Critics call for fairness in selecting developers for deep-sea port and SEZ

As the developers for the Kyaukphyu deep seaport and several special economic zone (SEZ) projects will be selected in late January, critics are calling on authorities not to give Chinese developers precedence over other international companies.

Thilawa SEZ, Dawei SEZ and Kyaukphyu SEZ have been mapped in Myanmar. Kyaukphyu SEZ is the only one with a deep-sea port.

Thilawa SEZ sits on prime land but lacks a deep-sea port, while the implementation of Dawei SEZ has hit a speed bump. Kyaukphyu SEZ serves as the main deep-sea port for Myanmar and China’s major doorway to the sea.

“Among the three SEZs, the Dawei SEZ is far from Yangon and makes transportation difficult. Not to mention the scattered islands around Dawei, which are vulnerable to industrial sewage. There are critics against dirty industries this very instance, and therefore, the planning of Dawei SEZ will be very limited and complicated. The Thilawa SEZ has shallow waters, and there will be no further expansion. Thus, the Kyaukphyu SEZ is Myanmar’s last shot for development,” said a Myanmar business owner.

Gas and oil pipelines from Kyaukphyu to China have already been assembled, and oil tanks are also in place. This arrangement makes Kyaukphyu SEZ particularly precious to China.

“While the Dawei SEZ must start from scratch, Kyaukphyu is all set for China. The pipelines there provide one per cent of China’s total energy needs. Other pipelines, including the one from Africa that is supposed to span across Myanmar, may supply 10 per cent. China has been planning to enter Kyaukphyu since 2005. The development area in Kyaukphyu is three times bigger than Singapore. The racial conflict there is deemed to be a result of lack of economic development. So it’s assumed that an economic boom would be a solution. If a grand deep-sea port were set up in Kyaukphyu, it would be a major strategic spot in Southeast Asia, even in all of Asia,” the business person told Eleven Media.

Many argue that as the Kyaukphyu deep-sea port is a strategically important place that connects Myanmar to the Bay of Bengal and the Indian Ocean, the key developer of such crucial project should not be an individual country.

“The deep seaport is like a key to our country’s development. If this key is to be entrusted to hands of China or India or the US alone, the consequences will not be favourable to Myanmar. To my knowledge, there were previously no Indian or native Myanmar companies among the tender applicants – only Chinese companies. That’s why our company applied for the tender to fill that space, despite the project not being within my realm of business,” said Pyae Wa Htun, chief executive of Parami Energy Group.

Since the country’s general election is scheduled in November or December this year, the developers for Kyaukphyu SEZ will be selected in during the ruling government’s tenure. At present, the country has seen only a few entries of Western companies.

“Take a look at Singapore’s model for example: the construction process is given to some world-class company, the investment and operation processes to other different companies. So, these three companies engaged in and competed for the same business, which helps maintain the sovereignty of the country somehow. In comparison, the Chinese have engaged economic checkpoints throughout Myanmar, which is risky for the country. The Kyaukphyu project is divided into a deep seaport, an industrial zone and a commercial zone, and all are dominated by Chinese companies. In the deep-sea port, there’s only our consortium against three Chinese companies. The tender announcement will be released at the end of January this year. Kyaukphyu deep-sea port and special economic zone are more precious than China’s Silk Road. Nothing will be left for the next generations. As a matter of fact, no need to handover a 100 per cent stake to them. We would carry out the country’s many infrastructure developments if the government could better manage them. So Myanmar must be involved in that project, in addition to the international companies. It would amount to exchanging a project worth US$1 million for Ks 5-10 if all stakes flow to China alone,” said Pyae Wa Tun.

“We are not opposing China. But we need to expand values for our country. In doing so, we must do it for the interests of the country as well as for the next generations. Nothing will happen by giving the green-light without taking account of it. So I decided to join the project. In fact, my company is very small and not a core business. The reason why I joined is so I can share my benefits with our country,” he added.

According to recent news, 61 companies from 11 countries have submitted Expressions of Interest (EOI) for the Kyaukphyu SEZ as of August 25 last year. Among them, 12 interested companies from seven countries took out documents related to the SEZ by paying US$1,000. Of them, seven companies from five countries submitted 12 EOI documents, according to the Kyaukphyu SEZ Management Committee.

“The tender-winning companies for Kyaukphyu SEZ will be released in late January or early February. Currently, I cannot reveal the number of tender winning companies. We cannot release the number of winning companies or the names of countries, as we still need to coordinate. We never allow cent-per-cent foreign investments. Consortiums from Myanmar are also included in the project,” said an official from the Kyaukphyu SEZ Management Committee.

“To tell the truth, there is no need to implement it in such hurried manner. The tender-winning companies should not be announced at the end of January, at a time when there is mounting tension around the controversial Letpadaungtaung copper mine project. For instance, let’s suppose that we share one-third with China. Or else share one-third with Europe. First, there should be transparency. And the way of how to get the benefits from the project will come second. How much benefit will be brought from the development of the deep-sea port and the SEZ to local people as well as to the country? How much benefit will the SMEs get? The project must take local products and social life of local people into consideration. No good will come to the country if a 100-per cent stake goes to China. This should be a win-win situation for both sides. It cannot be a win-win situation if China’s win is 99.5 per cent and ours is 0.5 per cent. In fact, the ratio should be 60:40. This will become a development centre if we could do it within the said ratio,” said a businessperson.

Source: Eleven Myanmar

NB: The best way to find information on this website is to key in your search terms into the Search Box in the top right corner of this web page. E.g. of search terms would be “property research report”, ”condominium law”, "Dagon City", “MOGE”, “yangon stock exchange”,"MECTEL", "hydropower", etc.

To learn about the business opportunities in Myanmar click here

To evaluate the various segments of the market that you could possibly enter base on your competencies you can do a Custom Market Entry Strategy Research. You can see a sample report at page "Actual Sample of Client Report”. Click here to go to page.

Do you know that IE Singapore is giving up to SGD 20,000 support for Singapore company to venture into Myanmar? To learn more click here