Myanmar junta’s decision to expedite the China-funded Kyaukphyu Special Economic Zone (KPSEZ) and deep-sea port project could emerge as a challenge for India built Sittwe Port given geographical proximity between the two ports.

The junta has recently invited bids to provide legal services to the KPSEZ and deep-sea port project in Myanmar’s western Rakhine State, a key strategic component of China ‘s Belt and Road Initiative (BRI).

Beijing considers the KPSEZ and the deep-sea port vital to the BRI, as they will give China direct access to the Indian Ocean, allowing Chinese trade to bypass the congested Strait of Malacca near Singapore, while boosting development in landlocked Yunnan Province, which borders Myanmar. This will be part of China Myanmar Economic Corridor (CMEC). Oil and natural gas pipelines are already functioning between Kyaukpyu and Kunming in Yunnan province.

The Kaladan multi-modal transit transport project, being built with an Indian grant of $484 million, includes Sittwe port, an inland water terminal at Paletwa on Myanmar’s Kaladan river and creating road connectivity from Paletwa to Zorinpui in Mizoram. “The Kaladan multi-modal transport link, including the Sittwe port and the Paletwa inland water terminal, will add to our access to the Myanmar coastline,” Foreign Minister S Jaishankar had stated while delivering an address in Guwahati.

Sittwe Port (situated at the mouth of Kaladan river) is a deepwater port constructed by India in 2016 at Sittwe, the capital of Rakhine State in Myanmar, on the Bay of Bengal. The distance between Kyaukphyu and Sittwe is merely 105 kms.

In May, the junta reorganized the KPSEZ management committee. The project is to be developed by the Kyaukphyu Special Economic Zone Deep Seaport Co. Ltd, a joint venture between the Chinese consortium CITIC Myanmar Port Investment Limited and the KPSEZ management committee.

Vice-Senior General Soe Win said in June that the successful implementation of the KPSEZ could create jobs and help Rakhine State develop.

The initial agreement estimated the project to be worth 7 billion. However, Myanmar during the NLD regime reduced the scope of the project cost to $ 1.3 billion following fears of being caught in a debt trap.

During Chinese President Xi Jinping’s trip to Myanmar in 2020, both sides signed concessions and shareholders’ agreements for the project.

Author: Dipanjan Roy Chaudhury.
Editor’s note: The article reflects the author’s opinion only, and not necessarily the views of editorial opinion of Belt & Road News.