Bilateral deal on Dawei unchanged

18 September 2014 | Onravee Tangmeesang | The Nation

Source: http://www.nationmultimedia.com/business/Bilateral-deal-on-Dawei-unchang...

Nay Pyi Taw - THAILAND AND MYANMAR are keen to proceed with the joint development of Dawei Special Economic Zone, with updated proposals to be tabled during the Thai prime minister's visit next month, said a Myanmar official.

A source from the Thai Embassy in Myanmar said Prime Minister General Prayuth Chan-ocha would visit the country on October 1 and 2.

Winston Set Aung, vice governor of the Central Bank of Myanmar and chairman of the Thilawa SEZ Management Committee, said the industrial project and deep-sea port in Dawei would be on the discussion agenda. He added that collaboration between the two countries remained positive despite the political changes in Thailand.

"There has not been any delay in the collaboration with the Thai side. Everything is going according to schedule. Actually, it seems to be quicker with the current government," Set Aung said on the sidelines of a Euromoney conference here.

He added that the project was now under the restructuring process, while due diligence by international auditors should be completed next month. The concession agreement is also being developed to meet international standards.

The original 75-year concession was awarded to Thailand's largest construction company, Italian-Thai Development, under a deal struck in the 1990s with Myanmar's then military government. The project has faced numerous difficulties from the outset, including the government's rejection of a proposed 4,000-megawatt coal-fired power plant. Investors also doubted the ability of ITD as the lead investor in the project, whose value was expected to exceed US$50 billion (Bt1.6 trillion) on full completion.

Last November, the Myanmar and Thai governments took over the project from ITD.

Set Aung clarified that ITD was not removed from the development process but had actually stepped aside to pave the way for the project's restructuring, he said.

Earlier, an official at Myanmar's Transport Ministry told Eleven Media that the financial audit of ITD's spending in the project was to be concluded in August.

The task, carried out by Ernst & Young, was to estimate the amount of reimbursement that the Myanmar government needed to shoulder as ITD opted out of the project.

ITD said it had invested about $190 million in the project and expected full reimbursement plus interest.

During an onstage discussion at the Euromoney Conference, Set Aung noted that the Dawei development model would differ from other SEZs.

"It will be step by step, as it is a huge project," he said.

He added that the selection of developers for projects in the initial phase was crucial, as it would have an impact on whether other developers decide to join in the later phase.