NEW DELHI: It took almost a year for India to drive out China from three islands off the Jaffna peninsula.
In January 2021, India was surprised by the announcement that the Ceylon Electricity Board had decided to award a contract to a Chinese company, Sino Soar Hybrid Technology, for the construction of “hybrid renewable energy systems” in three islands off the coast of Jaffna.
The three northern islands, Delft, Nagdipa and Analathivu, are strategically located and, given India’s security sensitivity, went red flags in New Delhi. Preliminary surveys showed that such systems were bound to fail environmental checks, as diesel was part of the mix. Second, the company was only nominally private.
The Indian government weighed in with the Rajapaksa family in power in Sri Lanka. India offered to manufacture similar systems, but more environmentally friendly and at a fraction of the cost. The Chinese project was being completed through an ADB loan as part of the Auxiliary Power Supply Reliability Improvement Project.
India offered a large part of the funds in the form of grants with a very small loan component on easy terms. Sri Lanka had an offer that it could hardly turn down.
The Sri Lankan government panicked, then went silent. The Chinese, who have tremendous influence over the Sri Lankan government, insisted it was an ADB project, with multilateral funding and all necessary protections against allegations of a Chinese “debt trap”.
The Sri Lankan government adopted this explanation as a way of keeping it away from India. Colombo tried to assuage Indian concerns, saying that the Chinese teams would be ready and go.
India promised that their teams would do the same. Colombo said that they cannot back down from the ADB project. India used its goodwill with ADB to ease the inconvenience to Lanka.
A new Chinese ambassador, Qi Zhenhong, persuaded the government to bring a cabinet note saying that India had not responded to the counter-offer, so the Chinese project should go ahead.
India jumped to show its formal offer made months ago and underlined that it was Sri Lanka that was backing down. By now Colombo had got an idea of the seriousness of New Delhi in this matter.
Around the same time, the Ceylon Electricity Board agreed to sell a 40% stake in a power plant in Keravalpatia near Colombo to an American company, New Fortress Energy, which the Chinese objected to.
To strengthen their case, the Chinese entered Pakistan, whose diplomats weighed in on Beijing’s side with Colombo, including sending its press councilor on a “vacation” near the islands.
But India was not losing. Eventually in November India managed to convince the Rajapaksa government about the feasibility of the Indian proposal. By the time Finance Minister Basil Rajapaksa visited India last week, Sri Lanka had agreed to hand over the project to India, after canceling China.
From its official handle, the Chinese Embassy in Colombo tweeted that the suspension was due to a ‘security concern’ of a third party. Beijing on November 29 signed a contract with the Maldivian government to set up solar power plants in 12 islands in the island country.
The fact that China used their official Twitter handle to make it clear that China was no longer making the company’s fig leaf private was yet another example of their “wolf-warrior” diplomacy.