Myanmar cancels multi-billion dollar railway project with China

The Myanmar government has shown that it is not afraid to upset its giant neighbor China by suspending a multi-billion dollar railway project that was intended to pave the way for China to reach the Indian Ocean, according to RFI.

On July 22, 2014, a senior Myanmar official announced that, due to strong domestic public opposition and many delays, the government had decided to suspend the Chinese-built railway project from Kunming, southern China, to the city of Kyaukpyu, in western Myanmar's Rakhine state, which is more than 1,200 km long.

The agreement on this railway project was signed between Myanmar and China in April 2011.

The railway is planned to be built along a gas pipeline from a western Burmese port to China's Yunnan region. DR illustration

Investment capital for the project is up to 20 billion dollars, mostly Chinese capital.

The railway is planned to be built along a gas pipeline connecting gas fields in the Andaman Sea to an oil refinery near Kunming.

The project is of great strategic significance to China because the Kyaukpyu-Kunming railway could replace the Strait of Malacca as the route to the Middle East.

Under an agreement signed in 2011 with the Myanmar government, China will have the right to manage and operate the railway for 50 years.

According to the above-mentioned senior official, the reason why the Myanmar government had to cancel this project was that it had been 3 years since the signing of the memorandum of understanding, but the project had not made any progress.

But in fact, it was the growing public opposition in Myanmar to the environmental and social impacts of the railway project that forced the government to suspend the project.

In Rakhine state alone, civil society organizations in 17 townships have formed a “front” to protest the project.

In addition to environmental and social reasons, Myanmar public opinion also does not accept the country's resources being taken abroad like that.

Currently, China has not responded to Myanmar's decision to cancel the railway project.

But a source from China Railway Construction Corporation told the Global Times that Beijing would respect the opinions of the Myanmar people on the project.

During a meeting with Myanmar President Thein Sein last month, Chinese President Xi Jinping defined the relationship between the two countries as “reciprocal and mutually beneficial.”

But the Myanmar government's cancellation of a Chinese railway project shows that relations between the two neighbors are not always smooth sailing.

This is the second time Myanmar has been forced to suspend a project with China due to domestic public pressure.

In 2011, the Myanmar government was forced to cancel a joint venture with China to build a $3.6 billion hydroelectric dam.

Beijing thinks that by pouring massive capital into infrastructure projects in Southeast Asian countries, it will "buy" more friends and have more energy supplies for the Chinese economy.

But for Myanmar at least, this policy has failed.

According to Bizlive.vn