China has clinched a multi-billion-dollar 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 deepwater 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 a 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 $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 a 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 $3.2 billion, the report said.