The Htoo Trading Co Lt, listed on the US sanctions list and owned by Tay Za, a business crony of senior Burmese generals, and others have been awarded a contract to build, operate and transfer electricity for two hydro power projects in Burma.

Htoo Co Lt is the first private Burmese company to be awarded such a contract in the hydro power sector.

Tay Za speaks at a press conference of the Yangon United soccer club in Rangon. (Photo: The Irrawaddy)

According to a short report on Thursday in a state-run-newspaper in Burmese, Myanma Alin, the Ministry of Electric Power-1 and the Htoo Trading Co Lt signed an agreement on Dec. 29 to build, operate and transfer electricity from the Hsedawgyi and Htaka hydro power projects.
 
On Saturday, Myanma Alin also reported that the Ministry of Electric Power -1 signed contracts with three companies.

The article did not say how long the agreement would remain in effect, but sources in the Rangoon business community said the contract between the government and Htoo Co. was for 75 years.

The Hsedawgyi dam will be build north of Mandalay. The articles did not mention the location of the proposed Htaka dam.

Observers in Rangoon say privatizing hydro-power projects could be a first step in the military government's attempt to resolve electricity shortages in the country. Almost the entire country lacks enough electricity to fill its needs.

In Rangoon and Mandalay, the two largest cities, electricity distribution is rationed to six hours a day per household while industrial zones are allocated 12 hours a day. According to statistics from the Ministry of Electric Power-2 , the country needs 1,555.25 magawatts while power plants can produce only 556 magawatts.

The Ministry of Electric Power-1 manages power plants. The Ministry of Electric Power-2 is responsible for distributing electricity.

“We heard that Htoo Company would also manage the distribution of electricity in Rangoon and Mandalay in the future even though electric distribution under the Ministry of Electric Power-2 has yet to be privatized,” said an editor at a Rangoon-based private journal.

Prior to the 62nd anniversary of Burma’s Independence Day, the state media published a series of articles on hydro power projects in the country, saying Burma “will achieve electricity sufficiency with surplus production across the nation” in the near future.

Tay Za, also known as Teza, also owns Air Bagan, Myanmar Avia Export Com Ltd, Htoo Group of Companies, Htoo Wood and Ayer Shwe Wah Co Ltd. The companies are involved in logging, gems, telecommunication, Internet technology and export-import. He also owns the Yangon United FC soccer club.

Burmese dissident groups have accused junta head Snr-Gen Than Shwe and his family of doing business through Tay Za’s companies. Than Shwe and Tay Za recently appeared together in a photograph in government newspapers was on Dec.12. The state media reported the two met when Than Shwe inspected a Tay Za company at Yadanabon IT City near Mandalay.

Irrawaddy correspondents in Rangoon contributed to this story.