Sri Lankans continue protesting against Adani being favoured by PM Modi and Rajapakse

The Indian government’s decision to nominate private companies to undertake projects in foreign countries has opened Indian foreign policy to the kind of negative scrutiny it has never encountered before.

Most recently it has happened in Sri Lanka, leading to public protests. Adani Enterprises has faced widespread protests in Australia, too, including in November 2020, when members of the #StopAdani movement gathered outside the Sydney Cricket Ground during a one-day international between Australia and India to protest against the company’s role in the Carmichael coal mining project in Queensland.

Controversy also surrounded the Narendra Modi-led government’s decision to remove the public sector Hindustan Aeronautics Ltd (HAL) and nominate Anil Ambani’s company to be the offsets partner in the government-to-government defence hardware purchase agreement with France, in 2016, to procure Rafale aircrafts.

Relations between India and Sri Lanka were severely strained last year when, in February 2021, the Gotabaya Rajapaksa government cancelled an MoU with India and Japan for Colombo’s East Coast Terminal project, clearing it instead for a Chinese company. Adani enterprises was the frontrunner for that project until suddenly, ECT and several other projects involving India were called off for reported “logistical issues and bureaucratic reasons”.

Reports indicate that widespread protests by the Colombo port authority workers and even by influential Buddhist monks at the way in which a private Indian company had been chosen for a strategic Sri Lankan national asset without following due procedure of a bidding process, forced the government to cancel the deal.

The Sri Lankan cabinet did, however, award the Colombo Port West Coast Terminal development project to India and Japan. India again “nominated” Adani Ports and, after several rounds of discussions, including among the top leadership, the deal was concluded leading to a “new enthusiasm and a fresh energy” in the relationship, Sri Lankan Foreign Minister GL Peiris said.

In September 2021, the Adani Group signed a Build Operate Transfer agreement with Sri Lanka’s largest listed company John Keells Holdings and the Sri Lanka Ports Authority (SLPA) to jointly develop the Colombo West International Container Terminal (CWICT) at Colombo Port, strategically located on one of the busiest shipping routes in the world.

The deal was reportedly a “compromise,” agreed upon to keep India invested in the island nation in need of funds. It remains unclear how the Adani group was nominated for the project, without due process, but it appeared to ease bilateral tensions between Colombo and New Delhi, slightly tilting the scales in India’s favour.

So, when Colombo faced an imminent debt default earlier this year, New Delhi stepped in to ensure that Sri Lanka was not humiliated. India has, in 2022, extended US$ 3.5 billion in support to Sri Lanka, through currency swap arrangements, deferral of a US$ 0.5 billion loan and as liberal lines of credit for the island nation as part of its financial assistance to help the Indian Ocean nation deal with its economic crisis and finance essential imports.

A grateful Rajapaksa government, once considered close to Beijing, opted to award a power project to the Adani-headed company. The undercurrent of anger against India harboured by a section of the Sri Lankan polity, including leading opposition figure Sajith Premadasa, however, erupted when a top energy official claimed that Indian Prime Minister Modi had “pressurised” Rajapaksa to award a renewable energy (wind power) project in northern Mannar district to Adani.

Ceylon Electricity Board chairman MMC Ferdinando, in a deposition explaining recent alterations to the country’s electricity laws before the Sri Lankan Committee on Public Enterprises, made the claim about the “pressure” from Modi to Rajapaksa to accommodate Adani. He withdrew the comment and resigned from his post after a tweet from President Rajapaksa refuting the claim of “undue” favouritism in awarding the project “to any specific person or entity”.

A besieged Rajapaksa, under immense political and social pressure for his acute mismanagement of Sri Lanka’s economy leading to its near collapse, and desperate to remain in power, vehemently denied the allegations but, despite the official’s resignation, the damage has been done and is being sought to be controlled.

However, the Adani group and the Modi government again find themselves in an unsavoury foreign policy controversy, with no explanations forthcoming. Even India’s Ministry of External Affairs, quick to thwart any negative commentary, has remained completely silent on the matter.

Protests erupted again last weekend in Colombo against the government’s decision to give Adani Enterprises the 500 MW Mannar renewable energy project. Sri Lankans protested what they alleged was a “dubious” deal between Modi and Rajapaksa, conducted in a non-transparent and illegal way, so that Adani did not have to go through a competitive bidding process. Apparently, the Sri Lankan Parliament passed an amendment to the Electricity Act to facilitate the Adani deal without any bidding for the Mannar project.

(This was first published in National Herald on Sunday)