BUSINESS
covering burma and southeast asia
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BUSINESS


By THE IRRAWADDY DECEMBER, 2010 - VOL.18, NO.12


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A Yangon Airways aircraft at the international airport in Rangoon. (Photo: www.travelpod.com)
Yangon Airways Suspends Service

Yangon Airways, a domestic airline in military-ruled Burma, suspended all flights starting Dec. 3 following the cancellation of its Aircraft Operator Certificate by the Civil Aviation Authority. In a statement, Yangon Airways said the action came like “a bolt from the blue.” The airline did not mention when it might be able to resume flights. According to business sources, the suspension is being seen in some quarters as part of a regime effort to restrict business activity by ethnic armed groups. One of the major shareholders in Yangon Airways, Aik Hauk, is the son-in-law of Bao Youxiang, the chairman of the United Wa State Army, Burma’s strongest ethnic cease-fire group.

10,000 Kyat Banknote in the Pipeline

Burma’s military regime reportedly plans to issue a new banknote, according to official sources in Naypyidaw. A Defense Ministry official said the new 10,000 kyat (US $10) banknote could be issued in December or January. A 5,000 kyat banknote, the country’s highest denomination to date, was issued in October 2009.

Thailand Unveils Plan for Tavoy

Plans for the development of a major transshipment port and industrial zones on Burma’s southwest coast at Tavoy will require a huge power plant with a capacity of 4,000 megawatts—more than the entire country currently uses. Blueprints indicate an area to be developed of 250 square km to accommodate two industrial areas in the hinterland of Tavoy, now also called Dawei, according to an industry website. Thai construction company Italian-Thai Plc has entered into a contract with the Burmese military government to undertake the $6.73 billion project, which will take 10 years to complete and include petrochemical industries, a refinery, a steel-producing factory and a new shipyard, said Dredging Today. If the plans are fulfilled, the new port will be capable of handling 100 million tons of goods, it said.

Black Market in Gasoline Makes Comeback

Months after Burma’s ruling regime ended a state monopoly on gas stations, newly privatized gas stations are reimposing quotas to prevent customers from buying petrol to resell on the black market. Gas station operators say that some customers have been profiteering by buying gasoline from them for 2,500 kyat (US $2.50) per gallon and then selling it for 3,000 to 3,200 kyat on the black market. Burma’s military regime started licensing private companies to purchase fuel for retail in June. It distributes gasoline to private stations for 2,350 kyat per gallon and allows them to sell it for a maximum of 2,500 kyat. Although the regime’s Ministry of Energy had a plan to collect a five percent sales tax from private stations, it has reportedly been collecting just 28 kyat ($0.03) per gallon.

Burma, China, Thailand Look at Salween Megadam

Burma, China and Thailand have agreed to study plans for a 7,000-megawatt hydropower project in Burma that would be Southeast Asia’s largest by generation capacity, the Chinese government and wire services reported. The US $10 billion project would be built on the Salween River in Burma over 15 years, China’s state-owned Assets Supervision and Administration Commission said in a statement. Companies from the three countries recently signed an agreement on the project, according to media reports. China Three Gorges Corp, Sinohydro Corp and China Southern Power Grid Co will work with the Electricity Generating Authority of Thailand and the International Group of Entrepreneur Co. in Burma on the study, reports indicate.

SE Asian Bourses to Form Alliance

The stock exchanges of Malaysia, Singapore and Thailand will link via an electronic trading system that will give investors access to all three markets simultaneously by the second half of 2011, while the Philippines’ Stock Exchange will join the alliance in the first half of 2012, Thirachai Phuvanatnaranubala, the secretary-general of Thailand’s Securities & Exchange Commission, told a regional finance conference in Malaysia.



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