Myanmar's Suspended Big Dam May Restart

Myanmar's controversial Myitsone Dam hydroelectric project, suspended last year by President Thein Sein in the first signal that the new democratically elected government was willing to listen to public protest, may well start up again after Thein Sein leaves office.

The Chinese backer of the project on Myanmar's Irrawaddy River says more than half the funds to construct the multi-billion-dollar project have already been paid, although the project was suspended last year.

Sixty percent of the US$3.6 billion in investment to build the controversial hydropower dam project in Kachin State has been paid, according to Wang Qiyue, director of China Power Investment Corporation (CPI), who was speaking during an energy investment summit in Rangoon earlier this week. It was the company's first transparent report about its investment in the project.

The dam had been expected to supply up to 4,600 megawatts of electricity when completed, some 80 percent of the power to be shipped to China, which had played a role in sparking domestic irritation. CPI had planned to build the dam in collaboration with Burma's Ministry of Electric Power as well as Asia World Co., which is owned by a Burmese business tycoon, Steven Law, who is the son of recently deceased drug kingpin Lo Hsing Han.

The project's suspension last year made major headlines well outside the previously sealed country . Although the president confirmed that the project will not be resumed during his term, which ends in 2015, in recent months renewed activity has been reported, including trucks driving around the proposed dam site, and China has expressed interest in restarting the project.

With more than half the US$3.6 billion investment paid, questions have arisen over how the funds were spent. When asked to explain who had received the funds, the CPI director told The Irrawaddy that the Burma government and the Burmese people were indivisible, that the government had initiated the project for the public interest, and that he believed the government had spent the money to build roads and bridges.

He said if the project was restarted, CPI would invest at least $1 billion more.

CPI signed a deal for the project in 2006, which called for another five dams to be constructed on the May Kha River, and another two on the May Li Kha River, according to the state-run New Light of Myanmar newspaper.

Wang Qiyue denied reports of activity at the Myitsone site, saying that although CPI hoped to resume the project, it had not yet begun negotiations with the Burma government to do so.

He said CPI did not plan to redraft its contract for the project, as the Chinese backers of another project, the controversial Letpadaung copper mine in Sagaing Division, did recently. That renegotiation gave a greater percentage of profits to the Burma government.

"Any country can inspect the division of profits for a project," Wang Qiyue told The Irrawaddy. "No country can invest in a project like Myitsone that just has a small profit. [CPI] will not continue the project if there are amendments to the previous pact or a change in the division of profits.

"We will just have to wait and see how the next government manages the issue. They [the Burma government] may try their best. Whatever we do, we will discuss with them."

He said CPI planned to share more information about the project with the Burmese public.

"The people object to the project just because they don't understand hydropower well," he said. "We'll explain it to them. We must show the public the pros and cons of the project so they can decide. Previously, we couldn't do that. Now we can. So we will do our best."

(Another version of this appeared in The Irrawaddy)