Singapore-Led Consortium Wins Kyaukphyu SEZ Consulting Tender

By Simon Lewis 3 March 2014

RANGOON — The Burma government has chosen a group of companies led by Singapore’s CPG Corporation to do consultancy work for the massive Kyaukphyu Special Economic Zone project.

During a press conference Monday, a consortium of five companies led by CPG was named as the winner of an open tender on the project, which is set to include a deep-sea port, an industrial zone and residential developments. The project—along with Chinese oil and gas pipelines and transit routes to connect the Bay of Bengal to southern China—is part of plans to create what has been called a “mini-Singapore” on an island off what is at present one of Burma’s poorest and most troubled states.

Deputy Labor Minister Myint Thein, the secretary of Burma’s Bid Evaluation and Awarding Committee, announced the Singaporean-led group as the winner. Netherlands-based KPMG was the stand-in second choice for the tender, in which 31 firms and consortiums expressed interest, he said.

The consortium led by CPG Corporation—formerly the Singaporean government’s Public Works Department—also includes real estate firm DTZ, Global Maritime and Port Services, global accountants EY (Ernst & Young) and project management company PM Link.

Myint Thein said the winning consortium was tasked with drawing up a workforce development plan and an environmental and social impact assessment plan. The project could require as many as 250,000 workers, and the Arakan coast has large stretches of untouched mangrove forests.

The companies must “develop infrastructure, for instance electricity, water, transportation, communication and hotels […and] work in conformity with the relevant ministries, state government, with interested investors,” Myint Thein said, according to an official translation of his speech Monday.

The winning consortium will also draw up an “involuntary resettlement sourcebook,” to make sure that any displacement of people related to the project follows World Bank guidelines, he said.

The companies are facing a short timeline to complete the work. A new tender to find developers to fund and build the project is open until November 2014, and the government wants implementation to begin in December.

Than Maung, an attorney with the Kelvin Chia Partnership law firm in Rangoon and a member of Parliament’s legal affairs commission, told The Irrawaddy that few people would need to be resettled for the project, since the area is “sparsely populated.”

“Most of the people don’t have to move out or resettle to other places. [Local communities] will be developed simultaneously. They can work in our projects, they can also enjoy the developed infrastructure,” he said, adding that the large workforce needed for the project could be made up of Burmese workers who currently go to Thailand or Malaysia in search of work and often encounter poor working conditions.

“[Now] we have no such projects. If bigger projects are being developed in Rakhine [Arakan] State or elsewhere in Myanmar, they will not go to other countries [to work] in such a dire situation. They will be very happily working within our country.”

A project led by the China National Petroleum Corporation has already installed a natural gas pipeline connecting the offshore Shwe gas field with China’s Yunnan Province. A parallel oil pipeline is reportedly near completion, and road and rail plans along similar routes have also been announced for what could become an important economic corridor for China.

Than Maung said that although the economic zone and port project is separate from the Chinese development, the plans together would make Kyaukphyu strategically important.

“It will be the hub of international trade between East and West,” he said.