A Chinese company that is the main investor in a US$3.6 billion dam project in Myanmar has warned of potential legal consequences in response to the Myanmese government's sudden decision to halt the joint venture last week, state media reported.
In a lengthy interview with Xinhua, Lu Qizhou, president of the state-owned China Power Investment Corporation, said he was totally astonished about the decision from the Myanmese side, which he said had not given the mainland company any prior notification.
'If the suspension means construction is halted, then it will lead to a series of legal issues,' Lu was quoted by the news agency as saying. The suspension could lead to sizeable losses for both sides due to the substantial investments made, resulting in a large number of default claims. Myanmese President Thein Sein made the surprise announcement to parliament on Friday that the project - proposed by the military junta in 2006 and due to be completed in 2019 - had been shelved because of public concerns the flow of the Irrawaddy River would be threatened, and that the project would flood an area about the size of Singapore.
Other critics noted that 90 per cent of the electricity generated from the 6,000-megawatt dam would go to China.
Lu stressed that his company had gone through all the proper legal channels, dismissing concerns that the project would serve only China's growing energy needs. 'People who hold such a wrong viewpoint either don't understand the situation or have ulterior motives,' he said.
He also hit back at environmentalists opposing the project, saying that the flooded area would account for only 1.4 per cent of the basin area of the dam when it was completed, and that the company had provided help in relocating affected residents.
China has been a staunch supporter of the Myanmese government. Bilateral trade increased by more than half last year to US$4.44 billion and China's investment in the country reached US$12.3 billion. Thein Sein's first major foreign visitor since taking office in February was Jia Qinglin, chairman of the National Committee of the Chinese People's Political Consultative Conference.