Two Thai construction companies are expected to sign an agreement with the Burmese government to start developing the first phase of the Dawei megaproject.
Somjet Tinnapong, managing director of Dawei Development Co, a subsidiary of Italian-Thai Development Plc, said a signing ceremony was expected this month for Ital-Thai and Rojana Industrial Park Plc.
The first phase will cover 17,000 rai of land or about 27 square kilometres at a cost of 20 billion baht, he said.
“The investment budget will be for infrastructure systems such as a small deep-sea port, an electricity power plant, LNG terminal, reservoirs and a road that will lead to the first phase,” Mr Somjet said.
The first phase of the special economic zone (SEZ) will be completed over the next two years, after which project authorities are due to start selling land to investors interested in the project in Dawei, also known as Tavoy.
“It is an industrial zone project that is designed to facilitate the companies wanting to invest and use raw materials mostly from Thailand and Myanmar [Burma] and other neighbouring countries,” Mr Somjet said.
“The first phase will be suitable for light industries such as food processing, the agricultural industry, and textiles and garments. We hope such investments will help to create jobs and improve the lives of people living in the area.”
Thailand and Burma agreed in June 2013 to set up Dawei SEZ Development Co (DSEZ) with an equal shareholding and initial investment of 12 million baht, far below the 100 million proposed earlier. The company is registered in Thailand.
DSEZ replaced ITD, which had received the original concession from the Burmese government for the megaproject in November 2010.
Japan is also to join the partnership for DSEZ, the special-purpose vehicle (SPV) that will manage the deep-sea port and SEZ.
Japan intends to participate in the project in terms of both technical and financial support.
Thailand and Burma also agreed to set up SPVs to manage the port, road and rail links, power plants, waterworks, industrial estates, telecommunications and a township.
These SPVs will be registered in Burma.
Mr Somjet said Japan had signed an agreement to provide soft loans to finance construction of a 130-km road worth between 3.5 and 13 billion baht (US$110 million – $425 million) to link Ban Phu Nam Ron in Kanchanaburi province with Dawei.
“The road will link the Thai border with Dawei, but the size of the road will depend on the size of the investment projects,” he said.
This article was originally published in the Bangkok Post on 3 March 2015.