Three agreements on future dam construction in Burma were signed on Friday last week at a ceremony in Rangoon, with plans inked for a second dam in the Shweli region of Shan state.
A Memorandum of Understanding (MoU) on the Bilin Creek dam in the country’s eastern Mon state was also signed off, as well as the transfer of running the Thaukyegat dam in Karen state to the government. All three ventures were done through Build Operate Transfer (BOT) systems, a form of public-private financing.
China-based Huaneng Lancang River Hydropower Co. Ltd will construct the Shweli 2 dam in collaboration with Asia World, which is owned by junta crony Lo Hsing Han and his son Steven Law. The capacity of the dam is expected to be around 460 megawatts (MW).
It comes as further evidence of increased muscle power of junta cronies in the post-election economy, after Yangon Airways, the only private airline not close to the regime, was forced to suspend operations.
Rumours are also circulating that Max Myanmar, which is owned by junta crony Zaw Zaw, will be rewarded contracts for the Tavoy port project in southern Tennasserim division.
While Asia World will likely construct and run the Bilin Creek dam on their own, they look set to play second fiddle to Huaneng Lancang in the Shweli project. The Yunnan-based company is already operational in the region on the Salween basin hydropower project, and contractors there include the Htoo Group, which is owned by powerful tycoon, Tay Za, and has on its board Aung Thet Mann, son of senior government minister Shwe Mann.
Construction of the first Shweli dam began in 2007 near the village of Man Tat, and came under considerable condemnation at the time from activist groups and local Paulaung villagers displaced by the project.
According to Sai Sai, from the Burma Rivers Network organisation, “Shweli 1 is already complete and most of the electricity goes to China so none of the community have been benefitting from this project. Instead the community has been suffering from forced labour, [displacement], and has been restricted from walking on their own farmland”.
Whilst few details of the BOT agreement were made public, Ren Peng, from the Chinese environmental group, Global Environmental Institute, said they had urged Chinese developers to abide by Chinese standards.
“In terms of environmental standards, it’s low [in Burma]. As a Chinese NGO we encourage them to adopt higher standards”, he said, adding that the BOT system in their experience gave developers greater scope to insist on environmental measures than if the project was undertaken by just a contractor. “To be a developer they have more space to adopt higher environmental standards.”
However, Sai Sai disagrees. “There are no bodies monitoring the standards. Under this [Burmese] government there are no institutions that make sure these companies make impact or environmental assessments, and none consult the local people.
“I think right now if you compare it to Thailand or China and what they do in their countries, the affected communities there are consulted, so that’s why they avoid these places and come to Burma and do whatever they want.”
Distribution of the benefits, namely the use of the electricity generated, will be one of the most controversial issues. Ren Peng said: “The fact is that the people, the local communities, do not benefit anything from these electricity projects.”
Burma has long been beset by severe power shortages, including in the major cities of Rangoon and Mandalay where lack of investment in electrification is woeful. As a result, the streets of Rangoon host private generators that run on imported diesel – a sight that is almost as ubiquitous as the beggars.
But not so in the new capital, Naypyidaw, which was built with the help of Asia World and Htoo Group. The latter is also set to act as a contractor in the first thermal hydropower project for turbines in the secretive city. The deal for this project was signed in August and will be built by Huaneng Lancang, making it the first such power plant developed with foreign capital.