Sherpa Hossainy's Blog

Thailand upbeat about Japan involvement in Dawei

Posted in ASEAN, Investment, Myanmar, Yangon by Sherpa Hossainy on July 10, 2013

Published in Myanmar Business Today (Vol 1, Issue 20) on June 20, 2013

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Thailand is still hopeful that Japan will take part in the multibillion-dollar Dawei special economic zone project, a grand Myanmar-Thailand scheme to transform the Southeastern coastal strip of Myanmar into a global trading hub.

According to last week’s Thai media reports, Thai Prime Minister’s Office Minister Nivatthamrong Boonsongpaisal said Thailand is still confident that foreign governments, especially Japan’s, are keen to join the Dawei project.

Labourers work at a relocation area close to a site for a billion dollar industrial estate in Dawei district, Myanmar. Khettiya Jittapong/Reuters

The announcement came ahead of the signing of a deal to set up a special purpose vehicle (SVP) entity on June 17 in Bangkok between Thailand’s Neighbouring Countries Economic Development Cooperation Agency (NEDA) and a state agency under Myanmar’s Ministry of National Planning and Economic Development.

Despite recent reports that Japan is more interested in their own project Thilawa, another special economic zone (SEZ) 25 kilometre south of Yangon, Nivatthamrong said he was still confident that Japanese interests would join in the Dawei project, which will be bigger in size and give bigger returns than Thilawa.

The Dawei deep sea port project has been dubbed as Southeast Asia’s biggest industrial zone, which includes 200-square-kilometre industrial complex with steel mills, oil refineries and petrochemical plants, a deep sea port and an eight-lane highway linking Dawei to major industrial zones and the port southeast of Bangkok.

The Italian-Thai Development (ITD) Co was put in charge to complete the construction of the project, however, ITD was unable to raise $8.5 billion to kick-start the first phase of the massive $50-billion SEZ. Shadows of doubt were cast over the project after experts said the projected return on investments might not be as high as previously calculated.

Myanmar and Thailand both tried to court Japan into financing the mega project but Japan seemed lukewarm about the prospect of Dawei, and was rather more interested in Thilawa.

Currently, the Thai and Myanmar governments each hold 50 percent stakes in the SPV. The entity will try to attract other countries, especially Japan, to take part in the SPV, according to Nivatthamrong, who added some countries were expected to join this year.

An investment framework agreement between the SPV entity and the Dawei Special Economic Zone Management Committee will follow the SPV creation.

Nivatthamrong co-chairs the Myanmar-Thai Joint Coordinating Committee overseeing the Dawei development project.

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