Indian concerns over Colombo port city project addressed:Lanka

Ruling out chances of India-China clash to gain control of the Indian Ocean, Sri Lankan Prime Minister Ranil Wickremesinghe today said his government has addressed New Delhi's security concerns over the newly- modified USD 1.5 billion Colombo Port City project.

"There is no question of security problem. The Indian security issues have been addressed by us. There will be further discussions with India" on this, Wickremesinghe told the media here wrapping up his four day-visit during which he held talks with Chinese President Xi Jinping and Premier Li Keqiang.

"We have discussed with India also. We are prepared to discuss it further," he said answering a volley of questions about USD eight billion Chinese investments including the Port City project made during former Lankan President Mahinda Rajapaksa's regime, which sparked off security concerns in India.

In a politically significant statement, Wickremesinghe said he has embarked on China visit after holding talks with Rajapaksa and former President Chandrika Kumaratunga to build consensus.

"I had discussion with Rajapaksa few days ago we came. We briefed him on issue we were going to discuss in China. He was for it. Also discussed with Kumaratunga.
Because we want to build consensus on long-term arrangement with China," he said.
About the likelihood of Chinese military presence in Lanka, he said: "Chinese have not asked for any military base in Sri Lanka."

"We are going to have further military co-operation by training. They offered offshore patrol vessel (OPV)," he said, adding that India is also building two for Sri Lanka.

About the likelihood of India-China clash in the Indian Ocean, Wickremesinghe said the Ocean should be governed by law of the sea principles with freedom of navigation.

"Sri Lanka is committed to freedom of navigation in the Indian Ocean," he said.
"India has naval presence as part of anti-piracy operation. China is also setting up base in Djibouti. Many countries are setting up bases. But that is part of UN agreement on anti-piracy operation.

"As it stands now, we cannot see a major clash or a threat taking place in the Indian Ocean because the Chinese military presence is one that is connected with the anti- piracy operations," Wickremesinghe said.

There are many navies that are operating in the Indian Ocean including the US which has bases, he said.

He also said the USD 1.5 billion Port City project which was halted for over a year by his government had been changed with several key factors altered.

The deal was entered during Rajapaksa regime.

"Port city and megapolis is not a threat to anyone. It is an opportunity to make everyone money," he said.

"As far as Sri Lanka is concerned we are the oldest state in SAARC. We are friendly with everyone. We have decided and taken step that any of our SAARC neighbours are not threatened in anyway.

On Sri Lanka backing China's Maritime Silk Road project which is not endorsed by India over apprehensions of Chinese domination in the Indian Ocean, he said: "Our policy is to make Sri Lanka as the hub of the Indian Ocean. We can accommodate one belt and one road (Silk Road) and Make in India both."

About the Chinese project, he said "we found many shortcomings in many of the (foreign funded) projects but we did not reject them. We modified and corrected them. We have gone ahead. One is the port city," he said.

His government has changed ownership of the contract with the state-owned Chinese firm to build the 583-acre city on reclaimed land.

Under the previous contract, the Chinese company was due to get 20 hectares of land on freehold basis, which has been changed into 99 years lease.

"Now the government in Sri Lanka like government in China does not believe in transferring freehold land. But we will give 99 year lease," he said.

Also, the Port City will be turned into a financial and business hub in the Indian Ocean.

"We selected port city to be the location. So from land filled real estate is becoming a financial hub," he said.

On the USD 125 million compensation demanded by the Chinese firm for one year, he said now that project has been made a financial hub, the company may have to pay money to Sri Lanka, but did not elaborate.

"We can talk and settle. There is not too much of a problem," he said.

About plans of turning USD eight billion Chinese debt into equity, he said in order to reduce the debt burden, the Sri Lankan government is in talks with China to invite its companies to take part of the equity in Lanka's state-owned firms.

He said he is in talks with Andhra Pradesh Chief Minister Chandrababu Naidu for cooperation between Sri Lankan ports and Visakhapatnam port. Once the planned Economic and Technology agreement with India comes into effect, the cooperation will be finalised, he said.

"The Chinese are already investing in some parts of Andhra Pradesh. We will be linked up with Mumbai. So there will be connectivity," he said.

About speculation that Sri Lanka will hand over the Hambantota port project to China, he said Hambantota development is not Chinese and Sri Lankan development.

"Anyone can come and develop in the areas," he said. "As far as the operations of the port and airport are concerned, state will be regulator and there will be separate independent operators. We will have a stake in operations both in operations in the airport and in the Hanbantota harbour."

He said Sri Lankan Navy will shift its base from Galle to Hambantota. "India itself is interested in developing more harbours" in Sri Lanka, he said.