Chinese sources close to the matter confirmed with the Global Times on Thursday that the Myanmar government and China's State-owned CITIC Group are expected to sign a framework agreement next week for the construction of the Kyaukphyu Deep Sea Port project in Rakhine state.
The deal was made after the Chinese side agreed to reduce its stake from 85 percent of the port to 70 percent.
"It was agreed that the first phase of the deep-sea port will be implemented with $1.3 billion in funds. The framework agreement will be signed between CITIC and the Kyaukphyu Special Economic Zone (SEZ) Management Committee on November 8," U Aung Htoo, deputy minister of commerce of Myanmar, told the Myanmar Times on Wednesday.
In December 2015, CITIC Group initially won the tender to construct the Kyaukphyu SEZ with an estimated investment of $7 billion. That tender, under the previous government, specified that the company would build the port in an 85:15 ratio, according to the report.
Difficult negotiations were conducted between China State investment vehicle CITIC Group and Myanmar's National League for Democracy government to reduce the Chinese stake in the port to 70 percent, according to the report.
Liu Xiaoxue, an associate research fellow at the Chinese Academy of Social Sciences' National Institute of International Strategy, told the Global Times Thursday that the slow development of the project is the result of careful planning and mutual discussion. "It would contribute to the long-term success of the project," Liu said.
After the completion of the deep-sea port project, the expected annual capacity of the deep-sea port will be 7.8 million tons of bulk cargo and 4.9 million TEU containers, the Xinhua News Agency reported in July.
Courtesy Global Times