The government issued a tender for five projects in June to bring in plants and barges with the aim of adding 1070 megawatts of power by next summer and avoiding this year’s power cuts.
The tender requirements – including the implementation deadline (210 days), heavy penalties for missing the deadline and short contractual term of five years – came under fire from industry consultants and experts.
The Myanmar Times this month broke the news that Hong Kong-listed VPower Group, of which Chinese CITIC is a shareholder, has won four projects. The ministry at the time declined to confirm or comment on the news.
A day after this paper, on October 22, reported that China Energy Engineering Group (CEEC) secured the fifth project, the ministry released a statement announcing the tender results.
VPower was given the letter of acceptance on September 6 while CEEC was given the letter on September 3, according to the ministry announcement. The government did not explain why they did not disclose the winners until October 23.
It was earlier incorrectly reported that Myanmar’s Zeya & Associates was included in VPower’s consortium. The government announcement identified state-owned China National Technical Import & Export Corporation as VPower’s partner in the three LNG projects instead, totalling 900MW.
In addition, VPower was awarded the 20.54MW gas project in Kyun Chaung.
The consortium of China Energy Engineering Group, including Hunan Electric Power Design Institute, China ITS Holding and Shenzhen Shennan Power Gas Turbine Engineering Technique won the 151.54MW gas project in Ahlone township.
In an interview last week, Katie Patterson of FMR Research & Advisory’s Myanmar Energy Monitor called the emergency tender as “an act of desperation” from the energy ministry.
“These projects are expected to be highly expensive, but the reality is that there is an election next year, and consumers will be extremely unhappy if find themselves paying even more for electricity when the blackouts are worse,” the energy expert said.
Critics are doubtful if these projects will materialise in time, she added. “We will be watching the situation closely to see how they come to fruition and what the size of the contracts will be.”
The emergency move risks worsening Yangon’s air pollution, observers warn. According to the latest World Health Organization statistics, 22,000 people in Myanmar die from air pollution every year, the country is also among 15 countries in the world with the worst air pollution.
Despite the pollution risks and costs, manufacturers and businesspeople say it is imperative to plug the energy shortfall next year to protect jobs, public service and business confidence. The widespread blackouts and forced scheduled outages this summer – with some townships experiencing two to six hours of power cuts every day – severely disrupted commercial and industrial activities.