The Hindu : International : Moratorium on Sri Lankan debt

Online edition of India's National Newspaper
Wednesday, May 04, 2005

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International

Moratorium on Sri Lankan debt

V.S. Sambandan

Shyam Saran announces relief of $16 million for the next three years

COLOMBO: The Foreign Secretary, Shyam Saran, on Monday announced a three-year moratorium on the repayment of Sri Lankan debt as part of India's ongoing tsunami-assistance to the island-nation.

The current outstanding debt is about $500 million, with an average annual repayment of about $5.4 million. In effect, the moratorium would give relief to the tsunami-devastated nation of about $16 million over the next three years.

Announcing the moratorium at the Foreign Office consultations between the two countries, a joint statement released here said India would "consider participation" in the reconstruction of the railway line between Colombo and the southern town, Matara.

"I go back with a very encouraging and very optimistic assessment of the prospects for India-Sri Lanka relations," Mr. Saran told Indian journalists based in Colombo on the conclusion of his four-day visit. To questions, Mr. Saran said the proposed Comprehensive Economic Partnership Agreement "is making good progress." "There is a strong political will both on the Indian side and the Sri Lankan side to bring about an early conclusion of this agreement."

Sethusamudram project

On apprehensions here over the environmental impact of the proposed Sethusamudram project, Mr. Saran said, "Protection of the environment is a matter of great importance to India as well. We believe the safeguards which are required have been incorporated." A "very extensive briefing" was given on the technical parameters of the project to Sri Lankan representatives and India was "ready to provide" any additional clarifications.

The petroleum joint venture between Indian Oil and Ceylon Petroleum Corporation, IOC Lanka, "has the potential of emerging as a major petrochemical base not only for the two countries but can serve the wider region as well. It has a very strong economic potential and that is what we are engaged in developing at this point in time."

Dispelling apprehensions on the proposed defence cooperation agreement, Mr. Saran said: "I don't think that any apprehension has a basis. I don't think this kind of cooperation is directed or should be seen as targeting either any group within Sri Lanka or against any third country."

On the Indian role in development of north and east Sri Lanka, Mr. Saran said: "Whatever we can do in order to improve the living conditions of people in these areas we will be happy to do so." Asked if Sri Lanka's peace process was crowded with the internationalisation of efforts, the Foreign Secretary replied: "This is really a call for the Government of Sri Lanka." India had made its stand very clear. "We are committed to the territorial integrity and national unity of Sri Lanka, so any peace process which is within those broad parameters is something that we would welcome. We would certainly be keen to see there is no return to violence and we would also like to see a settlement in which the interests of all the different ethnic groups in this country are safeguarded. There should be an acceptance of the values of plural democracy. As long as these principles are observed and ensured we would support it."

Investment in various sectors, including power and energy, transport and the proposed ferry service were discussed at the bilateral talks, which were led by Mr. Saran and H.M.G.S. Palihakkara. Yet another Indian element of tsunami-assistance would include a series of workshops on low-cost housing to be held by Indian experts and a capacity building exercise in management of disasters and post-disaster scenarios.

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