China's foray into North SL stalled; India relieved

Sri Lanka has stalled China’s bid to spread its tentacles into the island nation’s war-ravaged Tamil-majority Northern Province, where several reconstruction projects are being funded by India.

Sri Lanka has this week reversed its earlier decision to allow Beijing-based China Railway Engineering Group Company Limited to build 40000 houses in the island’s Northern Province with a loan of $ 300 million from Export-Import Bank of China. Colombo has now decided that most of the houses would be built by an Indian company in partnership with two Sri Lankan companies.

New Delhi has been concerned over China’s bid to expand its geopolitical influence in Sri Lanka, particularly the communist country’s foray into the Indian Ocean nation’s Tamil-majority Northern and Eastern Province because the region not only shares a historical cultural and ethnic bond with India but also linked to its key security interests.

New Delhi, itself, did its bit for reconstruction of Northern and Eastern provinces of Sri Lanka after the end of the conflict in 2009, supporting several infrastructure projects, including upgrading railway tracks and building houses for people displaced during the ethnic war. China’s support for development projects in the Indian Ocean nation was confined to its southern region till its proposal to help build houses in Northern Province was cleared by the Sri Lankan Government earlier this year.

Sri Lanka’s course-correcting move this week to keep China out of its north and east came just before its Prime Minister Ranil Wickremesinghe landed in New Delhi on Thursday for a three-day visit.

Wickremesinghe of late had run-ins with President Maithripala Sirisena over India’s offer of support to infrastructure projects in Sri Lanka, including on the issue of New Delhi’s proposal to help develop the East Container Terminal of Colombo Port. While Sirisena is not keen on allowing India to play a role in the development of Colombo Port, Wickremesinghe has purportedly been arguing in favour of accepting New Delhi’s offer of support.

Sirisena’s Sri Lanka Freedom Party and Wickremesinghe’s United National Party currently run a coalition government in the island, but the relation between the two leaders have of late come under stress.

The differences between Sirisena and Wickremesinghe over New Delhi’s offer of support for the development of East Container Terminal of Colombo Port reportedly came to the fore during a cabinet meeting on Tuesday.

A section of media reported that it was in the same meeting that Sri Lankan President had made a remark alluding to the possibility of India’s external spy agency Research and Analytical Wing hatching a plot to assassinate him.

Sri Lankan Government on Wednesday dismissed the media reports.

Sirisena also called up Modi and stressed that the “mischievous and malafide reports” had been “utterly baseless and false”, and seemed “intended to create misunderstanding between the two leaders as well as damage the cordial relations between the two friendly neighbours”.

Beijing is keen to develop Hambantota in southern Sri Lanka as a hub for its Belt-and-Road initiative. Sri Lanka earlier this year signed a $ 1.1 billion deal to sell a 70% stake of the strategic Hambantota port to China under a 99-year lease agreement. Sirisena's Government in Colombo argued that it had to enter into a deal as the construction of the Hambantota Port by another company of China during the erstwhile regime led by Mahinda Rajapaksa had resulted in a heavy burden of debt on it.

India is keen to take over the Mattala Rajapaksa International Airport in Hambantota on lease in order to make it sure that the coastal city does not go fully under control of China. The airport was built by Rajapaksa Government with a $ 190 million soft-loan extended by the Exim Bank of China.

New Delhi was concerned over Rajapaksa Government’s policy to allow China to expand its geo-strategic footprint in Sri Lanka, as it had serious security implications on India. When Sirisena succeeded Rajapaksa in January 2015, he sought to change his predecessor’s policy. With the next presidential election just little more than a year away, Sirisena, however, is trying to keep his options open, seeking to strike a balance between Sri Lanka’s relations with India and China.