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BEI­JING: China has clinched a multi-bil­lion­dol­lar deal to build a port at a strate­gic town along the coast of the Bay of Ben­gal in Myan­mar, its third project in In­dia's neigh­bour­hood af­ter Sri Lanka and Pak­istan.

China and Myan­mar signed an agree­ment on Thurs­day to build the deep sea port project in Kyaukpyu town af­ter ne­go­ti­a­tions dragged for years due to fi­nanc­ing and other is­sues, state-run Global Times re­ported on Fri­day.

China is also de­vel­op­ing deep wa­ter strate­gic Gwadar port in Pak­istan in the Ara­bian Sea which faces the Mum­bai coast.

It has also ac­quired Sri Lanka's Ham­ban­tota port on debt swap in the In­dian Ocean.

China has per­sis­tently de­nied the String of Pearls the­ory of build­ing strate­gic net­work of ports to en­cir­cle In­dia.

The Chi­nese con­sor­tium led by State-owned con­glom­er­ate Citic Group signed the frame­work agree­ment with the Kyaukpyu Spe­cial Eco­nomic Zone Man­age­ment Com­mit­tee on the devel­op­ment of the Kyaukpyu, deep-sea port, at a cer­e­mony in the Myan­mar cap­i­tal of Nay Pyi Taw, the re­port said.

Un­der the frame­work agree­ment, China will fund 70 per cent of the in­vest­ment for the project and Myan­mar will pitch in the re­main­ing 30 per cent.

The ini­tial phase of the project will in­clude two berths with a to­tal in­vest­ment of USD 1.3 bil­lion, ac­cord­ing to the agree­ment.

A joint ven­ture will be set up to con­struct and op­er­ate the port.

The sign­ing of the frame­work agree­ment marks a sig­nif­i­cant step for the port project, which has been stalled since 2015, and for the con­tin­ued im­ple­men­ta­tion of the China-pro­posed Belt and Road ini­tia­tive (BRI), which has come un­der in­creased scru­tiny be­cause of the cases such as the Kyaukpyu port project, the re­port said.

The Chi­nese con­sor­tium first won the bid to con­struct the port in De­cem­ber 2015 with an es­ti­mated in­vest­ment of USD 7 bil­lion but fur­ther devel­op­ment was halted due to dis­agree­ment be­tween the two sides over de­tails of the project's fund­ing.

This is the big­gest project China had se­cured af­ter Myan­mar leader Aung San Suu Kyi took charge of the gov­ern­ment re­plac­ing the pro­longed rule of pro-china mil­i­tary junta.

Pro­longed ne­go­ti­a­tions fu­elled crit­i­cism of the BRI as it could add to Myan­mar debts and even threaten other coun­tries' sovereignty.

The Kyaukpyu project is es­ti­mated to bring 100,000 jobs to the lo­cal com­mu­nity and will con­trib­ute as much as USD 15 bil­lion in tax rev­enue to Myan­mar. Once com­pleted, the port will have an an­nual gross out­put of USD 3.2 bil­lion, the re­port said.

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