Thai engineering giant signs Tavoy port deal

Construction News Laos Myanmar Vietnam

The largest civil construction company in Thailand, Italian-Thai Development, has signed a contract worth US$8 billion for an infrastructure project in Tavoy in Burma’s Tenasserim Division, the Bangkok Post reports.

thai engineering giant signs tavoy port deal 1aThe Tavoy (Dawei) development project on Burma’s east coast to be built would include a deep-sea port with shipbuilding and maintenance facilities, a petrochemical industrial estate with oil refining and gas-separation plant, and other medium and light industries such as automobile and garment factories, the report said.

The firm under the Italthai Group umbrella had established wholly-owned subsidiary Thai-Myanmar Development to operate the project in Tavoy, the Post reported.

The Burmese state-run newspaper, New Light Of Myanmar, reported that Italian-Thai  president, Premchai Karnasuta, signed the deal with Myanmar Port Authority managing director Thein Htay on Tuesday last week in Naypyidaw.

Construction is to commence next year and is expected to take 10 years. Confirmation of the deal signals the highest single foreign investment development project in Burma. It also came as Burmese state media announced that Burma’s first Special Economic Zone (SEZ) would be established on a 100,000-acre (40,000-hectare) plot around Tavoy.

Burmese strongman Than Shwe visited China’s SEZ of Shenzhen in September this year and said his country could learn from his northern neighbour’s China’s experience of rapid economic reform and expansion.

(Left) An artist’s impression of the industrial estate and deep-seat port at Tavoy (Dawei), Tenaserrim Division. The plan includes shipbuilding and maintenance facilities, a petrochemical estate with an oil-refining and gas-separation plant. The project is aimed at developing links between southern Burma and Thailand, a major gas customer, and southern Burma and China. Photo: Dawei Development Project handout

However, Professor Sean Turnell, a specialist on Burma’s economic landscape at Australia’s Macquarie University, told Mizzima that Burma’s understanding of the nature of SEZs was superficial.

“I think they’ve misunderstood. Yes, China adopted these and China has turned out to be reasonably economically successful. But the reason wasn’t the creation of these SEZ’s and so on but the freedom allowed in them and the idea that enterprises could enjoy property rights and non-interference from the state,” he explained. “The trouble is that the state in Burma, unlike China, can never leave them alone, they’re constantly interfering.”

thai engineering giant signs tavoy port deal 2Construction of the Tavoy deep-sea port and industrial centre will take place in three phases. The first will link Tavoy to the rest of Southeast Asia with the construction of an eight-lane highway and a railway connecting the port to Kanchanaburi province in western Thailand, forming a portion of the southern economic corridor in the Greater Mekong Subregion, which will run from Ho Chi Minh City in Vietnam to Burma.

A north-south railway running from Kunming in China’s Yunnan province through Mandalay and Pegu (Bago) to Tavoy (Dawei) is also in the planning stage.

It was envisioned that the new trans-border corridors would promote regional integration among Asean countries and boost the “connectivity” theme that has dominated recent Asean summits, the Post reported.

The second and third phases would incorporate the construction of the deep-sea port and industrial estate. With completion of the port upgrade, goods bound for Thailand, China, Vietnam and Laos will be able to cut an average of 10 days off transport, as cargo will no longer be required to pass through the Strait of Malacca.

As with other industrial development projects in Burma, locals may well be forced to pay a price for the project’s realisation, with land confiscation a distinct possibility.

(Left) An impression of a future section of the planned trans-border corridor linking Tavoy and Kanchanaburi in western Thailand. Photo: Dawei Development Project handout

Shwe Gas Movement co-ordinator Wong Aung, whose campaign targets gas pipeline development in central Burma, told Mizzima that a reform of land policy in post-election Burma was high on the agenda for humanitarian groups.

thai engineering giant signs tavoy port deal3“We are very concerned about it, a lot of the civil society groups from inside and NGOs are trying to push land reform and to carve out some proper adoption of international standards,” Wong Aung said. “They [the Burmese government] need to change everything, not only in the policies but also in terms of demilitarisation and privatisation. It all needs to be more independent.”

Supporters of the project hope it will provide jobs for the local population.

The Union Solidarity and Development Party (USDP), the National Unity Party (NUP), and the National Democratic Force were all standing in the Tavoy constituency seat of Tenasserim on Sunday. The result is as yet unknown, however the NUP has already filed complaints against the USDP in the area for allegedly collecting absentee votes from fishermen, palm-oil plantations, farmers, soldiers and police in the area and bullying them into making advance votes for the USDP, Mizzima reported on November 4.

(Left) The project envisions that the new trans-border corridors will promote regional integration. Through the port and transport links, an average of 10 days will be cut from the journey of goods bound for Thailand, China, Vietnam and Laos as cargo will no longer be need to pass through the Strait of Malacca. Photo: Dawei Development Project handout


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