Chinese Firm Opens Assessment Tender for Strategic Deep-Sea Port in Western Myanmar

By Nan Lwin 25 January 2021

YANGON — A Chinese company has invited proposals by Feb. 8 to provide consultancy services and field investigations environmental and social impact assessments of its ambitious Kyaukphyu deep-sea port project in Rakhine State.

The move brings the Belt and Road Initiative project – which would open Chinese access to the Indian Ocean – one step closer to implementation.

The project is a crucial aspect of the China-backed Kyaukphyu Special Economic Zone (SEZ) Deep Sea Port Project, which is part of the China-Myanmar Economic Corridor.

The SEZ is expected to allow Chinese trade to bypass the congested Strait of Malacca near Singapore while boosting development in landlocked Yunnan Province.

Chinese consortium CITIC Myanmar Port Investment Limited announced on Monday that it would hire a third party to provide “scoping, investigation and reporting” of the project’s assessment process. The move aims to obtain “environmental compliance certificates” for the project.

The company said it would follow Myanmar’s environmental procedures and other laws.

In August, Myanmar  approved the registration of Kyaukphyu Special Economic Zone Deep Seaport Co. Ltd, a joint venture between CITIC and Myanmar’s government-backed SEZ Management Committee, to develop the project.

The parties have reportedly already entered a concession agreement to design, build, finance, operate, maintain and transfer the port. It will also include construction of terminals on the islands of Yanbye and Mede, a bridge connecting the islands and a 15km road to the SEZ industrial park.

In 2019, CITIC hired the Canadian firm, Hatch, to supervise and recruit consultants to environmentally assess the port project. It has also submitted a project proposal to the Ministry of Natural Resources and Environmental Protection which early last year said the project required environmental and social assessments under Myanmar’s law.

A framework agreement for the long-delayed project was signed between the management committee and the CITIC in November 2018. The project was delayed due to a shareholder agreement under President Thein Sein which gave the Chinese developer an 85-percent stake.

The National League for Democracy renegotiated the agreement to increase Myanmar’s stake to 30 percent. The initial agreement estimated  the project to be worth US$9-10 billion. However, both sides agreed to begin the project on a smaller scale after Myanmar raised concerns about debt traps. According to the Ministry of Commerce, the first phase of the port will cost around $1.5 billion (2 trillion kyats).

Concession and shareholders’ agreements for the project were signed during Chinese President Xi Jinping’s trip to Myanmar early last year.

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