Myanmar: China-led port project slowing inching ahead

  • Myanmar’s USD1.3bn Kyaukphyu deep-sea port project, a China-backed scheme under Beijing’s Belt and Road Initiative (BRI), is one small step closer to realization.
  • CITIC Group Corporation, the Chinese state firm leading the project has started to prepare a legally required environmental and social impact assessment (ESIA) and preliminary geological survey in Jul 19, the first signs of on-the-ground progress for the mega-project.
  • The moves come after Aung San Suu Kyi’s civilian government inked a framework agreement with a CITIC-led consortium. The agreement fell short of, but paved the way for, an actual concession-granting deal.
  • The CITIC-led consortium, comprised of four other Chinese enterprises and Thailand’s Charoen Pokphand Group, aims to develop the port as part of a special economic zone (SEZ) in Myanmar’s conflict-ridden Rakhine state.
  • Negotiations for the mega-project, green-lighted by previous president Thein Sein, stalled in the first two years of Suu Kyi’s government, either for reasons of red tape or lingering official unease over the scheme.
  • In 2018, the National League for Democracy-led government renegotiated the port’s consortium-government share-holding ratio down from 85:15 to 70:30, while shaving the project’s total cost from USD7.5bn to USD1.3bn.
  • However, even with the Kyaukphyu port project’s cost slashed, there are other complicating factors.
  • Chinese outlays, as with many mega-projects in Myanmar, have been attended by controversy.
  • Furthermore, If CITIC’s plan relates to only the port without an SEZ, then the current Kyaukphyu SEZ authority in charge must transfer oversight responsibilities to the Myanmar Investment Commission, according to Sean Bain, legal adviser to the International Commission of Jurists.
  • Bain says the announced assessment appears to only concern the port, which would fail to examine the cumulative environmental and human rights impacts of a wider project that includes a SEZ.

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