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Japan set to join Dawei SEZ

Japan is set to sign a deal in July to participate in Dawei SEZ Development Co (DSEZ), a special-purpose vehicle (SPV), to run the languishing multibillion-dollar Dawei megaproject in Burma.

Arkhom Termpitayapaisith, secretary-general of the National Economic and Social Development Board (NESDB), said Japan would hold an equal partnership in the DSEZ with Thailand and Burma, officially known as Myanmar.

In June 2013, Thailand and Burma agreed to set up DSEZ with an equal shareholding and initial investment of 12 million baht (US$400,000), far below the 100 million proposed earlier. The countries also agreed to set up SPVs to manage the port, road and rail links, power plants, waterworks, industrial estates, telecommunications and a township.

Mr Arkhom said details of the partnership would go through consultation with Japan during his visit there from 23- 25 April.

“Japan has agreed to join the Dawei development after considering the decision for almost two years. The concept has changed, as the Myanmar government wants to develop infrastructure first and then allow the private sector to invest in relevant projects instead of letting the private sector develop the infrastructure,” he said.

“Japan also wants to use Thailand as a gateway to invest in neighbouring countries.”

Mr Arkhom said Thailand and Myanmar also agreed to create a comprehensive master plan for Dawei development to embolden Japan. The plan will be prepared by the Neighbouring Countries Economic Development Cooperation Agency by June, comprising an industrial estate covering 132 square kilometres, a deep-sea port to service 170 million tonnes of goods and 5 million 20-foot equivalent units a year, a four-lane road linking Thailand’s border to Dawei, water supply and water treatment, and power plants.

NESDB deputy secretary-general Chanvit Amatamatucharti said his agency and the Finance Ministry would ask the cabinet to approve 4.5 billion baht ($150 million) in loans to the Burmese government to build a 132-kilometre road from the Thai border to the Dawei project. The terms of the loans will be 20 years with a 10-year grace period. Construction is expected to take three years.

The Burmese government also needs to ask for approval from its parliament for the loan and conduct an environmental impact assessment for the road construction, part of the first phase of development. Italian-Thai Development and Rojana Industrial Park are scheduled to sign a contract with the Burmese government in May or June to build the first phase, covering roads, power plants and an industrial estate.

 

This article was originally published in the Bangkok Post on 22 April 2015.