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Belt and Road at Glance: RWR Advisory Newsletter

Top Developments

Belt and Road at Glance

🔴  Mnmar Seeks to Balance Chinese Economic Influence in New Yangon City 
On September 8, Myanmar hired German consulting firm Roland Berger to oversee the tendering process for its multi-billion dollar New Yangon City development project in an apparent effort to challenge a bid from China Communications Construction Company (CCCC). In 2018, CCCC drafted a proposal to build the first phase of the $1.5 billion development, and the project has been called a "pillar" of the BRI’s China-Myanmar Economic Corridor by Xi Jinping. With the new “Swiss challenge” tendering process, the mega-development will be divided into smaller projects, and other firms have been invited to submit their own proposals for these new sections. 

 🔴  $30 Billion-Plus Malaysian City Project Launched
On September 15, China Railway Engineering Corporation (CREC) held an ‘advance payment and deposit handover’ ceremony for its massive Bandar Malaysia project, giving a $300 million check to the Malaysian Ministry of Finance-owned company TRX City to launch the start of the business development and transit project that has been in the works since 2011. CREC and its local partner Iskandar Waterfront Holdings initially signed an agreement in 2015 to acquire 60% of the 486-acre, $33.8 billion Bandar Malaysia project from 1Malaysia Development Berhad, but the deal was cancelled in 2017 amid a swirl of controversy surrounding 1MDB, concerns about excessive Chinese influence in the country, Malaysian claims that the consortium failed to raise the necessary funds, and reports that the Chinese government had refused to authorize CREC to take on the project. In December 2019, the partners once again signed an agreement on the share acquisition. The project includes the construction of an international financial center, a high-tech industrial park, a commercial and exhibition center, tourist landmarks and a cultural exchange center, as well as potentially housing the terminus of the High Speed Rail to Singapore. 

🔴  China Hengyi to Invest Billions in its Brunei Petrochemical Complex
On September 15, China’s Hengyi Petrochemical Co., Ltd. announced that it plans to spend $13.65 billion to expand its refinery and petrochemical complex in Palau Muara Besar, Brunei. Construction will be complete within three years and will add a 14 million ton per year crude oil refinery and a two million ton per year paraxylene unit to its existing complex. The complex was the largest investment by a Chinese company in Brunei at the time of its construction beginning in 2017, with Hengyi investing $3.445 billion into the project.  Hengyi is a joint venture between Zhejiang Hengyi, owning 70% of the shares, and the Brunei government. 

🔴  Zimbabwe Bans Mining in Parks after Chinese Firms Found Exploring for Coal in Hwange
On September 9, after Chinese companies Zhongxin Coal Mining Group and Afrochine Smelting were revealed to have been given permits to explore for coal in Hwange, Zimbabwe’s largest national park, Zimbabwe banned mining in all of its national parks. The Zimbabwe Environmental Lawyers Association (ZELA) took the government to court over the potential environmental damage that could be caused by coal mining in the park, which is home to almost 10% of Africa’s existing wild elephants. The ban also applies to mining along the majority of river beds, which will affect small-scale Chinese and local gold miners. 

🔴 Chinese Firms Dominate Myanmar’s Solar Plant Tenders, Doubts over Financial Feasibility 
On September 9, 28 of the 29 solar power plant bids that were put to tender by Myanmar’s Ministry of Electricity and Energy were won by Chinese companies. Sungrow won nine bids, China Machinery Engineering Corporation eight, and SPIC Yunan International took four. The sole bid won by companies based outside of China was taken by Germany’s Ib Vogt. The tenders came under fire for their hurried bidding timeline and the seeming bias toward Chinese bidders. The plants are required to be built within six months, though industry experts expressed doubt that these deadlines would be met, and also voiced surprise over the low winning bid rates, stating that it was “highly questionable these solar projects can be adequately constructed and financed at these low proposed energy rates.”

🔴    ByteDance Invests Billions in Opening HQ in Singapore
On September 10, ByteDance, owner of TikTok, announced that it would invest billions of dollars in opening a southeast Asian headquarters in Singapore over the next three years. The move comes as TikTok faces an upcoming ban in the United States and has been met with resistance in other markets such as India. The firm has applied for a license to operate a digital bank in Singapore and has expressed its intent to build a data center in the country. 

🔴   Lgal Dispute in Uganda over Chinese Firm’s Work on Isimba Dam
On September 16, Uganda Electricity Generation Company Limited (UEGCL) and China International Water & Electric Corporation (CWE) accused one another of contract violations over the Chinese company’s work on the 183MW Isimba dam. CWE alleged that it was still owed $28 million for the project’s completion in May 2019, but UEGCL said that the dam had major defects that had not been fixed and that the payment could be withheld on those grounds. CWE appeared not to dispute the charge of the dam having over 700 defects, but instead stated it was still entitled to 95% of the payment due to their work being completed. 

Source: RWR Advisory Group

Belt and Road at Glance


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