Italian-Thai Development Plc (ITD), the contractor for the Dawei deep-sea port project in Burma, said on Wednesday that the gradual withdrawal of its Burmese partner in the US$ 50 billion project should not affect the viability of the project, although it might set it back temporarily.
Italian-Thai has been struggling to find financial backing for the 250-square-kilometre complex on Burma’s southern coast that is planned to include a deep-sea port, steel mills, refineries, a petrochemical complex and power plants. It is designed to provide a cheaper transportation route for energy and other material to Southeast Asia.
Somchet Thinaphong, the managing director of the Dawei Development Co. Ltd, said a gradual withdrawal by the Burmese strategic partner is unlikely to affect the project’s long-term viability, according to an article on Thursday in The Bangkok Post.
“The viability of such a capital-intensive development project is largely dependent on fund sourcing,” he said. “The local company, or even Ital-Thai, does not have the financial capacity to fund such a massive development project. We have to bank on others to provide us financial support.” The company has been in talks with various governments and other groups in an effort to line up financing.
However, the company said the withdrawal of the local partner raises "questions" about connections in Burma.
The Burmese partner, the Max Myanmar Group, which owns 25 percent of Dawei Development Co Ltd, said on Wednesday it had decided to pull out of the huge development project. Ital-Thai said it will keep 51 per cent of the that company.
Zaw Zaw, the owner of Max Myanmar, is one of Burma’s most influential businessmen who had close ties to the former military regime and to the current government.
The project was agreed to with the military government that ruled Burma until March 2011. The Burmese energy minister said last month two other development zone projects would proceed faster than the Dawei project.
In May, Thailand approved a budget of 33.1 billion baht for infrastructure in the west of the country that would provide links with the border area by Dawei, saying many Thai firms want to set up in Dawei and the government had to offer support for that investment.