Tuesday, June 9, 2015

Thais seek Dawei parity

Proposal seeks equal voting rights for all

Bangkok Post Published: 30/05/2015

Thailand, Japan and Myanmar will have equal voting rights in mapping out the development plan of the Dawei Special Economic Zone regardless of their respective investments, according to a proposal.

Thailand will propose the idea of equal voting rights, as it does not want Japan to dictate the development of the multibillion-dollar project even if the latter has a higher shareholding than the former, said a source at the Neighbouring Countries Economic Development Cooperation Agency (Neda).

The Japanese government expressed interest in the joint development of Dawei after Myanmar committed to the project by approving a 138-kilometre road linking Thailand’s Kanchanaburi province with the megaproject, the source said.

Arkhom Termpitayapaisith, secretary-general of the National Economic and Social Development Board, earlier said Japan would sign a tripartite agreement in July for the joint development of Dawei.

The Dawei project will include an industrial estate covering 132 square kilometres, a deep-sea port to service 170 million tonnes of goods and 5 million 20-foot equivalent units a year, a four-lane road linking Thailand to Dawei, water supply and water treatment facilities, and power plants.

The source said Japanese investment would increase the viability of the project, as Japan had capital and its business operators were leaders in several industries such as steel and automobiles.

In a related development, a comprehensive master plan to develop the 195-sq-km Dawei project is expected to be completed by the third quarter, and it will then be forwarded to the Myanmar government for final approval, the source said.

The master plan, carried out by a foreign adviser hired by the Neda, is now half complete.

It will outline the project’s development over the next 10-20 years, investment and development plan template.

The public sector is expected to invest in basic infrastructure including deep-sea ports and roads as they require large amounts of investment and it will take a long time to reach the break-even point, the source said.

In June 2013, Thailand and Myanmar agreed to set up Dawei Special Economic Zone Development Co, a special-purpose vehicle, with an equal shareholding, to run the megaproject, replacing Italian-Thai Development Plc (ITD), which had received the original concession from the Myanmar government in November 2010.
However, Myanmar has granted a 75-year concession contract to ITD and the Rojana Industrial Estate jointly to develop a 27-sq-km area in Dawei.

The source said due diligence on compensation for earlier investment by ITD in the Dawei project had been completed, and there were several options for compensation including paying in cash and allocating additional development areas in the project to ITD.

ITD earlier said it had spent 6 billion baht developing a 132-km non-asphalt road, small reservoirs and a small seaport.

“I don’t know the details about equal voting rights, but we are watching the developments and discussions between the three parties,” said Masayasu Hosumi, the Japan External Trade Organization Bangkok's president and Asean chief representative.