Tuesday, December 15, 2015

Japan allowed in Dawei SPV

THE NATION December 9, 2015 1:00 am

Dawei special economic zone remains barren as construction activities stand still. /Eleven Myanmar
THE CABINET yesterday approved the Finance Ministry's proposal to involve the Japanese government in the shareholding structure of the special-purpose vehicle (SPV) to manage Myanmar's massive deep-sea port and special economic zone project in Dawei.

The Thai and Myanmar governments currently each hold 50 per cent in the Dawei SPV - the Dawei SEZ Development Company - with an overall budget of no more than Bt100 million.

Japan's inclusion would mean that the three parties would hold an equal share of around 33.33 per cent, while the maximum budget would still be capped at Bt100 million.

"The visit of Deputy Prime Minister Somkid [Jatusripitak] to Japan last month has led to this eventual inclusion of Japan into Dawei's SPV firm, and the inclusion should benefit propulsion in the working process of the SPV company," said Sansern Kaewkamnerd, the government spokesman.

The Cabinet also approved in principle the Transport Ministry's proposal to construct the Mass Rapid Transit Authority of Thailand's Orange Line with a budget of around Bt95 billion and an estimated contract period of 65 months, with the auction process expected to commence in mid-2016.

The Orange Line will run for 21.2 kilometres, from the Thailand Cultural Centre station in Taling Chan to Suwintawong station in Min Buri.

The budget for land and real-estate surveys is set at Bt9.625 billion, while the construction cost plus reserve is estimated at around Bt85.483 billion.

Some 9km of the electric-rail route will be elevated and comprise seven stations, with the remainder comprising 10 stations on the underground section.

The line, whose trains will have an average speed of 80 kilometres per hour, is expected to serve around 114,000 commuters per day.

"Somkid also told the meeting that the auction process for all electric rail lines, including the Purple Line, is expected to be completed by the middle of next year," Sansern told reporters after the Cabinet meeting.

Thailand Future Fund

Finance Minister Apisak Tantivorawong said discussion regarding the financial return and ease of investment in the country's planned Bt100-billion infrastructure fund - also known as the "Thailand Future Fund" - had been completed and the matter was now waiting to be put on the agenda for next week's Cabinet meeting.

The infrastructure fund is meant to help with the funding of government investment in transportation infrastructure, which involves the auction process for projects worth Bt1.796 trillion from 2015 to 2017, of which around Bt58.435 billion is expected to be disbursed during the current fiscal year, which runs until September 30 next year.

The Cabinet also approved an increase in the Bank for Agriculture and Agricultural Cooperatives' (BAAC) loan budget for rubber farmers and small operators affected by the drop in rubber prices and a slowdown of demand, from the current Bt10 billion to Bt15 billion.

Under the loan scheme, the government compensates 3 percentage points of the interest rate to the BAAC, whose rates charged to farmers and cooperatives are now around 7 per cent and 5 per cent, respectively.

The state bank has provided loans worth Bt7.394 billion to around 82,000 households since the measure was approved last year, while a further Bt5.2 billion to some 53,000 households is awaiting BAAC approval - hence the Agriculture and Cooperatives Ministry's proposal to increase the budget to support households awaiting loan approval.

The Cabinet approved use of the central budget to fund the increase in the scheme's budget.

Meanwhile, Energy Minister Anantaporn Kanjanarat said the Cabinet had yet to approve amendment of the Petroleum Act of 1971, as there were 26 issues of contention that still had to be discussed between the government, non-governmental organisations and the private sector.

The Cabinet has, however, instructed the Office of the Council of State to continue to find solutions to these issues, such as which concession system to use, the sharing of output, and the management in the establishment of the National Oil Company, he said.

The Council of State will now have to find a win-win solution for all sides before the matter of the Act's amendment can be tabled for Cabinet approval, followed by consideration by the National Legislative Assembly, he explained.