The Adani Group, an Indian multinational conglomerate company headquartered in Ahmedabad, Gujarat State, is currently building a container terminal along Yangon river. But the political turmoil has put the company between a rock and a hard place, reported The Hindu Business Line.
“We are watching the situation in Myanmar carefully and will engage with the relevant authorities and stakeholders to seek their advice before deciding how to manage this project into the future,” a spokesperson for Adani Ports and Special Economic Zone Ltd (APSEZ) told the paper.
The conglomerate is indeed in a tough spot. In May 2019, Adani Group said it would invest as much as USD 290 million to build and run a new container terminal along Myanmar’s Yangon river on a 50-year deal. The terminal is being built under the Myanmar Port Authority’s auspices and the Myanmar Ministry of Transport and Communications.
The paper details the project as helmed by Adani Yangon International Terminal Co Ltd (Adani), a unit of Adani Ports and Special Economic Zone Ltd (APSEZ). The project, named the Ahlone International Port Terminal 2 (AIPT 2) was to be developed over 54 acres of land leased from Myanmar Economic Corporation Co Ltd (MEC), which is currently operating AIPT 1.
MEC is controlled by the Tatmadaw and the Directorate of Defense Procurement – just as Myanma Economic Holdings Ltd (MEHL). These 2 companies are at the center of boycott campaigns and in the crosshair of activists and other organizations claiming they are providing funds to the military for its operations.
The first phase of the new terminal was expected to start operations by end 2020 with a capacity to handle 150,000 twenty-foot equivalent units (TEUs) but has been delayed. The second phase was planned for June 2021 taking the capacity of the terminal to 800,000 TEUs.
As part of the deal, Adani had also committed to build a maritime university to upgrade skills of local people and build local infrastructure such as waterways and other transport facilities to bring efficiencies and drive economic development in the region.
While pursuing the project will involve reputational risk for the Indian conglomerate, the project is on the other hand of geopolitical importance for India to counter Chinese influence, notably China-backed Kyaukphyu deep-sea port in Rakhine State, part of the China-Myanmar Economic Corridor (CMEC).