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Military party awards major projects to China

A local worker walks along a road in Rakhine State near strategic oil and gas pipelines connecting China's southwestern province of Yunnan directly with the Indian Ocean. © Reuters

By Thurein Hla Htway
January 13, 2016

YANGON -- After a delay of nearly a year, Myanmar's outgoing military-controlled government has awarded Citic Group, China's largest state conglomerate, contracts to develop Kyaukphyu Special Economic Zone (SEZ) and a nearby deep sea port in Rakhine State close to Myanmar's border with India.

The impoverished and remote area has been blighted by serious sectarian strife in recent years. Parliament approved the development of Kyaukphyu SEZ at the end of December despite criticism of the tender process. The ruling military-linked Union Solidarity and Development Party is in its final weeks after being defeated in a general election in November by the National League for Democracy (NLD) led by Aung San Suu Kyi.

The Citic consortium comprises China Harbor Engineering Company, China Merchants Holding, TEDA Investment Holding, Yunnan Construction Engineering Group and Charoen Pokphand Group, a Thai conglomerate.

The first phase of the 1,600-hectare industrial park will get under way in February. It will be home to technology and capital-intensive industries as well as more labor- intensive ones, including textiles and garments, according to the Kyaukphyu SEZ bidding and awarding committee.

The deep sea port is to be constructed in four phases over 20 years, and will have road and bridge links to the industrial park.

President Thein Sein received a delegation led by Citic Chairman Chang Zheng Min on Dec.24 in Naypyitaw, the national capital, a few days before the successful tender was announced. Civil society groups in Rakhine State had appealed for parliamentarians to delay a decision until Suu Kyi's NLD took over.

Min Khin, a member of the NLD's economic team, told the Nikkei Asian Review that his party had been visited by a Citic delegation and China's ambassador ahead of the decision. The visitors were asked for more information and told that nothing should be "decided in haste".

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