The Shan State Progressive Party (SSPP) is set to partner with the Burmese government to build a model village for displaced persons and the families of soldiers in northern Shan state, despite ongoing clashes.

The news comes as the rebel group concluded their latest round of peace talks with the government in Lashio this week.

A joint committee consisting of rebel and government representatives will oversee the development of the new village, intended to house around 350 households, including the families of troops from Brigade-36 of its armed wing, the Shan State Army-North (SSA-N), and internally displaced persons.

“The committee will include powerful officials including U Aung Myat of Shan state’s government, [the Burmese Army’s] Eastern Central Regional Commander and the Northern Regional Commander. We will decide who to appoint from our side,” said Major Sai La from the SSA-N.

It is unclear if the new village will be modelled on the Kyaukkyi pilot project in Karen state, jointly run by the Karen National Union (KNU) and the Norway-led Myanmar Peace Support Initiative. In August, the World Bank also announced an $80 million dollar grant to establish over 300 model villages across the country.

The SSPP and the government have yet to reach a political settlement or sign a formal ceasefire agreement, with the latest round of talks focusing primarily on economic development in the eastern state.

According to the Shan Herald, ongoing fighting near a Chinese pipeline in the northern part of the state was not discussed at the talks, nor the contentious Ta Hsarm Pu crossing over the Pang River, from which the government has demanded the SSA-N withdraw their troops.

“It means the fighting goes on,” said Major Sai Lai in an interview with the Shan Herald.

The SSA-N signed a tentative ceasefire agreement with the government in January, but the two sides have clashed repeatedly over the course of the summer.