A state-owned Chinese investor has agreed to develop a $1.3bn deep sea port in the southwest Myanmar town of Kyauk Pyu, in line with China’s Belt and Road Initiative.
The agreement between CITIC and the government of Myanmar has been under discussion for a number of years, but the final version of the deal has been trimmed to meet Myanmar’s concerns about debt.
Myanmar’s military administration awarded CITIC a tender in 2015 to develop a port and special economic zone with a combined price tag of nearly $10bn, of which $7.3bn was taken up with the port itself.
China will finance 70% of the two-berth port’s construction costs, rather than the 85% envisaged in the original proposal.
Set Aung, Myanmar’s deputy finance minister and lead negotiator for the scheme, spoke to the media at the signing ceremony in Naypyitaw, the capital of Myanmar.
He said the scheme would be developed in phases so that its economic performance could be gauged. Aung said the government had set a target of generating about $3.2bn a year when the port and zone were complete.
As with the Pakistani port of Gwadar (pictured), the port will be connected by road and rail corridors with China, thereby relieving its dependence on the South China Sea and the Malacca Strait, an important geostrategic objective of the Belt and Road Initiative.
Image: One they built earlier: Gwadar port in Pakistan (Alinghi3/CC BY-SA 4.0)