Kachin hydropower projects the result of back-door deals

Kachin hydropower projects the result of back-door deals

Eleven Media, 15 January 2014

A Chinese company has been planning to sign a contract with the Myanmar government to build four hydropower projects in northern Kachin State.

The projects are planned along the Nawchankha River, which flows into Maykha River, according to sources close to the Ministry of Electric Power.

In 2010, YPIC International Energy Cooperation & Development Ltd., based in Yunnan province, signed an agreement with the government together with International Group of Entrepreneur (IGE), an unknown private entity from Myanmar, to construct hydropower projects on Nawchankha River.

The initial agreement, approved by the government's Hydropower Administration Department, covers the establishment of five projects on the river, namely Laungdin, Htonshin Chaung, Wukyone Kyal, Gaw Lan, and Kankan. 

However, the public has been kept in the dark about these projects as the agreement was signed during the previous military government which made numerous secret agreements with China. 

Experts who have read the 2010 agreement said it was an ‘umbrella MOA’ that covers all five projects in the Nawchankha River basin. However, one has since been removed. 

Government left with 15 percent share

According to the agreement, YPIC International from China and IGE will own a joint 85 percent share, leaving the government with the remaining 15 percent. However, IGE will only claim 2 percent of the joint share, leaving YPIC International with a de facto 83 percent ownership of the project. 

Revisions have been made to prevent potential flooding, leading parties to sign a new contract to build the four hydropower projects – Laungdin (600 megawatt), Gaw Lan (120 megawatt), Htonshin Chaung (340 megawatt) and Kankan (140 megawatt). 

While Myanmar is currently planning up to 67 hydropower projects, the government remains reluctant to explain how it plans to distribute the electricity or what the environmental impact will be. 

Behind closed doors

Following the controversy of the Myitsone dam project, which was halted by President Thein Sein after public outcry, similar contracts are now emerging that were signed behind closed doors between military brokers, private companies and government officials. 

Environmental and social concerns are often the most neglected by such large-scale development projects. For example, the entire Htamathi forest in Sagaing Region was cleared within six years under the pretence of building a hydropower project. Residents who were forcibly removed from the area are still facing difficulties reclaiming their land, while land brokers have become disproportionately rich. 

The Latpadaungtaung copper mine project is another case study. It has demonstrated the high-stake economic interests, again involving China, that have resulted in an iron-fisted response to the peaceful protests that oppose the project. 

Transparency to equal accountability

The meagre benefits of such projects for the general public who have long faced eviction, forced resettlement, as well as land-grabbing and lack of compensation, has led to even greater discontent. 

The back-door deals with foreign companies that orchestrate these projects further increases the suspicions that development projects only benefit crony businesses at the expense of the public. 

In the past, contracts signed with Chinese companies have sought to exploit the countries natural resources, often leaving the government with a meagre 15 percent share. This rarely translates in compensation for land or better public services. 

The Nawchankha hydropower project is only the latest to come to light. With growing transparency, the public can only hope for better accountability.  

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