Friday, June 1, 2012

Understanding the durability of Dawei

A small port is built for temporary use at a site for a billion dollar industrial estate in Dawei district
in Burma on 10 May 2012. (Reuters)
In recent months, a spate of news reports has raised concerns about whether or not the Dawei deep-sea port and industrial zone project in Tenasserim division will actually go forward.

According to these reports, national-level political support for the project in Burma is failing amid a dawning recognition that the project will largely benefit Thailand, not Burma. The cancellation of the project’s coal-fired power plant earlier this year has been seen as reflecting this decline in political patronage.

It hasn’t helped that Italian-Thai Development (ITD), the lead developer for the project, has very publicly struggled to secure funding for the project’s second and third phases, while Thailand’s announcement that it will move forward on a port below Dawei on its own Andaman coast – unceremoniously leaked in a UK-based trade publication – has more deeply furrowed the brows of Dawei watchers in Burma and Thailand.

With the ink barely dry on the 2010 framework agreement that gave ITD the green light, is it possible that the project is already on the chopping block? If so, the news hasn’t filtered down to areas in and around Dawei, where project implementation activities proceed apace.

Over a few muggy days in mid-May, bulldozers and pick-ups emblazoned with the orange logo of ITD were busy turning earth and kicking up dirt on the road link to Thailand. ITD employees were actively liaising with communities around the dam site about upcoming social and environmental impact assessments, while construction on company facilities, relocation sites, and worker camps were moving forward in and around the industrial zone area. The perception among local activists and community leaders in the Dawei area is that the project has not even slowed, much less stalled.

Just days ago, Thailand committed some THB 30 billion (USD 1 billion) to supporting the project on the Thai side of the border, while rumours circulated around Dawei that former PM Thaksin was due soon for his second secret visit to the industrial zone site. For an initiative said to be on life support, the Dawei project is inordinately lively.

What has been missing, perhaps, in the death-knell reportage on Dawei, is a keen sense of the deep-lying dynamics in play – especially the circumstances surrounding ITD’s involvement, and the broader structural context of regional economic integration in the Mekong countries.

ITD has myriad reasons to see the project through. The main one is essentially financial: the Dawei project, the showpiece contract for ITD’s expansion outside of Thailand, is central to the company’s growth strategy. For the better part of six years now – that is, since the fall from grace of Thaksin, a personal friend of ITD president Premchai Karnasutra – ITD, Thailand’s largest construction company, has struggled to sustain the company on domestic contracts.