Mythic link to Lanka may become a reality

In keeping with improving equations with the emerald islands to her south, India will shortly commence negotiations with Sri Lanka to build a road-cum-rail sea-link between Dhanushkodi in Tamil Nadu and Talaimannar in minority Tamil-dominated northern Sri Lanka with an investment of $12 billion.

Prime minister Narendra Modi has sounded out his Sri Lankan counterpart Ranil Wikramasinghe and president Maitripala Sirisena on the project in works.

“Sri Lankan leadership is open to negotiation for the road-cum-rail sea link between the two countries that has the potential to open up vast trade and investment opportunities, apart from people-to-people contacts between the two countries,” said a top official, preferring not to be identified.

Multilateral funding agency Asian Development Bank (ADB) will be roped in to provide 50 per cent of the required funds as low-cost credit on nominal interest rates and deferred repayment terms, including a moratorium during the construction period.

ADB’s working group for South and South East Asia is expected to meet later this month in Tokyo where a decision would be taken to commission the techno-economic feasibility study for the proposed project.

If the project finally takes off, it will include extending a railway line in India from Rameshwaram to Dhanushkodi in Tamil Nadu for further extension along with a road-cum-sea link over Palk Straits up to Talaimannar in Sri Lanka.

While Dhanushkodi is 29 km to the west of Talaimannar, connecting the two places would involve constructing road and rail link over sea.

The project may also involve developing the seafront between Talaimannar and another Tamil-dominated Lankan town, Jaffna, once the hotbed of Liberation Tigers of Tamil Eelam (LTTE). The 74-kilometre waterfront along with Jaffna-Talaimannar is considered ‘strategically important’ for both countries.

The prime minister mooted the idea of Dhanushkodi – Talaimannar rail-cum-road link project for the first time during the maiden visit of his Sri Lankan counterpart Wikramasinghe.

The Modi government is banking on Maitripala Sirisena regime considered `pro-India’, as compared to the earlier government led by Mahindra Rajyapaksha.

“The Sri Lankan leadership has given enough hints that the Chinese establishment will be kept away from the northern parts of the country that could have security concerns for us,” the official said.

But no dates have yet been fixed for India and Sri Lanka negotiations on the project. Talks are likely to be held only after the ADB meeting in Japan.

The official did not rule out the possibility of roping in other multilateral agencies like the World Bank, if needed, for broad-basing funding for this project.

The rail and road sea-link will also have the provision for movement of ships in the region. This project is being billed as the largest in developing trans-Saarc road and transport network.

The road-cum-rail link over sea between Dhanushkodi and Talaimannar comes in wake of the Sirisena government’s decision in February this year to abandon the China-funded $ 1.5 billion Colombo Port city project.

The Sirisena government had ordered a probe into the project whose construction was inaugurated by Chinese president Xi Jinping in September 2014 amidst fanfare to set up a port city that includes reclaiming a 230 km waterfront with roads, electricity, communication facilities, hotels, shopping areas, apartments, recreation areas and marinas.

However, to balance its relations with the Chinese leadership, the Sri Lankan government may continue to involve the dragon in development of the Hambantota port in the southern province.

Hambantota is also the constituency of Mahinda Rajapaksa who was elected Sri Lankan president for the first time in 2005 and reportedly had close links with Xi Jinping’s government in China.

Delhi had grown increasingly wary of Rajpaksa’s policy of closer ties with China. Ties took a turn for the worse when his government allowed Chinese submarines to dock twice in 2014 despite a warning issued by India.

While the port’s first phase was opened in November 2010, the $ 361 million project has been built mostly with funding from the Chinese government. Over 85 per cent of the funds for this project have been sourced from Chinese Exim Bank.

“The Sri Lankan government will continue to partner with Chinese companies and banks in the second and third phase of this port,” another official aware of the developments, told Financial Chronicle.