Sufficient time needed to do it right
The capital-intensive Dawei project in Myanmar needs time to ensure adequate preparation, while investment and assurance from relevant governments are also critical, says the Asian Development Bank.
The ADB, which is part of the Greater Mekong Subregion secretariat, has concluded that the GMS's Southern Economic Corridor should be extended to include Dawei on Myanmar's eastern coast, said Arjun Goswami, the bank's director of regional cooperation and operations coordination in Southeast Asia.
But he said this type of large infrastructure project requires time for good preparation and careful planning.
For example, the preparation stage for the Nam Theun 2 hydropower project in Laos lasted 10 years.
"The project needs to complete all feasibility studies including environmental and social impact assessments as well as due diligence. You should not rush into it," Mr Goswami told Euromoney's Greater Mekong Investment Forum.
The two-day event ended yesterday at the Centara Grand & Bangkok Convention Centre at CentralWorld.
Dr Goswami added that the Dawei project is critical for the GMS's credibility, as failure will damage the group's reputation.
However, the Dawei project may not need all of the planned elements to succeed, said Kenneth Stevens, the managing partner of Leopard Capital LP, an investment manager providing financial and operational support to small and medium-sized enterprises in frontier markets.
He said while the deep-sea port and roads are important, a coal-fired power plant may not be the right option, what with renewable energy becoming "more interesting", said Mr Stevens.
The power plant could even be located somewhere else in Myanmar besides Dawei.
High-profile Italian-Thai Development (ITD) is under pressure to move the Dawei project forward, or else Myanmar could turn away from Thai contractors and look to Japan or South Korea instead, said Mr Stevens.
ITD, Thailand's largest contractor, has been awarded a concession to develop the Dawei Special Economic Zone including infrastructure such as a deep-sea port, power plant and steel mill.
The company earlier admitted it has tried its best to "involve" other Asean governments in the project, especially Singapore, as well as Europe.
Financial support from international institutions such as the World Bank is also being sought.
The ADB's Dr Goswami said the Dawei project will require public investment and assurance from relevant governments in order to attract multilateral agencies and private investors.
Myanmar is the only Asean country that is not a member of the Asean Infrastructure Fund, which was set up last year to invest in regional Dawei-scale projects.
The latest developments in Myanmar are encouraging, but the final shape of reforms has yet to be seen, said Dr Goswami.
Helen Han, the head of International Finance Corporation's Bangkok office, said despite retrenchment from the European debt crisis, huge amounts of equity remain available for Asean infrastructure projects.
"There is a lot of capital out there if we want to raise funds, but it lacks bankable projects," she said.
