Tuesday, May 12, 2015

Cloud over Dawei project

Nation Multimedia - Achara Deboonme
Special to Myanmar Eleven May 8, 2015 1:00 am
A worker loads goods at a jetty in Yangon. Though the country is in need of deep-sea ports, the project in Dawei faces another delay. /EPA
The future of the Dawei project becomes more shaky as the signing agreement that would kick start construction of the Dawei deep-sea port in Myanmar has been delayed for the third time.

The signing agreement was delayed twice before; it was first due to be signed in March, and then in April.

The Thai and Myanmar governments, along with real estate developer Italian-Thai Development (ITD), postponed the signing until early June. The delay is reportedly due to administrative slowdowns in Nay Pyi Taw, Pravee Kamolkancha, the company's marketing manager, told DPA.

The Thai government and Italian-Thai Development are ready to sign the agreement, he said yesterday.

When completed, the Dawei project would be the largest of its kind in Southeast Asia. The 200-square-kilometre project will include a deep-sea port and special economic zone. With a road link with Thailand, the project will be an integral part of the East-West Corridor, which will support the Asean transport network.

ITD, the original concessionaire of the development project, estimated that the entire project would require an investment of over US$70 billion.

The delay deepens the uncertainties that have surrounded the project for years. The big question is when the mega project would eventually kicked start.

Winning the concession from the junta government, ITD decided to give up its development rights in 2013 following difficulties in finding partners. Taking control of the project, the Myanmar and Thai governments have been successful in winning Japan's commitment to participate in the development, though several key Japanese investors are busy with another special economic zone - Thilawa.

ITD and Rojana Industrial Park were upbeat that the contract would be signed yesterday, as the two Thai companies are vying for the contract for the initial phase of development. The phase will consist of a 27-square-kilometre industrial estate and a 138-km two-lane road between the SEZ in Myanmar's Tanintharyi region and Phunumron checkpoint in Thailand's Kanchanaburi, an initial township for the workers, a liquefied natural gas terminal for gas transport over long distances, a telecom landline, a power plant, a small port, and a water reservoir.

The delay raised a question if the construction would commence this year as expected by Thailand's Deputy Prime Minister MR Pridiyathorn Devakula. He estimated that first phase construction cost at around $1.7 billion.

No contract was signed though Thailand's Neighbouring Countries Economic Development Cooperation Agency (NEDA) is considering a soft loan of about Bt4 billion (approximately $121 million) to Myanmar to finance the construction of the 138-kilometre road from Dawei to Kanchanaburi. The road is expected to boost trade and investment between Myanmar and Thailand and between Asean nations and Japan,

On Tuesday, NEDA director Newin Sinsiri said that the road construction is expected to commence next year.

There was speculation that Myanmar might delay the project intentionally out of some displeasure against Thailand. That is unlikely, though. Bilateral trade has been increasing in the past years. Meanwhile, construction of a second Thai-Myanmar Friendship Bridge and a road connecting the bridge to the main highway in Thailand's Mae Sot is expected to commence in October, according to Thailand's Deputy Transport Minister Arkhom Termpittayaphaisith.

Another possible answer may then lie with resistance of some local residents. Land was confiscated for the project and local residents are fearful of changes to their livelihoods.

Anther possible answer also centres on a crucial study to be done by Japanese experts. Three research projects were started in October last year for completion in March, according to the Dawei SEZ Working Committee. The research is aimed at pinpointing ways Myanmar, Thailand and Japan can cooperate in developing the stalled multi-billion dollar project near the Thai border in Tanintharyi Region, Myanmar officials said. To date, there was no update on the project.

Masato Abe, the economic affairs officer at United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), said in his recent article that Myanmar should first focus on deep-sea ports near Yangon, not in Dawei which is nearly 700 km away.