Myanmar and Thailand agreed to continue Dawei SEZ project within a month and a two-lane highway to link Thailand and Dawei SEZ will be built (Ambassador of Thailand to Myanmar)

24 มีนาคม 2560

Visits to Myanmar led by the deputy prime minister of Thailand, followed by a visit from the minister of transportation of Thailand who met with Vice President Henry Van Thio in February, resulted in an agreement to continue the Dawei SEZ project within a month.

Pisanu Suvanajata, the Thai ambassador to Myanmar who attended the meeting with Henry Van Thio, spoke exclusively to the Myanmar Times in February 22 that both sides agreed to restart the SEZ.

“They agreed to recommence it [Dawei’s SEZ] in a month’s time. It is positive that in a month from now that both sides will have a chance to sit together again will show how we can move the project forward.

“The visits indicated that Thailand really want to move forward,” he said.

The Dawei project is an important strategic project for Myanmar because the materialisation of the project could showcase the region as a whole, the ambassador said.

“Many people talk about the benefits of Thailand from this project, but I can say that the project will contribute to the economic development of the region as a whole. The Dawei project has been delayed for quite some time now … The new NLD-led government needs time to study and see how to move the project ahead,” he added.

At this stage, both countries are very keen to recommence the project. But success relies whether the highway which links Thailand and the Dawei SEZ can boost investor confidence and to make the project a reality, according to the ambassador.

“What is considered by the Myanmar government is also the offer from the Royal Thai Government for a soft loan to establish road connection from Htee Khee to the [Dawei] SEZ. We want to make an ASEAN-standard highway to facilitate the flow of movement of people, goods and everything between both countries. With that road I think more people will be interested and they would encourage business transitions in the Dawei SEZ,” he said.

Thailand has proposed to offer a soft loan for the establishment of a road connection and to upgrade the existing road into an ASEAN-standard highway in May 2015.

“The offer is a 4.5 billion baht soft loan with a 10 percent interest rate and a rest period for 10 years … altogether you have 30 years. But this is up to the decision of Myanmar government. We have proposed this request for some time and it has been reconsidered by the NLD-led government,” the ambassador said.

In the meantime, there are a lot of issues at stake with the developer of the initial phase, Italian-Thai Development company (ITD). The ITD received a contract to complete nine projects within eight years since 2010 for the initial phase of 27 square kilometres within the SEZ.

The ITD has stopped implementing the SEZ in 2013 due to financial crises and community complaints regarding lack of adequate compensation.

The two-lane road construction of 150 kilometres has been carried out by the ITD but the firm has to compensate the local community for the construction, pollution and disruption caused.

U Myint San, the vice chair of Dawei SEZ’s management committee, said that if the government receives the loan from Thailand, it will be a Thai company which will construct and upgrade the ASEAN-standard two-lane project.

“The management committee recommended accepting the [soft] loan from Thailand because the committee believes that the road is very important for the community as well. The community has to suffer because of the project’s pending [status]. But there are many dilemmas as to who will carry out the upgrade for the road,” he said.

Civil society groups in Dawei think the Myanmar government will be in debt from the ITD road construction. They are also of the opinion that the ITD is not competent in execution of the project in aspects such as finance, human rights protection and environmental protection.

On February 25, villagers impacted by the activities of the ITD in Dawei submitted a letter to the National Human Rights Commission of Thailand (NHRC of Thailand), requesting problems to be solved before reactivating the SEZ project. The letter asked for the firm to disclose all data and information related to the project, to undertake meaningful public participation and ensure that fair and adequate compensation is provided with the consent of the local community.

 U Ye Swan, a villager from Mayingyi village in Dawei, whose plantations are included in the project site, told the Myanmar Times earlier this month that almost all the villagers want to get fair compensation and an Environmental Impact Assessment (EIA).

Regarding the two-lane road, U Myint San said that there are two central issues to be decided – should the two-lane road be a public or a private road? And who should be in charge of the operations of the road?

“The management committee wants the ITD or another Thai company to upgrade the road. The management, maintenance and ownership of the road should lie in the hands of the Myanmar government. Otherwise the community will have to pay high toll fees – from US$6.5 to US$43,” he added.

High toll fees could present a problem for economic development in the region as it affects various kinds of transport and hence many industries including manufacturing and logistics. Last week, John Hamilton, country manager of CEA in Myanmar, told the Myanmar Times that both road tolls are a major challenge for the logistics sector in the country.

“Road tolls are for sure the highest we have ever encountered in any country we work in Asia. Up to 35% of our trip cost is road tolls anywhere up to K340 per km is spent on just road tolls,” he said.

According to U Myint San, the central SEZs management committee has not decided whether to accept the loan.

(The Myanmar Times: http://www.mmtimes.com/index.php/business/25421-two-lane-highway-to-link-thailand-and-dawei-sez.html)