Well-known Chinese news site Sina recently reported that Set Aung, Myanmar’s Deputy Minister of Finance, commented on the downsizing of the Kyaukpyu project, which is part of China’s One Belt One Road program. The original Kyaukpyu Deepwater Port project was targeted at US$7.3 billion. The scope will now be reduced to around US$1.3 billion. The Chinese Ministry of Foreign Affairs suggested that the business negotiation is still on-going. The primary developer, China CITIC Group, explained that the US$1.3 billion is for the “initial phase,” which is one of four phases. Deputy Minister Aung expressed his concern about falling into a “debt trap.” The project’s original plan was to construct 10 berths for large oil tankers in the deep-water port. However, the number has been down-scaled to two. The Myanmar government already clarified that it will not provide sovereign guarantees for any loans to the project and the government will require a third-party independent audit on project spending. The Port of Kyaukpyu is located right at the entry point of the China- Myanmar Oil and Gas Pipeline.
Source: Sina, August 3, 2018