China has agreed take a 70% stake in a strategically important sea port in Myanmar, at the lower end of a proposed range amid local concerns about Beijing's growing economic clout in the country, a senior government official said.
Oo Maung, vice chairman of a government-led committee overseeing the project, said Myanmar had pushed for a bigger slice of the roughly $7.2 billion deep sea port, in western Rakhine state, in negotiations with a consortium led by China's CITIC Group. Agreement was reached in September, he said.
"Locals from Rakhine and communities across Myanmar think that the previous 85/15% agreement is unfair to Myanmar. People disagree with the plan and the government is now trying to make a better deal," he said.
The new proposal has been sent to the office of Myanmar's Vice President Henry Van Thio for approval, Oo Maung said. But the two sides have not yet reached an agreement on financing details, he added, saying further negotiations were needed to move the project forward.
Beijing-based CITIC, China's biggest and oldest financial conglomerate, did not immediately respond to requests for comment.
Yuan Shaobin, executive president of CITIC Myanmar, told the Myanmar Times in an interview published on Monday that the company had agreed to a 30% stake, but also said more negotiations were needed to iron out the financing details.
China has been pushing for preferential access to the deep sea port of Kyauk Pyu on the Bay of Bengal, an entry point for a Chinese oil and gas pipeline that gives it an alternative route for energy imports from the Middle East that avoids the Malacca Strait, a shipping chokepoint.
The port is part of two projects, which also include an industrial park, to develop a special economic zone in Rakhine. CITIC was awarded the tenders in both initiatives in 2015.
A total of 52 Myanmar companies will contribute to half of Myanmar's stake in the Kyauk Pyu port, according to San Myint, general manager of the local consortium Myanmar Kyaukpyu Special Holding Company.
Myanmar's leader, Aung San Suu Kyi, has argued that economic development is the solution to the long-running ethnic tensions in Rakhine state. The port is in the southern part of the state, which has so far not been affected by the violence in northern Rakhine in recent weeks.
