Another Deadline Missed by Kyaukphyu SEZ Developers

By Kyaw Hsu Mon 13 March 2015

RANGOON — Announcement of winning bids for development of the Kyuakphyu Special Economic Zone in western Burma’s Arakan State could be announced at the start of the next fiscal year, a project official said, after the second selection deadline came and went with no resolve.

Aung Kyaw Than, secretary of the Kyaukphyu SEZ bid evaluation committee, told The Irrawaddy on Thursday that the committee is still in a “negotiations stage.”

“This is the final stage of negotiations. We still need to discuss more about the processes with the winners,” said Aung Kyaw Than, though he declined to reveal who the frontrunners were.

After failing to meet an earlier deadline in mid-January, the committee told The Irrawaddy that the winning bidders would be announced in late February.

The government called for infrastructure tender bids in September 2014, a few months after awarding a massive consulting contract to Singaporean CPG Corporation. Bidding closed on Nov. 24, with a total of 12 proposals submitted by one local and 11 international firms.

Aung Kyaw Than said three contracts will be awarded for development of the site’s deep sea port, petrochemical processing plant and a variety of industrial factories.

“That’s why it’s taking so long,” he said. “This is a huge project and it will impact the country’s economy, that’s why we’re discussing this cautiously with them.”

Pyi Wa Tun, chairman of the Parami Group of Companies, was the sole domestic bidder on the project. He said the evaluation and selection process has lacked transparency from the outset, predicting that China’s CITIC Group would be among the winners.

CITIC Group has been a known contender for the project, having produced a feasibility study in May 2011 that estimated project costs at $14 billion and a land planning area of about 350 square kilometers (217 square miles).

The Kyaukphyu SEZ is one of three major economic zones planned for Burma’s ports, and will serve as a key feature of an energy corridor transferring gas sourced from the Bay of Bengal and oil shipped from the Middle East and Africa into China’s isolated southwestern provinces. The overland shipments of crude could eventually save China millions by avoiding long and costly tanker routes through the Malacca Strait.

The corridor, which cuts through Burma diagonally passing through Mandalay and parts of conflict-affected northern Shan State before entering China through Muse, also creates convenient shipping hubs for India and Bangladesh, as they will be linked to Mandalay via a proposed tri-lateral highway connecting Northeast India to Thailand.

The project has faced opposition from villagers in Burma and China, primarily because of the amount of land required for related developments. The Kyaukphyu SEZ is expected to take up an initial 1,000 acres of land and later swell to about 4,000, according to comments made last year by the tender selection committee Chairman Myint Thein.