Development of the Dawei Special Economic Zone (Dawei SEZ) between Thailand and Myanmar has reached the next level, with construction of the initial phase of the strategic project expected to commence this year, MR Pridiyathorn Devakula, deputy prime minister in charge of the economy, said yesterday.
Construction works in the initial phase will consist of a 27-square-kilometre industrial estate, a 138-km two-lane road between the Dawei SEZ in Myanmar's Tanintharyi Region and Phunumron checkpoint in Kanchanaburi, an initial township for the workers, a liquefied-natural-gas terminal for gas transportation over long distances, a telecom landline, a power plant, a small port and a water reservoir, he said.
The projects are worth around US$1.7 billion (Bt55.67 billion) in total.
The investment budget for the two-lane road is expected to be around Bt3.9 billion, and Thailand will provide a soft loan for Myanmar to fund construction of the road on condition that a Thai company builds it, said the deputy PM.
Japan might be involved by sharing in the provision of the soft loan, and discussions about this should be concluded within a month, he added.
"The bidding to start the investment with a small industrial estate in the initial phase is a brilliant idea, because if we start with 200 square kilometres [covering all the planned projects], it will never be finished.
"We'll start with 27 square kilometres and can wait and see the interest of investors. If they then began to build factories in the SEZ, then it would truly show the progress of the project," he said.
The projected total area of the Dawei SEZ is about 196 square kilometres.
Pridiyathorn told the press after the Third Myanmar-Thailand Joint High-level Committee Meeting regarding the Dawei SEZ, held in Bangkok yesterday, that the ongoing exclusive negotiations with a Thai consortium regarding the concession agreements for initial-phase development were already 90 per cent completed, and that the remaining 10 per cent was waiting for confirmation from the Myanmar side.
He expects the negotiations between the private sector and the Myanmar government to be finalised within the next month, and signed by March, after which construction should commence before June.
The Thai consortium that won the bidding comprises Italian-Thai Development, Rojana Industrial Park, Thai ESCO, and LNG Plus International.
The deputy premier also revealed that the Thai government had recommended to its Myanmar counterpart the need for a third partner in the Dawei project, and that Japan was the most suitable country to play such a role.
An official trilateral meeting between the countries was taking place yesterday, he said.
"Japan has declared an interest in joining the project, and they are willing to share their experience and help in terms of the technical and financial aspects. The trilateral meeting today will also include talks about a SPV [special purpose vehicle] partnership between the three parties," he added.
An SPV is a company specifically formed to develop, build, maintain and operate the assets for the contracted period of an infrastructure project.