Economy

The Irrawaddy Business Roundup (March 15, 2014)

By William Boot 15 March 2014

Yoma in Deal With Hong Kong Firm for Luxury Hotel in Rangoon

Burmese-owned conglomerate Yoma Strategic Holdings has signed another business deal, this time with the Hongkong and Shanghai Hotels company (HSH) to open a luxury Peninsula brand hotel in Rangoon.

The two firms signed an agreement in Hong Kong to cooperate in acquiring and converting the famous colonial Burma Railways headquarters in the city’s central business district, said travel industry magazine TTR Weekly.

“The agreement, subject to conditions and approval, will seek to redevelop and restore the heritage building, which dates from the 1880s and is one of the oldest existing colonial buildings in Rangoon,” the magazine reported.

It’s not clear what stage the partnership is at in securing a lease or ownership of the protected building and no details of cost or development timetable were announced.

The partnership was signed by HSH chief executive Clement Kwok and Singapore-based Yoma’s chairman, Serge Pun.

“[Burma] is one of the world’s most exciting emerging markets and we see good potential in this market as a luxury travel and tourism destination,” Kwok said in a statement reported by TTR Weekly.

Only days earlier, Yoma announced it had signed an agreement with ED&F Man, an international food commodities merchant based in London to develop a large coffee plantation in Burma.

Yoma has business interests in real estate, agriculture, vehicles and tourism.

Plans for Kyaukphyu-China Commercial Road, Rail Link ‘Complete’

Plans for the development of a so-called commercial corridor linking the port and district of Kyaukphyu with China’s Yunnan Province via the border crossing of Ruili are complete, a senior Ministry of Construction official told a Rangoon conference.

The corridor, which will include a new highway and railway line, proposed by China, is one of a number of transport improvements being considered and for which foreign investors are sought, the special construction promotion conference heard.

The conference was organized by Singapore’s Centre for Management Technology.
“Besides the Kyaukphyu-Ruili Corridor, [Burma] and China have other bilateral agreements for more construction. We expect that the corridor project will be implemented soon,” said ministry executive engineer Thet Zaw Win, Eleven Media reported.

Earlier this month, the government named the CPG Corporation of Singapore as leader of five firms chosen as consultants for the Kyaukphyu Special Economic Zone development.

Energy Ministry ‘Struggling’ With Offshore Block Bid Decisions: Report

Burma’s Ministry of Energy seems to be having trouble making decisions on the award of licenses for 30 offshore oil and gas exploration blocks, a leading international oil industry magazine said.

“Results of the tender, which the energy ministry had indicated would be released late December or early January, are expected in March. Even so, the March timeline will also depend on the management,” US based Rigzone said, quoting what it called a ministry source.

“Evaluation of the bidders’ final proposals for the country’s offshore exploration blocks appeared to have been completed although top governmental officials are still finalizing the tender award,” it said.

The blocks were first put up for tender last June and 30 mostly large international oil companies submitted bids.

It could be that the ministry “finds it very hard to select from the many bidders,” Rigzone quoted Rangoon law advisory company VBD Loi.

Drillers Plumb New Depths to Squeeze Burma’s Oldest Oil Field

Renewed efforts to try to increase oil recovery from Burma’s oldest oil field, the Yenangyaung, involve drilling to a new depth of more than 1,300 meters, a report said.

The drilling is being carried out by Goldpetrol, a company controlled by Singapore-based Interra Resources, said the industry magazine Rigzone.

Interra has been working in the field since 2011 under an Improved Petroleum Recovery Contract with the state-owned Myanmar Oil and Gas Enterprise.

The Yenangyaung field is in the Irrawaddy River valley north of Naypyidaw and was first tapped by the British in the 1930s.

The field and the adjoining Chauk field are not major oil providers. Production is currently limited to several hundred barrels of crude per day.

Military Keeps Strong Grip on Business Institutions, Says UN Investigator

Burma’s military still maintains a strong hold on many of Burma’s commercial and political institutions the United Nations’ special representative to Burma, Tomas Ojea Quintana, said.

“For the time being, the military retains a prevailing role in the life and institutions, [and] in general remain unaccountable,” Quintana said in a statement in Geneva reported by AFP news agency. “The rule of law cannot yet be said to exist in [Burma].”

Quintana, the UN’s special rapporteur on human rights in Burma, last visited the country at the end of February. He is scheduled to present his final report before to the UN Human Rights Council on March 17.

On his way to Geneva, Quintana told reporters in Bangkok he was concerned about the effect of infrastructure projects in Burma on human rights issues such as land ownership and loss of home.

“What is the responsibility, not only of the government … but also of foreign investors? [Burma] lacks the concept of the rule of law and accountability. So if these infrastructure projects really affect the livelihoods, the local community and the environment, and they will, what will be the rule of law that will protect them?” said Quintana.

Air Asia Airline Gives ‘Generous’ Help to Suu Kyi Health Foundation

Malaysian regional budget airline Air Asia is helping the foundation to promote better health care in Burma launched this week by Aung San Suu Kyi.

The company, which flies between Kuala Lumpur and Rangoon and Bangkok and Rangoon and Mandalay, is giving unspecified aid to the Suu Foundation, said travel trade magazine TTR Weekly.

Air Asia chief executive Aireen Omar said the firm was “committed to develop the community and economy of the destinations that we fly to,” but gave no details. Suu Kyi described the aid as generous, said the magazine.

One of the foundation’s aims is to try to improve conditions at Rangoon Hospital where, it said, healthcare has “vastly deteriorated.”

“Deprived of funding, training, and facilities, the hospital reflects the state of healthcare in Burma. The World Health Organization ranks [Burma] last of 190 countries in healthcare outcomes,” said the foundation.

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