New Delhi: Prime Minister Modi had pressured President Gotabaya Rajapaksa to award a power project to the Adani Group, a senior Sri Lankan official on Friday claimed but withdrew the statement later.
MMC Ferdinando, who is the Chairman of Sri Lanka's Ceylon Electricity Board (CEB), was appearing before a parliamentary panel in Colombo when he raised the allegation.
As the controversy picked up, Sri Lankan President Rajapaksa "vehemently" denied it, according to the Indian Express.
The project in question, according to the report, was the 500-megawatt renewable energy project in the island nation's northern Mannar district.
Ferdinando told the Committee on Public Enterprises (COPE) that Rajapaksa had revealed to him that he was under pressure from Modi, and he added that President then directed him to award the project to the Indian company.
COPE was told by him that CEB had never before given unsolicited proposals not even on a government-to-government basis.
Ferdinando however withdrew his statement saying that he became emotional as some questions he was asked appeared to insinuate wrongdoing by him.
Rajapaksa took to Twitter vehemently denying any authorization to award the project to any specific person or entity.
Later the President's office issued a longer statement that said Sri Lanka was currently facing acute shortage of power and the President wanted to run mega power projects as early as possible.
The statement added that no undue influence work in awarding the project and selection of institutions for the projects would be done strictly on the basis of transparent and accountable system of the government of Sri Lanka.
Only days before, Sri Lanka amended its laws to remove competitive bidding for energy products.
Opposition in Parliament alleged that the change of laws was aimed at regularizing the Manar contract to the Adani Group.
Following this allegation, CEB unions threatened but called off a country-wide strike after a presidential order declaring electricity an essential service.
There was no immediate response from India or the Adani Group over the controversy.
During an interview with the Indian Express, Sri Lankan High Commissioner to India Milinda Moragoda said the ideally located Manar project could offer wind energy of 5,000 MW. If it was exploited, Sri Lanka could export to and import from India energy, because undersea cables are not a big deal to lay.