The Max Myanmar Group, a Burmese company, will no longer be involved in the Dawei project, a huge deep-sea port and industrial complex project in southern Burma, a business source in Rangoon told Mizzima on Monday.
The source, who is close to the group, said the company “had given up its stake.”
In January, Max Myanmar said it had agreed to acquire one-quarter of Dawei Development Company (DDC). Max Myanmar is owned by one of Burma’s most influential businessmen, Zaw Zaw, whose has close ties to the government.
Earlier, the Thai contractor, Italian-Thai, had said it will maintain at least a 51 per cent stake in DDC, but other partners are welcome, said Reuters news agency in February.
Work on the Dawei project in southern Burma has slowed drastically since a power plant designed to serve the area was cancelled in early January.
Reports say there is scant activity underway on the $50-billion project that is being built by Thailand's largest construction firm, Italian-Thai Development Pcl ITD.BK, to transform 250 square kilometres (97 square miles) into Southeast Asia's largest industrial complex, complete with a deep-sea port to serve as a hub for Southeast Asia.
Local residents said there has been little building going on in the area.
Super-highways, steel mills, power plants, shipyards, refineries, pulp and paper mills and a petrochemical complex are part of the planned project.
The former military junta signed a deal to the Dawei special economic zone, but Italian-Thai has yet to secure $8.5 billion to finance construction of its first phase – roads, a telecoms network, utilities and a port – after building a dirt road of more than 100 km (62 miles) to neighbouring Thailand. Officials said it hopes to find a strategic partner by year-end.
In February, Myanmar Energy Minister Than Htay told Reuters that at least two other special economic zones would be built more quickly than Dawei: the Thilawa project near the commercial capital of Rangoon, and Kyaukphyu, where the China-Myanmar pipeline starts and a deep-sea port is nearly finished.
“It is faster than the Dawei zone,” he said of Kyaukphyu. “Now we are considering supplying the electricity at Kyaukphyu area,” he said.
Burmese officials cancelled the construction of a 4,000 megawatt coal-fired power plant in the area on January 10, citing environmental concerns.
Somchet Thinaphong, managing director of Dawei Development Co Ltd, controlled by Italian-Thai, told Reuters on January 23 that its power plant partner, Ratchaburi Electricity Generating Holding Pcl RATC.BK, would decide on a fuel type within three months, including the possible use of natural gas funnelled to the site via a 50 kms (31 mile) pipeline from fields within Burma.
Than Htay said other ministries would decide Dawei's future, not his. But he offered his personal view of what the government will do: “My guess is sell out, according to the contract made by the previous government.”
However, Italian-Thai insists the project will go ahead.
Reuters reported that the Singapore stock brokerage DBS Vickers Securities recently highlighted the risks.
“Despite potential to bring economic prosperity to Burma, the project is still in its infancy and clouded with risks,” it said. “The sudden call to halt the 4,000 megawatt coal-fired power plant project would make it difficult for Italian-Thai to secure strategic partners to help fund the project.”