Thai agency to review Myanmar Dawei investment

Nongnapas Maipanich in Bangkok/The Nation
Asia News Network12 February 2013

Bangkok (The Nation/ANN) - The Thai Office of Transport and Traffic Policy and Planning (OTP) is to review the estimated investment for the Dawei project in Myanmar following a discrepancy over project information, the concern being a potential miscalculation of the return on investment.

The office is expected to reach a preliminary conclusion on the matter on February 18, Transport Minister Chatchart Sithipan said yesterday.

Chatchart, who chairs the subcommittee for infrastructure and construction of the Dawei deep-sea port and Dawei industrial estate, said the OTP had been assigned to conduct additional analysis of the overall project's investment in infrastructure, which includes roads, port, rail link and industrial estate, due to a difference in key details provided by the government and Italian-Thai Development, which has won the project concession.

Such a discrepancy could impact on the calculation of return on investment and the project's feasibility, he said.

Additional analysis ranges from the demand for utilities, the structure for calculating utility prices, project investment and project period, to technical information for the construction of utilities.

State agencies had earlier requested additional details from Ital-Thai to review and analyse each year's investment and cash flow, so as to ensure an accurate picture of revenue and expenditure for investors willing to pour money into the project.

The OTP's preliminary conclusion is expected to be forwarded to Chatchart's subcommittee at its next meeting on February 18.

Among the information discrepancies is the cost of tap water in the industrial estate, the minister said. The government's information estimates a cost of 28.50 baht (US$0.95) per cubic metre, while Ital-Thai projects the cost at 23 baht.

No clear decision has yet been taken about the establishment of a special-purpose vehicle for the project's financing, he added.

The Finance Ministry is studying the matter in detail, and needs to take into account the affordability of utility service rates that potentially affects the time in which a return on investment can be made.

Meanwhile, Japan is presently unclear about its joint investment in the Dawei project, as it may need about a year to study its potential involvement, given the high overall Thailand-Myanmar project investment cost of , he said.

Chatchart said the government would speed up infrastructure investment in Thailand for the Dawei project, in regard to the 96-kilometre Bangya-Nakhon Pathom-Kanchanaburi motorway.

The government will, however, wait for clarity from the Myanmar government over the construction of a 70km motorway to link Kanchanaburi and Ban Phu Nam Ron.

Moreover, there is no need to accelerate construction of a rail link, which is provided for under the second phase of investment in 2015, he added.

*US$1=29.8 baht