Plan for Burma-China Train Link Derailed

By Kyaw Hsu Mon 21 July 2014

RANGOON — A proposed railway to link the planned industrial hub in Arakan State with China has been abandoned due to concerns over the potential cost and environmental impact of the project, according to a Myanma Railways official.

In 2011, Burma signed a memorandum of understanding (MoU) with a Chinese state-owned enterprise to construct a railway from Kyaukphyu, on the Bay of Bengal, to the Chinese border and on to Kunming, the capital of China’s Yunnan Province—also the route of Chinese-built oil and gas pipelines.

Since the announcement of the initial agreement, however, no progress has been made on the rail project. The gas pipeline is up and running and the oil link is thought to be nearing completion, and a road along the vaunted economic corridor has also been proposed.

“We haven’t had any detailed agreement to implement this railroad since [2011],” said a senior Myanma Railways official in Naypyidaw, who asked not to be named because he is not permitted to talk about the project.

“We just made a memorandum of understanding between the two parties. Now, we haven’t made any new agreement to start operations, so what I can say is that we aren’t working on this project.”

China’s state-owned Railways Engineering Corporation was to spend US$20 billion building the 1,215-kilometer railway, which it would then operate for 50 years before handing the infrastructure over to the Burmese government, according to the terms of the original MoU.

“Actually, the cost proposed by China for the project was not sufficient to construct the long railroad, and, also, there are other environmental impact issues that we would have to consider along the railroad,” the official told The Irrawaddy.

At the planned terminus of the now-abandoned railway, Kyaukphyu, preparations are going ahead for a special economic zone, with a tendering process currently underway to find developers for a deep-sea port, industrial zone and residential development.