Debt fears impact Myanmar project
Myanmar has scaled back plans for a US$7.3bn Chinese-backed port on its western coast after concerns it could result in a large debt.
The southeast Asian country has substantially reduced the cost of the Kyauk Pyu deepwater port, part of China’s Belt and Road initiative, following reports of troubled Chinese-backed projects in Sri Lanka and Pakistan, a government official and an advisor has told Reuters.
Deputy finance minister Set Aung, who was appointed to lead project negotiations in May, told Reuters the “project size has been tremendously scaled down”.
The project now has a cost estimate of “around $1.3 billion” said Sean Turnell, economic advisor to Myanmar’s civilian leader, Aung San Suu Kyi.
According to Reuters, he stated this is “something that’s much more plausible for Myanmar’s use.”
China’s state-run CITIC Group, the main developer of the project, commented negotiations were ongoing and that the $1.3bn would be spent on the “initial phase” of the port. The project is divided into four phases, it said.
No details on plans for subsequent stages were revealed.
The original plan was to develop around 10 berths at the 25m deep sea port to accommodate bigger oil tankers, but the size will now be revised to only two berths, Set Aung said in an interview, reported Reuters.