Burma’s Neighbors Line Up for Three Port Deals

At the other end of Burma, the old rice port of Sittwe on the edge of the Bay of Bengal is about to be redeveloped by India. And in between China is working on a major new port construction at Kyauk Phyu on Ramree Island.

All three neighbors have been stepping up their business links with the Burmese military regime at a time when Western countries are seeking to isolate the generals.

The future of Dawei, also known as Tavoy, was raised by Thailand’s Prime Minister Samak Sundaravej and Foreign Minister Noppadon Pattama on recent visits to the capital of Naypyidaw.

Few details of what the Thai government has in mind have emerged, but analysts note that Dawei is close to the Thai border and only 300 kilometers from the markets of greater Bangkok and Thailand’s major electricity generating plants.

“A port capable of handling ocean-going oil tankers and within easy reach of the Bangkok region would be very convenient for the Thais,” Hong Kong-based logistics expert Vince Lomax told The Irrawaddy.

“But that standard of port will take a lot of money to build, and would also need to be able to handle TEUs [Twenty-foot Equivalent Unit containers] and would need road upgrades and maybe a railroad link,” said Lomax, an independent consultant involved in several major ports in East Asia, including Hong Kong. 

Ironically, Dawei was previously in India’s sights for development as part of New Delhi’s oft-discussed “Look East” policy. The Indians were in discussions with the Burmese generals in early 2005 on a plan to turn Dawei into a sea gateway to Southeast Asia, shortcutting the long sea route round the tip of Malaysia and the cluttered Malacca Strait.

At that time, New Delhi spoke about a feasibility study on Dawei. Nothing more was heard of it.

Observers think China’s rising interest in the geography of Burma may have had some influence on ending India’s ambitions beside the Andaman.

Not only is Beijing quietly developing a naval logistic presence round the rim of the Indian Ocean, like the Indian navy, it sees in Burma both a source of raw energy and gas and a conduit to transport Middle East oil into Southwest China by a pipeline.

The same shortcut avoiding the Malacca Strait seems to have occurred to the Chinese about the same time as the Indians.
China has settled on a far more strategic location on the Burmese coast for its naval and economic plans—the isolated fishing port of Kyauk Phyu on Ramree Island adjoining Arakan State.

But whereas Dawaei is handy for the Thais, Kyauk Phyu will necessitate a 1,500-kilometre highway and similar length pipeline to reach Kunming, the capital of China’s bordering Yunnan Province.

Few details about Kyauk Phyu have emerged, but the Chinese government news agency Xinhua has reported that the port will have a water depth of 20 meters. That would enable it to handle the biggest deep-draught container vessels.

Even the port in Shanghai does not have such depth.
Chinese engineers and other skilled labor are involved in the Ramree development, which is isolated from prying eyes. The leading construction manager is Asia World, a multiple-activity Burmese company whose owners, Lo Hsing-han and his son Steven Law, are close to the junta and blacklisted by the US government.

Xinhua has said that Kyauk Phyu will also be linked by road with Sittwe, the dilapidated British colonial-era port in the far west near the Bangladesh border.

“You could say that Sittwe is India’s consolation prize,” said Erik Lannson, an international freight manager in Bangkok. “They lost out on the Shwe gas to China, who may have blocked their Dawei ambitions, but they still get a kind of look-east seaside window even though it is a smaller one.”

Indian state companies will spend US $120 million to renovate Sittwe and dredge the Kaladan River which connects the port with the Indian northeast state of Mizoram.

New Delhi now sees this as a key to opening up its landlocked northeast states.

Sittwe seems certain to become important as a link port for the nearby offshore Shwe gas field where more than 200 billion cubic meters of proven reserves are waiting to be tapped.

No one should expect any early developments at Dawei. The Indian government spent more than two years negotiating with the military before a formal agreement was reached on Sittwe earlier this month—with a loan sweetener of $10 million.