New links in the chain

opinion January 19, 2013 00:00

By Nophakhun Limsamarnphun
The N

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Thailand and the wider region can look forward to better trade links and greater economic growth with the development of Myanmar's Dawei deep-sea port

Transport Minister Chatchat Sitthipan says Thailand and other Asean countries stand to gain enormously from the Dawei deep-sea port and industrial estate development projects.

“The Dawei projects in Myanmar are situated in a strategic area close to Thailand’s Eastern Seaboard and Laem Chabang deep-sea port. It’s west of Thailand from Karnchanaburi province, about 132 kilometres from the Thai border. The distance from Dawei to Bangkok is just over 300 kilometres and to Eastern Seaboard and Laem Chabang port is just over 400 kilometres.
“This will form the southern economic corridor from Dawei to Bangkok, Phnom Phen and Ho Chi Minh City, linking the South China Sea with the Indian Ocean. At present, we don’t have nearby access to the Indian Ocean for Europe-bound cargoes and vice versa.
“Cargoes now have to leave Laem Chabang and go all the way down to the Straits of Malacca and Singapore. Southern China, such as cities like Kunming, also need nearby access to the Indian Ocean, so Dawei can serve several countries, not only Thailand and Myanmar.
“Another key point is that we could not find large suitable space for heavy industries in Thailand, so the Dawei projects will provide an alternative, like another Eastern Seaboard in Thailand. Dawei can be the new place for upstream industries such as petrochemicals and steel.
“Asean, China, India and other countries will benefit over the next 20 years. Now, Myanmar wants the Thai government to help improve the framework agreement between its government agency and the Thai private sector using our previous experience in the Eastern Seaboard Development programme.
“There are six sub-committees in charge of the Thai-Myanmar talks on the Dawei projects, covering infrastructure, energy, social issues, financial issues and regulations. State enterprises such as the Industrial Estate Authority, the Port Authority of Thailand and PTT are among potential investors since the Thai government cannot invest directly beyond the national borders.
Meanwhile, Areepong Bhucha-oom, permanent secretary of Finance, says, “The Dawei projects are about 10 times larger than those of our Eastern Seaboard, requiring an initial investment of up to Bt300 billion for infrastructure. Investors need to have a lot of confidence in investing in Myanmar to implement these projects. They need clear rules and regulations on foreign investment, as Myanmar is only just opening up to the rest of world.
“We are talking with our Myanmar counterparts to help clear barriers against foreign investment such as foreign investment promotion and banking services.
“Everyone looks forward to doing business and investing in Myanmar. Siam Cement Group, CP Group and Sahapat, among others, are already there, so there will be benefits for Thai firms and our economy as soon as construction of the Dawei projects start, as we are the closest in terms of supplying such things as building materials.
“In the Asean context, the projects will boost economic and other links that will be expanded to cover China, India, Japan, and other Asean partners. Movement of goods and services, as well as people, across national borders will be freer, with Dawei projects being a major catalyst for regional economic growth.”
Somchet Thinnaphong, managing director of Dawei Development Co, says, “The Dawei projects started in 2008 when the Samak government signed a memorandum of understanding with the Myanmar government. In 2011, the framework agreement was signed between ITD and the Myanmar government.
“Now, the Yingluck government is stepping up its role as promoter of the projects to boost the confidence of investors and lenders in this mega-investment programme.
“The initial investment outlay is around Bt300 billion for construction of the highway from Thailand’s border at Phu Namron to the project site, construction of the industrial estate and public utilitiess – namely water supply and electricity. Overall, the area is about 204 square kilometres.
“As far as the Dawei projects are concerned, connectivity will have multiple forms starting from physical, institutional and other links, but the most important first step is probably to link Thailand with Myanmar via the highway from Bangkok to Dawei, covering a distance of just over 300 kilometres.”