Wednesday, March 14, 2012

A test for China in Myanmar hydro dam

A test for China in Myanmar hydro dam
March 13, 2012
Financial Times

By Gwen Robinson and Leslie Hook

A hydropower project in Myanmar � one of the biggest in southeast Asia �
is testing China�s capacity to influence its impoverished neighbour, and
deal with a phenonomen rarely seen at home � the NGO.

The Chinese-led scheme was abruptly halted by the Myanmar government
last September. In a rare reference to concerns about the enviroment
and local people�s welfare, Myanmar's president Thein Sein said the
project would not resume in his term, which ends in 2015.

Now, six months on, Chinese officials are calling for work to restart on
the controversal $3.6bn hydroproject in Myitsone, in Myanmar's remote
northeast region near the Chinese border.

News agencies at the weekend quoted Chinese officials saying they hoped
to restart the project, where construction started in 2010, "as quickly
as possible".

Among them, Lu Quizhou, president of state-owned China Power Investment,
which was financing the project, expressed strong hope that the company
could recommence construction.

China Power "wants to restart the Myitsone project at the right time to
ensure safety and to meet the demands of local residents," the company's
president, Lu Qizhou, told media in Beijing on March 10.

In unusually candid remarks Lu also said the lesson of the Myitsone
suspension was that the company had to work more closely with
non-governmental organisations and local residents in its projects abroad.

"After we did everything legally, why did we end up in a situation like
this? We�ve been reflecting on this. As we go overseas, our central
state-owned enterprises are not used to dealing with NGOs and with local

Other Chinese energy officials have urged Myanmar to restart the
project, arguing it would provide badly-needed energy to local people
and raise living standards.

However, under the original agreement, nearly 90 per cent of electricity
generated by Myitsone project was destined for bordering Yunnan
province, and for retransmission to China's coastal areas.

Myitsone was the largest of seven dams in a regional network that China
is building � most of them on the Chinese side � to provide a total
electricity-generating capacity of nearly 17,000MW. Myitsone alone would
have had a capacity of 3,500MW to 6,000MW � ranking as one of the
world�s largest 20 hydropower stations.

China Power and its Myanmar partner Asia World agreed with Myanmar's
government to build the Myitsone dam in late 2006. The Myanmar
government, consulting with Chinese state-owned China Southern Power
Grid and some subcontractors, was in charge of planning and construction.

Beijing was caught off-guard by Myanmar's sudden decision last September
to suspend the project, amid mounting international and domestic opposition.

The area around Myitsone, dominated by ethnic Kachin people, is off
limits to media and tourists, and access is strictly policed.

China's new push to restart the project comes amid recent reports from
NGO staff and residents near the dam site, indicating that Chinese
construction workers � brought in to work exclusively on the dam project
� have remained in the region.

At the same time, DVB, an online journal run by Myanmar exiles, reported
on Monday that about 1,100 villagers who had been forced leave their
houses in Tanhpre, near the dam site, in 2010, had begun returning to
their homes.

However, local NGO workers and reporters said some dam construction
workers, mostly Chinese and some locals, were still living in the
workers� quarters located south of Aungmyintha village, next to the dam
site. Work was continuing on a road linking the dam site with the
Chinese border, they said.

One NGO worker, Zung Ring, recently sent emails of photographs of
activity in the Myitsone area including continued road-building. A
photograph taken in late February shows a convoy of about 70 heavy
Chinese dump trucks, heading towards Myitkyina, near Myitsone, from the
border. The convoy was one of many seen coming in empty and leaving
loaded with sand, said Zung Ring.

Locals and some NGO people in the area claim the trucks are taking the
sand into China to pan it for gold.

As improbable as that may sound, one local NGO worker noted: "Chinese
have been gold-panning in the rivers of Kachin state for years. Now,
since the Myitsone controversy and displacement of local people, the
Chinese are hated more than ever here. Trucks heavily laden with sand
and earth go from the area to China. So of course people conclude,
'they're now stealing our gold�. The truth could be either that the
Chinese are afraid to wash the sand in Kachin state � angry villagers
could kill them � so they truck it out to wash it in China."

Or else, he said, "the (free) sand and earth from Myitsone are trucked
to China for use in construction there. But people prefer to believe
China�s motive is 'golden sand'."

It's quite a stretch from dam-building to gold-panning. No wonder,
Chinese state companies find NGOs difficult.

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