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Political and diplomatic greenhorn, President Gotabaya Rajapaksa may have landed his foot in his mouth by causing a diplomatic faux pas, much to the detriment of relations between Sri Lanka and India and causing a political and diplomatic crisis.
The drama began on Friday 10 when the Chairman of the Ceylon Electricity Board (CEB), MMC Ferdinando told the parliamentary Committee on Public Enterprises (COPE) that Rajapaksa had asked him to give a 500-megawatt renewable energy project in Sri Lanka’s northern Mannar district, to the Adani Group of India.
Ferdinando claimed that Rajapaksa summoned him on November 24, 2021 and told him that India’s Prime Minister Modi is pressuring him to hand over the project to the Adani Group.
“On November 24, the President summoned me after a meeting and said that India’s Prime Minister Modi is pressuring him to hand over the project to the Adani group. I said ‘this matter doesn’t concern me or the Ceylon Electricity Board but the Board of Investments (BOI)’. He however insisted that I look into it. I then sent a letter to the Finance Secretary stating that the President has instructed me and that the Finance Secretary should do the needful. I pointed out that this is a government-to-government deal,” the official said in Sinhala in the video, addressing the panel.
However, a letter sent on November 25, 2021 by Ferdinando – a day following his reported meeting with President Rajapaksa – to SR Attygalle, Secretary to the Treasury, does not mention any “pressure” from Prime Minister Modi. What was stated in the letter was that the President had asked him to “facilitate” the projects to the Adani Group as it had agreed to make “substantial” foreign investment in Sri Lanka.
On Friday 10, Chairman of the Ceylon Electricity Board (CEB), MMC Ferdinando told the parliamentary Committee on Public Enterprises (COPE) that Rajapaksa had asked him to give a 500-megawatt renewable energy project in Sri Lanka’s northern Mannar district to the Adani Group of India.
The letter refers to a “direction” by the former Prime Minister Mahinda Rajapaksa to recognise the Adani Green Energy proposal as a proposal from the Indian Government to the Government of Sri Lanka, as both heads of the countries are in agreement to realise this investment in Sri Lanka, to meet the present day FDI crisis.
The letter further states, “Immediately after a progress review on renewable energy with HE the President held on 16 .11. 2021…I was directed by HE the President, to facilitate M/s Adani Green Energy to develop the 500 MW wind and solar, renewable energy projects in Mannar and Pooneryn, as he has already agreed to invest a substantial amount of FDI in Sri Lanka.”
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As per this directive, I assumed that this is a proposal of an investor backed by the Government of India on the basis of the bilateral discussion between the Heads of the States. Therefore, on the above basis, it is logical to assume that this is an investment proposal on the basis of G-G and can be processed as an investment channeled through the BOI (Board of Investments of Sri Lanka) as required under Cabinet Appointed Management Committee on Investment Process….” States Ferdinando in the letter.
The Adani Group reportedly won contracts worth $ 500 million to develop two wind power projects, in Mannar and in Pooneryn, in December 2021.
On Saturday 11, Ferdinando withdrew his comments, on the flimsy grounds that he had been overcome with emotion caused by hunger while facing questions by the COPE committee that suggested wrongdoing by him. A video clip of Ferdinando’s comment at the COPE hearing has been widely circulated on social media.
President Gotabaya Rajapaksa took to Twitter Sunday 12 evening, ‘I categorically deny authorisation to award this project to any specific person or entity.” he wrote.
Although Ferdinando retracted what he had told the COPE panel the previous day, his statement triggered a political controversy, with the Opposition accusing the Rajapaksa government of “pampering” Modi’s “friends” by allowing them “backdoor entry” into the country.
The controversy erupted just days after Sri Lanka amended its laws to do away with competitive bidding for energy projects. Last week the Government changed the governing law of the state-run Ceylon Electricity Board to end competitive tendering. The Adani project is one of several which the authorities were trying to approve, without competitive tender.
President Gotabaya Rajapaksa took to Twitter Sunday 12 evening, vehemently denying the allegation by Ferdinando, “Regarding a statement made by the #lka CEB Chairman at a COPE committee hearing regarding the award of a Wind Power Project in Mannar, I categorically deny authorisation to award this project to any specific person or entity.”
Following the President’s strong denial – which many find hard to believe – Sri Lanka’s Minister of Power and Energy Kanchana Wijesekera tweeted on Monday 13 that Ferdinando had resigned, “I have accepted the letter of resignation tendered to me by the CEB Chairman Mr. MMC Ferdinando. Vice Chairman NalindaIlangaokoon will take over as the New Chairman CEB.”
Meanwhile, the Adani Group responded to the scandal stating that they intend to invest in Sri Lanka and are disappointed by the detraction that seems to have come about. “Our intent in investing in Sri Lanka is to address the needs of a valued neighbour. As a responsible corporate, we see this as a necessary part of the partnership that our two nations have always shared. We are clearly disappointed by the detraction that seems to have come about. The fact is that the issue has already been addressed by and within the Sri Lankan Government,” stated an Adani Group spokesperson.
India’s Former Minister of Finance and External Affairs, Yashwant Sinha, tweeted on Monday 13 stating that the nexus has now been established. “The Modi-Adani-Sri Lanka affair is a serious matter and should not be allowed to be swept under the carpet. The nexus is now clearly established. No further proof is needed (sic),” he said.
The Adani Group responded to the scandal stating that they intend to invest in Sri Lanka and are disappointed by the detraction that seems to have come about.
The latest diplomatic hiccup between Sri Lanka and India comes amidst Sri Lanka’s acute foreign currency crisis that resulted in foreign debt default. The Government was forced to suspend a nearly USD 7 billion foreign debt repayment due in April this year. Sri Lanka, with a population of 22 million is in deep economic crisis with more than USD 50 billion in external debt.
The economic and political crisis has now spiraled into a humanitarian emergency as millions of people face ever escalating costs of living, acute shortages of food, fuel, cooking gas and medicine. India came to Sri Lanka’s aid by extending multi-pronged assistance to the people of Sri Lanka during the last few months, ranging from economic assistance of approximately USD 3.5 billion to secure food, medicine, fuel etc.
The Sri Lanka-Adani row has given greater credence to the nation’s call for President Gotabaya Rajapaksa to step down, though he has vowed to complete the remaining two and a half years of his term in office, disregarding months-long street protests calling for his ouster.
Rajapaksa claims that he “can’t go as a failed President.” But his personal legacy is among the least of the people’s concerns battling a severe economic crisis.
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