Sri Lanka unilaterally decides to scrap the East Container Terminal (ECT) agreement after facing massive backlash from the port trade unions.
It was an important deal from India’s strategic point of view in the Indian Ocean. Because of the trade union protest, India’s Foreign Minister Dr. S. Jaishankar went to a three day visit from 5th to 7th January 2021 to ensure the ECT deal remains intact.
What is ECT agreement?
- In 2019 a Memorandum of Cooperation was signed between India, Japan and Sri Lanka to develop the East Container Terminal (ECT) at the Colombo Port.
- The development cost of the project was estimated around 500 to 700 million dollars.
- It was a trilateral project where Sri Lanka had the full ownership with 51% of stake and India & Japan having 49%.
Reason given by Sri Lankan to scrape the agreement:
- Due to the immense protest by the Colombo trade unions Sri Lanka had no choice but to scrap the deal.
- A senior cabinet minister told that though President Gotabaya Rajapaksa is a man who never change his word but the protest was becoming so intense that his presidential chair was at stake and he had to agree for the cancellation of ECT agreement.
CHINA and UNHRC Factor
China’s Involvement
- China already holds important strategic points at the Colombo Port and Hambantota Port.
- Colombo Port has total 4 terminals in which two ports (Jaya Container Terminal JCT & South Asia Gateway Terminal SAGT) are already developed by the Sri Lankans and the third Colombo International Container Terminal (CICT) was developed by the Chinese having 85% of stake with China and 15% of stake with Sri Lanka.
- And Hambantota is given to a Chinese enterprise on a lease of 99 years as they couldn’t pay the debt and fall into the Chinese debt trap policy.
- Recently in January, the cabinet approved the Chinese energy project on the three islands of Jaffna peninsula which is just 50km away from Tamil Nadu.
- It is quite possible of China’s involvement behind the trade union protest because China will never want India to have an edge over them as the port holds an important strategic point in the Indian Ocean.
UNHRC Factor
- Sri Lanka has major two ethnic groups, Sinhalese & Sri Lankan Tamils.
- Sinhalese are in majority with 74.8% of total population & Tamils are in minority with 11.2%
- During the last phase of civil war as there were numerous killings and human rights violation by Sri Lankan military forces on Tamil civilians per the UN report.
- In this regard, the western nations are placing a resolution against them for the alleged war crimes. The UNHRC session is going to be held in March. So, Sri Lanka has asked the support of India and other nations to vote in favour, to which India has said that it will consider and has not made any clear stance. On the other hand, China and Russia have already made their stance clear and will vote in favour of Sri Lanka. Earlier India voted against it and later remain absent from the voting and this time it says it might consider and not made a clear stand. Sri Lanka might have cancelled this ECT project probably to show India that they can give an answer.
India and Japan Reaction on being pulled out:
Both countries have condemned the unilateral decision of Sri Lanka to pull them off from the project. MEA spokesperson Anurag Srivastava, said that Sri Lanka should abide by its commitments and adhere to the international pact. Indian High Commissioner is in regular touch with Sri Lankan authorities to re-implement the agreement.
From the mouth of Sri Lankan Foreign Minister:
On being asked about the impact in relations with India Foreign Minister Dinesh Gunawardena said that India – Sri Lanka relations will not be disturbed with just one project. Our relation is vast, we share long historical bonds & cultural relations and cannot be determined by just one project.
On the involvement of China Gunawardena said that China is not involved in any way and Chinese have also faced many criticism in past on the development of the Colombo port by the trade unions.
Alternate Offer by Sri Lanka:
The Foreign Minister of Sri Lanka revealed an offer is there for the development of a western terminal at the Colombo Port with India.
In the western terminal project, India will have 85% of stake which is a better deal than ECT project, further added by Gunawardena.
