The Irrawaddy Magazine

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The Irrawaddy Business Roundup (Jan. 2, 2016) Posted: 01 Jan 2016 05:00 PM PST A jetty for oil tankers is seen on Madae island, Kyaukphyu Township, Arakan State, October 7, 2015. (Photo: Soe Zeya Tun / Reuters) Kyaukphyu SEZ 'Open Tender' Goes to Familiar Chinese Firm The winners of the contract for part of the Kyaukphyu Special Economic Zone project have finally been announced. But those hoping for new faces to be brought into the development—originally touted as a Chinese government-led plan before it was put out to competitive tender—may be disappointed with the result. The leader of the winning consortium is CITIC, one of China's largest state-owned enterprises, which appears to have been involved in the project from its inception, raising questions about the "open tender" to award the construction and operation rights to the development on the coast of Arakan State. Locals in Kyaukphyu have already had significant experience of dealing with large-scale Chinese developments, and have raised concerns about the lack of consultation and local benefits of such projects. Officials from CITIC met with Burmese government officials as early as July 2009, when the company's president met with then Industry Minister (2) Soe Thein, according to a report in state media at the time, although it is unclear whether Kyaukphyu was discussed. Soe Thein later became the chief architect of President Thein Sein's economic reforms and is a minister of the president's office in the outgoing government. According to a report by watchdog group Arakan Oil Watch, the Burmese government signed two memorandums of understanding with China in December 2009 and February 2011 relating to the creation of an SEZ in Kyaukphyu. CITIC conducted the initial feasibility study for the project and was initially set to begin development before any tendering had been conducted. "Under the MoU with Burma's Ministry of Planning and Economic Development, CITIC Group will construct a Special Economic Zone, including expansion of a deep sea port, railway, airport and industrial areas," said the 2012 report, which also claimed US-blacklisted businessman Tay Za's Htoo Group was involved in the project at that stage. Dual oil and gas pipelines running from Kyaukphyu Township to the Sino-Burmese border have also been constructed following deals signed with Burma's former military regime. However, after Thein Sein's quasi-civilian government suspended the Chinese-backed Myitsone hydropower project in Kachin State, signaling a move away from the former regime's reliance on China, it also appeared that CITIC could lose control of the Kyaukphyu project. In early 2014, a consulting tender was awarded that would see international construction firms invited to bid separately to build a deep-sea port, an industrial zone and residential developments that would make up the SEZ at Kyaukphyu. The winning consortium for that tender was led by Singapore's CPG Corporation. Although CPG had recently been purchased by a Chinese state-owned engineering and design company, Burmese government officials insisted that the construction tenders would not necessarily go to Chinese firms. In its bid to win back the project, CITIC hired London-based accountants PricewaterhouseCoopers, which provided, among other services, advice on "bid structuring." (Another of the "big four" global accountancy firms, EY, or Ernst & Young, was also involved in the deal as part of CPG's consulting consortium). Finally, after almost two years of deliberations and numerous missed deadlines, it was finally announced on Wednesday that CITIC would indeed be awarded the contracts for the "construction and operation of the industrial park and deep sea port projects," China's state-run newswire Xinhua reported. The residential part of the project has reportedly not yet been awarded. "According to the plan, during the whole concession period, Myanmar government will accumulatively receive US$15 billion of tax revenue from the two projects," the Xinhua report said. According to the website Deal Street Asia, CITIC and six other firms will hold an 85 percent stake, with the Burmese government taking the rest. The other firms in the winning consortium, according to Xinhua, are China Harbor Engineering Company, China Merchants Holdings (International), TEDA Investment Holding and Yunnan Construction Engineering Group (YNJG), as well as Thailand's Charoen Pokphand Group Company Limited, the only non-Chinese company involved. Better known as CP Group, the Thai company is a sprawling conglomerate that controls much of Thailand's food industry, and also plays a significant role in Burma, producing livestock and eggs. CP Group's subsidiary CP Foods has been under fire for buying fishmeal from suppliers accused of manning their boats with slaves, many of whom are Burmese. A lawsuit has been filed in the United States against CP Foods and American supermarket chain Costco alleging that their supply chains are tainted by slavery. CP Foods says the case is without merit, and insists that it has taken action "to ensure traceability and humane and sustainable practices throughout our shrimp supply chain." Thai Conglomerate to Enter Mobile Money Race Another CP Group subsidiary is set to enter Burma as the race to provide mobile money services hots up. Retail News Asia reports that True Money Myanmar is set to pilot a money transfer service this month. True Corporation, a part of the CP conglomerate, is a major mobile phone service provider in Thailand, but is currently working in Burma's booming telecoms industry only as a contractor to market leader MPT. True Money Myanmar has been providing top-up services to the former monopoly holder, as well as the military-run MecTel since September, according to Retail News Asia. "True Money Myanmar Company Limited has already recruited agents around the country to enable easy access to banks," the report said, adding that True Money Myanmar was a partnership with Asia Green Development Bank, part of Burmese tycoon Tay Za's Htoo Group. "The firm is also aiming to expand to other payment services like bill payments and international remittance," Retail News Asia said. "The money transfer service is looking at the possibility of offering safe and easy remittance facility for the Myanmar population working in southeast Asian countries." Another mobile money service, Wave Money, is also readying to launch in Burma. The service is a joint venture between phone company Telenor and Yoma Bank, but is reportedly awaiting the issuance of new rules on mobile money from the Central Bank. Malaysian Firm to Set up Box Factory in Thilawa SEZ A Malaysian box maker will set up a factory in the new Thilawa Special Economic Zone close to Rangoon, according to a filing with the stock exchange in Kuala Lumpur. Box-Pak (Malaysia) has declared its intention to manufacture paper, paper boxes and cartons in Burma, and announced on Tuesday that it would lease land within the zone. The company said on December 9 that it had incorporated a wholly-owned subsidiary in Burma, with paid-up capital of $7.5 million Filings with the Bursa Malaysia show that the subsidiary Boxpak (Myanmar) Company Limited, entered into a sublease agreement with Myanmar Japan Thilawa Development for 74,830 square meters of land in the SEZ for a total cost of just over $5.6 million. "The Lease Transaction is in line with Box-Pak's strategy to expand into newly opened Myanmar to broaden the Group's revenue base and source of earnings by setting up a new manufacturing plant to tap on the existing and new markets there," a filing this week said. "The land is strategically located near the Myanmar International Terminals Thilawa and Thilawa Railway Terminal. Thilawa also has its own power, water and internet supplies. In addition, companies located in Thilawa are given tax advantages." Myanmar National Airlines to Launch Thai Routes As it begins to spread its wings internationally once again, state-owned airline Myanmar National Airlines is set to begin flights between Rangoon and two cities in Thailand next month. The airline has already launched flights to Singapore and Hong Kong following a restructuring and corporatization. Formerly known as Myanma Airways, the carrier had developed a poor safety and service record, and was previously only flying domestic routes. According to schedules published on its website, the airline will fly twice a week, on Mondays and Fridays, between Rangoon and Chiang Mai, beginning on January 8. MNA will then on January 28 begin flying twice daily from Rangoon to the Thai capital Bangkok's Suvarnabhumi airport. According to website airlineroute.net, the airline will operate the flights using Boeing 737-800 aircraft. The airline in June took delivery of the first of 10 new 737-800 aircraft. The post The Irrawaddy Business Roundup (Jan. 2, 2016) appeared first on The Irrawaddy.

Dateline Irrawaddy: ‘Tensions Are Still Running High’ Posted: 01 Jan 2016 04:36 PM PST Ko Min Oo, a member of the committee formed by the Burmese Embassy in Thailand to assist with the Koh Tao case, and The Irrawaddy's reporter Kyaw Kha join this week's Dateline. (Photo: The Irrawaddy) Kyaw Zwa Moe: Welcome to Dateline Irrawaddy. This week, we'll discuss the controversy over the Koh Tao murder case ruling—whether the two Burmese men, who were given the death sentence, are guilty or are scapegoats, and if the appeal will be considered. Ko Min Oo, who is a member of the investigation committee on the case formed by the Myanmar Embassy to Thailand and The Irrawaddy's reporter Kyaw Kha will join me for the discussion. I'm Irrawaddy English editor Kyaw Zwa Moe. This case is quite complicated and protests are going on against the verdict in some major towns in Myanmar including Yangon. Ko Min Oo, you were at the trial when the court handed down the ruling on December 24. What reasons did the court give for the ruling and what do you think of it? Min Oo: The two were charged for seven cases and two of them are death-penalty cases. They were given the death sentence for those charges. For a year, our committee members and lawyers have pointed out the holes in the prosecution's process, presenting any evidence available which supports the innocence of the two. But the ruling suggests that our arguments were disregarded and I am totally disappointed with this. On many occasions, they [Thai authorities] failed to keep appointments. For example, the parents of Win Zaw Tun and Zaw Lin officially requested the members of the National Human Rights Commission and the DSI [Department of Special Investigation] of Thailand to review the case. DSI did not re-investigate the case. The human rights commission however took action. We've attempted several times to meet the concerned police officers to challenge their assumptions. But they never attended the appointments. KZM: International newspapers, some Thai organizations as well as Burmese organizations, alleged that the two were tortured during the investigation process and that there were no eye-witness and the evidence was not concrete. To what extent are those allegations true? MO: They [Thai authorities] acted to the prejudice of those two Burmese workers. Win Zaw Tun and Zaw Lin were not among the suspects when likely suspects were first named. Before they were arrested, two foreign suspects were interrogated. KZM: Those two were the friends of the British victims, weren't they? MO: Christopher is their friend and another one, Sean, was a guitar player at a bar. They were released. They were reportedly interrogated, but details of the interrogation were not released.  We think these two must know something about the murder, and they should be interrogated. Both Britain and Thailand have to seriously consider this. KZM: There have been protests against the death penalty verdict in Myanmar. And the military chief Snr Gen Min Aung Hlaing has called on the Thai government to review the case and Thai authorities have also issued responses. The case seems to have escalated into a foreign relations issue between the two countries. What is your assessment of the latest developments of the case, Ko Kyaw Kha? Kyaw Kha: The news of the death penalty ruling spread immediately. Consequently, some people have staged protests in front of the Thai Embassy in Yangon. The protests are ongoing and have intensified. Protests have spread beyond Yangon and reached other towns in Upper and Lower Myanmar including Mandalay and Monwya. The protests have reached border trade towns like Myawady, Tachilek and Three Pagodas Pass. These protests made Thailand respond. Even Thai Prime Minister Prayuth had to speak at a press conference on the case. Tensions are still running high and protests are still going on. KZM: Ko Kyaw Kha, you went to the scene after the murder to cover the case last year. What did you see then? KK: The parents of Zaw Lin and Win Zaw Tun arrived after the two were arrested. The two, as their fear was eased by the arrival of their parents, told their parents and the investigation committee formed by the Myanmar Embassy in Thailand that they were not involved in the murder. Later, Thailand's prominent forensic expert Dr Pornthip said that the DNA of the two Burmese men and DNA found on the victims did not match. When they heard this, parents were extremely happy and believed that their sons would be acquitted. But then, when the two were handed the death penalty, the parents were very surprised and burst into tears. Zaw Lin's mother is quite a strong woman, but then she could not help crying her eyes out. KZM: There was a request for secondary DNA testing, wasn't there? MO: The result of the first DNA test showed that DNA samples did not match. Then, they [Thai authorities] did the test again and said that the result showed that the DNA samples matched. At the court hearings, our defense lawyers pointed out the holes in the DNA testing, and requested for re-testing of DNA. Judges were changed frequently at the court. At first, the court accepted our request, but then a few days later, they declined our request, giving a number of reasons. KZM: What did Dr Pornthip say at that time? MO: She mainly pointed out that there are certain standards in doing DNA tests. The murder took place at the beach and the DNA test was carried out long after the murder. She said Bangkok should send a DNA expert team to examine the evidence and that the examination process should be transparent. She said these things were not done and the result therefore would not be right. KZM: Another thing is they confessed committing the murder at first. Later, they denied it. Everyone says that they were forced to confess. What did you see? MO: When we visited them in prison for the first time, at a glance we knew something was wrong. They responded weirdly. We knew that they were hiding something as they did not answer our questions. We assumed that they would tell the truth in the presence of someone who they can trust and rely on. So, we discussed with the Myanmar embassy, and Myanmar government and we brought their parents. As we expected, they said they had confessed because of torture and threats when their parents came. KZM: There have been protests in front of the Thai Embassy and the residence of National League for Democracy (NLD) leader Daw Aung San Suu Kyi. Ko Kyaw Kha, do you see any sign that the protests may intensify? I ask because some people have other grievances not related to the verdict. What else do you see? KK: I have seen signs that there will be more protests. For example, Ma Ba Tha members have joined the protests. Regarding the protest in front of the residence of Daw Aung Suu Kyi, U Win Htein told the protesters that though the party had won the election, it has not yet assumed power. There are suggestions that rather than Daw Aung San Suu Kyi and the military chief, it is President U Thein Sein who should contact the Thai government. KZM: Another interesting element is the extent to which the British police force has investigated the case. Do you know how much they have cooperated [in the investigation process] especially with defense lawyers and defense teams? How much information did they share? We heard they didn't share information. MO: Yes, a British team came. But they did not directly communicate with us. But they did interact with our defense lawyers. Moreover, the Myanmar Ambassador to Thailand asked the British Ambassador about their findings after that team went back. The ambassador also shared the information he learnt from his British counterpart with us. But, they [the British] did not give any factual information. They arrived and went there [the crime scene] by helicopter and came back within a few hours. Then, they went there again the next day. We heard that the team already sent their members one or two days before they arrived [in Thailand]. We are not clear how many members they had sent. But then, they did not share information after they went back. And we don't know why. The suspects Sean and Christopher are from their country, Britain. So they should participate in the investigation. I don't understand why Britain didn't participate. KK: The case has become a cause for concern. Thai media agencies have assessed that if the ruling is not reconsidered transparently, it may strain relations between Thailand and Myanmar. As there are protests at the border, some Thai media suggest that the Thai government and detectives from Britain should undertake field investigations and make public the findings, openly and transparently, for the knowledge of Myanmar and Thai people. KZM: My final question. What can we expect from an appeal to the ruling? MO: I think the defense lawyers will defend to the best of their ability. They have experience, but we do not know yet what will the result be. We, investigation committee members, will hold meetings with defense lawyers. Defense lawyers have in their mind what arguments to put forward against the ruling. So, with the assistance of the Myanmar government, we'll try our best when we go back to Thailand. KZM: Thank you for the discussion. The post Dateline Irrawaddy: 'Tensions Are Still Running High' appeared first on The Irrawaddy.

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