Myanmar agrees smaller deal for China-backed port after ‘debt-trap’ concern

YANGON, Nov 8: Myanmar on Thursday signed an agreement with China’s state-run CITIC Group to begin work on a deep-sea port in the west of the country, after negotiations that saw the initial phase of the project scaled back over fears of a “debt trap”. Myanmar Deputy Minister of Planning and Finance Set Aung said Myanmar and CITIC signed a “framework agreement” for the port in Kyauk Pyu, in conflict-hit coastal Rakhine State. “We estimate the total cost of the first phase of the project will be $1.3 billion,” he told reporters at a signing ceremony in the capital, Naypyitaw. Myanmar’s previous military-backed administration awarded CITIC a tender in 2015 to develop a deepwater port and special                 economic zone with a combined price tag of nearly $10 billion. Thursday’s agreement covers the construction of two deepwater berths, said Set Aung, who was chosen to lead negotiations for the government of Nobel laureate Aung San Suu Kyi that came to power in 2016. Earlier proposals for the project set aside $7.3 billion for the port, but Myanmar officials raised concern about the cost due to reports that Chinese-backed projects in Sri Lanka and Pakistan had entangled those countries in debt. Set Aung said the two parties had agreed on a phased rollout so the feasibility of the project’s different stages could be assessed. “We will implement the project phase by phase, step by step,” said Set Aung. He said the project would be “transparent and according to international standards,” adding that international experts would be involved in environmental and social impact assessments.