By Feizal Samath
TRINCOMALEE, Sri Lanka, Jun 24 2002 (IPS)

With the guns of war stilled and the prospects for peace bright, investor interest is again being drawn to the deep, calm waters of Trincomalee, one of the world’s greatest natural harbours on Sri Lanka’s east coast.

“In the last six months, after the ceasefire came into effect, there’s been a lot of interest in Trincomalee,” says Gamini Chandrasekera, the Sri Lanka Ports Authority’s (SLPA) resident manager here.

Most of the interest in the picturesque port, a former British base that used to protect the Royal Navy’s Indian Ocean fleet during the Second World War, come from India. Some of the investments that are in the pipeline look set to guarantee a permanent Indian presence in the area — and protect the Sri Lankan government’s interests against Tamil rebels using it as their future base.

The landlocked inner harbour, surrounded by ridges and low hills atop which some of the fortifications built by the British can still be seen, used to provide safe anchorage for merchant ships laid up and waiting charters before the outbreak of the ethnic conflict in 1983.

The port has been neglected for some time, largely because of the Tamil separatist war. But now that a truce is in place, the government wants to make best use of its potential.

Peace talks between the government and the Tamil rebels, originally set to start this month in Thailand, are likely to get off the ground in July as both sides hurl accusations of ceasefire violations.

Despite this, though, no shots have been fired by either side since December, making it the longest ever truce in the history of the 19-year long conflict that has killed over 60,000 people.

The sheltered waters of the harbour, home of the Sri Lankan Navy’s biggest base and headquarters of its eastern command, eliminate the need to build expensive breakwaters.

“The most distinct advantage of this harbour is that there’s no need for dredging. We have the natural depth,” points out SLPA’s Chandrasekera.

The Commander of the Eastern Naval Area, Rear Admiral Sarath Ratnakeerthi agrees that there is a lot of potential to develop the harbour. “But first we need peace,” he says while wary of the intentions of the rebels who have opened six offices in the town since the formal truce.

Tamil Tiger guerrillas, he says, have been infiltrating cadres into the town under the pretext of doing political work while also studying military installations.

With peace in the air, potential foreign investors have been scouting around the area in recent months. There’s plenty of land available in and around the harbour with some 5,000 acres of state land vested with the SLPA. The SLPA, which acts as the guardians of the land, is to release some 750 acres for an industrial zone in Kappalturai, near the town’s highway.

Dr Bandula Perera, chairman of the Industrial Development Board, said the IDB plans to set up an industrial estate on 100 acres that have been allocated in Kappalturai.

However, there are concerns from minority Tamil politicians about the speed in which the government is proceeding to attract foreign investment to Trincomalee.

R. Sambandan, senior Tamil United Liberation Front member of parliament from the area, rejects government plans, saying that whatever is being done should be initiated by the people of the area and that no big investments should come in until the peace process moves forward.

“Tamils who have suffered several decades of discrimination and unequal treatment are not prepared to trust anyone in a hurry,” he said in an interview. “We want to decide our destiny, including our economic future, within the framework of a united country.”

In the past, he pointed out, the beneficiaries of economic development, whether it be in agriculture, industries or fisheries, were not the Tamils but people from outside the region.

“Trincomalee has great potential in port development, agriculture, fisheries, industries, tourism,” Sambandan said. “But the present industrialisation effort is totally ill-conceived. Development must be done in consultation with representatives of the region. We don’t want this to be foisted on us from Colombo.”

Trincomalee has a slightly higher percentage of Tamils than Sinhalese (the majority community) or Moslems. Tamils, who mostly live in the north and the east, claim they have been discriminated against in job allocation, land use and education by governments run by the majority community.

Arjuna Mahendran, chairman of the state-run Board of Investment also concedes that disputes could emerge if investment — decided by Colombo — proceeds before the planned interim administration is set up.

The government has said it would like to create an interim administration with help from the LTTE (Liberation Tigers of Tamil Eelam) to administer the north and east for about two years as an interim measure before a political solution is found to the long-running conflict.

“As far as the oil tank farm is concerned, that is not a problem because it involves two parties with the land in Trincomalee owned by the Ceylon Petroleum Corp (CPC). The problems could arise if state land is demarcated for various investment before the interim administration is established,” said Mahendran.

The biggest recent development in Trincomalee is an agreement to lease part of the CPC’s 99 oil tanks, each with a capacity of 100,000 tonnes, to the Indian Oil Corp. The deal, signed in New Delhi earlier this month, gives effect to some of the provisions of the 1987 Indo-Lanka Peace accord which denies the use of Trincomalee to any power inimical to India and gives India first choice in the use of the oil tank farm.

The other major commercial establishments already in city are a flour mill owned by Prima Ceylon, a subsidiary of Prima Singapore, and the Tokyo Cement Co. plant, a subsidiary of Japan’s Mitsui.

Among the new industries coming up in Trincomalee is a coal processing plant that will produce coking coal for use in Indian steel mills.

During much of Sri Lanka’s conflict, Trincomalee played a key role in keeping troops and civilians in Jaffna further north, supplied with essential commodities and other requirements.

Just like foreign investors, the rebels are also eyeing the city and its natural harbour as the capital of so-called Tamil Eelam, the name of the Tamil nation the rebels have been battling for. But the possible presence of the Indian army to protect Indian interests may serve as a deterrent.

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