Irrawaddy Business Roundup (January 18, 2014)

By William Boot 18 January 2014

Secret Deal to Build Hydro Dams in Kachin State Revealed

Details have emerged of plans by a Chinese construction company and a Burmese firm to build four hydro dams on a river in Kachin State that would generate a combined 1,200 megawatts of electricity, according to local media reports.

An agreement exists between YPIC International Energy Cooperation & Development Limited of Yunnan and a Burmese firm called International Group of Entrepreneurs, said Eleven Media.

The agreement was first made with the military regime in 2010 and has recently been amended and made current, the report said, quoting sources in Burma’s Ministry of Electric Power.

International Group of Entrepreneurs is owned by the sons of former Minister of Industry Aung Thaung, who is still a member of Parliament, said the Kachin News Group.

The plans, not previously made public, involve developing dams on the Nawchankha River at Laungdin, GawLan, Htonshin Chaung and Kankan, said Eleven Media.

There have not been any consultations with communities likely to be dislocated by the dams.

The electricity planned to be generated by these projects is equal to one third of Burma’s entire present power capacity. It’s not clear from the reports whether the electricity would be distributed inside Burma or transmitted to China.

Thai Firm ‘to Build Second Gas Electricity Plant in Rangoon’

Gunkul Engineering of Thailand is building a second small gas-fueled electricity plant in Rangoon, and is reportedly planning to develop more power stations elsewhere in Burma.

The firm said it will develop a mixture of natural gas, solar and wind power projects with an electricity generating capacity of 150 megawatts by 2016, The Nation newspaper in Bangkok reported.

Gunkul has completed one 25-megawatt gas plant in Rangoon and is planning a second with an unnamed Burmese partner and via its subsidiary Gunkul Myanmar Power (Hlawga) Pte registered in Singapore, the paper quoted executives saying.

Investment in other projects amounting to about 100 megawatts, using gas or wind turbines is being studied, chief executive Sopacha Dhumrongpiyawut told The Nation.

Surveys of potential development sites are planned in Mon, Karen and Shan states and the Taninthayi region, it said.

Japan’s Marubeni Corp Eyes Building a Fertilizer Factory in Burma

Major Japanese conglomerate Marubeni Corporation is considering building a factory in Burma to produce agricultural fertilizers, a report said.

Senior managers of Marubeni have held talks on the factory with various government officials in Naypyidaw, including the Minister for Environmental Conservation and Forestry Win Tun, said Eleven Media citing unnamed government sources.

No details of possible locations for the factory or the investment and timeframe are available.

Marubeni is one of three large Japanese companies investing in the Thilawa Special Economic Zone on the outskirts of Rangoon. The other two are Mitsubishi Corporation and Sumitomo Corporation.

They are working on establishing infrastructure such as roads, sewage, drainage and electricity to cater for factories and warehouses. The first phase of Thilawa is due for completion in 2015.

Indian Businesses Look for Partners at Trade Show in Rangoon

Dozens of Indian companies are taking part in a trade promotion show in Rangoon.

The show, featuring Indian products and services, is being supported by New Delhi’s Ministry of Commerce and Industry.

“The show will bring together leading Indian brands and small and medium size entrepreneurs on one platform, effectively presenting the India business perspective and leverage business partnerships with Myanmar Industry,” said an Indian Embassy statement quoted by Eleven Media.

It will focus on agricultural equipment, vehicle components, construction machinery, education and training, energy transmission, financial services, irrigation, metals and minerals, and waste management.
Burma’s giant western neighbor has been hesitant to invest in Burma’s economic renaissance. The show runs until January 18.

Denmark Cancels Multimillion Dollar Debt to ‘Aid Burma’s Growth’

European Union member country Denmark has cancelled debts of US$54 million owed by Burma.

The debt is old loans advanced by Denmark years ago to pay for fishery protection vessels, said the Copenhagen Post.

“When we forgive debt, it opens up resources that can be invested in a population’s health, schools and roads, which they are in desperate need of,” said Danish Development Minister Rasmus Helveg Petersen during a visit to Naypyidaw.

“[Burma] should no longer be weighed down by old debt while they continue their path towards development and political reforms that will benefit the poor population,” he said at a meeting with Burma’s President Thein Sein, the paper reported.

Burma’s Newest Airline Starts Mandalay-Chiang Mai Route

Another air service between regional districts of Burma and Thailand is set to start at the end of January.

Burma’s newest airline, Asian Wings Airways, will fly a weekly service on Wednesdays from Mandalay to Chiang Mai and return from January 29, said Bangkok travel newspaper TTR Weekly.

Up to now, Asian Wings has flown only on domestic Burma routes, linking Rangoon with 16 other destinations in the country, said the paper.

The Mandalay-Chiang Mai route is to serve “travel demand between the two cities,” TTR Weekly said. It will operate until April 30.

A number of other small airlines, mostly Thai, already fly between the two cities, including Nok Air the budget line owned by state-owned operator Thai Airways.

Nok Air also links Chiang Mai with Bagan and the Thai border town of Mae Sot with Moulmein in Mon State.