Myanmar, China agree cross-border rail project

YANGON, April 28 Thu Apr 28, 2011 9:18am EDT

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YANGON, April 28 (Reuters) - Myanmar and China have agreed to build a rail link connecting Southwest China with the Indian Ocean, officials and local media said on Thursday.

The railroad will be built in five stages over the next three years and will stretch for total of 1,215 kilometres (755 miles), from the Kyaukphyu deep-sea port in Myanmar's Western Rakhine State to China's Yunnan province, a senior official from the Ministry of Rail Transport told Reuters.

"The entire project also includes construction of a highway running parallel to the railroad," said the official, who requested anonymity.

The road and rail will run parallel with two giant pipelines currently under construction that will carry 12 million metric tons of crude oil and 12 billion cubic meters of annually into China within the next two years.

The railway is part of a wide-ranging network to connect southwest China with its Asian neighbours through a system of railways, roads, power grids, telecommunication networks, oil and gas pipelines and ports.

China is Myanmar's biggest political ally and is set to become its biggest investor through a series of energy and infrastructure projects currently underway of planned for the next few years.

China enjoys close trade and economic ties with Myanmar, with little competition for contracts as a result of wide-ranging Western sanctions on the country's new government, which critics say is a front for the old military regime.

Trade across the porous Yunnan-Myanmar border has flourished in recent years, but the rail link is just one part of an ambitious scheme that will put the provincial capital of Kunming at the centre of a regional free trade zone. (Reporting by Aung Hla Tun; Writing by Martin Petty; Editing by Andrew Marshall)

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