Mon 28 Jul 2014
Filed under: Business / Trade,News,Regional
According to a report by Eleven Group on the 20th, Myanmar Ministry of Railway Transportation formally released information that the Sino-Myanmar Kyaukpyu-Kunming Railway project has run aground. It said that the MOU, signed in 2011, has expired, but “China did not continue the conversation and the Ministry of Railway Transportation does not have a plan to implement it.” On July 21st, an authoritative figure who participated in the project verified to Global Times that “the push for a related project has been put on hold.”
The Sino-Myanmar Kyaukpyu-Kunming Railway project was announced in 2011. Public information revealed that articles about the project appeared on the websites of the State-Owned Assets Supervision and Administration Commission, the Ministry of Commerce, and the China Railways Engineering Corporation (CREC). These articles portrayed the railway as a part of the Sino-Myanmar Kyaukpyu-Ruili Corridor. The project’s difficulty is relatively low and the feasibility is high. Upon completion, the railway would become a grand corridor to transport Chinese products to overseas countries. Many cargo yards were to be built in Mandalay and Kyaukpyu and China would invest in the Kyaukpyu special economic zone.
The authoritative figure told the reporters that the MOU signed between CERC and Ministry of Railway Transportation in April 2011 stipulates that construction should begin within 3 years. The original amount of investment planned for the project was 20 billion USD, with a completion date in 2015. The Chinese side was responsible of raising most of the funding and accordingly was to enjoy the right to operate the railway for 50 years.
On July 20th, the Eleven Group quoted Railway Ministry official Myint Wai as saying the project had not commenced by the expiration date of the MOU. In addition, civil society organizations in Myanmar are opposed to the project. Before the expiration date in March, the Myanmar Ministry of Transportation had made multiple statements that they were investigating and reviewing the Sino-Myanmar Kyaukpyu-Kunming Railway project. “Although China is the main investor, the construction and operation by the Chinese will last for as long as 50 years in all.” Furthermore, Myanmar civil society organizations and local residents have launched multiple protests to the government, saying the project would negatively affect the region. Some political parties in Myanmar say that a consensus has yet to be reached in the parliament. Some Myanmar media even issued warning that China might use the infrastructure projects to “interfere with the internal affairs of Myanmar and threaten the national security of Myanmar.”
On the 21st, the authoritative figure told the Global Times that the Chinese side has decided to suspend the push for related projects out of consideration for Myanmar popular sentiment and respect for their view. A CREC spokesperson told the Global Times during an interview that the company does not have a formal response on the issue and related information will be released after the discussion by the board, according to regular procedure.
A project map released by Eleven Group shows the Sino-Myanmar Kyaukpyu-Kunming Railway starting at the deep-sea port of Kyaukpyu in the Rakhine state, passing through mid and northern Myanmar from the southwest of the country, entering China at Ruili, and proceeding to Kunming. The reporters from the Global Times learned that the railway basically parallels the Sino-Myanmar oil and gas pipeline. The line used to be called China’s southwest grand strategic corridor. The gas pipeline was completed by last October. From January to June this year, Yunnan has imported 613,000 tons of natural gas from the pipeline, with a trade of 2.27 billion RMB.