The Irrawaddy Business Roundup (Aug. 8, 2015)

By Simon Lewis 8 August 2015

Australian Engineers Defend Salween Dam Role

The Australian company that has faced protests in its efforts to hold public meetings on a hydropower dam in Shan State has defended its role in the Chinese-Thai project.

The Snowy Mountain Engineering Corporation (SMEC) has been hired by the developers of the planned 7,000 megawatt Mong Ton dam—China Three Gorges Corporation and the Electricity Generating Authority of Thailand—to carry out environmental and social impact assessments, involving public consultations.

Environmentalists and local residents have opposed the massive project—which would be first dam on the mainstream of the Salween River and would flood some 676 square kilometers of eastern Shan State, displacing thousands of people. SMEC has come in for criticism back in Australia in recent months, where it is also under investigation for paying bribes overseas.

A report from the Australian Associated Press (AAP) on Tuesday said SMEC had issued comments responding to the criticism over the dam.

The company admitted that engaging with “certain community representatives has been challenging, with planned consultations sometimes disrupted,” according to AAP.

“(The) SMEC aim is to conduct an EIA/SIA process that is inclusive, constructive and transparent,” the comments said. “[SMEC] maintains a neutral position on this project, whereby it is simply reporting the facts, both positive and negative.”

In a development that may be unrelated to the corporation’s work in Burma,Australian media reported in April that SMEC’s offices in New South Wales had been raided as part of an Australian Federal Police (AFP) investigation into allegations that the company paid bribes in unnamed foreign countries.

Under the Organisation for Economic Co-operation and Development’s Anti-Bribery Convention, Australia’s government is obliged to investigate and prosecute companies who pay bribes to officials in foreign countries to gain a competitive advantage.

The company says it has been working in Burma since 1969, although there is no indication that the AFP investigation centers on the country. According to its website, SMEC has worked in more than 100 countries and has a network of more than 75 offices across five continents.

In emailed comments to The Irrawaddy, the AFP declined to say whether Burma was involved in the investigation.

“The AFP is only able to confirm that it has an ongoing investigation into the SMEC relating to allegations of foreign bribery,” it said. “We are not into a position to provide anything further as it is an ongoing investigation.”

New Weather Alert System Could Bring SMS Flood Warnings

In a timely announcement as the country reels from severe flooding across the states and regions, a Maryland-based technology company says it has entered an agreement to bring a weather monitoring and forecasting system to Burma. The local firm involved in the venture says the deal means severe weather warnings could be sent out through mobile phone companies in the future.

The US company, Earth Networks, said on Tuesday that, together with Burmese company Lucky Bird Group, it was “deploying a nationwide network of real-time lightning detection sensors and weather stations.”

In the hope of speeding up emergency responses, the private company said it would set up a nationwide system of weather sensors that could provide real-time weather information to emergency services officials, those operating aviation and those in charge of infrastructure.

It is unclear from the statement whether the Burmese government has agreed to use the technology or enter any agreement with the two private companies involved, however.

“Data from this network will be used with weather modeling and analysis technology. Together, the data and the analytical tools will provide critical weather monitoring, forecasting and alerting services,” the announcement said.

Earth Networks in the statement pointed out the massive damage that severe weather has wrought in the past 20 years, claiming that as well as leading to the loss of more than 100,000 lives, storms, flooding and landslides had destroyed more than $1 billion worth of property.

It did not mention the current flooding, but the statement comes amid criticisms of the government for ailing to respond quickly as flood waters rose rapidly. The flooding has displaced an estimated 330,000 people and wrought untold damage to roads, bridges and crops.

Htin Aung Khine, managing director of Lucky Bird Group, said in the statement that the deal will  “help Myanmar adapt to climate change and mitigate the impact of extreme weather.”

“In addition, we will be making it possible to provision [sic] SMS alerts through the nation’s top mobile providers to support the agricultural community and other sectors,” he said.

Japan’s Komatsu Opens Mandalay Plant 

Manufacturing conglomerate Komatsu has reportedly opened its first plant in Burma, as yet another large Japanese group builds its presence in the country.

According to a report from the publication International Construction this week, Komatsu—which manufactures construction and mining equipment as well as military hardware—has invested some $5.5 million in a plant in Mandalay, where it will produce generators and remanufacture components.

The location in Central Burma’s main city positions Komatsu at the hub of most of the road, river and rail connections to Upper Burma’s Sagaing Division, Kachin State and Shan State, where large mineral deposits have been found and mining activities are likely to step up in the coming years.

The plant’s remanufacturing business will involve taking apart used machines, and rebuilding them with any worn out parts replaced. The International Construction report said Komatsu would also manufacture new generators at the site, citing demand for electrical power generation in a country where the grid is still limited to major towns and cities in many areas.

“With KMM (Komatsu Manufacturing Myanmar), Komatsu is better positioned to supply [remanufactured] products closer to customers’ jobsites, and will thus be able to help customers improve their productivity and reduce operating and maintenance costs,” the report quoted a Komatsu statement saying.

“At the same time, Komatsu will also be able to capture aftermarket demand and work to expand sales.”

London-Listed Firm Leads $30M Investment in Apollo Towers

Myanmar Investments International Limited has helped pump $30 million into Apollo Towers, the firm building telecommunications infrastructure for Norway’s Telenor.

The investment vehicle said it led a consortium of investors putting $30 million into Apollo Towers. Myanmar Investments is itself putting $20 million into the tower company, the same amount as it raised last month from selling shares on the London Stock Exchange’s Alternative Investment Market.

Myanmar Investments—which has an office in Singapore, but is registered in the British Virgin Islands—has said it is also interested in investing in the finance, manufacturing, healthcare and education sectors in Burma.

“Part of MIL’s strategy is to target investment opportunities in Myanmar where there are acute shortages and long term growth potential,” Michael Dean, Myanmar Investments’ director, said in the statement.

“Apollo, with its established market leading position in a fast growing and essential sector of the Myanmar economy, epitomises these opportunities. We are delighted to be able to partner with [Apollo Towers founder] Sanjiv Ahuja and TPG Growth [the major shareholder in Apollo Towers] to assist with Apollo’s long term growth.”

Telenor this year ordered 700 new phone masts from Apollo Towers, on top of 1,000 the company has already built for the Norwegian firm. Alongside Qatar’s Ooredoo, Telenor entered Burma’s mobile phone market last year under a 15-year license from the government that requires it to reach 90 percent of the country within five years.

State Energy Firm to Award Supply Base Deals Soon

Burma’s state-owned oil and gas company could appoint foreign and local firms to develop offshore supply bases later this year, according to an industry report.

With production already underway in some of Burma’s offshore gas fields, and contracts signed by large companies to explore for new opportunities, upstream activity in the country’s oil and gas sector is set to expand, requiring more infrastructure.

According to a report from industry site Rigzone this week, the Myanmar Oil and Gas Enterprise (MOGE) will soon invite companies to apply to build the facilities to provide support services to those companies performing exploration and production activities in the offshore blocks.

The report cited an MOGE official saying the company will name the winning firms “later this year or early next year,” adding that 51 local and foreign entities had expressed an interest in building supply bases.

“We will inform interested parties to submit proposals in the second week of August and they will be given three months to do so,” the company official told Rigzone.

The report added that the number of bases that will be built has not yet been decided.

“MOGE will decide on the locations… [possibly in consultations] with foreign [oil and gas field] operators,” the official told Rigzone.