Rapacious neighbors still trying to grasp Burmese energy

Follow the Money: CleanBiz.Asia

Questions over the future of Burma’s energy policy are arising yet again. Not only has Thailand’s energy minister denied that bribes have been given by the state oil company PTT Exploration and Production (PTTEP) but China has stepped up its pressure to reignite the environmentally bankrupt Myitsone dam project.

Thai energy minister Pongsak Ruktapongpisal said that PTTEP had been doing business in Myanmar for over 20 years and had paid concession fees as specified in the contract. He added they had not paid any extra sum to any person close to the government and its accounts were checked by the Office of the Auditor General.

He was responding to reports in the Myanmar Times that there were concerns about the transparency of new oil and gas concessions. These concerns led to the downfall of former Burmese minister for energy U Than Htay and his deputy, U Htin Aung.

In December last year a survey by Transparency International ranked Burma as the fifth worst country in terms of public sector corruption among 176 nations.

There is a scramble for contracts in Burma, from mobile networks to power and mining franchises but there are increasing concerns that the system may not be robust enough to handle the temptation of backhanders, so common in big international contracts.

Meanwhile in an exclusive interview with The Irrawaddy the Chinese ambassador Yang Houlan said that China would like to renew operations on the cancelled Myitsone dam project. The project ran into problems when the new government of President Thein Sein decided to “listen to the people” and cancel the project.

In typically Chinese diplomatic press advisory style the interview managed to insert the phrase “with permission from Burma’s government and consent from the Burmese people, China would like to renew operations at the stalled hydropower dam”. In direct quotes from the ambassador he said with echoes of old times: “If you want to develop the industrial sector, then power supply is a basic need. Without electricity, how can you develop industry?”

Critics would answer, “Well not from this project”. The Myitsone dam was to be the world’s fifteenth largest hydro-power project, with 90 percent of its output slated to go to China’s power grid.

The Irrawaddy reported that Yang said that any revival of the project would take place in close consultation with the Burma government and the Burmese people. “China’s view is that we hope we can revive the project. But of course, we respect the Burma’s government’s decision and we also respect the people’s views,” he said.

China has been offended that since Burma has gone down its own liberalization route it has turned to western companies and other Asian nations for support. As the Financial Timespointed out during the country’s first World Economic Forum meeting, held in a “gleaming convention centre built by a Chinese state-owned construction company and donated to the military junta a few years ago in a gesture of bilateral amity,” only 16 of the 900 executives came from China

For China, apart from the major loss of face, it also lost out on the 90 percent of the Myitsone project’s 4.3-GW generating capacity and state-owned China Power Investment Corporation lost a major contract.

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