Italian-Thai lowers Myanmar project cost estimate

Construction News Myanmar

Italian-Thai in talks to sell an additional 3,600 megawatts of power to EGAT from the plant

Italian-Thai Development PCL President Premchai Karnasuta said Wednesday the investment cost of a planned infrastructure project in Myanmar is likely to be less than the $8 billion it had expected.

He said the firm’s financial adviser, Siam Commercial Bank PCL, is working on the financing structure of the project and expects to determine the size of the loans needed for the project in the next few months.

The cost of building a deep-sea port, roads and railways in the first stage of infrastructure development at the 250-square-kilometer Dawei Special Economic Zone in southern Myanmar will cost less than the $4 billion earlier projected, Mr. Premchai told reporters.

The projected $4 billion construction costs for other infrastructure projects the firm will build in the special economic zone, including an industrial estate and a waste-water treatment system, will be reviewed later, he said.

Mr. Premchai said financial institutions from Japan, China and elsewhere have shown an interest in the projects, despite Myanmar remaining under sanctions from the international community. “They can fund the projects through Thailand,” he said.

He said infrastructure construction at the special zone is likely to start early next year and finish in late 2015.

Italian-Thai expects to reduce its stake in its wholly owned Dawei Development Co., the developer of the economic zone, to 51% in a move to raise funds.

The firm will meet Japanese investors and business operators next week, followed by China and South Korea to attract partners to develop the international industrial hub.

Italian-Thai expects to hold a 10%-30% stake in each project built after the infrastructure is completed, through Daiwei Development, Mr. Premchai said.

The developer expects to build a power-generating plant in Dawei that will supply 6,000 megawatts of electric power to business operations in the area, Mr. Premchai said. The power plant is likely to need a total investment of $15 billion and the firm is seeking partners to operate the plant, he added.

PTT PCL, Electricity Generating PCL, Ratchaburi Electricity Holding PCL, state-owned Electricity Generating Authority of Thailand, and power-generating firms from Japan and China have expressed an interest, Mr. Premchai said.

Italian-Thai is also in talks to sell an additional 3,600 megawatts of power to EGAT from the plant, and this project may need about $5 billion of investment, he said.

The construction of the port in Dawei would markedly cut transportation costs to Europe as ships could bypass Indonesian waters.

Italian-Thai signed a deal with the Myanmar government in 2010 to build roads linking Thailand to Dawei, a deep-sea port, a power plant, and an industrial estate. Under the agreement, Italian-Thai has the rights to a 75-year leasehold on 27,200 hectares of land.

Dawei is 300 kilometers from the Thai capital of Bangkok, and Italian-Thai plans to develop it into a trading hub on the Andaman Sea.


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