Thailand, Myanmar throw weight behind Dawei zone

Wed Nov 7, 2012 6:16am EST
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By Amy Sawitta Lefevre

BANGKOK (Reuters) - Ministers from Myanmar and Thailand met on Wednesday to show their support for the struggling multibillion-dollar Dawei economic zone in Myanmar and to look for ways to drum up more private sector interest.

"Collaboration on Dawei is of the utmost importance to both our countries. The next step is to invite investment from the state and private sectors," Thai Finance Minister Kittirat Na Ranong said during a break in the meetings in Bangkok.

The $50 billion, 250 sq km (100 sq mile) complex was planned to include a deep-sea port, steel mills, refineries, a petrochemical complex and power plants.

However, Italian-Thai Development Pcl, Thailand's largest construction firm and the parent of Dawei Development Co, has struggled to find the $8.5 billion needed to finance infrastructure and utilities under the first phase.

On Wednesday, Thailand and Myanmar agreed to set up joint committees overseeing infrastructure projects, including a 132-km (83-mile) road stretching from Dawei to the Thai border, plus water and energy needs. Another committee will advise businesses on Myanmar's new foreign investment law.

A follow-up meeting will be held in Myanmar's capital, Naypyitaw, in December.

Funding for Dawei's first phase will be decided in the next three or four months, with Myanmar keen for construction to begin no later than April 2013, said Somchai Sajjapong, chief of the Thai Finance Ministry's fiscal policy office.

In September, sources said Thai banks, led by Bangkok Bank and Siam Commercial Bank, would provide short-term loans to keep the first phase afloat before an expected Japanese loan of up to $3.2 billion was secured.   Continued...

Thailand's Deputy Prime Minister and Finance Minister Kittirat Na Ranong speaks during the 10th Asia-Europe Finance Minister's Meeting and other related meetings at a hotel in Bangkok October 15, 2012. REUTERS/Chaiwat Subprasom