28 November 2018
Lack of clarity in the contract signed between Italian-Thai Development (ITD) and the Myanmar government to develop the highly controversial Dawei Special Economic Zone (SEZ) in Tanintharyi Region needs to be addressed, an SEZ official cautioned as the government is mulling plans to change the developer.
Myanmar SEZ Central Working Body Secretary U Aung Soe said there could be financial repercussions for Myanmar if the contract is dissolved before the ambiguities are straightened out, adding that under the current contract, only if ITD opts out of the project can another company join in.
Deputy commerce ministry U Aung Htoo told reporters last week that the government is planning to transfer the project to another company, as it feels ITD has been unable to deliver on what it promised with regards to the SEZ.
“Under the current contract, the existing company shall pay off investments if it stops operating, but the contract doesn’t clearly state whether another company can replace an existing one,” he remarked.
Initiated in 2008, the proposed Dawei SEZ covers 27 square kilometres in landmass for its initial phase and 197sq km for the entire project. Article 83 of the 2015 Environmental Impact Assessment (EIA) Procedure under the Environmental Conservation Law states that an SEZ Permit or any permit regarding implementation of the project can only be granted to a developer after the issuance of an Environmental Compliance Certificate (ECC) by the environment ministry. The Dawei SEZ proposal, encompassing the 156km highway, sea port, industrial zone and other economic activities, is categorised as a project which requires a site-wide EIA. Therefore, constructing the project is illegal without the assessment.
People in Tanintharyi have long been sceptical of the SEZ project as it has been engulfed in allegations of human rights violations including forced evictions, a lack of transparency and environmental disruption. ITD’s president, Premchai Karnasuta, was arrested and charged by Thai authorities this year after being caught with guns and animal carcasses in a wildlife sanctury in Thailand. The scandal had further alarmed Tanintharyi communities. It is unclear why the government still entrusts the project – a project ten times larger than Thilawa SEZ – to a Thai firm which is mired in a major scandal in neighbouring Thailand. ITD started the initial groundwork in 2010, but progress halted due to the lack of funds.
U Than Myint, chair of the SEZ Central Working Body, said during a meeting with the Private Sector Development Committee on July 6 that the SEZ project will resume and that both the initial phase and the latter phase will be implemented “simultaneously”.
The port construction and establishment of an industrial zone will be facilitated by both the public sector and private businesses from Myanmar, Thailand and Japan, the working body announced in the summer. Construction of the 156km two-lane highway linking Htee-Khee village at the border to the SEZ site was scheduled to begin as well. Myanmar will take a 4.5 billion bahts loan from Bangkok to finance the road and this was approved by Pyidaungsu Hluttaw on March 26.
The initial phase of the SEZ consisted of nine projects, with eight of them contracted to ITD.