Tuesday, January 24, 2012

Dawei energy project moving forward


Tuesday, 24 January 2012 13:13 Mizzima News

(Mizzima) – Italian-Thai Development Plc. (ITD), the developer of the Dawei deep-sea port project on the southern coast of Burma, needs to secure around US$ 8.5 billion to move ahead on the infrastructure phase of the massive mega-billion project.

Thailand's largest construction company by market value, ITD will require the backing of Thailand, Burma and a blend of international partners, Somchet Thinaphong, managing director of Dawei Development Co (DDC), told The Bangkok Post on Monday.

The local Burmese investor Max Myanmar has agreed to acquire 25 percent of DDC, which ITD had set up to manage the Dawei project. The Thai contractor has said it will maintain at least a 51% stake in DDC, while other partners are welcome, he told the newspaper.

ITD has been granted a 75-year concession for the energy project that will cover 250 square kilometers. Located on the Andaman shoreline, Dawei is about 350 kilometers west of Bangkok. The project will supply oil and other goods to Southeast Asia, bypassing the Strait of Malacca and cutting costs.

The Dawei Special Economic Zone includes an integrated steel mill, power plants, a petrochemical complex and a fertilizer plant. Separate entities will be set up to invest in each project, Somchet said.

“China, Japan and South Korea are the key strategic partners of our projects,” he said. “Finding a balance for each of these groups is important. For example, if we have a lot of Chinese partners, the U.S. might not be happy with that.”

Somchet told the Post that the Thai and Burmese governments would provide support in four areas for the Dawei project.

– First is physical infrastructure such as roads in Thailand to link with Burma roads.

– Second is simplifying border procedures between the two countries under the Asean Economic Community (AEC) in 2015.

–Third is financial transactions such as money exchange between the two countries.

– Fourth is enhancing competitiveness of Thai and Burmese businesses in cross-border investment.

He said Burmese authorities have yet to issue ITD a notice that Dawei's planned coal-fired power plants had been halted after environmental protests, as reported by various media on January 9 after remarks by Burmese officials.

Somchet told Reuters news agency that its power plant partner, Ratchaburi Electricity Generating Holding Pcl, would decide on fuel type within three months, including the possibility of using natural gas funneled to the site on a 50- kilometre (31 mile) pipeline from fields in Burma.

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