News / Asia

Burma Turns to Japan, Thailand to Kick-start Stalled Dawei Project

FILE - Dawei Development Company's Managing Director Somjet Thinaphong discusses a model of the economic zone.
FILE - Dawei Development Company's Managing Director Somjet Thinaphong discusses a model of the economic zone.
Reuters
Burma is set to wrest control of its Dawei industrial complex from a Thai company, Italian Thai Development (ITD), over its failure to attract investors to a strategically located, multi-billion dollar project tipped as a game-changer for regional trade.
 
According to two sources involved in the Dawei Special Economic Zone (SEZ), plans have been overhauled to inject foreign capital and expertise to revive what is arguably Southeast Asia's most ambitious industrial zone - a 100 sq mile deep-sea port, petrochemical and heavy industry hub on the slim peninsula separating the Pacific and Indian Oceans.
 
The project's leader, ITD, and firms it had made contracts with, have been told to cease activities at Dawei to undergo due diligence by international auditors to create “better modality”, according to a senior Burmese government official.
 
The review of a project that was for years stuck in a quagmire could be a significant boost to swelling Japanese industrial interests in the region, which include numerous deals with Burma's pro-business, quasi-civilian government and long established automobile and high-tech manufacturing plants in neighboring Thailand, where firms like Honda, Toyota, Canon and Toshiba operate.
 
The planned complex, which will include a steel mill, a refinery and a power plant, will be linked by highway to Bangkok and Thailand's eastern seaboard industrial zone.
 
That will mean Dawei could serve as an industry and trade gateway to Southeast Asia's markets, bypassing the Malacca Straits, the world's busiest shipping lane.
 
Burma would ask for Japanese and Thai government support to appoint companies to carry out a revised plan for the first stage of Dawei. This stage would include the development of a small port and access roads and setting up a water supply system and small gas-fired power plant “as quickly as possible”, the government source said, adding that it had yet to be agreed which firms would be involved.
 
The second stage would involve international tenders for the bigger projects, including the deep-sea port, and the building of a bigger power plant, which could be coal-fired.
 
Junta’s Deal Ditched?
 
It had also yet to be determined what role ITD, Thailand's biggest construction company, would play in a project for which it was granted a 75-year concession under a deal struck in the 1990s with Burma's then military government, which ceded power in 2011.
 
“We're trying to figure out a different model where ITD is going to be involved as well as other investors. We're talking about billions of dollars, how can one company be able to develop all these projects?”, the source asked.
 
A Burmese delegation was due to meet Thai and Japanese government officials in Bangkok starting on Wednesday. Thailand's commerce minister said the gathering would see ITD relieved of its lead role and reimbursed for costs incurred.
 
“The meeting's agenda also includes termination of ITD's contract in terms of the company's role as Dawei project manager,” the minister, Niwatthamrong Boonsongpaisan, told reporters.
 
“[Burma] wants to open up this project to other parties and involve international companies and governments in the other phases of Dawei's construction and wants to ensure the project's transparency,” Niwatthamrong continued.
 
Burma's move on Dawei comes amid a series of liberal economic reforms to attract jobs and investment to one of Asia's poorest states. One year ago, the country asked for Thai support for the project and the government pledged financing from Thai banks, including Bangkok Bank and Siam Commercial Bank.
 
Investors have expressed reluctance to commit to Dawei because of reservations regarding the leadership of ITD, which was dealt a blow last year when Max Myanmar, a company owned by local construction and banking tycoon Zaw Zaw, announced it would divest its 20 percent stake. Burma's government has until now had a hands-off approach to Dawei, but ITD has struggled to find private investors.
 
Despite being hailed by ITD as “the new global gateway of Indochina”, with an estimated $50 billion value within the next decade, the project has been fraught with difficulties from the outset, including issues finding a power source amid concerns about pollution from a proposed 4,000 megawatt coal-fired plant, which Burma's government rejected.
 
A finance industry source in Bangkok with close knowledge of the deal said ITD would most likely back out of the broader Dawei plan due to a lack of funds, but would be likely to stay on as the main contractor for infrastructure. ITD officials did not respond to requests for information.
 
Burma's decision to overhaul the plan follows rapid progress on its 5,900-acre Thilawa economic zone, near the biggest city, Rangoon, which is to be run by a Burma-Japan joint venture involving Mitsubishi, Marubeni and Sumitomo, plus support from the Japanese government.
 
Edwin Vanderbruggen, a Rangoon-based business lawyer with the law firm of VDB Loi, said the new approach to Dawei would be more efficient and financially secure as big players would be involved, especially those from Japan.
 
“It's too large to be a single-purpose, Thailand-oriented project. This is on a Southeast Asia scale, so its better to broaden the base,” he said.
 
“There's been a lot of progress made. The regulatory framework has changed, the perception of the country has changed. It has improved. Maybe that's why they want to reboot it,” Vanderbruggen continued.

You May Like

Republican Majority in Congress Off to Rough Start

Standoff over Homeland Security funding exposes philosophical, tactical problems within party More

Pakistan Blocks Baloch Activist from US Trip

Human Rights Commission of Pakistan slams Islamabad officials for stopping people from leaving country to attend human rights conference More

Video Muslims Long Thrived in North Carolina Before Students Killed

Idyll shattered February 10, when three Muslim university students living in Chapel Hill were gunned down by a neighbor More

ILO: Women Still Losing Out in Global Work Place

International Labor Organization says women are marginally better off now than they were 20 years ago More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Muslims Long Thrived in N Carolina Before Slaying of 3 Studentsi
X
Jerome Socolovsky
March 05, 2015 9:04 PM
The killings of three Muslim students in North Carolina early last month came as Muslims across the United States have felt under siege, partly as a result of terrorist attacks being committed internationally in the name of their faith. But Muslims have long thrived in university cities in this part of the American South. VOA's Jerome Socolovsky reports.
Video

Video Muslims Long Thrived in N Carolina Before Slaying of 3 Students

The killings of three Muslim students in North Carolina early last month came as Muslims across the United States have felt under siege, partly as a result of terrorist attacks being committed internationally in the name of their faith. But Muslims have long thrived in university cities in this part of the American South. VOA's Jerome Socolovsky reports.
Video

Video Fuel Shortages in Nigeria Threaten Election Campaigns

Nigeria is suffering a gas shortage as the falling oil price has affected the country’s ability to import and distribute refined fuels. Coming just weeks before scheduled March 28 elections, the shortage could have a big impact on the campaign, as Henry Ridgwell reports for VOA.
Video

Video Report: Human Rights in Annexed Crimea Deteriorating

A new report by Freedom House and the Atlantic Council of the United States says the human rights situation in Crimea has deteriorated since the peninsula was annexed by Russia in March of last year. The report says the new authorities in Crimea are discriminating against minorities, suppressing freedom of expression, and forcing residents to assume Russian citizenship or leave. Zlatica Hoke has more.
Video

Video 50 Years Later African-Americans See New Voting Rights Battles Ahead

Thousands of people will gather to mark the 50th anniversary of a historic civil rights march on March 7th in Selma, Alabama. In 1965, dozens of people were seriously injured during the event known as “Bloody Sunday,” after police attacked African-American demonstrators demanding voting rights. VOA’s Chris Simkins introduces us to some civil rights pioneers who are still fighting for voting rights in Alabama more than 50 years later.
Video

Video Craft Brewers Taking Hold in US Beer Market

Since the 1950’s, the U.S. beer industry has been dominated by a handful of huge breweries. But in recent years, the rapid rise of small craft breweries has changed the American market and, arguably, the way people drink beer. VOA’s Jeff Custer reports.
Video

Video Video Claims to Show Shia Forces in Iraq Executing Sunni Boy

A graphic mobile phone video is spreading on the Internet, claiming to show Iraqi forces or Shia militia executing a handcuffed Sunni boy. Experts have yet to verify the video, but already Islamic State followers are publicizing it across social media, playing on deep-rooted sectarian fears. VOA’s Jeff Seldin reports.
Video

Video Ukrainian Authorities Struggle to Secure a Divided Mariupol

Since last month's cease-fire went into effect, shelling around the port city of Mariupol has decreased, but it is thought pro-Russian separatists remain poised to attack. For the city’s authorities, a major challenge is gaining the trust of residents, while at the same time rooting out informants who are passing sensitive information to the rebels. Patrick Wells reports for VOA.
Video

Video Volunteer Gauge-Watchers Help Fine-Tune Weather Science

An observation system called CoCoRaHS is working to improve weather science, thanks to thousands of volunteers across the country who measure precipitation in their own backyards, then share their data through the Internet. VOA's Shelley Schlender reports.
Video

Video NASA Spacecraft Approaches a Dwarf Planet

NASA’s Dawn spacecraft will make history on Friday, March 6, when it becomes the first man-made object to orbit a dwarf planet named Ceres. It is located in the asteroid belt between Mars and Jupiter, almost 500 million kilometers from Earth. Among other objectives, Dawn will try to examine two mysterious bright white spots detected on the planet’s surface. VOA’s George Putic has more.
Video

Video Young Muslims Radicalized Online

Young Muslims are being radicalized ‘in their bedrooms’ through direct contact with Islamic State or ISIL fighters via the Internet, according to terror experts. There are growing concerns that authorities and Internet providers are not doing enough to counter online extremism - which analysts say is spread by a prolific network of online supporters around the world. Henry Ridgwell reports from London.
Video

Video Positive Messaging Transforms Ethiopia's Image

Ethiopia was once known for famine and droughts. Now, headlines more often point to its fast-growing economy and its emergence as a regional peacemaker. How has Addis Ababa changed the narrative? VOA's Marthe van der Wolf reports.
Video

Video Answers Elude Families of MH370 Passengers

For the families on board Malaysia Airlines flight MH370, an airline official’s statement nearly one year ago that the plane had lost contact with air traffic control at 2:40 AM is the only thing that remains confirmed. William Ide reports.

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More