Japan joins Thailand as full partner in Dawei development
Japan has joined Thailand and Myanmar as a full partner in the development of the Dawei Special Economic Zone (SEZ) in Myanmar, which should become the largest industrial and trade zone in Southeast Asia upon completion and boost the economies of both Thailand and Myanmar.
Japan announced it would take a one-third equity stake in the Dawei project’s special purpose vehicle (SPV), a funding mechanism, at the fifth Myanmar-Thailand Joint High-Level Committee Meeting last week that was attended by senior officials from all three countries.
Thailand’s economic czar Deputy Prime Minister Somkid Jatusripitak said that Japan’s participation means the project can proceed at full speed and full scale. The Myanmar government had been delaying investments and construction on the Thai-led initiative in hopes that Japan would sign on as a partner.
Somkid said the Myanmar government has given top priority to Dawei, and that it would help Myanmar’s economic expansion while also contributing to increased trade and by extension the prosperity of many countries in the region, including Thailand.
Dawei is situated on Myanmar’s relatively undeveloped southern peninsula with its coast on the Indian Ocean. As the new center of industry in Myanmar, Dawei will be linked directly to Thailand’s own industrial heartland on the Eastern Seaboard through a highway system under development.
The Dawei deep-sea port on the Indian Ocean will also connect to Thailand’s deep-sea port at Laem Chabang on the Gulf of Thailand and the South China Sea, providing exporters with an alternative to shipping through the Straits of Malacca.
Although the SPV has registered capital of just $2.7 million, the project requires an estimated $10 billion worth of investment. The first phase of the project will cost an estimated US$1.7 billion and involve an industrial estate and an 86-mile two-lane road between the SEZ in Myanmar and the Thai border province of Kanchanaburi.
Construction is expected to begin in the first quarter of 2016 and will cost an estimated $1.7 billion.
The first phase also includes a township for workers, a liquefied-natural-gas terminal, a telecom landline, a power plant, a small port and a reservoir.
Thailand’s own Italian-Thai Development, which has been involved in building several large infrastructure projects at home, is the lead developer on the Dawei project. Company executives said that 78 Thai and foreign companies have expressed interest in investing in Dawei.
The entire project will feature a 75-square-mile industrial estate, a four-lane road, a railway to the special economic zone, large power plants and a deep-sea port, said Transport Minister Arkhom Termpittayapaisith.