Chinese Firm Warns of “Legal Issues” Over Burma Dam

Posted October 4th, 2011 at 2:00 am (UTC-5)
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A Chinese company involved in the construction of a hydroelectric dam in Burma is warning of “legal issues” if the Burmese government decides not to go ahead with the project.

Lu Qizhou, president of the China Power Investment Corporation, said in an interview with China's Xinhua news agency that his company has invested a huge sum of money in the Myitsone Hydropower Project and strictly observed all laws and regulations in both countries.

Burmese leaders said last week they are suspending work on the project, which is opposed by local residents and environmental groups. They say the dam will do irreparable damage to the Irrawaddy River.

But Lu said late Monday that he was “bewildered” by the announcement, which he learned of through news media. He said if construction is permanently halted, it will lead to “a series of legal issues.”

Lu said Burmese officials urged the company in February to accelerate work on the project, which was due for completion in 2019. He said villagers have already been resettled from the dam area and that work is under way on road construction, site leveling and excavation for the main spillway.

He said a final decision to halt the $3.6 billion project would prompt numerous default claims from contractors and cause “immeasurable” losses to both Burma and China. Most of the power from the dam would be sold to China.

The decision to halt the project has been welcomed by pro-democracy leader Aung San Suu Kyi and foreign governments, including the United States and the European Union.

Aung San Suu Kyi warned in August that the dam would have devastating consequences on the country's rice production and on the life of the local population.

Burma's new President Thein Sein, a former general, told the parliament last week that it should act according to the desire of the people.