Bangkok needs project more than Myanmar, analysts say
The Dawei mega industrial project in
Myanmar could boost Thailand's economy by 1.9 per cent and upgrade it
from labour-intensive to value-added, according to the Economic Research
Institute for Asean and East Asia.
Transport from Thailand to India will
take only three days instead of seven without having to pass through the
Strait of Malacca.
Thailand would gain closer access to
natural gas and oil, which are abundant in Myanmar, while Thailand will
run out of proved natural gas reserves in nine to 10 years.
The environmental problems in Thailand, such as at Map Ta Phut, make it difficult to build heavy industry there.
"It appears to us that Thailand needs to
invest in Myanmar more than Myanmar needs investment from Thailand,"
Nomura Research said in its recent report.
Myanmar will likely continue to receive its share of press coverage in Thailand this year, it said.
Italian-Thai Development (ITD) has won
the mandate to develop and run this project, which will become the
largest industrial estate in Myanmar. However, ITD appears to need help
to finance this mega-project, as it will require up to US$8.5 billion
just to set up infrastructure and $50 billion to complete.
The Myanmar government has proposed
eight joint ventures to operate the roads, railways, water systems,
power industrial estates, the port and telecommunications systems, and
to relocate residents in the initial stage.
Many meetings of officials from the two
countries have been held over the past few months. In November, they
reaffirmed their plans to jointly develop the Dawei special economic
zone. The Thai PM visited Dawei in December to meet Myanmar President
Thein Sein and finalise details. Following the meeting, both governments
agreed to jointly finance the project, which is in line with the
guidance provided by the transport minister.
The joint committee will finalise the
plan by next month before signing the framework agreement by March.
Fundraising should start in April, followed by construction of the
project.
Myanmar keen to reduce size
Following the latest meeting, Myanmar
officials have suggested reducing the scale of the Dawei project from
204 square kilometres to 150 sq km. Myanmar also intends to invite a
third country such as Japan to join the project.
Thailand is expected to spend about Bt45
billion for the construction of a motorway between Bang Yai and
Kanchanaburi and Bt10 billion for a motorway between Kanchanaburi and
Banphu Namron on the Myanmar border.
The railroad from Dawei to Map Ta Phut would require about Bt20 billion.
To facilitate Thai companies' investment in Myanmar, the Board of Investment may give special privileges.
A few examples of these projects are steel and automobile factories.
Thailand has invested $9.6 billion in
key projects such as natural gas, factories and agriculture since 1988.
Major Thai players in Myanmar are PTT Exploration and Production,
Electricity Generating Authority of Thailand, ITD, Charoen Pokphand
Group and Siam Cement Group.
Latest investment plans in Myanmar by
Thai companies include SCG's $400-million greenfield cement plant. It is
waiting for the licence. The plant is scheduled to be up and running by
2015.
Airports of Thailand has been invited by
the Myanmar government to develop and operate the airports in Yangon
and Nay Pyi Taw. In 2011, Yangon airport handled about 2.4 million
passengers.
Bangkok Dusit Medical Services wants to
build a hospital this year, but is waiting for clearer directions on key
issues such as land acquisition and fund transfers. Demand for medical
services is already there.
3 phases
Dawei development phases:
0 - basic infrastructure by next year
1 - ports, roads, water systems and transport systems by 2015
2 - downstream investment by 2020
Nomura: Thailand needs Dawei
source: Eleven Myanmar
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