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India, China competing for Lankan share

India and China have a handful of outstanding issues to resolve but the two countries seem united on one common cause — Sri Lanka.

world Updated: Jun 14, 2010 00:17 IST
Sutirtho Patranobis

India and China have a handful of outstanding issues to resolve but the two countries seem united on one common cause — Sri Lanka.

While President Mahinda Rajapaksa was in New Delhi talking cooperation and signing seven agreements with the Indian government, a top leader from China was in Colombo — heading a 30-member delegation — to sign six pacts.

The Chinese Vice-Premier Zhang Dejiang signed six agreements with Prime Minister DM Jayaratne including pacts on economic and technical cooperation, highways development, cooperation in information technology and communications, the development of maritime ports and the second phase of the Hambantota Port Development project.

Rajapaksa met Dejiang for breakfast on Saturday within hours of his return from India.

Dejiang, according to a statement from Rajapaksa’s office, said China reciprocated Sri Lanka’s continued support for the one-China policy and for a seat at the UN Security Council; the diplomatic support for which Sri Lanka has also promised India.

China, along with Russia, in return had deflected a move to include rights abuses during the end of the Lankan civil war in 2009 as part of the UN Security Council’s agenda.

Since 2006, the Chinese government has provided Sri Lanka $3.04 billion in financial assistance. It is aiding Sri Lanka in several projects like the Katunayake Expressway, extension of the railway line from Matara to Kataragama, the Norochcholai Coal Power Project, the Hambantota Port Development, and building the Centre for the Performing Arts in Colombo.

India, on its part, has offered $800 million through line of credit (LoC) to rebuilt rail infrastructure in northern Sri Lanka as well as the Matara-Colombo rail line apart from rehabilitating the Palaly airport, the Kankesanthurai harbour, the Duraiappah stadium and building a cultural centre in Jaffna.

India’s LoC for various infrastructure projects in Sri Lanka is estimated to touch $1.8 billion in the near future. As of now, China’s LoC at higher commercial rates is estimated to be around $3.4 billion.