Local firms say project halt is news to them
Thai companies remain confident in the future of a 4,000-megawatt coal-fired power plant at Dawei despite Burma abruptly halting construction on Monday after a domestic outcry over the plant's environmental impact.
Italian-Thai Development (ITD) and its partner Ratchaburi Electricity Generating Holding Plc (Ratch) said they had yet to be notified and were satisfied the power plant would proceed, perhaps using natural gas instead.
"If they don't want coal-fired power plants, we have to look for other fuel sources. It could be natural gas, and we'd need to discuss how to supply that," said Somchet Thinaphong, the managing director of Dawei Development Co.
Ratch president Noppol Milinthanggoon said his company had not received an official report from Burma.
"It needs to be verified thoroughly before making any comment," he said, adding that it would be better to let ITD speak, as the construction company holds a 25% stake in the proposed power project.
Original story: Burma cancels Dawei power plant project
The suspension of the project illustrates the unpredictable business climate in Burma as a new government seeks to boost its public image while attracting investors to help revive the economy.
The decision to put the brakes on the plant follows the suspension last October on environmental grounds of the Chinese-led, US$3.6-billion Myitsone dam, a move that stunned China _ Burma's biggest ally _ but won President Thein Sein political credit among sceptics at home and abroad who have doubted his government's commitment to reform.
Like Myitsone, Dawei has been strongly opposed by local residents and environmental groups. The government's willingness to heed such opposition is all the more remarkable in that many among the leadership were also part of the former junta.
The 250-square-kilometre, $50-billion Dawei Special Economic Zone will be Southeast Asia's largest industrial area and a vital source of revenue for a government seeking to overhaul its economy and raise living standards.
Dawei will include an $8-billion deep-sea port, an oil refinery and a petrochemical factory in a project scheduled to be developed in three phases from 2010-19.
It is located in the Tanintharyi region of southern Burma on the Indian Ocean, 350 km west of Bangkok.
Thun Reansuwan, a first executive vice-president of Siam Commercial Bank, the financial adviser for Dawei, says further elaboration of the project is needed.
"If the government is concerned about the environment, then we need to discuss and understand why coal-fired power plants were proposed," he said.
"If they decide to use other fuel, then we have to think about electricity prices."
Joseph Cheng, a political scientist at Hong Kong University, said the suspension of the Dawei plant could reflect disunity in a government in which reformers want rapprochement with the outside world but hard-liners want to maintain tight control.
"There are difference in the regime between liberals and the old guard about the extent of its openness in terms of the economy and politics," he said.
Shares of ITD, Thailand's biggest building contractor, closed yesterday on the Stock Exchange of Thailand at 3.64 baht, down 2 satang, in trade worth 204 million baht. RATCH shares were unchanged at 44 baht, in trade worth 31.2 million baht.
