Sri Lanka balances between India and China with Trincomalee agreement

India will refurbish and develop a strategically important 'oil tank farm' at Trincomalee

The popular narrative that China has bought over Sri Lanka, using subsidised infrastructure projects to whittle away Indian influence, was served a reality check during the visit of Sri Lanka’s Prime Minister Ranil Wickremesinghe.

In New Delhi on Wednesday, the two countries signed an agreement for India to refurbish and develop a strategically important “oil tank farm” at Trincomalee on the northeastern coast of Sri Lanka.

The giant oil farm, with the capacity to store over a million tonnes of petroleum, was built between the two World Wars as a logistic facility for British forces in Southeast Asia.

Trincomalee, reportedly the world’s second-deepest natural port, was one of the bases from which the Indian Peacekeeping Force (IPKF) operated from 1987-90.

In 2003, Indian Oil Corporation’s Sri Lanka subsidiary signed a 35-year lease to develop the oil farm and build a refinery. However, due to the civil war in Sri Lanka and a risk-averse IOC management, the oil farm has lain unutilised since then.

Only 15 of its giant oil tanks are currently usable, with the remaining 84 tanks swallowed up by dense jungle.

While offering only limited petroleum storage, Trincomalee offers India a face-saving presence in Sri Lanka, where it is engaged in an unacknowledged trilateral tussle for influence with China and the US.

While China is often regarded as a winner in Sri Lanka with its infrastructure projects and Belt and Road proposals, Colombo actually balances carefully between New Delhi, Beijing and Washington.

Says Nilanthi Samaranayeke, a Washington-based naval analyst: “Sri Lanka has historically resisted being relegated to one camp of competing major powers. In fact, echoes of Colombo’s 1971 UN proposal for an Indian Ocean Zone of Peace that sought to minimize great power rivalry in the region can be heard today in Sri Lankan calls for a Code of Conduct in the Indian Ocean.”

True, China made inroads into Sri Lanka from 2005-15, under the previous president Mahinda Rajapakse. But Beijing’s presence was as controversial as high profile. Chinese companies took on the $1.4 billion development of the Hambantota Port complex in southern Sri Lanka, 240 kilometres from the capital, Colombo, which including the construction of the Mattala International Airport. Rajapakse hails from Hambantota.

To Beijing’s and Colombo’s chagrin, Hambantota has been commercially unsustainable, with businesses and industry reluctant to relocate to this remote location, and little revenue accruing from the port. Mattala was quickly dubbed: “The world’s emptiest airport.”

With the cost of Hambantota placing Sri Lanka in debt to China for $8 billion, the Ranil Wickremesinghe government sold a reported 80 per cent of Hambantota equity to China, transforming the strategically located port complex into a Chinese enclave. Locally, that has raised sharp resentments against apparent Chinese encroachment into Sri Lanka’s sovereignty.

In the military realm, New Delhi expressed concern to Colombo at Chinese navy visits to Sri Lanka, including one by a nuclear submarine. China also sold weaponry to Sri Lanka during its war with the Liberation Tigers of Tamil Eelam (LTTE).

Meanwhile, New Delhi has retained close, if low key, military ties with Colombo even through the Rajapakse era. These interlock with flourishing ties with other Indian Ocean countries like the Maldives, Mauritius, Seychelles and Madagascar. A large percentage of Sri Lankan military officers have traditionally trained in India during their careers.

Since 2011, the Indian and Sri Lankan navies have conducted an annual training exercise, SLINEX (Sri Lanka – India Naval Exercise). A trilateral Coast Guard exercise, named Dosti, is carried out annually between the Indian, Sri Lankan and Maldivian navies and coast guards. The Sri Lankan Navy’s flagship is a Sukanya-class vessel built in Hindustan Shipyard Ltd, Visakhapatanam.

In 2012, New Delhi and Colombo formalised military cooperation, instituting an annual dialogue between their defence secretaries.

Similarly, Washington is ratcheting up military cooperation with Colombo, which had been scaled back during Rajapakse’s presidency. Since March 2016, US warships are back to visiting Sri Lankan ports after a five-year hiatus.

Last year, US forces delivered humanitarian aid to the Jaffna area through Operation Pacific Angel. The Pacific Command chief, Admiral Harry Harris delivered the keynote address at the Galle Dialogue, a prestigious maritime security conference that Sri Lanka hosts every year.