Bilateral panel approves Dawei framework
The Thai-Myanmar Joint Coordination Committee (JCC) met in Bangkok yesterday and approved a new framework agreement on the development of the Dawei Special Economic Zone (DSEZ).
Thai Commerce Minister Niwatthumrong Boonsongpaisan, who co-chaired the JCC meeting, said the panel also witnessed the signing of three related agreements.
The first was a contract between the Dawei Special Economic Zone Authority and Dawei SEZ Development, which is a special purpose vehicle (SPV) jointly owned by Thailand and Myanmar on a 50:50 basis. The SPV will invite investors for the project. The second deal was a tripartite memorandum among Italian-Thai Development, the DSEZ Authority and the SPV, which determines the remaining operating rights of ITD before it transfers them to special purpose companies (SPCs).
The third is an agreement terminating the existing concession of ITD to construct and manage the Dawei project, which was earlier signed between the Thai company and the Myanmar Port Authority. This concession right will be transferred to the SPV and put up for bids. After the transfer, the SPV will have the right to manage projects in Dawei for 75 years, which can be extended by another 25 years under Myanmar’s new investment law.
For the investments that ITD has already made under this project, the committee agreed to employ an adviser to estimate a fair amount of funds to be returned to the company. The analysis is to be completed by next May. In addition, ITD will be able to bid as an individual investor for future projects opened up by the SPV.
Niwatthumrong said the initial phase of the Dawei project would consist of three major components. These are the main road into the project, which will be a two-lane road running from the Thai border into the Dawei economic zone, a small seaport, and an industrial estate, as well as basic infrastructure, such as an electricity system and water supply.
The management committee for the DSEZ is drafting terms of reference to identify the project details, to be completed by December 20. Bidding will be opened by February 28 and investors selected by May 15.
“The investment framework for the Dawei economic zone will be divided into two phases. In the first phase, the bidders will receive concessions in the project, which will include the development of the industrial estate and its basic infrastructure. In the second phase, individual investors for the big project concessions will be selected. The overall investment in the project will be worth between Bt300 billion and Bt400 billion. It will occupy about 200,000 rai of land. In the initial phase, industrial sectors to be located in Dawei industrial estate will be soft industries as well as necessary infrastructure,” said Niwatthumrong.
Set Aung, vice governor of the Central Bank of Myanmar, said the meeting on the Dawei project was observed by representatives from Japan. The management committee also invited investors from Japan to give their proposals for the first-phase development in the Dawei project. However, in the primary stage, the potential Japanese investors said they wanted to see the investment in basic infrastructure settled for a certain period of time before deciding on whether to invest in the project. However, it is expected that Japan would announce its investment plan in the Dawei project at the meeting the mark 40 years of ties between Japan and Asean to be held in Tokyo in December.
