Twelve Months on, Kyaukphyu Tender Still up in the Air

By Kyaw Hsu Mon 18 September 2015

RANGOON — Twelve months since Burma’s government opened tender bids for the development of the Kyaukphyu Special Economic Zone in Arakan State, officials continue to insist the announcement of three successful bidders is on the horizon.

After bidding closed last November, with a total of 12 proposals submitted by one local and 11 international firms, the announcement of successful proposals was expected in January.

However, the opaque tender and evaluation process has been beset by delays, while local opposition to the contentious project, slated to include a deep-sea port, petrochemical processing plant and a variety of industrial factories, continues to simmer.

Aung Kyaw Than, a member of the tender selection board for the Kyaukphyu SEZ, told The Irrawaddy this week that successful bidders would be announced during the term of the current government.

“It has been delayed for about a year because this is a huge project,” he said. “But I can say that the process is nearly finished… For the time being, all I can say is that multinational corporations are among the selected developers.”

One of three major economic zones planned for Burma, the Kyaukphyu SEZ is billed as Burma’s western economic gateway, with dual oil and gas pipelines, the latter of which became operational in 2013, running from the port overland to China’s southwest Yunnan province.

Local residents and lawmakers have criticized the tender process as lacking in transparency and questioned what benefits the project would have for the local population. Their concerns are informed in part by lingering grievances over the dual pipelines, centering on issues of displacement, compensation and environmental degradation.

Aung Kyaw Than countered that the selection committee was receptive to local concerns, which would be factored into decision-making.

“We always listen to their voices, including when we devised the rules and regulations for tender nominees on environment impacts, labor issues and land issues,” he said.

As the tender process drags on, speculation has swirled as to the successful bidders. An official from Parami Energy Group of Companies cited “internet sources” as pointing towards a positive outcome for the local applicant.

“It was reported… that two Chinese companies and one Burmese company have been selected by the government to develop the project. I understand that Parami is the only Burmese company that participated in the bid,” said Yap Kwong Weng, chief operating officer at Parami.

“We have not been officially informed of any news yet,” he added.

An industry source predicted some months ago that China’s CITIC Group was likely to be awarded one of the three tenders, with the company having produced a feasibility study for the project in 2011.

Yap Kwong Weng agreed with this assessment, citing the Chinese firm’s size, capability and reputation. He added that the bidding process should be more transparent.

“I believe the delays are due to reasons beyond the project’s ‎scope,” he said. “The Kyaukphyu Special Economic Zone houses the Burma-China pipeline… and it is positioned in a strategic location on the Bay of Bengal that could allow big ships to dock.”

Originally the SEZ was slated to encompass a 1,000-acre allotment of land, but this was downsized to 4,000 acres, according to the zone’s management committee.

Singapore’s CPG Corporation was awarded the US$2.5 million consulting contract for the project in March last year.