Green Light For Border Trade

9 July 2014 | Chatrudee Theparat | Bangkok Post

A meeting of the National Council for Peace and Order (NCPO) chaired by chief Gen Prayuth Chan-ocha yesterday assigned the government's planning agency to map out short- and long-term plans for the development and expansion of checkpoints, infrastructure, facilities and special economic zones.

Arkhom Termpittayapaisith, secretary-general of the National Economic and Social Development Board, said the top priority would be five checkpoints, at Padang Besar and Sadao in Songkhla province, Mae Sot in Tak, Poipet-Klong Leuk in Sa Kaeo and Khlong Yai in Trat.

In fiscal 2015, the regime will invest more to upgrade facilities at the five checkpoints and build infrastructure such as a motorway linking Sadao and Hat Yai to reduce traffic congestion.

Mr Arkhom said the NCPO chief also stressed the development of special economic zones, with the first project to be established at Mae Sot and others later in Chiang Rai and Mukdahan among the planned 12 locations.

Investment in the checkpoint and infrastructure network at Kanchanaburi is also deemed significant, as it will link with the Dawei project in Myanmar. The project has been delayed since the House dissolution last December.

The massive project took another twist early this year, when no bidders applied for concessions opened in February for three ventures — a dual-lane highway linking Thailand with the site in eastern Myanmar, a small port and a 30,000-rai industrial estate.

One economist who asked for anonymity said the Dawei project needed to move forward, as Thailand required a new industrial zone to serve the industrial sector outside the country after development in Thailand was obstructed by anti-industrial groups over pollution fears.

However, the Dawei project has been delayed due mainly to the wrong approach of Myanmar's government and Italian-Thai Development Plc, the source said. The project is too large to have only one company managing it, so it is crucial to design it as a multinational project.

A strong possibility is a holding company will help to find co-investors to invest in each part of Dawei. But the company should be a joint venture between Myanmar's government and other partner governments, the source said.

The source said the project was not too large to be located in Thailand, as the Thai private sector had adequate capital to develop it, but Myanmar required a lot more infrastructure development that presented risks for investors.

"We need a number of investors to share the investment, lowering the risk exposure for a single investor," said the economist.

Under the original schedule, Dawei SEZ Development Co (DSEZ), a special-purpose vehicle, had planned to open bidding for the three construction jobs in February and announce the results last month.

Mr Arkhom earlier warned the project would prove difficult to develop if the Myanmar and Thai governments failed to invest in infrastructure and utilities.

Normally, investment in megaprojects or large industrial towns worldwide is handled by the government, which invests in utilities and infrastructure while offering privileges to persuade the private sector to set up factories.

Thailand and Myanmar last November officially agreed to push the ambitious scheme forward, with three memoranda of understanding signed by the two countries.

The first covered the framework agreement of the Dawei concession and its transfer to DSEZ from Italian-Thai Development.