s security interests negatively; fulfilling the assurances which it gave in 1985 that India would be given an opportunity to maintain the Trincomalee Oil Tank Farms and that Sri Lanka would prevent foreign broadcasting stations like the VOA from being utilized for military purposes by western countries, were some other primary concerns India was alleged to have listed down at the time.

Three decades later, Sri Lanka is still struggling to find lasting solutions to its problems that caused a bloody war.

Exactly after thirty years, on 29 July 2017, Sri Lanka once again sat with another country – this time with China – unspoken rival of India, Japan and USA to ink another agreement with the objective of increasing its foreign reserve and coming out of the debt trap.

What was commonly observed on both occasions was the public outcry against the deal, uncertainty of true objectives and the suspense.

Not sold, but sold

13th amendmentSri Lanka justified the deal stating that it is done with the intention of writing off Chinese debt it owed for constructing the Port in Hambantota by leasing it to China for USD 1.5 billion.

However, several senior economists pointed out that the government is actually adding a debt burden to the Treasury which did not exist all this time, while losing a property to China.

“The Sri Lanka Ports Authority (SLPA) is the institution that was supposed to pay off the Chinese loan obtained. Actually, the SLPA is in a position to pay the instalment even though it might bring down its annual profit for some time. At least, earlier what we had were a debt plus a port. After signing this agreement we might find some solace with the money China pumping in. But this time we will get money, but lose a property to China, while an additional debt would be added to the Treasury,” they pointed out.
The SLPA has thus far paid off the loan obtained from China and they could have paid off the entire loan by 2038 as per the initial plan.

Sri Lanka Ports Authority has made a profit of nearly Rs 11 billion during 2016, with a recorded revenue of more than Rs 44 billion during the same period. In March this year, SLPA announced that it had paid more than Rs 7.1 billion for loans obtained for the loss making Hambantota Port, while another Rs 16.7 million was paid in 2016 as capital and interest for loans.

According to Minister Mahinda Samarasinghe, SLPA has paid China Rs 47 billion so far for constructing the Hambantota Port.

“SLPA has been paying back the loan since 2011. All this was paid from SLPA funds. Nothing was taken from the Treasury,” the Minister said.

The notable absentee at the signing of the agreement yesterday was former Minister of Ports and Shipping Arjuna Ranatunga who was rumoured to have been removed from holding the office as a result of his opposition to the deal.

On the other hand, Colombo Port has been positioned 26 in the list of profit earning ports in the world.

“The government claims Sri Lanka would earn foreign exchange through the development zone to be established in Hambantota

They hope China will bring lots of factories to the country and the port starts earning through ships coming to take those products. This is an absolutely bizarre argument as the Colombo Port is earning its profits through re-exports and providing facilities to ships. Hambantota too, had a bunkering facility, but Sri Lanka will no longer be able to earn from it as it goes to a company that has majority of Chinese shares,” economists further opined.

SLPA has earned Rs 4 billion income alone by bunkering 69,000 metric tons of oil to the ships in the first eight months of 2014.

Maithri, a puppet?

Protesting Port and Petroleum Employees accused President Maithripala Sirisena of duping them.

The President and the government have taken the trade unions for a ride and sold a property that could have been made into a profit earning entity. They have basically given China, the liberty to own a port of the calibre of Singapore Harbour for 99 years without any trouble, they pointed out.

Meanwhile, Janatha Vimukthi Peramuna (JVP) Leader Anura Kumara Dissanayake said the time had come for President Maithripala Sirisena to prove that he was not a puppet dancing to the tune of Prime Minister Ranil Wickremesinghe.

“This agreement is illegal. It has not received Cabinet approval properly. It was not discussed in Parliament. The President is yet to give his approval. Atop all that, there is a case being heard in the Supreme Court against the agreement. While these four issues are there, the Prime Minister says he will go ahead and sign it. How could he say so? This is not his family property. Had it been the case he could have discussed it with his wife and signed the agreement. This is national property and we all have to pay for his follies. How can the Prime Minister override the President on an issue? We of the JVP will do everything possible to prevent this disaster. We may not be able to prevent the PM from putting his signature on the agreement, but we will make sure that the agreement will remain a piece of paper. We will not permit its implementation. The agreement will never become a reality.”

However, with this move, it is expected that India will put pressure on the Sri Lankan Government to take a final decision on the Trincomalee oil tanks before the end of this year.

Unexpected events

From all the developments that unfolded at the Special Presidential Commission appointed on the Treasury Bond issue, it appears that things are falling off the hands of President Sirisena and Prime Minister Ranil Wickremesinghe.

“President Sirisena must not have imagined things would go this far, when he appointed the commission. If the proceedings of the Commission have already not slipped from the grip of the President and working on its own will, President Sirisena is letting things to form on his own will. Who knows…may be he wants to save his face,” a senior Cabinet Minister opined. It was revealed that former Finance Minister Ravi Karunanayake and his family leased out a penthouse at Monarch Residencies for eight months with the monthly lease rental Rs.1.45 million being paid by Arjun Aloysius.

Ironically, in the same week President Sirisena rejected three Cabinet proposals put forward by Foreign Affairs Minister Karunanayake.

One paper sought permission to acquire Visumpaya (Ackland House) Union Place, Colombo as his official residence, Cabinet Co-spokesperson Rajitha Senaratne said.

Visumpaya has been used as an official residence for Government Ministers and a residence for visiting Heads of State.

Objecting to the proposal, Cabinet members pointed out that the facility was to be maintained as an official residence for visiting dignitaries. Making light of the situation, President has pointed out to his colleague that many politicians who lived in Visumpaya had seen their political careers end and warned the same fate would befall Karunanayake.

Karunanayake also sought approval to appoint a Chief of Staff for himself for a monthly salary of Rs 250,000, which was rejected by the President on the grounds that if he allowed this then other ministers would seek to follow his lead.

“He was told to appoint an advisor to the ministry if he wants at the salary which is already stipulated. Ministers are entitled to that,” Senaratne said.

The Minister also submitted another paper seeking to transfer the authority of the Sri Lanka Buddhist Pilgrims’ Rest in New Delhi from the mission in that country to the Sri Lanka branch of the Mahabodhi Society. The President had rejected all three proposals.
By the end of the week, pressure was mounting on President Sirisena to remove Karunanayaka from the Cabinet. Parties are also calling on Karunanayake to resign in a dignified manner and pave the way for an independent inquiry.

The government said it is betting all its chips on Karunanayake to clear the negative image created by his alleged involvement in the controversial Treasury Bond scam.

Co-Cabinet spokesperson, Senaratne said while it is undeniable that the entire fiasco has had major negative impact on the government, the Cabinet expects Minister Karunanayake to appear before the Presidential Commission on the Treasury bond issue.

“We cannot make judgements based on one side. We know all these allegations have had massive negative impacts on Yahapalana Government as a whole. We are now waiting to see if he (Karunanayake) would turn the tables and make it positive,” he added.

He made these remarks when journalists queried whether the government or the Cabinet is not bothered about the impact on it by the revelations made so far at the Commission.

Flash transfer
While the pressure was on to remove Karunanayake from the post, yesterday came the surprise transfer of Foreign Ministry Secretary career diplomat Esala Weerakoon.

Weerakoon has been appointed as the Secretary to the Tourism Development and Christian Affairs Ministry, while Sri Lankan Ambassador in Washington, Prasad Kariyawasam has been appointed as the new Secretary to the Foreign Affairs Ministry, the President’s Office said.

Though not confirmed, government sources indicated that the sudden change could have occurred as a result of President Sirisena being irked by the fact UN Special Rapporteur on human rights and counter-terrorism Ben Emmerson was allowed to meet LTTE suspects in prison.

He was reported to have asked who gave permission for the UN Rapporteur to visit prison inmates.

Emmerson who concluded his mission in Sri Lanka accused it of using torture against people detained under the Anti-terror Act and that its progress on human rights, reforms and justice remained woefully slow.

Justice Minister Wijeyadasa Rajapakshe criticized the UN official with regard to the allegations he had levelled at the government.
It was revealed later that the Foreign Affairs Ministry had given permission for Emmerson to meet the LTTE detainees. Besides, Bradman Weerakoon, father of Esala Weerakoon is the advisor to the Ministry of Prison Reforms and Rehabilitation.


It was indeed a bad omen for the signing of the 1.4 billion dollar Hambantota Port Agreement at the auditorium of the Ministry of Ports and Shipping at Chaitya Road, Colombo 1, yesterday.

Within the hour of the signing ceremony, there was a long power failure resulting in pandemonium reigning high. Officials were seen running hither and thither getting the workmen, to restore the power through the generators; which was done. Within the next 15 minutes, the generators had also been switched off and angry officials were incensed, were driving workmen to restore the power through the generators. With the restoration of the generators, then the faulty area was the central air-conditioning which was also not functioning!

The funniest part of the story was that this was also the first time that a major government agreement was being inked without the presence of the media!!

There were no seating arrangements for the media within the auditorium and they were not allowed in the auditorium as well.
They were supposed to report the event from an adjoining room from live Television coverage where the images were there but the sound system was malfunctioning.

The Television set was in one room in front of the auditorium and the sound in another room which was accessible only through the corridors of the Ministry building upper floor.

So, journalists, the few and far between who found the time and the inclination to cover the historic event amid their busy schedules ahead of the breaking news stories and other assignments for Sunday, had the option of seeing the images on the Television without the auditions, or go to the corridor and record the speeches through the public address system without the pleasure of seeing the television images!!

There was speculation that the power cut could have been an act of sabotage and that the journalists being made to retreat to another location might have been to avoid the embarrassment of having to answer “politically sensitive “questions” (RL)

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