- POSTED: 27 Sep 2013 15:54
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Major Asian investors are crucial to developing Dawei, a massive special economic zone on Myanmar's western seaboard.
DAWEI: Bilateral ties between a changing Myanmar and its neighbour Thailand have long been important.
However, the co-development of a massive special economic zone on Myanmar's western seaboard will need other investors and may have implications for the entire region.
The Dawei megaproject in southeastern Myanmar is closer to Bangkok than Yangon or Myanmar's capital Napyidaw.
The Thai government has now taken over responsibility for the project which was initially developed by Ital Thai, Thailand's largest construction company.
A glance around Dawei reveals a completed small port, but much, including the necessary dredging to construct a deep water harbour remains undone.
ITD's project engineer Pisit Girdmongkol, explained: "What you see behind (me) is the main port for the Dawei project. The shipping land will be shaped like an "L". Each phase will take about five years. At this point, I cannot confirm when it will all start. Also, the five years for each phase is a rough timeframe."
Also missing are other major Asian investors crucial to developing Dawei for its strategic location.
Dr Ruth Banomyong, head of department of international business, logistics and transport at the Thammasat Business School, said: "If you ask the Burmese, the Myanmar government they are not going to put in any money because they are providing in kind.
"If you ask the Thai government, this is a big risk for Thailand to suddenly say ‘Okay, we want to invest in this mega project’ and I wouldn't be surprised to see that at the end of the day we might have another investor coming in the SPV (special purpose vehicle)."
Officials closest to the project consider it a trilateral partnership with Japan as the third party.
Set Aung, Myanmar's Deputy Minister of National Planning and Economic Development, said: "The significance of the signing of this shareholder agreement is the cooperation between Thailand and Myanmar. And not only for that; but also the possible cooperation and commitment, and the interests from Japan to be involved.
"These cooperation actually shows, not only the stronger commitments for Dawei project development; it also shows the passion and the friendship of the three countries together."
So far, there has been no official Japanese involvement in Dawei.
The speculation is that for Japanese interest to be there, the vision for the massive project has to be revamped to make it more favourable for the Japanese.
Meanwhile, Thailand hopes Dawei comes to fruition as it seeks to secure its energy needs.
A major port in western Myanmar means easier access to the oil producing nations in the Gulf, and the ability to bypass the Straits of Malacca in order to refine and export that oil.
Moving forward, this could be the game changer for the energy security of Asia.
Logistics experts say the regional impact won't be as big as some have imagined.
"It is true that Dawei has been seen as the potential "energy gateway", but that will be really for Thailand," said Dr Banomyong.
He added: "Will this affect the Straits of Malacca? Maybe (it will) reduce congestion for a bit. In reality, even now the big tankers do not want to go through the Straits of Malacca because of the congestion. In fact, they go the other way around but the role of Singapore as a key trading place will not be affected."
Japan has committed a US$205 million low-interest, long-term loan for Myanmar to develop another port in Thilawa - a one-hour drive away from Yangon.