Myanmar scales back China-funded Kyauk Pyu port project in Rakhine state due to debt concerns
The Kyauk Pyu port is a key part of Beijing’s ambitious Belt and Road Initiative, aimed at expanding trade links across the world, but many in Myanmar are also wary of becoming too dependent on China
Myanmar has scaled back plans for a Chinese-backed port on its western coast, sharply reducing the cost of the project after concerns it could leave the Southeast Asian nation heavily indebted, according to a top government official and an adviser.
The initial US$7.3 billion price tag on the Kyauk Pyu deep water port, on the western tip of Myanmar’s conflict-torn Rakhine state, set off alarm bells due to reports of troubled Chinese-backed projects in Sri Lanka and Pakistan, the official and the adviser said.
Deputy Finance Minister Set Aung, who was appointed to lead project negotiations in May, said the “project size has been tremendously scaled down”.
The revised cost would be “around US$1.3 billion, something that’s much more plausible for Myanmar’s use”, said Sean Turnell, economic adviser to Myanmar’s civilian leader, Aung San Suu Kyi.
China’s state-run Citic Group, the main developer of the project, said negotiations were ongoing and that the US$1.3 billion was to be spent on the “initial phase” of the port, adding the project was divided into four phases. It did not elaborate on plans for subsequent stages.
A Chinese foreign ministry spokesman, Geng Shuang, said on Monday that “according to what I understand, at present both sides are having commercial negotiations” on the Kyauk Pyu project.