Sri Lanka & India sign MOU to achieve equal benefits to both countries through economic investment & development co-operation

Sri Lanka & India sign MOU to achieve equal benefits to both countries through economic investment & development co-operation

India reiterated its commitment towards supporting Sri Lanka to become a powerful nation in the region and towards the efforts of the Sri Lankan government to empower people. The prime minister of India also extended their fullest support to Sri Lanka’s mission of being an economic, trade, social and finance hub in the Indian ocean. This was done amidst the Sri Lankan prime ministers 5 day visit to India for a series of discussions with top government personnel.
This was supported by the signing of a MoU with India to achieve mutual and equal benefits to both countries through joint business ventures, economic investments & development co-operation. Indian Foreign Minister Sushma Swaraj commented that the MoU was signed as an initial agreement and was based on mutual friendship, cordiality and brotherhood of both countries.
The primary focus of the MoU has been given to road development, Liquefied Natural gas production, Solar Power, Modernization of railway services, Agriculture, water management, development of Trincomalee City and port and other economic zones. As a result of this MoU a joint working group will be formed and that group will be dealing with the discussion on port and refinery as well as other infrastructure related matters in Trincomalee according to Indian Ministry of External Affairs Spokesperson Gopal Baglay.
The specific projects which has been mentioned in the MoU include, 50 MW Solar Power Plant in Sampur which can be extendable up to 100 MW. This is a differentiation as the site was previously proposed for a coal plant however, the government of Sri Lanka is focusing on renewable energy as a priority.
Another specific project is a Liquefied Natural Gas fired 500 MW capacity power plant as well as a LNG terminal or Floating Storage Re-gasification unit in Kerawalapitiya. India will also be involved in setting up of a piped gas distribution network in Colombo and the suburban area and also help set up retail outlets for the supply of Compressed Natural Gas and convert fuel based power plants to LNG power plants. It is also proposed in the MoU to conduct these projects jointly with the Ceylon Petroleum cooperation.
Furthermore, according to the MoU india will set up Industrial or Special Economic Zones in demarcated location in Sri Lanka and will develop jointly with Sri Lanka the Dambulla – Trincomalee road as an expressway. The development of Mnnar- Jaffnar and Mannar- Trincomalee highways is also an agenda on the MoU.
MoU also makes provisions for Indian companies to be encouraged to invest in a container terminal in Colombo port along with already agreed works to develop the railway sector in Sri Lanka including track updating.
According to the Cabinet Spokesperson Rajitha Senarathne, the discussions are continuing to sign a separate agreement with India to establish a joint venture company to operate and manage oil tanks in Trincomalee under a 50-year lease agreement. It was also communicated that the joint venture company shall take up to 74 tanks and discussions are underway to obtain 10 tanks for the Ceylon Petroleum Cooperation.
It is expected that the endeavor to develop the upper tank farm will yield an investment ranging from USD 300 -500 Million and will bring the facility to international standards. Furthermore, as stated by Deputy Minister Harsha de Silva, in his keynote address to the “Oceans Dialogue – 2017” the Surbana-Jurong of Singapore has already been engaged with to develop a city master plan along with inputs from India and Japan.
As the Sri Lankan government has also received grants from Japan in developing the city and port of Trincomalee it is expected that Japan will also be a stakeholder in some of the upcoming projects in the region and it is likely a tripartite agreement to facilitate such will be formed in the near future. The broad scope of the MoU allows for many sectors to undergo rapid development and it will open many opportunities for new ventures as the improved infrastructure and increased production outputs comes to fruition.
Indian Prime Minister, Narendra Modi is expected to visit Sri Lanka on the Vesak Day to take part in the celebrations and is expected to also take part in discussion with key politicians in the country during his visit.

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Article Code : VBS/AT/16052017/Z_1

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