Sri Lanka’s recent decision to pull out of the East Container Terminal (ECT) deal with India and Japan is not the only challenge to New Delhi’s interests emerging this year. A week before reneging on the 2019 Colombo Port terminal agreement, Sri Lanka cleared a Chinese energy project in three islands off Jaffna peninsula that are barely 50 km from the Tamil Nadu coast.
On January 18, the Cabinet approved a proposal to involve Sinosoar-Etechwin Joint Venture in China to install ‘hybrid renewable energy systems’ in Nainativu, Delft or Neduntheevu, and Analaitivu, located in the Palk Bay. The islands are connected to the Jaffna peninsula by a limited ferry service, managed mostly by the Sri Lankan Navy.
India has not commented on the development, but sources in Colombo said: “concerns were raised”, citing the project site’s proximity to the Indian coastline. Delft island is one of the closest points to India from northern Sri Lanka. The three islands, where the energy systems are coming up, are home to a few thousand people. Several families residing in these islands fled the civil war, and crossed over to Tamil Nadu in boats, according to residents. Following years of neglect, the islands have remained much less developed compared to Jaffna peninsula.
Housing project
The energy project is not the first instance of a Chinese role in northern infrastructure in Sri Lanka. In 2018, India voiced concern over China’s $300 million housing project for war-affected areas, accusing the Resettlement Ministry [of the former government] of holding an “opaque” bidding process. The project was eventually dropped.
Commenting on the development, Austin Fernando, Sri Lanka’s former High Commissioner to India, said the Sri Lankan government cannot be blamed for this decision, because the project is backed by the Asian Development Bank, which has its “own procurement guidelines that should be followed by the borrower”.
However, India raising concern is “understandable” and “unsurprising”, he said, adding that the reaction was consistent with New Delhi’s positions in the past, when a Chinese submarine called at the Colombo Port in 2014, and when the government had a Chinese offer to develop housing in the north. “The islands chosen now are even closer to the Indian border. India would not like another source of tension at a time when the confrontation with China in Ladakh is yet to be resolved,” Mr. Fernando said.