Burma and China have resolved adispute over the recent suspension of the Chinese-backed Myitsone hydro-powerdam project in Kachin State, according to a Burmese presidential adviser whosaid that Burma may have to compensate China for the move.
The sudden suspension of the US $3.6billion project earlier this month angered Beijing and the state-owned ChinaPower Investment (CPI) corporation, the main investor in the scheme. In aninterview with Chinese state media, CPI president Lu Qizhou warned the Burmesegovernment of possible legal repercussions and said the suspension of theproject would cause immeasurable losses to both countries.
A week after Beijing called for talksto address the issue, Burmese President Thein Sein held a rare meeting with theChinese ambassador to Burma, Li Junhua, in Naypyidaw on Saturday and brieflyexplained his reasons for making the decision, according to presidentialadviser Dr Nay Zin Latt.
At the same time, Thein Sein sent hisforeign minister, Wunna Maung Lwin, to Beijing for talks with Chinese VicePresident Xi Jinping and his Chinese counterpart Yang Jiechi over the damsuspension issue.
In its coverage of the meetings, theChinese state-run news agency Xinhua reported on Monday that the two sides hadagreed to properly settle the matter while reaffirming commitments aimed atachieving joint development.
The meetings clearly highlighted themagnitude of Thein Sein's decision, which has been widely seen as ademonstration of his new, quasi-civilian government's eagerness to demonstratethat it is not a client of China and is ready to re-balance its international relations.
“It is not good for Burma or anyother nation to rely too much on relations with just one country. We must forgefriendly ties with all nations,” said Nay Zin Latt in an interview with TheIrrawaddy on Monday, describing the president's decision as an extraordinarilybold step taken in the national and public interest.
He added that the Myitsone dam issuehas been thoroughly settled by both sides, but Burma might have to compensateChina, probably in the form of granting economic concessions to its giantresource-hungry neighbor.
“I don't think we have to pay themback in the form of billions of dollars,” he said, without specifying what kindof economic concessions Burmese leaders agreed to offer to make up for thesuspension of the Myitsone project, which was expected to generate 6,000megawatts of electricity, mostly for export to China.
It also remains unclear if theproject has been canceled completely, because in his original announcement,Thein Sein only said it had been suspended for the remainder of his term inoffice, which expires in 2016. Meanwhile, it is believed that work is stillcontinuing on six other hydro-power dams in Kachin State connected to theMyitsone dam project.
In response to a comment by the CPIpresident that suspension of the project would make it impossible for Burma toimplement a loan agreement between China and Burma's former military junta, NayZin Latt said Burma will find other means of repaying the loan.
“Using revenues from other sources,not only from Myitsone, we can repay the loan. For example, we can pay backusing revenues from the gas pipeline to China,” he said, referring to the $2.5billion oil and natural gas pipelines being constructed by China's state-ownedChina National Petroleum Corp from the Bay of Bengal to China's Yunnan Provincethrough central and northeastern Burma.
The pipelines are seen as China'smost geopolitically and economically important investment in Burma. Last week,Burmese activists called for a suspension of the pipeline project, citing humanrights violations, but both the Chinese and Burmese governments have expressedoptimism that it will continue smoothly.
