Electrical industry of burma/myanmar

Compiler’s note: This edition of NLM contains a very long report of a press conference called by the newly constituted media information unit of the Myanmar government. Over three pages of the print version of the newspaper are filled with a minutely detailed accounting of the government’s version of the breakdown of its relations with the Kachin Independence Organization and efforts to arrange a new and temporary cease-fire. Compendium users are advised to consult the on-line version of NLM for full details, particularly with regard to developments related to the Tapein and Myitson hydropower projects. One noteworthy comment by Information Minister Kyaw Hsan and answers to two questions from journalists are included verbatim below:
Information Minister Kyaw Hsan: You know, Tapain hydropower project is a joint-venture of the Ministry of Electric Power-1 and Datang (Yunnan) United Hydropower Developing Co Ltd-DUHD of China. It is an important project and its capital is large. We have heard that the Chinese company secretly paid Yuan 15 million to KIO to implement the project smoothly without obstacles. However, KIO/KIA disturbed, threatened and blackmailed Chinese technicians and staff working at the project in June. It also launched heavy weapon attack from its Donbon camp, tried to cause menace to the transport link of the project and blew up towers from the project to Bhamo. Because of KIO/KIA disturbances and menace 215 Chinese citizens of the company working at the project left for home from 9 June to 14 June. Because of their departure, the project had to stop operations of its four 60-MHz turbines on 14 June.
Question from Lin Ko of the Myanmar Global Post:

Regarding armed conflicts in Kachin State, they said they fight because of Myitsone Dam Project. And also, there have been criticisms that the project is harmful to Ayeyawady River and its environs. So, I’d like to know if there is any research like environment impact assessment on it.

Answer of Director-General U Kyee Soe of the Hydropower Planning Department of EPM-1:

As to your question, correct and complete reports have been described in articles in newspapers issued on 9 and 10 August, 2011. And concerning EIA and SIA, we have researched into its impact on upper Ayeyawady and we are researching down to the Delta region in lower Ayeyawady.

Question from Zeya Myat Khaing of the Monitor News Journal:

KIA said current situation occurs because of Myitsone dam. It is heard that ceasefire is still under negotiation. So, I would like to know whether the State will continue construction of Myitsone dam or not.

Answer of Information Minister Kyaw Hsan:

By taking account of national interest, it is needed to pay serious attention to continuation of Myitsone dam project or not. We must not believe one-sided words lopsidedly in thinking and working. KIO and other groups are now saying this and that about the project. There are many views and opinions. The government will never get its people into trouble and never spoil the Ayeyawady River. I would like you to think about the situations reasonably. In the interest of the country, the government with goodwill will taken approach to matters deliberately.

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International Crisis Group (ICG), 15/07/11. Edited.

http://www.crisisgroup.org/en/publication-type/podcasts/myanmar-the-changing-scene.aspx

Excerpt from an interview with Jim Della-Giacoma, ICG’s South East Asia Project Director.

The fighting between the Myanmar army and the Kachin rebel groups is significant because it’s seen a breaking of the ceasefire, and that is a very negative development. The agreement that has held for many years has now effectively been revoked. What will follow it is still unclear. The fighting itself has died down, but we are not sure whether this confrontation is part of a larger or strategic move against the ethnic groups or whether this was just localized fighting between the army and the rebel forces. Because of significant economic investments, China has a lot riding on stability in the border area between its provinces and Myanmar. After the fighting started, there were a number of calls, particularly from the KIO, for Beijing to intervene. While it wasn’t a very public move, after a few days of fighting, there had clearly been signals sent to both sides that Beijing disapproved of this conflict. There seemed to be a toning down of the rhetoric and the fighting. It is significant that the ceasefire was broken as a result of this fighting, but it also shows that the major player in resolving these issues is China. Now, we are waiting to see whether both sides can get back to the table to restore the broken ceasefire—or to repair it to a point where we can have some confidence that small disputes won't lead to a larger return to the fighting we have seen in the 60-year long civil war.
KNG, 14/07/11. Edited and abridged.

http://www.bnionline.net/news/kng/11154-kachins-reject-ceasefire-with-untrusted-burmese-government.html

A meeting of 120 delegates from Kachin State was held at the KIA’s Alen Bum military base in Laiza, on July 12 and 13 to hear opinions from Kachin public leaders on renewing the ceasefire between the KIO and the Burmese government. During the meeting, the delegates were told about the KIO’s ceasefire plan by Maj-Gen Gunhtang Gam Shawng, Chief of Staff of the Kachin Independence Army (KIA), the military-branch of the KIO. Gam Shawng said the KIO would only seek a temporary ceasefire with the central government of up to six months. However, it could be abolished at any time if there are no political talks. The ceasefire plan was rejected by the delegates because of the failure to achieve a political solution over the last five decades, a Kachin News Group (KNG) reporter in Laiza said. The KIO is still waiting for the government’s response to its new ceasefire proposal.

Ba Kaung, IRROL, 12/07/11. Excerpt. http://www.irrawaddy.org/article.php?art_id=21679

According to a KIA draft of a ceasefire agreement with the Burmese government seen by The Irrawaddy last week, the KIA will only agree to a six-month temporary ceasefire if [the Burmese government] commits to a political dialogue during this period. And the KIA wants the United Nationalities Federal Council, which represents the armed ethnic groups in Burma, to play a leading role in this dialogue. Many KIA leaders also want to see changes in the current military-drafted Constitution coming out of this possible dialogue. Asked what will happen if the government does not make any political concessions, Brig-Gen Gun Maw, the KIA deputy military chief, said, “Wars will continue to take place throughout this region. It only depends on the government to decide. We only ask for the proper solutions.” Asked if the KIA would be compelled to restrain its future military operations due to concerns about how such actions would affect Chinese interests in Kachin State, Hkwun Nawng, the official representing the KIA in its relations with China, said, “We respect China's recent call for peaceful solutions between us and the Burmese government, but there is nothing that we won't touch simply because it is Chinese.”

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Yun Sun, PacNet, (Pacific Forum CSIS), 08/07/11. Edited and abridged.

http://csis.org/files/publication/pac1132A.pdf

Yun Sun is foreign policy analyst in Washington DC. She was a Beijing-based China analyst for the International Crisis Group from 2008-2011.
Some identify Chinese dams in Kachin State, including Dapein, as the catalyst of the conflict between the Myanmar army and the KIA. They are located in areas of strategic importance for both sides. Approved by Naypyidaw without local consultation, they exacerbate hostility between the government and the Kachin. The latter opposes the dams, condemning them for destroying the local environment, economy, and culture. This resentment is believed to have led to the 2010 bombing of the Myitsone dam, a Chinese mega-hydropower project in upper Kachin State.
Chinese dams might have aggravated the situation, but they are not the root cause. They contributed, however. Under strict requirements from Naypyidaw, Chinese companies negotiated these deals with the central government and almost no consultation with the local Kachin population. They lack transparency, neglect local needs, and have negative environmental, economic, and social impacts. More importantly, they are viewed by the KIA as strategic maneuvers by Naypyidaw to exploit the Kachin’s natural resources and expand its control under Chinese protection. Locals see nothing to gain and everything to lose.
Today, both Naypyidaw and the KIA are using Chinese dams and the conflict to advance strategic goals. By using the protection of the dams to justify military actions, Naypyidaw tries to cover up its intention to eliminate the KIA and enlist Chinese support to squeeze the armed group out of its traditional territory. The KIA sees China’s desire for border stability and dam safety, and uses the conflict to force China into mediating a settlement. Indeed, after rejecting the government’s call for a ceasefire a week after the fighting started, the KIA made an official appeal for China to be a “referee” in potential negotiations.
Such a strategy is risky for both sides. Given Kachin opposition to the dams, it is reasonable for Naypyidaw to expect Chinese support for its military actions. But China understands well that once the KIA resorts to guerrilla warfare, Chinese dams, roads, and pipelines will become targets of retaliation. By jeopardizing China’s border stability and vested interests, Naypyidaw may invite pressure from and intervention by China in its ethnic affairs, which may not work in Naypyidaw’s interest.
The KIA has even more at stake. It might be able to use the conflict to force China to step in, but this approach generates negative feelings. China has accused Kachin groups of harassing and blackmailing Chinese hydropower companies. Now, the KIA is seen as deliberately breaking the status quo and rejecting Naypyidaw’s offer of a ceasefire. Unlike the United Wa State Army, which has refrained from colliding with the tatmadaw despite several skirmishes, the KIA is openly challenging China’s bottom-line interests.
These factors feed into China’s long-term distrust of the Kachin and doubt about its relations with the West. The KIA takes pride in Kachin’s historic affinity with the West, dating back to the Kachin rangers during World War II. Their leaders have traveled to Washington several times to solicit US assistance, a move that greatly annoys China. Further, China suspects that the Christian Kachin population represents certain Western interests. Since the beginning of the fighting, Chinese reports have claimed that Western organizations operating in Kachin State have “instigated anti-China sentiment to disturb Chinese projects.” China might be drawn in by the KIA out of practical calculations, but these moves simultaneously alienate China.
Chinese dams in Kachin state are not the reason the truce fell apart. Although they have aggravated hostility between Naypyidaw and the KIA, they have mostly been used for strategic leverage by both sides to advance their positions. China is being forced to step into the conflict to protect its interests. Mediating is not a problem for China, but Naypyidaw and the KIA must both understand that their strategies risk unexpected consequences and costs.
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Ba Kaung, IRROL, 01/07/11. Edited and abridged. http://www.irrawaddy.org/article.php?art_id=21610

[At a second meeting with officials of the Kachin State government that included Col Than Aung, the Kachin State minister for border affairs], Brig-Gen Gun Maw, the deputy military chief of the KIA, expressed a desire for a ceasefire [but] indicated that any agreement to halt the fighting with the Burmese army must come with tangible political reforms and compromise from the Naypyidaw government. In particular, Gun Maw told the delegation that the Burmese government must change the “Nargis Law,” referring to the current Constitution, which was voted on in a referendum held in the aftermath of Cyclone Nargis in 2008.

During the ceasefire [1994-2011], the KIA and its political wing, the Kachin Independence Organization (KIO), asked the Burmese regime to engage in regional development and provide a political solution to the decades old conflict which granted autonomy to the Kachin people in Kachin State. At that time, the Burmese military generals said they did not have the mandate to solve the political questions, which could only be addressed after a civilian government came into power.
Between the time the 1994 ceasefire was entered into and 2009, when the KIA first rejected the BGF plan, Chinese companies and Burmese business groups with links to the government invested in a number of large projects in Kachin State, such as hydropower projects, that benefitted the outside investors but not local people and came with significant negative social and environmental impacts. In addition, during that time the KIA focused its efforts on regional development and stopped actively recruiting and training new forces for its armed militia, which weakened its position in relation to the Burmese government. So when the KIA complained to the Burmese government about the unfairness and negative effects of projects such as the Chinese-built Myitsone Dam, it lacked the negotiating leverage either to halt the project or change the terms.
Within the KIA, there is not much optimism that a new ceasefire deal will be reached, and many members expressed a complete distrust of the Burmese government. Some officials assume that the current lull in armed clashes with the Burmese troops is either because of an internal clash in the Naypyidaw leadership, or because the Burmese government is just waiting for a proper time to launch a major military offensive against them. Despite the skepticism, however, Burmese and KIA officials intend to meet again in the near future for another round of ceasefire talks—although when is unclear.
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Press Statement, U.S Dept of State, 24/06/11. http://www.state.gov/r/pa/prs/ps/2011/06/167056.htm

The United States is concerned by on-going violence in Burma’s northern Kachin State and other regions of the country and calls for a halt to hostilities. The Burmese Army and the Kachin Independence Army began fighting on June 9 and have continued over the past three weeks. We are particularly concerned by the reports of human rights abuses in the area, including reports of casualties, rape, and displacement of thousands of local residents. There have also been reports of clashes in Karen and Shan states. We urge all appropriate authorities to ensure, in line with international standards, adequate support, safety, and protection for those persons fleeing conflict along Burma’s borders. This recent violence underscores the need for an inclusive dialogue between the Government of Burma and opposition and ethnic minority groups to begin a process of genuine national reconciliation.

Zarni, IRROL, 21/06/11. Excerpt. http://www.irrawaddy.org/article.php?art_id=21535

Since the end of the Cold War there have been shifting alliances and/or business partnerships among Burma’s military, neighboring governments such as Thailand, India and China, and various armed ethnic organizations along the 3,000-plus kilometer Indo-, Sino- and Thai-Burmese borders. These have had significant impact on the dynamic and political economy of ethnic conflicts in Burma. In this connection, two unfolding phenomena warrant a close-up look: the resurgence of economic developmentalism and the creation of a single, integrated lucrative energy market in the Greater Mekong Sub-Region (GMS). In Burma’s neighborhood, governments are focused on development and economic growth through large-scale projects such as dam constructions, overland cross-border trade, special trans-boundary economic zones which will turn displaced Burmese populations into cheap laborers in assembly lines and dirty industries such as oil refineries. The integrated energy market in Southeast Asia intends to draw much of its resources and electricity from the border areas of Burma. Most of these projects are situated across ethnic minority lands. The insensitivity of the Burmese generals to the survival needs of local communities results in the rise in military tensions with respective ethnic armed organizations. This the military uses as a way of re-framing itself as the guarantor of physical safety of these mega-development projects and provider of market stability. Ominously for the multi-ethnic communities of Burma, a confluence of interest and (pro-market) ideology between the generals and external players is emerging.

Xinhua, 18/06/11. Excerpt. http://english.people.com.cn/90001/90777/90851/7413878.html

Myanmar official media Saturday said the government would open the door of peace to dissidents, referring to recent armed clashes between the government forces and the ethnic armed group, the Kachin Independence Army (KIA) based in northernmost Kachin state bordering China. The New Light of Myanmar cited the attitude of the government as saying that "It would open the door of peace to welcome those who are holding different views if they wish to cooperate with the government in mutually concerned cases for the interest of the nation and the people and run for election in compliance with democratic practice to justly gain power". "The only objective of the Tatmadaw (armed forces) in launching attacks on KIA is just to protect its members and an important hydropower project of the nation without even a single intention of aggression and oppression," clarified the official report.

IRROL, 16/06/11. Excerpt. http://www.irrawaddy.org/article.php?art_id=21505

The KIA's vice chief-of-staff, Brig-Gen Sumlut Gun Maw, told The Irrawaddy on 16/06/11 that the Kachin Independence Organization (KIO) had sent a letter to Beijing on June 14th requesting it to act as a “mediator” between the Burmese regime and ethnic groups. According to the Kachin commander, the conflict in Kachin State could escalate, as there are estimated to be at least six government army battalions around the conflict area near the Tapein-1 hydropower site and more reinforcements from other light infantry divisions are reported to be on their way. On June 16th, Chinese authorities made their first public statement on the Kachin conflict. “We are paying attention to the situation in Myanmar [Burma] near the border area. We urge the two parties to exercise restraint and prevent the escalation of the situation, and resolve the relevant disputes through peaceful negotiations,” Chinese Foreign Ministry spokesman Hong Lei said at a news conference in Beijing. “We have good relations with the Chinese authorities and Chinese companies. Why do they need to call for further security?” asked Sumlut Gun Maw.

Chris Buckley, Reuters (Beijing), 15/06/11. Edited. Abridged.

http://uk.news.yahoo.com/myanmar-border-clashes-spark-fears-wider-conflict-084020066.html

Some experts have warned that [the current fighting along the border in Kachin State] could destabilise the mosaic of ethnic enclaves and alliances across a region vital for China's growing energy needs. As well as hydropower dams, China is building oil and gas pipelines that will span its Southeast Asian neighbour. Cease-fire arrangements previously made allowed a degree of self-rule, but those deals were torn up last year when the larger ethnic armies refused a government order to disarm and form political parties to run in a November 7 general election in Myanmar. Repeated efforts by the SSA, UWSA and KIA to negotiate with the government have failed and their fighters have long been preparing for an all-out offensive by the Tatmadaw. Most analysts say Myanmar's 10-week-old government is not ready to go to war with the militias but is under pressure to secure the dams and pipeline construction sites to appease China, its biggest political and economic ally. Some suggest the KIA, which was shut out of lucrative energy deal between the two countries, might have escalated tensions to force the government to negotiate and offer some financial incentives, such as protection money. "This is mainly about material interests," said Lin Xixing an expert on Myanmar at Guangzhou's Jinan University. "The Kachin also want a piece of the action." Lin said it was likely China would use its diplomatic clout with both the rebels and the Myanmar government. "There is often friction in the area. But I don't think this will become too intense," said Lin. "The Chinese government has good contacts with both sides and will ask them to maintain the security of the frontier lands."

Kachin Independence Organization, 16/03/11.

http://www.burmalibrary.org/docs11/KIO-Letter_to_China-red.pdf

Text of an ‘open’ letter addressed by Chairman Lanyaw Zawng Hra of the KIO to the Chairman of the Communist Party of China (CPC) with regard to seven hydropower projects under construction by CPI [China Power Investment Corporation] of the PRC and Asia World Co Ltd of Myanmar along the Mali Hka and Nmai Hka rivers in Kachin State. The letter states that the KIO has no objections to six of the planned dams and hydropower plants but appeals to the Chairman of the CPC for assistance in finding a “suitable solution” to the problem created by locating the seventh dam at the confluence of the Mali and Nmai rivers. It describes the Confluence as an important historical and enviromental site of the Kachin ethnic people and says the KIO has appealed to the Asia World Co to enter into discussions with it regarding the location of the dam at the Confluence. While the letter addresses problems created by the relocation of residents in the area to be flooded by the dam at the Confluence, its main thrust appears to be directed at the deteriorating relationship between the KIO and the Myanmar military regime and the problems this could create for dam construction activites involving the CPI’s other projects in upper Kachin State. “17. The leaders of the Military Government’s Northern Command in Kachin State recently informed us that security concerns and other necessary procedures will be launched in the six dam project locations./ 18. We have replied that the Myanmar military troops will not be allowed to invade the area [assigned to the] KIO [by the 1994 cease-fire agreement] under current circumstances./ 19. We also informed the Military Government that the KIO would not be responsible for civil war if war broke out because of hydro power plant and dam construction.” [Compiler’s note: The text of the points quoted has been modified for the sake of clarity. It should be noted that this ‘open’ letter was not made public until at least a couple of months after it was sent. Also, that the ‘military government’ of General Than Shwe was replaced at the end of March 2011 by the ‘Union Government’ led by President Thein Sein. The letter should be read in the context of the outbreak of hostilities between the KIA and the Myanmar Army in various parts of Kachin State in May and June 2011. In this connection, see recent items in key articles ELEP035, ELEP 034, ELEP027 and other general sources related to political developments in Kachin State.

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IMPROVED POWER SUPPLY BRINGS BETTER BUSINESS CLIMATE TO MOST

Juliet Shwe Gaung and Naw Naw, Myanmar Times, 06/06/11 (Issue 578).

http://mmtimes.com/2011/business/578/biz57802.html
More rain, bigger hydroelectric dams and a new gas pipeline have combined to make Yangon’s electricity supply vastly more reliable than last year. In the 2010 hot season temperatures soared during the months of March, April and May and the air was filled with the noise and smog of generators as businesses did their best to make power when the mains supply was out, as it frequently was.
Figures from the Yangon Electricity Supply Board (YESB) shine a light on how much better the power supply to the city has been this year – about 40 percent, in fact. In March 2011, Yangon Region received about 362,000 megawatt hours (MWH) of electricity, an increase of about 40pc on the same month in 2010, the figures show. In April 2011, 368,750MWH of electricity were supplied to Yangon Region, a 40.7pc jump on the 262,000MWH recorded a year earlier. By May 19, Yangon had already received nearly 78,000MWH more than it had for the whole month of May in 2010.
A spokesperson for YESB said the increased electricity supply was largely the result of increased output from hydroelectric stations courtesy of better rainfall and improved catchments. Another factor has been the completion of a natural gas pipeline from the Yadana offshore gas project to Yangon, which nearly doubled the supply of natural gas to the city. On June 9, 2010, the then-Minister for Energy, U Lun Thi, opened the 24-inch pipeline to Yangon, which increased the amount of natural gas supplied to the city’s electricity generation plants from 110 million cubic feet of gas a day to about 200.
For the manager of General Food Technology Industry Company, which processes and exports fisheries products at its factories in Insein township, the electricity supply this year has been remarkable because it was available every day. “The most important time for our factories is from 4pm to 10pm when our freezers are working at full capacity,” said U Myo Nyunt. “This year the electricity has been quite regular during that period. But last year we had no choice but to run our generators, which use up to 20 gallons of diesel an hour. It was really tough for the business,” said U Myo Nyunt. He said that during May 2010, there was a period of seven consecutive days when the factory received little or no electricity supply. But by the middle of May this year the worst power cut had lasted for five hours and most days there were no cuts at all, he said.
For businesses in the six downtown townships, it’s a similar story: Where last year it was rare to have power, in 2011 it is power cuts that are unusual, said Daw Phyu Phyu Tin, the owner of Monsoon Restaurant on Thein Byu Road. “We spent about K100,000 buying diesel in April this year, which was a major relief because in the same month last year we bought more 300 gallons, which cost us more than K1 million,” she said.
For businesses in Yangon’s industrial zones, the improved electricity supply has saved thousands of dollars that would otherwise have been spent fuelling generators. A spokesperson for United Wood Company at Hlaing Tharyar Industrial Zone said electricity has regularly been supplied to the zone from 7am to 4pm each day. “After 4pm the electricity is cut and sometimes the voltage is quite low but we have our own transformer. “Last year we got electricity from 7am to noon but we suffered frequent cuts,” the spokesperson said, adding that this year blackouts have been rare and limited to about 30 minutes when they occur. “When we must use our 350-KVA [kilovolt ampere] generator it consumes about 7 gallons an hour. We also have a 215-KVA generator that uses about 4 gallons an hour” but that isn’t sufficient for all operations, the spokesperson said.
A spokesperson from Hlaing Tharyar Industrial Zone Management Committee confirmed that supply has been much better this year. “We’ve had electricity nearly every day from the hours of 7am to 5pm,” he said. During the same months last year businesses in the zone were split into two groups, with one group getting a maximum of five hours of electricity in the morning, and the other group getting the same amount in the afternoon. “But within that five-hour period we probably only got between two and three hours because there were frequent cuts,” he added. He said the chronic electricity shortages that hit Yangon during the 2010 dry season had abated by mid June. He added that the improved supply this year had not come at an increase in per unit charges.
However, not everybody is happy to see regular electricity supplied to Yangon. Zaw Naing Heavy Machinery Co Ltd sells and leases generators from its 53rd Street office in Pazundaung township. A company spokesperson said business has been bad this year. “Last year’s sales and leases were 60 percent higher than this year’s,” said U Zaw Naing. The company stocks or can supply generators ranging from 5KVA through to 500KVA, he said.
Another generator supplier, Top Machinery Trading Co Ltd in Kamaryut township, has seen an even more dramatic fall in sales, according to a company spokesperson. “Our sales are down by 90pc compared to last year,” said Ma Hnin Pwint Zin, a spokesperson for the company.