(Repeats story first published late on Wednesday, no change to
* $3.6 bln, 6,000 MW Myitsone project stalled since 2011
* Myanmar likely liable for China compensation if Myitsone
* Alternative hydro projects, port concessions under
* Myanmar president to discuss options on upcoming visit to
By Yimou Lee and Shwe Yee Saw Myint
NAYPYITAW, April 5 China has shifted its
position in a lengthy dispute with Myanmar over the building of
a $3.6 billion dam, seven sources said, signalling its
willingness to abandon the project in exchange for other
economic and strategic opportunities in Myanmar.
Myanmar President Htin Kyaw will discuss a potential deal on
the massive Myitsone dam during a trip to China beginning on
Thursday, two senior Myanmar officials and a person familiar
with the matter told Reuters.
Until recently, China had been pushing hard for the 6,000
megawatt project to go ahead despite widespread opposition
within Myanmar which forced the suspension of work in 2011.
Now, it is discussing alternative options with Myanmar
including developing a number of smaller hydropower projects and
securing preferential access to a strategically important port
to compensate it for shelving the project, the sources said.
The seven sources include senior Myanmar government
officials, a person familiar with the original deal and a person
close to the Chinese state-owned operator of the dam. They
declined to be named due to the sensitivity of the matter.
Executives at the developer, the Sino-Myanmar joint venture
Upstream Ayeyawady Confluence Basin Hydropower, are "deeply
concerned" the project will get scrapped, according to a person
close to the company.
In a statement, the company said it was looking forward to
"an impartial and fair" review by the Myanmar government into
the environmental and social impact of the project. It said it
remained confident of an appropriate solution, without giving
Myanmar's national security advisor Thaung Tun said the
review, led by Htin Kyaw, was in its final stages.
The person familiar with the original deal said the
Chinese-owned operator of the dam, the State Power Investment
Corp Yunnan International Power Investment (SPICYN) has not been
actively pursuing the project over the last six months, in
contrast to its more proactive stance previously.
SPICYN declined to comment.
LESS POWER NEEDED
China would maintain communications with Myanmar to handle
"any difficulties encountered in the course of cooperation on
the project" Hua Chunying, a spokeswoman for China's Ministry of
Foreign Affairs, told a regular media briefing.
The Myitsone dam was supposed to send 90 percent of its
electricity to China's neighbouring Yunnan province, angering
many in electricity-starved Myanmar.
But in recent months, China's appetite for the project has
diminished because Yunnan now has an oversupply of electricity
as it switches to less energy-intensive industries amid an
economic slowdown, sources said.
Instead, China, with its "One Belt, One Road" ambitions of
improving links with central Asia and Europe, "wants a
face-saving solution" that would allow it to advance its other
economic interests if it shelves Myitsone, said a top government
official familiar with discussions.
A deal would mark a geopolitical shift away from the West,
as Naypyitaw looks to improve ties with China at a time when the
United States and the European Union are focussed more on
Beijing is an increasingly important partner for Myanmar
leader Aung San Suu Kyi, who has made ending decades of ethnic
war her top priority. Myanmar needs Chinese support to stabilise
their shared border amid increased fighting with armed ethnic
Myanmar is likely to be liable to China for compensation on
hundreds of millions of dollars already spent on the project,
according to the source close to the deal and a person familiar
with the government's position.
Myitsone's developer and operator did not comment on
potential compensation arrangements and it was not clear how
that would be handled.
"The compensation doesn't have to be cash," said one of the
officials familiar with Suu Kyi's thinking. "China is interested
in other infrastructure projects including smaller-scale dams."
China is also pushing for preferential access to the deep
sea port of Kyauk Pyu on the Bay of Bengal, according to two
sources familiar with the government's position.
Kyauk Pyu is the entry point for a Chinese oil and gas
pipeline and the two countries are close to starting pumping oil
through it. The pipeline will provide China an alternative route
for receiving Middle Eastern oil.
(Additional reporting by Antoni Slodkowski, Wa Lone, Simon
Lewis, Soe Zeya Tun in MYANMAR, Michael Martina in BEIJING and
David Stanway in SHANGHAI; Editing by Lincoln Feast)