This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 02 COLOMBO 000551 
 
SIPDIS 
 
DEPARTMENT FOR SA, SA/INS, S/CT; NSC FOR 
¶E. MILLARD 
 
LONDON FOR POL/RIEDEL 
 
E.O. 12958:   DECL: 04-01-13 
TAGS: PGOV PTER MOPS CE NO JA LTTE
SUBJECT:  GSL considering a referendum re federalism 
later this year; Tigers suspected in another sea attack 
 
Refs:  Colombo 543, and previous 
 
(U) Classified by Ambassador E. Ashley Wills. 
Reasons: 1.5 (B,D). 
 
¶1. (C) SUMMARY:  In a March 29 conversation with the 
Ambassador, Minister Moragoda said the GSL was thinking 
of holding a referendum on federalism later this year. 
He commented that the PM believed the referendum idea 
could be a way to place opponents of the GSL's peace 
initiative on the defensive.  Moragoda also said a 
report re the security zones in Jaffna will soon be out. 
In other developments, the Tigers have apparently struck 
again, attacking a navy ship late March 31.  In our 
view, a referendum may be a way to move the peace 
process forward, but it needs careful planning or it 
could backfire.  END SUMMARY. 
 
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Possible Referendum 
------------------- 
 
¶2. (C) The Ambassador spoke March 29 with Milinda 
Moragoda, the Minister of Economic Reform and a key 
player in the Sri Lankan government on peace issues. 
Moragoda mentioned that the GSL is considering holding a 
peace-related referendum possibly in the September 
timeframe.  The preliminary thinking is that the 
referendum would allow Sri Lankans to vote on whether 
they approve of a federalist-type negotiated solution to 
the conflict.  The exact wording of the referendum has 
not been put together yet, Moragoda remarked, and would 
hinge in large part on the status of GSL discussions 
with the Liberation Tigers of Tamil Eelam (LTTE) on the 
federalism issue.  (Note:  The discussions re federalism 
only kicked off at the sixth round of talks held last 
month and are in their embryonic stage -- See Reftels.) 
 
¶3.  (C) Re the potential political ramifications of such 
a move, Moragoda commented that Prime Minister 
Wickremesinghe felt that such a referendum, if it was 
handled correctly, could win overwhelmingly.  It would 
also have the benefit of placing anti-peace process 
elements in the south of the country on the defensive. 
The referendum process itself, Moragoda noted, is a 
relatively simple and straightforward one:  All the 
government needs is a majority in Parliament to approve 
the text and it can then be taken to the public for a 
vote. 
 
------------------------ 
Report re Security Zones 
------------------------ 
 
¶4.  (C) Moragoda also mentioned that a long-awaited 
report re the Sri Lankan government's controversial 
"high security zones" in Jaffna has been given to the 
GSL.  (Note:  The zones cover about 18 percent of the 
land area of Jaffna District.  The LTTE and many Tamils 
have demanded that the zones be drastically decreased in 
size, but the military says it needs the zones for 
defensive purposes -- see Reftels.)  The report was 
drafted by Satish Nambiar, a retired Indian general, who 
visited Sri Lanka earlier this year to assess the 
situation in Jaffna.  Moragoda said the report, which 
the government was reviewing, was quite elaborate in 
that it provided for large-scale monitoring, including 
of heavy weapons, and for the shifting and consolidation 
of troops.  Nambiar is due to visit Sri Lanka in late 
April to discuss the report with the government and the 
LTTE.  (Note:  The fact that the report is ready and has 
been given to the GSL is close-hold, and has not hit the 
press yet.  Mission has not yet seen a copy of the 
report, although Moragoda said he would try to get us 
one.) 
 
------------------ 
Another Sea Attack 
------------------ 
 
¶5.  (C) In another peace process-related development, 
the LTTE's sea wing has apparently struck again.  The 
Sri Lanka Monitoring Mission (SLMM) has confirmed that 
several small boats fired upon a Sri Lankan naval 
transport vessel in waters just north of Trincomalee 
port late March 31.  The attack left up to three sailors 
injured, one seriously.  The ship, which was carrying 
1,500 soldiers, was not seriously damaged and was 
reportedly able to continue its voyage to Jaffna.  The 
SLMM reports that naval personnel fired back and the 
navy believed that one of the small boats may have been 
sunk.  The SLMM could not confirm the claim. 
 
¶6.  (C) The SLMM is investigating the incident and 
reports that the LTTE has denied involvement in the 
attack in categorical terms.  Observers we have spoken 
to believe that the LTTE's claim is ludicrous on its 
face.  They assert that the group is almost certainly 
responsible for the attack, as the use of small boats in 
lightning raids fits the Sea Tigers' modus operandi 
perfectly.  The attack also took place very near Sea 
Tiger bases on the northeast coast. 
 
¶7.  (C) (((Note:  There have been other incidents 
recently in the same general area off the northeast 
coast:  On March 20, for example, unidentified small 
boats attacked a Chinese fishing trawler in waters near 
the LTTE-controlled town of Mullaitivu.  The boat sank, 
with the loss of 17 crew.  As with the latest incident, 
the Tigers denied involvement.  In its recently released 
report about the March 20 incident, the SLMM admitted 
that it could not come to any conclusion about what 
happened, with all sides denying they had instigated the 
attack.  In private, SLMM contacts have told us they 
thought the LTTE was responsible.  End Note.))) 
 
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COMMENT 
------- 
 
¶8.  (C) We are not sure how serious the GSL is about the 
referendum idea.  It may be a trial balloon (there have 
been some press articles mentioning the idea in general 
terms of late).  That said, a referendum could prove a 
way to move the peace process forward if it is put 
together carefully.  A big win in a referendum, for 
example, could provide the GSL's peace initiative 
significant momentum.  At the same time, the government 
must mull over the matter very carefully.  If something 
goes wrong, the GSL's plans could backfire and the peace 
process suffer possibly irreparable harm.  In any case, 
we expect that government insiders will debate this 
issue for some time before making a final decision on 
whether to go forward. 
 
¶9.  (C) Re the March 31 sea attack, we believe that the 
Sea Tigers are almost certainly the culpable party.  As 
we have reported, the Sea Tigers are apparently on a 
hair trigger, waiting for the right opportunity to 
strike back at the Sri Lankan navy over the sinking of a 
LTTE resupply ship last month (see Reftels).  END 
COMMENT. 
 
¶10. (U) Minimize considered. 
 
WILLS