BURMA: KEY REGIME CRONY LIKELY TO BUILD DEEP SEA

C O N F I D E N T I A L SECTION 01 OF 03 RANGOON 000645

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C O R R E C T E D C O P Y (paras 1, 5, 7 & 9)
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E.O. 12958: DECL: 09/21/2016
TAGS: ECON PGOV BM
SUBJECT: BURMA: KEY REGIME CRONY LIKELY TO BUILD DEEP SEA
PORT

REF: A. A: 06 RANGOON 0762

B. B: 06 RANGOON BM1473

C. C: 06 RANGOON 1704

D. D: RANGOON 0313

E. E: RANGOON 0600

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Classified By: P/E Chief LHAYDEN for Reason 1.4 (b,d)


1. (C) Summary: Tun Myint Naing aka Steven Law of Asia World
Co. Ltd. has emerged as a key regime crony running one of
Burma's most powerful business conglomerates. Local reports
that Asia World has won the right to build a deep sea port at
Kyauk Phyu in Rakhine State appear premature. However, Asia
World will likely take the lead in constructing the port.
Asia World is also likely to play an important role in the
future construction of a natural gas pipeline, crude oil
pipeline, and highway that would create a strategically
valuable link between China and the Bay of Bengal.
End Summary.

Asia World Ltd.: Past and Current Projects
--------------


2. (SBU) The Asia World Co. was founded in 1992 with strong
financial backing and a broad platform of business
activities. The company now operates its own deep-sea port
in Rangoon on a 30-year land lease from the GOB. Constructed
in 1996 and equipped with container-handling facilities in
2001, the Asia World Port handles 40 percent of the country's
container traffic. Asia World also constructed and now
operates the 208-mile-long toll road that runs from Lashio in
central Burma to Muse on the Burma-China border. The road
serves as a primary trade conduit between Burma and China.
Asia World collects a 2200 kyat toll (USD 1.75) and splits
profits with the GOB (ref A). When the GOB moved the
administrative capitol from Rangoon to Nay Pyi Daw, the
government gave a multitude of construction contracts to Asia
World, including roads, ministry buildings, and hotels.


3. (SBU) Asia World has also just completed construction on
the new USD 13.3 million terminal at Rangoon Airport. The
construction of the 20-story Hledan Center Condominiums five
miles from the airport is underway, and Asia World is
building the majority of the new Rangoon-Mandalay highway.
The GOB had originally divided the project into five sections
to be built by five different companies. Asia World was
given two of the five sections. A third section was later
taken away from another company and given to Asia World. In
addition, Asia World operates a mini market chain in Burma
and has begun producing laminated woven bags.

U Tun Myint Naing aka Steven Law
--------------


4. (C) Contacts who know Tun Myint Naing describe him as
capable, likeable and soft-spoken. In his late forties, Tun
Myint Naing has always tried to keep himself and his company
out of the limelight. Said to have an excellent personal
relationship with the GOB senior generals, some sources told
us he can get any Cabinet member on the phone without
trouble. He has accompanied Senior General Than Shwe on
trips to China, and dignitaries who have visited GOB
officials in Nay Pyi Daw often stay in his hotels (ref B).


5. (SBU) Speculative links between Tun Myint Naing and the
drug trade are born out of links with his father, Lo Hsing
Han, an ethnic Chinese from the opium-producing Kokang region

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and a notorious drug lord. Lo Hsing Han is the Chairman of
Asia World and reportedly guides his son to maintain the
company's reputation and credibility. Asia World operates
highway passenger and cargo transportation services from
Rangoon to northern Burma. Many speculate Tun Myint Naing
also uses the transportation services for drug trafficking.


6. (C) Cecilia Ng aka Ng Seng Hong, Tun Myint Naing's
Singaporean wife of 12 years, also has links to illicit
business. Dr. Nay Win Maung, CEO of the local journal, "The
Voice," (PROTECT) told us that Cecelia Ng operated an
underground foreign exchange remitting system between Burma
and Singapore. Though he said she stopped the operation after
Asia World became successful, other sources said they believe
she still operates three "overseas branch companies" for Asia
World in Singapore. Some speculate she uses the overseas
branches to channel drug money out of Burma, although U Soe
Win, former representative to Price Waterhouse Cooper and
managing director of Myanmar Vigor Consulting Co. (PROTECT),
insisted there were no known links between her overseas
companies and Asia World.

Shwe Natural Gas Fields and the Road to China
--------------


7. (C) After months of speculation, the Burmese government
has given the rights to extract natural gas from the Shwe
Offshore Fields to China (ref C, D, E). The next step is the
construction a natural gas pipeline from the Shwe fields to
Kunming, China. Many believe the pipeline will be a part of
a parallel development project which would include a crude
oil pipeline, a new highway, and a deep sea port at Kyauk
Phyu on Rambree Island, off the coast of Rakhine State.
During his last visit to China on June 5-10, Secretary-1
Thein Sein signed a number of MoU's with China launching
feasibility studies regarding these projects (ref E).


8. (C) Local weekly journal "The Voice" recently reported
that the GOB awarded Asia World the contract to build the
deep sea port at Kyauk Phyu. We spoke to Dr. Nay Win Maung,
the CEO of The Voice, and he expressed confidence the
reporting was correct. U Soe Win echoed his confidence that
Asia World did indeed get the contract, despite the lack of
an official announcement. However, attempts to confirm this
information with Myanma Port Authority officials were
unsuccessful. Discrepancies regarding the exact location of
the port and the water depths at Kyauk Phyu suggest that even
if Asia World does have plans to build the port, construction
would take a long time. A Port Authority official speculated
Asia World might only construct an oil and gas terminal
rather than a full-scale commercial port.


9. (C) The Dr. Nay Win Maung said the Chinese plan to build
the pipelines along the now overgrown China-Burma Road built
by U.S. General Stilwell during World War II. He said China
insisted that the road be modernized and expanded if the
pipeline were to be built. Observers believe that, if built,
the deep-sea port, crude oil pipeline, and new highway would
be of greater strategic value to China than access to the
Shwe natural gas fields. They would provide a high-capacity
trade conduit from the Middle East that bypasses the Straits
of Malacca. Dr. Nay Win Maung speculated that Asia World
would likely be involved in the construction of several
aspects of these development projects.


10. (C) Dr. Nay Win Maung and U Soe Win each emphasized that
the GOB might not be as enthusiastic about these development

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projects as they publicly appear. Business contacts share a
growing concern surrounding China's increasing influence in
Burma. The construction of a major trade conduit for China
through Burma would only strengthen and broaden an already
visible Chinese presence throughout Burma.


11. (C) The GOB's possible hesitation, however, only
increases the significance of Tun Myint Naing and Asia World.
Dr. Nay Win Maung said that Tun Myint Naing has consistently
profited by facilitating business agreements between Chinese
companies and the GOB. He speaks Chinese fluently. Tun
Myint Naing appears to have gained more influence over time,
as his father recedes into the background.


12. (C) Comment: Whatever the current extent of his
involvement in the drug trade and other illicit activities,
Tun Myint Naing must be considered the most powerful
businessman in Burma, alongside Tay Za. Tun Myint Naing's
increasing identification with the Chinese in Burma puts him
at risk as a target of a popular backlash as Burmese
increasingly complain of the "sinoization" of their country.
The Burmese are seeing their natural resources plundered by
their neighbor to the North, while the profits go into the
pockets of the generals and their cronies, and the people get
nothing. End Comment.
VILLAROSA