China to build Huge Port, Highways in Burma

A port capable of handling the largest cargo ships will be built o­n the Burmese island of Ramree specifically to service China's shipping needs, the official state news agency in Beijing has confirmed.

The port at Kyauk Phyu will be connected to a new 1,950-km highway to be built through Burma directly to Kunming, the capital of China’s Yunnan Province, according to China's Xinhua agency.

The major project, which would give developing but isolated Yunnan its first sea-trade window o­n the world, is to be undertaken by Asia World Company, a Burmese firm linked with Singaporean, Malaysian and Chinese business interests, and named in the past by US investigators in connection with drug smuggling.

Observers say such a port will require extensive highway infrastructure improvements, in order to transport the large cargo containers o­n trucks into China.

There has been speculation for some time that China wanted to develop a port o­n the Burmese coast to transship crude oil from Africa and the Middle East, but the Chinese agency report made no mention of this.

Burma watchers in Bangkok say the Xinhua report presents a disarmingly misleading picture, however.

“This is an attempt to portray China as a bystander who might benefit from some Burmese enterprise,” said a Southeast Asia political analyst at a Western embassy in Bangkok.

“But in truth it is another piece in the jigsaw picture emerging of China’s growing influence and control over Burma. In reality, the Chinese will be funding and building the port and the road links, and there is probably even more to it than that.”

The Kyauk Phyu port will have a water depth of 20 meters, said Xinhua, making it capable of handling the biggest container ships that currently dock at the world’s largest and busiest ports.

With that water depth, the port will be able to handle even larger vessels than in China’s busiest port, Shanghai.

Chinese shipping companies are now using some of the world’s biggest container ships, but even with dredging the Shanghai port does not have a depth of 20 meters.

“If this Burmese port is going to be that deep it could process really big ships carrying the largest containers,” said Bangkok-based shipping agent Sven Kaarstad. “But in that case, they would also have to build a fairly wide, straight highway up into China to be able to accommodate trucks with 20-foot or even maybe 40-foot containers. You cannot move container trucks o­n two-line roads.”

The Kyauk Phyu port will be linked with a new highway planned between Yunnan’s Kunming and the far western Burmese port of Sittwe via Mandalay with a spur o­nto Ramree Island, the Chinese news agency said.

Asia World is owned and managed by Steven Law and his father, Lo Hsing-han, who has a history of involvement in illegal drugs.

From a small business base in the early 1990s, Asia World has developed into o­ne of Burma’s biggest and most privileged business conglomerates, with interests ranging from transport to construction and retailing.

The company already operates Rangoon port and has built roads linking northern Burma with Yunnan. Asia World is also a major developer in the ruling junta’s new isolated capital of Naypyidaw.

Both Steven Law—also known as Tun Myint Naing—and his father have been accused by the US of involvement in drug trafficking. Law, who has a Singaporean wife with strong business and political links in the city state, was refused a visa to visit the US in the 1990s, although he studied there in his youth.

The Indian government is supposed to be financing the redevelopment of Sittwe port to provide India’s landlocked and isolated northeastern states with access to the sea via the River Kaladan. However, it’s not clear if this US $110 million project will go ahead because India and China both are vying to buy most or all of the verified 200 billion cubic meters of gas in just two blocks of the Shwe field 60 kilometers offshore from Sittwe.

If China is confirmed as the preferred buyer, a pipeline would also be built from Sittwe into Yunnan, and India may turn its investments elsewhere, say observers.

“India is desperate to monopolize Sittwe as part of its trade improvement plans, but development is really bedded in the gas which it wants to pipe into its northeast states to power their development,” says energy commodities analyst Sar Watana in Bangkok. “It’s hard to imagine New Delhi funding a port development that benefits China.”

The cost of building the Kyauk Phyu port and a linking highway is not yet known.