Monday, 21 June 2010

Burmese tycoon brokered arms deal with China

Chiang Mai (Mizzima) – Burma’s richest business tycoon and close ally of despotic ruler Senior General Than Shwe, went to China early this month to broker a deal enabling the regime to buy 50 multi-role jet bombers for its air force, trusted sources said.

Tay Za was also spotted at the Kunming regional trade fare on June 7, in China’s southern province of Yunnan. The purpose of his visit was to help the Burmese regime acquire the K-8 Karakorum, a two-seat intermediate jet trainer and light attack aircraft developed in a joint venture between China and Pakistan.

Estimates for the price of the aircraft vary widely. Last October, Bolivia announced that it would spend US$57.8 million to buy six of the planes. According to Jane’s Defence Weekly the deal also included “two spare engines, a KTS2000BW test vehicle, an Interactive Multimedia Instructor system, initial spare [parts], training and maintenance equipment”.

Since then, Venezuelan leader Hugo Chavez had announced on June 7 that his government would spend US$82 million on 18 of the planes. The air force of the country on the northern coast of South America already has at least 200 aircraft.

The Burmese Air Force had bought 12 K-8 Karakorum. Sources close to the air force told Mizzima that Burma’s rulers want more ground attack fighters than strategic fighters such as the Russian-made MiG-29 or its Chinese-built version, the F-5. Such ground attack fighters could be used to intimidate ethnic groups under ceasefire which have refused to bring their troops under the supervision of the junta’s Border Guard Force.

Aircraft part of a mystery deal announced by Hongdu Aviation in September?

Last year Jane’s Defence Industry (also part of the Jane’s Intelligence group) reported that K-8’s Chinese manufacturer Hongdu Aviation had released a cryptic statement in September saying it had just secured a contract with an “unnamed Asian country” to export 60 K-8 planes. According to Jane’s, the statement disclosed that a deal had been struck between Hongdu, the mystery Asian nation and China’s National Aero-Technology Import and Export Corporation on September 6 at Hongdu’s offices in Nanchang, Jiangxi province.

Jane’s speculated that the unnamed Asian partner could be Iran or Indonesia, both seeking to upgrade their air forces. While it is possible that the unnamed partner was in fact the Burmese regime, Mizzima was unable to determine if this was the case.

According to Jane’s the statement Hongdu issued in September disclosed that the deal would transpire in three stages. The first stage would involve the export of 12 aircraft. The second stage would involve the customer acquiring K-8 related technologies, equipment and tools. The third would involve the customer producing the final 48 aircraft under licence locally.

Mizzima has learned that Tay Za was looking to buy an ATR-72 twin-turboprop short-haul regional airliner from Chinese Southern Airlines for his own airline, Air Bagan. He had bought two A-310 Airbuses from China but was unable to use the aircraft because they were grounded in Rangoon for safety reasons.

China is one of the few places where Tay Za can now conduct business transactions with relative ease since he was put on the American, European, Canadian, Australian and Swiss financial sanctions blacklists for Burma. The US government, which commonly refers to Tay Za as “an arms dealer and financial henchman”, was the first Western nation to target the portly tycoon on their black list, citing his close financial ties to Than Shwe and the reclusive dictator’s children. Despite the sanctions against him Tay Za is estimated to have amassed a fortune of more than US$10 billon dollars.

News From Mizzima

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