More transparency needed for China deals, Myanmar officials say

With Chinese investments in Myanmar expected to rise, more should be done to ensure transparent and responsible business practices between Chinese companies and the Myanmar government, industry watchers said.

Chinese investments historically dominated Myanmar’s foreign direct investment landscape. Some projects are government-to-government initiatives while others were won through tenders.

Observers say Myanmar should diversify its partners in strategic sectors such as electricity for more sustainable development.

Apart from financial matters, Myanmar’s government should take into account security issues,” said Daw Khin Khin Kyaw of the Institute for Strategy and Policy.

She said that tenders should be conducted more transparently and not pushed through in a hurry.

Under Daw Aung San Suu Kyi’s government, the two countries have looked into ways to work together through the China-Myanmar Economic Corridor scheme and moving ahead with the proposed Kyaukphyu port, the Yangon “New City” development and the Muse-Mandalay railway project.

Meanwhile, China Harbour Engineering Co, supported by China Communication and Construction Co as adviser, recently won a US$100 million tender to construct the Gote Hteik Bridge under a build, own and operate agreement.

Chinese firms also took part in the bidding for the 20.5-kilometre elevated toll road project in Yangon in which the private sector is expected to invest up to US$400 million, though the government has not yet made a final decision on the project.

In the energy sector, a consortium led by Hong Kong-listed VPower Group, which enjoys close links to Chinese state-owned enterprises, and another consortium led by state-owned firm China Energy Engineering Corp won all five of Myanmar’s emergency-power projects, which are expected to generate a total of 1072 megawatts of electricity to meet Myanmar’s needs.

Chinese firms now compete with Japanese and South Korean entities because they have the technology, capital and raw materials. Chinese companies also usually win tenders through competitive pricing.

“But the tender selection team should be competent and must have a mechanism to prevent bribery,” said former Hluttaw MP U Ye Tun, adding that regulators should hold the winning bidders accountable.

Current lawmakers and observers also emphasise that Chinese investments should be implemented with transparency and responsibility.

“The responsibility also lies with our government. The government should fully disclose the contracts and terms to the public. But right now, even members of parliament don’t know much about some of the projects. For example, we do not know how many years warranty there is for vehicles purchased by our government from China,” said U Kyaw Zay Ya Regional Assembly MP for Dagon township Constituency No. 2.

“Chinese companies implemented the Yangon Bus System… If they wanted to buy through government-to-government arrangements, there are other countries such as Japan, South Korea and India, rather than China alone. But so far the purchase deals have only been with China,” he said.

“There are school buses that were purchased [from China] that haven’t been put into use even now. We‘ve witnessed on many occasions that the businesses set up with China are not much of a success,“ U Kyaw Zay Ya said.

He said that even though a tender was called for the development of the Gote Hteik Bridge project, other companies didn’t compete for the project. The MP added that the Regional Assembly is also monitoring the New City project, located to the west of Yangon.

U Ye Tun said despite the fact that Chinese companies are investing in Myanmar at a time when investors from Europe and the US appear to be more reluctant than before, it does not mean Myanmar should “allow them to do whatever they want”.

The MPs added that the Chinese government should also participate in making their companies accountable when investing overseas.

Source: Myanmar Times

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