Ital-Thai presses on with Dawei project

Thailand's biggest construction company Italian-Thai Development is not expected to have an easy ride in developing the mega-investment Dawei Project as there are many hurdles ahead.

Ital-Thai chairman Premchai Karnasuta is making utmost efforts to push the Dawei Project, which involves a deep seaport, an industrial estate complex and transborder corridor, though there has been a little progress towards implementation.

The US$8.6-billion (Bt268 billion) project, over 250 square kilometres in Dawei, Taninthayi Region, began after the framework agreement was signed by Italian-Thai Development and Myanmar Port Authority (MPA) in November 2010, following the signing of a Memorandum of Understanding between the two nations in May 2008 and the signing of an MoU by the company and MPA in June 2008.

The company was granted the rights to develop a deep seaport and industrial estate complex on a Build Operate Transfer basis. It will be allowed to run this project, established as a Special Economic Zone, for 60 years with a possible extension, on a 75-year land lease. According to the company's conceptual design, road and rail link to Thailand will be included.

A 4,000-megawatt coal-fired power plant planned for the project was recently suspended due to resistance from local residents, social institutions and environmental groups. The Karen National Unit (KNU) and some local residents are refusing to relocate.

"Sanction and humanity are the most sensitive issues in the project," said Kiwamu Honda, senior adviser to the chairman of Board of Dawei Development Co Ltd, a 75:25 joint venture between ITD and Max Myanmar Group.

Initially, the project would be supplied electricity generated by a gas-engine power plant with a 50-megawatt capacity installed by the Electricity Authority of Thailand, which is expected to commence operations within three months. Then the gas-turbine cycle power plant will be installed in the second phase, said Surin Vichian, project manager of ITD.

He said the 4,000-MW coal-fired power plant is likely to be installed in the third phase.

A corporate social responsibility (CSR) unit was established in December last year. About 4,400 households in 16 villages - about 30,000 residents - are needed to be moved out of the project area to other areas, arranged by the Myanmar government. Under the agreement, ITD will have to build residential areas and township, accommodation infrastructure, power and water supply, school, hospital and public areas.

Nophadol Brisksavand, ITD's senior adviser on environment for the Dawei Project and also head of the CSR team, has worked with his team for a few months, trying to build good relations with local residents. He has tried hard to explain to them the benefits they can get from the project.

"We give them seeds of kitchen plants such as papaya, gourd, corn and chili. We also train them how to grow these plants," he said.

New relocation areas are Bawah, Pagaw Zoon and Pad din In. Now, ITD is engaged in negotiations with residents to move to those prepared areas. Compensation is also being processed for 5 per cent of total areas to be paid. In the first phase, 1,800 households in five villages living in the area designed for the heavy industrial zone are scheduled to move to the Bawah area. For these people, 434 new houses are expected to completed in October, said Panno Kraiwanit, project manager for infrastructure development of ITD.

He added that all residents should be moved to the new relocation areas by the end of next year. He said the newly built houses will be of different sizes with utilisation space of about 130sqm, 150sqm and 190sqm respectively. Each will be built on 185 square wah of land (1 wah is 4 sqm), arranged by the Myanmar government and paid by ITD.

Compensation, depending on the types of plants on the land, range from 1.5 million kyats (Bt840,000) to 3 million kyat per acre, said Nophadol.

A local woman, who works at the ITD site in Dawei, said that her house is in an area from where it will be relocated. But she is satisfied with a new house in a new area. She said that local people who had already been paid compensation had spent most of their money on buying motorcycles and gold.

A merchant in Dawei town said that he is happy with the project as it would help grow the economy there, though there are some opposing voices. But, there was a look of dissatisfaction among some residents living along the road to the Bawah relocation area when an ITD pickup truck drove past, a Thai media cameraman said.

Meanwhile, ITD has speeded up work on the deep seaport, industrial estate complex and road link to Thailand.

DEEP SEAPORT

For the seaport, the design has already been completed for the first and second phases with investment value of US$1.2 billion and US$600 million, respectively, said Ruangrit Sornnarai, project manager for the deep seaport.

He added that the project will commence in November and all phases are planned to be completed in 2015 as previous targeted. The third phase is in the design process, and is expected to be completed soon.

Eugene Tan, senior general manager (projects) of Global Maritime Port Services, an adviser to the Dawei deep seaport design, said that the adjusted design of the port with an L-shaped berth will help save millions of US dollars and also save the environment. A 10km stretch of beach would have disappeared with the previous design.

Ruangrit added that a small seaport with the capacity of handling up to 5,000 tonnes of vessel is now available for use. ITD uses this port to ship equipment and machinery for constructing the deep sea port, including cement and building materials, from Ranong and Trang provinces, to the project site.

An ITD official at Dawei site said in regard to a delay in the project - previously scheduled to commence at the beginning of this year - that there are many factors from the process of design, sectoral agreement framework to loans application.

ROAD AND RAIL LINK

ITD has now completed a 132-km-long access non-asphalt road linking Phu Nam Ron to the Dawei Project. Travelling from Bangkok to the Dawei Project takes about seven and a half hours. When completed, the Dawei-Phu Nam Ron highway will have four lanes, with some parts elevated and 750-metre tunnels in stages.

Other infrastructure to support the project include plans for an international airport in Dawei, which ITD is expected to build. A small dam six metres high is expected to be built to supply water to the industrial zones. This dam is designed for irrigation, not for power generation. However, there is an effort to encourage a Thai airline operator to open regular flights using a 12-seat aircraft between Bangkok and Dawei.

Many multinational firms have expressed interest to participate in the project. But, most of them are still waiting to see a clear picture of the project without local political certainty and local resistance.