India, Sri Lanka sign energy pact

Following Wednesday’s overarching Memorandum of Understanding (MoU) signed between India and Sri Lanka, both sides will collaborate in a host of energy and infrastructure projects across the island, The Hindu learns.

The Ministry of External Affairs in New Delhi says the MoU provides a road map that will require further discussions.

“Our vision to promote connectivity and development takes Sabka Saath Sabka Vikas to our external environment, and naturally to neighbourhood first,” said the MEA spokesperson on Thursday.

The MoU — signed in New Delhi during Prime Minister Ranil Wickremesinghe’s visit — includes the setting up of a Liquefied Natural Gas (LNG) plant in suburban Colombo and a solar power plant in Sampur in Trincomalee; Indian assistance to enhanced use of natural gas in Sri Lanka; joint investment in the petroleum sector and partnerships in highways and transportation, the spotlight remains on the proposed joint venture to develop a World War-era oil storage facility in Trincomalee, the strategically located port town on the island’s east coast.

Last week, petroleum trade unions here went on a strike opposing the joint venture fearing Sri Lanka was “handing over its national asset” to India. They called off their protest only after assurance from top leaders that they were not entering into any legally binding agreement yet.

Making a case for the renovation of the facility, Cabinet spokesman and Health Minister Rajitha Senaratne on Wednesday told the media: “Oil tanks have not been used for years now, it looks like the Sinharaja forest [national park in the Southern Province]. Are we going to worship it like Thuparamaya [sacred structure that Buddhists worship] or rent it out and get an income?”

Almost always viewed in relation to India’s perceived strategic interests in Trincomalee, the oil tank farm has drawn much attention here in the run-up to the high-level visit of Mr. Wickremesinghe, to be followed by that of Prime Minister Narendra Modi to Sri Lanka in May.

Currently, Indian Oil Corporation Lanka IOC runs 15 tanks in the lower farm, and the joint venture pertains to the remaining 84 in the upper farm, of which Sri Lanka wants to keep 10. “Even as per the 2003 agreement, India could have gone ahead with the project. But in keeping with the Prime Minister’s neighbourhood first policy, New Delhi was keen on a partnership with Colombo, although much of the investment will come from India,” a senior diplomatic source told The Hindu on Thursday.

As per the MoU, the countries will also jointly set up Industrial Zones and Special Economic Zones in Sri Lanka. Colombo has been keen on attracting Indian investment into the island.

On their vision of the partnership, Finance Minister Ravi Karunanayake told The Hindu: “We want to be to India what Hong Kong is to China.” While the two countries are yet to finalise the locations of the proposed investment zones, the idea is to make Sri Lanka a favourable financial hub for Indian investors, the Minister said on Thursday.

(With inputs from Kallol Bhattacherjee)

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Printable version | Sep 21, 2021 3:22:38 PM |

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