BANGKOK, Thailand - An $8.6 billion port development project in eastern Burma, led by Thai investors, will be a key item in talks when Burma’s President Thein Sein visits Thailand later in July. But, the development company is seeking financing, environmentalists urge caution amid concerns about Burma’s fragile political landscape and need for environmental and social impact assessments.
The Dawei port and industrial zone is being seen as key to building closer ties between Burma and Thailand during talks between Burma’s President Thein Sein and Thai Prime Minister Yingluck Shinawatra.
President Thein Sein’s visit follows postponement of an earlier trip to attend an economic forum in Bangkok, also attended by opposition leader Aung San Suu Kyi.
Thai Deputy Transport Minister Chadchart Sittipun, says the bilateral talks will focus on the development as a key strategic project between Thailand, Burma - also known as Myanmar -- and Japan -- an expected key source of financing.
“Right now we are trying to set up the task force in Thailand to look at the possibility of the project and I think we have to talk to Myanmar also," he said. "We see it as a strategic project, if it happens. But right now I think we have to talk to Myanmar, Japan, Thailand maybe we have to work together to go ahead with the project.”
The Dawei port complex, near the Thai border, is being developed by Thailand’s largest construction company, Italian Thai Development Company. The project covers more than 250 square kilometers on the Andaman shoreline in Burma. It is planned to include a steel mill, power plants and a petrochemical complex and fertilizer plant.
Once fully operational the Dawei zone could be worth up to $50 billion and supply oil and other industrial exports to Southeast Asia, with vessels bypassing the Straits of Malacca, saving up to three days in sailing time.
Managing director of Italian Thai offshoot, Somchet Thinapong, is confident an initial completion target of 2016 will be met, marking the first phase of the deep sea port.
“We feel very confident that this is a project that the Myanmar government [will support]. Our time in mind is the year 2016 We’ve got to deliver critical path of the project milestones allowing factories to be set up," he said. The critical path you’ve got to deliver, otherwise you miss the target, you miss the train. The opening of ASEAN, harmonization of all the advantage that you can get; you’ve got to reach these. That’s what we’re rushing.”
But the project has faced setbacks. Burma halted plans for a 4,000-megawatt coal fired power plant in Dawei after opposition from environmentalists.
Also Burmese investor Max Myanmar announced its withdrawal from the project while the Asian Development Bank, while broadly supportive, called for caution and completion of all environmental and social impact assessments.
Environmentalists say Burma is still ill-prepared to undertake such projects, given the country’s weak legal and social infrastructure.
“The situation in Burma now, although you could see the rapid changes there are many that are not ready on the ground, are not really in place," said Paul Sein Twe, the spokesperson for the Burma Environment Working Group. "So we, from an environmental social movement, we are trying to warn the investors to come and be careful and move slowly, step by step. Particularly at this time it is a very fragile political situation.”
Burma’s government recently reached a ceasefire with the ethnic Karen in the Dawei area. But Sein Twe fears renewed conflict if disputes about land purchases and compensation to local communities fail to be resolved.