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Belt and Road Monitor: Top Developments

RWR Belt and Road Monitor

RWR Advisory Group

This edition covers developments from April 25- May 11.

Top Developments

Chinese Contractor Reportedly to Win Iranian Highway Contract
On May 5, Iran’s Ministry of Transportation disclosed that it is in the final stages of negotiations with an unnamed Chinese contractor for the third phase of construction of the 124 km, four-lane Tehran-Shomal Freeway. Separate reports suggest that the Ministry is in discussion with five Chinese contractors for collaboration on the strategic highway project, which is part of a road network connecting Tehran to Iran’s Caspian coast via the Alborz mountain range. The value of the project is estimated at around $1.5 billion. Iran has taken steps to expand the economic and strategic potential of its Caspian coastline since the 2018 signing of a legal convention between the five Caspian littoral states, which established the legal boundaries of the sea. Competition to advance the area's logistics and transport facilities is largely influenced by Chinese interest in multi-modal access and trade through the Caspian and also by the 25-Year Comprehensive Strategic Partnership Agreement between China and Iran, finalized earlier this year. For example, in March 2021, the Iranian government announced the construction of Iran’s first ever artificial island in Mazandaran province situated on the Caspian under the framework of the Iran-China deal. 

China Signs Feasibility Study for Airstrip Upgrade in Kiribati
On May 5, Chinese plans to upgrade an airstrip on Kiribati’s Kanton island were revealed. Few details on the project were disclosed, other than reports that the Chinese government had signed a feasibility study for the rehabilitation of the runway and bridge. Since  Kiribati switched official recognition from Taiwan to China in September 2019, the two countries have signed several agreements, including a deal for China to provide ‘technical assistance’ in converting Kiribati-owned land in Fiji into a commercial farm, a tuna licensing deal, and an MoU on joining the Belt and Road Initiative in early 2020. Taiwan also stated that, in exchange for switching recognition, Kiribati received full funding for the procurement of airplanes (such as a Boeing 737) and commercial ferries. In addition to serving as a strategically important location for military operations, being based in the Pacific between Australia and Hawaii, Kiribati is the site of a Chinese space tracking station that aided in tracking China’s first manned space flight. Although the station was offline by the time that Kiribati switched recognition, there has been speculation that the station may be put into operation again. 

Australia to Potentially Cancel Lease of Darwin Port to Chinese Landbridge Group
On May 3, it was reported that Australia was reviewing a 99-year lease of a commercial and military port in Darwin to China’s Landbridge Group under the country’s 2018 critical infrastructure law, which is intended to manage the national security risks associated with foreign involvement in Australian infrastructure. In 2015, Landbridge signed a $370 million deal to operate the port and take an 80% ownership stake in the land and facilities of the port’s East Arm Wharf, including the marine supply base. The agreement elicited criticism at the time of its signing, with some raising concern over the port’s strategic location near the South China Sea, and others alleging that Chinese interests would have access to sensitive information on American and Australian naval operations (the port hosts U.S. Marines, who train there six months a year). 

Myanmar Potentially Approves Major Chinese Energy Project
On May 8, it was reported that the Myanmar Investment Commission, which is owned by the Burmese military junta, had approved 15 projects, including a $2.5 billion LNG power project, which is the largest approved since the junta’s takeover in February. Although not officially disclosed, reports have speculated, based on the estimated cost, that the approved LNG plant is the Chinese-owned Mee Lin Gyaing power plant in Ayeyarwady Region. In January 2021, Chinese officials, such as Foreign Minister Wang Yi, had been pushing Myanmar to implement BRI projects more quickly, and, in 2020, a letter of intent was signed to hasten the development of the Mee Lin Gyain project during President Xi Jinping’s visit. The approval comes as Chinese investment in Myanmar becomes increasingly risky, with some energy firms reportedly considering exiting the Burmese market after three guards near the oil and gas pipeline were killed by unknown assailants in early May. Other Chinese firms, however, have launched projects in Myanmar since the coup, including China Gezhouba Group and Sungrow Power Supply, which signed three solar power projects in Myanmar in Magway region and Mandalay province in late February. 

Huawei to Develop Smart City Features for Qatari Real Estate Projects
On May 4, Huawei signed an MoU with Qatari public shareholding company United Development Company (UDC) to deploy “smart city characteristics” to UDC’s flagship Pearl-Qatar and Gewan Island mixed-use real estate development projects. Per the MoU, Huawei will integrate technology features such as an intelligent operations center, WiFi-6 technology, a smart CCTV system supported by artificial intelligence cameras, as well as an advanced data center facility. The reclaimed land, situated 350 km offshore from Qatar’s capital city of Doha, will be the first area in Qatar to be available for ownership by foreign nationals and will feature a combination of residential and commercial property developments. The Pearl-Qatar MoU reflects a recent and growing pattern of engagement on ICT cooperation between Huawei and Gulf countries in the Middle East. In 2020, Huawei entered into an agreement with Saudi investment firm Batic to collaborate on smart city projects in the country, and it is also a primary partner for the development of the Kingdom’s Yanbu Smart Industrial City project on the Red Sea. In the United Arab Emirates, Huawei is among the leading technology solutions providers, having launched projects involving the implementation of cloud services for the UAE’s public transport networks and utilities


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