Myanmar eyes Dawei do-over

Myanmar is seeking to modify the Dawei deep-sea port and special economic zone contract to have a holding company to be set up soon handle the investment instead of Italian-Thai Development Plc (ITD).

"Myanmar is worried about the long delay of the project and wants to change the concession to a new holding company or special-purpose vehicle to be set up soon," said Arkhom Termpittayapaisith, secretary-general of the National Economic and Social Development Board.
He said the new company will likely be formed by Thai state-owned enterprises, Japan's investment organisation, the Myanmar government and ITD.
The joint-venture company is instrumental in creating confidence in the project, but the two countries differ on the format of the new entity.
Thailand prefers a special-purpose vehicle or one key holding company to handle investment in all parts of the project, from the port, industrial estates and power plants to water and other facilities.
Myanmar, however, wants separate companies to invest in the various aspects of the project.
Thailand has also proposed that Myanmar improve investment-related laws.
Under Myanmar's existing laws, investment promotion privileges for the project are not very attractive, making it difficult for the holding company to hold roadshows and raise funds from foreign investors, he said.
Thailand may also need to update the project's investment cost, as it was estimated two years ago by ITD.
In the meantime, the Industry Ministry is prioritising industries to be invested under the project.
The next meeting of the Myanmar-Thailand joint high-level committee for the Comprehensive Development in Dawei special economic zone and its related project areas will be held in Thailand next month and in Myanmar in March.
ITD, Thailand's biggest construction company by market value, was granted a 75-year concession to develop a special economic zone and deep-sea port in Dawei, eastern Myanmar.
The project requires an US$8.5-billion infrastructure investment in the first phase including roads and the port. Taking into account heavy industry programmes such as oil refineries and integrated steel mills, the cost goes up to $50 billion.
Covering 200,000 rai, the Dawei project is one of the three special economic zones being developed in Myanmar along with the Thilawa and Kyaukpyu projects.
Somchet Thinaphong, the managing director of Dawei Development Co (DDC), an ITD subsidiary, said his company is not aware of Myanmar's intention to change the concessionaire but welcomes partners.
"The more investment partners the better for a huge project such as Dawei," he told the Bangkok Post, brushing aside speculation the Myanmar government is dissatisfied with ITD's delays in mobilising funds for the project.
"Having the Japanese government as a partner will give Dawei the capital injection it needs and also make it more appealing to international investors," said Mr Somchet.
Kiwamu Honda, DDC's senior adviser to the chairman of the board, confirmed the Thai government is asking Thai state enterprises and foreign investors including Tokyo to invest in the project.
However, he noted details of the Dawei concession have not been changed, and the partner remains ITD.
"We are going to find new partners to set up a special-purpose vehicle to invest in each infrastructure project such as the deep-sea port," said Mr Honda.
He too dismissed as a "misunderstanding" reports the Myanmar government is not happy with the delays.
At the same time, Myanmar has agreed with ITD's request to review the Dawei Special Economic Zone law to make the project more attractive compared with other areas of Myanmar.
The Dawei law was endorsed last year before Myanmar's new foreign investment law took effect, making Dawei not attractive enough for investors, said Mr Honda.

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