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Tuesday, December 18, 2012

Thai, Burmese govts back Dawei project

Tuesday, 18 December 2012 15:40 THE BANGKOK POST 

The Thai and Myanmar [Burmese] governments agreed to raise funds to finance the development of the massive Dawei deep-sea port and special economic zone project during a key meeting in Myanmar on Monday.

Thai Prime Minister Yingluck Shinawatra (center) is pictured alongside Burma's President Thein Sein (pale blue shirt) at a briefing at the Dawei Special Economic Zone project on Monday, December 17, 2012. (Photo: Yingluck Shinawatra / Facebook)
Thai Prime Minister Yingluck Shinawatra (center) is pictured alongside Burma's President Thein Sein (pale blue shirt) at a briefing at the Dawei Special Economic Zone project on Monday, December 17, 2012. (Photo: Yingluck Shinawatra / Facebook) 
Thai Prime Minister Yingluck Shinawatra and her delegation, including 40 Thai businesspeople, visited Dawei city in Myanmar to inspect the sites of the development projects.

The governments' infusion of cash is expected to prove to international investors that Dawei is a sound investment.

It was agreed that once funds are in place, construction will begin between April and the end of next year.

The delegation, which met Myanmar President Thein Sein, included Deputy Prime Minister and Foreign Minister Surapong Tovichakchaikul, Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong, Transport Minister Chadchat Sittipunt and Energy Minister Pongsak Raktapongpaisal.

Ms Yingluck told the meeting her government fully supported development projects in Dawei. She hoped her trip would boost the project and give the businesspeople who accompanied her more information about the various development projects and the city.

The Dawei project has made progress since both governments formed a joint committee for the development plans last month, Ms Yingluck said.

Thailand plans to open a consulate in Dawei to ease investment, she said.

The Thai-Myanmar Joint Coordination Committee is reviewing technical data and working out details about how to attract investment to Dawei, but the investment details are not yet finalised.

She expects the committee will finish reviewing the project details by February next year and both countries could sign a framework agreement and their sectorial agreement on the project in March.

Both countries hope to start fund-raising in April next year, with initial construction beginning shortly after.

Ms Yingluck and Thein Sein said a full partnership between the countries will assure development projects in Dawei will be completed in an environmentally friendly manner.

In July, the two countries signed a memorandum of understanding to create a special economic zone for Dawei, with Bangkok agreeing to provide security, infrastructure and logistical assistance.

The project—led by Thailand's largest construction contractor Italian-Thai Development—is expected to bring foreign investment into Myanmar as it emerges from decades of military rule, and provide Thailand with a gateway to the Indian Ocean and to Western markets.

But it has faced funding difficulties as Italian-Thai continues to seek investment partners.

Resistance has also come from locals. "Thai investors are afraid and hesitating about Myanmar's political policies and the funding," Italian-Thai marketing manager Pravee Komolkanchana said before the visit. "Thai banks are less likely to lend money if it is to invest in other countries, especially in Myanmar."

Potential Myanmar investors are also wary, according to a businessman in Yangon who did not want to be named.

"We dare not invest there because of the costs. We would have to pay Thai salary rates," he said.

"The project won't benefit Myanmar much, but mainly Thailand."

Work has yet to progress beyond the construction of new homes for the thousands of villagers due to be resettled, but the developers hope to begin work on infrastructure and factories next year.

Opponents to the plan were emboldened by Thein Sein's decision last year to suspend construction of a $3.6-billion Chinese-backed hydropower project in the northern state of Kachin—a rare response to public opposition.

But local resistance to Dawei appears to have eased, although some villagers are still reluctant to move despite the offer of new homes. "We understand that we cannot stop the whole project," a local environmental activist said.

During the meeting, Thein Sein agreed to a long-standing Thai request to have the Dan Singkhon border passage at Prachuap Khiri Khan developed into a permanent crossing.

Ms Yingluck has promised to support the building of a highway from Myawaddy via Kawkareik to Mawlamyine, and to revive an old railway near the Three Pagoda border crossing.

This article first appeared in The Bangkok Post on December 18, 2012.


Reconsider the Dawei project

The flying visit to Myanmar by Prime Minister Yingluck Shinawatra on Monday had more of a look of desperation about it than confidence. It revealed deep trouble for the plan to build a deep-sea port at Dawei. The Dawei deal is short of money, backers, business confidence and popular support. Ms Yingluck deserves some credit for revealing these problems, although that was probably not her intention. She should put this undertaking on hold to allow a reset and rethink of the Dawei project.
Dawei is one of those programmes that seemed like a good idea in very tight and rarefied business-government circles. The more it has been exposed to public scrutiny, the less attractive it appears. On the one hand, it sounds like a good idea to send Thai goods on a short trip overland for shipment from Dawei, instead of routing ships for two or three days through the crowded Malacca Straits. But so does the 50-year-old plan to build the Isthmus of Kra canal.
The Dawei project has gone from enthusiasm to realism in the past year. The would-be source of funds is Japan, and it has dropped out. The would-be builder is Italian-Thai Development Plc, whose spirit has sagged in direct relation to its chances of getting reliable funding. Groups in Myanmar, Thailand and outside the region are concerned about the predictable damage that will be done. The Myanmar people have shown no enthusiasm for the claimed business prosperity, and Myanmar business circles have switched their attention to Thilawa, a planned and probably feasible economic zone near Yangon.
No one has bothered to ask the 140,000 people of Dawei how much they like the idea of a deep-sea port, planned much like the Thai eastern seaboard models of Laem Chabang and Map Ta Phut. The biggest difference is that few Thais resided in those areas in the 1980s when construction began. The second biggest difference is that there is much more attention given to the environment in 2012. If plans to build the port go ahead, so will strong opposition from Myanmar and foreign environmentalists.
Then there is the money. At first, the $8 billion seed money was to have been borrowed in Japan. But on Monday, Ms Yingluck made official what many have suspected for months. Thai taxpayers will pick up enormous guarantees to build the Dawei port. It is clear they also will finance actual construction if outside funds are not found, and so far they have not been.
To recap, business will not (or cannot) fund the construction, and neither can Myanmar. Foreign and local builders both favour the Thilawa project over Dawei. Ms Yingluck remains enthusiastic, to the point where she has decided to spend Thailand's national coffers, when Myanmar cannot or will not spend on it. The environmental damage will include tens of thousands of displaced people, harm the ecology of the marine environment for hundreds of kilometres, and cause known and unknown damage to the sea.
Clearly, as shown by the prime minister's trip to Dawei on Monday, evidence and facts are rapidly building against the Dawei deep-sea port. Ms Yingluck would help the people of Dawei, Myanmar and the reputation of Thailand by calling "time" on the project for a while. That would allow a proper study and public input on whether to build or abandon the Dawei port.


Burma wants to downsize Dawei, says Thai daily

Wednesday, 19 December 2012 11:47 Mizzima News 

Thailand’s The Nation reported on Wednesday that Burma’s government has “caused Thailand concern” by proposing a significant reduction in the overall area of the Dawei Special Economic Zone from 204.5 sq km to 150 sq km.

Burmese President Thein Sein (right) discusses details with Thai Premier Yingluck Shinawatra as they travel to the Dawei Special Economic Zone. (PHOTO:Yingluck Shinawatra / Facebook)<br />
Burmese President Thein Sein (right) discusses details with Thai Premier Yingluck Shinawatra as they travel to the Dawei Special Economic Zone. (PHOTO:Yingluck Shinawatra / Facebook)
“Thailand has responded to the proposal by saying it is already in the process of a feasibility study on the Dawei Deep Sea Port and Dawei Industrial Estate Project based on the original proposed size of the project,” The Nation quoted Thai Transport Minister Chatchart Sithipan as saying.

The news comes just a day after Burma’s President Thein Sein and Thai Prime Minister Yingluck Shinawatra told reporters in Dawei that both governments would back the multi-billion-dollar project and would actively seek investors.

The Nation went on to quote the Thai Transport Minister as saying: “This is the first meeting in which Myanmar's president clearly said he would invite a third country, likely Japan, to join in the investment. It is a benefit, as Japan has long-term funding sources for investment in infrastructure, including the port and roads.”

Thailand is committed to 35 percent of the US $9 billion-dollar industrial zone set to be located in Burma’s southern Tenasserim Division.

Due to begin in April, the Dawei project involves a deep-sea port, power plants and factories. The Thai investment also includes financing for a highway to run from Dawei on Burma’s Andaman coast across the Thai border to Kanchanaburi and on to Bangkok.

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How will the Dawei project benefit Myanmar?

By Stuart Deed   |   Monday, 05 November 2012 

Keven Costner is a polarising actor – in between some sterling performances in Dances With Wolves and A Perfect World, he found time to act in some of the worst movies of the recent past, bottoming out with widely derided Waterworld, a film so dreadful that even Dennis Hopper as a mad pirate could not save it.
And at this point in time you might legitimately be wondering if The Myanmar Times has been taken over by crackheads: An opinion article in the business section about that dashing rogue Kevin Costner – what’s that possibly got to do with Myanmar?
The point lies in another Costner effort that deals with his apparent desire to portray himself as a serious but down-on-his-luck sportsman – and no, I’m not talking about the preposterously awful Tin Cup, but the moderately watchable Field of Dreams, released in 1989.
Now, I’m not going to lie and say I remember the movie well but I do recall the line delivered by Costner’s ghostly co-star: “If you build it, he will come.”
At this point Costner’s character digs up part of his cornfield in a bid to encourage the ghost of Shoeless Joe Jackson, a long-dead player idolised by Costner’s father, to play baseball at the field.
And here’s where I belatedly – and very crudely – arrive at my point: I think the mooted US$50-billion Dawei Special Economic Zone and deepsea port in Tanintharyi Region is Myanmar’s field of dreams, with Thailand and possibly Japan acting as the ghostly voice.
Frankly, I don’t see the benefit that Myanmar gets from Dawei but it seems clear from former Thai prime minister Mr Abhisit Vejjajiva’s comments during a weekly television address in late 2010 that Thailand knows what it wants from the project.
“Some industries are not suitable to be located in Thailand. This is why they decided to set up there,” he said, referring to Dawei.
Tycoon U Zaw Zaw told Reuters news agency in early July that his company, Max Myanmar Group of Companies, planned to reduce its share in the 250-square-kilometre project from 25 percent.
“We are pulling out from the project gradually,” he confirmed to Reuters in a phone interview on July 4.
The ambitious Dawei project was announced to the public in late 2010 but has hit a number of roadblocks since then, including U Zaw Zaw’s planned pullout, the axing of a planned 4000-megawatt coal-fired power plant on environmental grounds and perhaps the greatest threat of all – the failure of developer Italian-Thai to secure funding.
Somjet Thinaphong, the managing director of the Dawei Development Co. Ltd, said a gradual withdrawal by the Myanmar strategic partner is unlikely to affect the project’s long-term viability, according to an article in the Bangkok Post in early July.
“The viability of such a capital-intensive development project is largely dependent on fund sourcing,” he said. “The local company, or even Ital-Thai, does not have the financial capacity to fund such a massive development project. We have to bank on others to provide us with financial support.”

However, Japan and Thailand have since intervened to keep the project afloat.
“Italian-Thai has had difficulty in mobilising the funding. So now the Thai government has effectively taken over the project,” U Thaung Lwin, chairman of the Dawei SEZ told Reuters in mid-September. “The next step is to invite Japan”, which he said is committed to seeing the project succeed.
Since the Thai and Myanmar governments agreed on July 23 to connect Dawei to the Thai port of Laem Chabang, 100 kilometres southeast of Bangkok, Thai banks led by Bangkok Bank and Siam Commercial Bank have arranged a 10 billion baht ($325 million) bridge loan to sustain it for another 8-10 months, Mr Somjet Thinaphong told Reuters.
However, I think the concerns over funding miss what I consider an important point: There seems to be an expectation that if the site is built then workers will arrive in droves to take up jobs.
“We need tons of workers,” Premchai Karnasuta, the president of Italian-Thai Development, told the New York Times in November 2010. “We will mobilise millions of Burmese.”
But unless wages and working conditions on offer at the project are competitive, who is going to turn up for work?
There seems to be an unspoken belief that Myanmar workers are going to stream to the development from further north in Myanmar or from other jobs in Thailand, but it just looks like a pipedream to me – and Kevin Costner ain’t around for the happy ending.
There are just so many question marks hanging over the project: Where are the workers going to live? Is road and rail infrastructure linking the zone with the rest of Myanmar going to be built?
Above all – how does this development benefit Myanmar and its 60 million people?
Instead, the special economic zone planned for Thilawa in Yangon’s Thanlyin township seems a much better bet: The workers, basic infrastructure, services and companies are already there, and Japanese businesses and the government are strongly backing the project, which means the funding should not be a problem in the same way that it has been in Dawei.
For its part, the Asian Development Bank has advised the Thai government to invest in transport and infrastructure development in Myanmar to encourage international investors and financiers, the Bangkok Post reported on August 30.
Mr Craig Steffensen, the ADB’s Thailand country director, said during the Thailand Focus 2012 meeting in Bangkok on August 29 that the $8 billion required for the first phase of the project had not been secured.
He added that the Thai government should consider building more roads or rail links to augment the motorway planned between Nonthaburi’s Bang Yai district and Kanchanaburi province.
“It doesn’t need to be a massive investment, just an initial amount that can get the Dawei project off the ground,” he said.

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