The Irrawaddy

USDP Lawmaker Questions Transparency of Private Power Deals

Naypyitaw—The opposition Union Solidarity and Development Party (USDP) has criticized the Ministry of Electricity and Energy for implementing four power projects worth US$5 billion in total without holding tenders.

During a Lower House session on Monday, USDP lawmaker U Maung Myint questioned the responsibility, accountability and transparency of the ministry, which he said is implementing four gas-fired power projects in Taninthayi, Irrawaddy and Yangon regions and in Rakhine State without inviting tender offers as required by the President’s Office’s Instruction 1/2017.

“If the ministry were to say it didn’t invite tender offers, but sought the approval of the Economic Committee and the Cabinet [to award the contracts], I’d say that the government is violating its own order and instruction,” U Maung Myint said.

Electricity and Energy Minister U Win Khaing told the parliament that initial permissions were granted on Jan. 30 to Total Gas & Power Business Service S.A.S and Siemens A.G to implement a liquefied natural gas power project in Taninthayi’s Kanpauk, Zhefu Holding Co Ltd and Supreme Trading Co Ltd in Irrawaddy’s Mi Laung Kyeing, TTCL Public Co Ltd in Yangon’s Ahlon Township and Supreme Trading and Sinohydro Corporation in Rakhine State’s Kyaukphyu.

According to the decision of the Economic Committee on June 11, 2017, the government can give permission for government-private partnership projects proposed by private investors depending on the level of benefit to the country and the concerned region. In such cases, the government needs not hold a tender for the project, and can award permission to the investor that proposed the project, U Win Khaing explained.

“With the state budget, we will be able to produce only around 100 megawatts per year. Because what needs to be done was not done in the past, we are now forced to produce 3,000 megawatts at once,” he said, implying the previous USDP-led government was to blame for the country’s power shortfall.

Successive governments said they would generate 41,000 megawatts from mega hydropower projects, but they were just paper claims, the minister said.

Current production is only 3,000 megawatts and the ministry has to explore every possible means to produce an additional 3,000 megawatts in the next three years, he added.

“When I know as the electricity and energy minister that our country will run out of gas in the next three years, I cannot just sit and do nothing. Currently, 10 gas-fired power plants provide over 1,400 megawatts. If we run out of gas in the next three years and those 1,400 megawatts are removed from the [power supply] system, you can imagine what will happen,” U Win Khaing said.

Outside parliament, the Minkin Township lawmaker repeated his accusation that it was a violation of the instruction from the President’s Office to implement those projects with only the approval of the Economic Committee.

He claimed that the wife of U Kyaw Win, the former planning and finance minister who resigned over a corruption scandal, worked for Supreme Trading, which was given the go-ahead to implement two power projects.

“Supreme is a citizen’s company. And I personally know its chairman, U Sein Myint. That company got two projects. The wife of U Kyaw Win, who was sacked, works for Supreme. That’s why it got the licenses,” U Maung Myint told reporters after the parliament session.

He cited the example of the selection of a telecoms operator under the U Thein Sein government in which tender offers were invited and an international consultant was hired to select the bid winners.

U Win Khaing, however, defended the selection process, saying over 20 local and international companies had submitted over 20 proposals to generate power from LNG, and the electricity company had considered the backgrounds of the firms, their origins, the location and land acquisition processes for the projects, and the viability of connecting them to the national grid as well as the availability of LNG.

Successive governments had signed memorandums of understanding, memorandums of agreement and joint venture agreements with local and international investors in water-powered projects, the richest source of electricity in Myanmar. There were a total of 30 agreements signed for 50 projects projected to generate 41.8 megawatts, but they were only on paper, the minister said.

“We have not awarded them contracts. We have just issued notices to proceed (NTP) for those four projects so that they could conduct EIAs (environmental impact assessments), and social impact assessments (SIA). If I didn’t do that, I would be held responsible for what happens in the next three years,” he said.

Yangon consumes around 1,275 megawatts of electricity, Mandalay 430 megawatts and other regions and states 1,495 megawatts, totaling around 3,200 megawatts. Meanwhile, around six million households have yet to be connected to the national grid.