The Dawei deep-sea port and industrial zone project took a new twist Thursday, as the Thai government insisted it cannot spend taxpayer money for private gains in Dawei.
“The government itself cannot invest directly in the Dawei project, as by practice the government cannot directly fund any business in the private sector,” said [Thai] PM's Office Minister Niwatthamrong Bunsongphaisan, speaking in his capacity as the project's coordination committee chairman.
“Investments in the project should be handled by Thai state enterprises or the private sector, with the government coordinating.”
He said such investments could come in the form of joint ventures for the various aspects of the project—port facilities, power plants, roads, high-speed rail or water supply.
State enterprises such as the Industrial Estate Authority of Thailand, for instance, could set up a joint venture with local or foreign partners to develop industrial estates in Dawei, while PTT Plc could invest in oil and chemicals.
The minister said the Yingluck Shinawatra government will continue building infrastructure such as the roads linking Kanchanaburi with the Myanmar border, and the private sector is also willing to contribute.
“The government has already made it clear to Italian-Thai Development Plc, the project developer, that the government cannot directly support the project,” said Mr Niwatthamrong.
“What the government can do is facilitate investment in the project.”
Nonetheless, his remarks seemed to contradict what Pansak Vinyaratn, an adviser to Ms Yingluck, said early last month.
He said the leaders of Thailand and Myanmar had agreed on a special-purpose vehicle, with stakeholders from Thailand, Myanmar and Japan managing and handling investment in Dawei.
Mr Pansak also said the Thai government may be called upon to give financial support for Dawei infrastructure projects.
A source with knowledge of Wednesday's meeting between the Thai and Myanmar governments said Myanmar proposed that eight joint venture companies be established to operate road, rail, water, power, industrial estates, a port, telecommunications, and relocating residents of the community of Dawei.
Narongchai Akrasanee, a member of the Bank of Thailand's Monetary Policy Committee, suggested the Thai government at least provide loans to Myanmar to develop infrastructure, similar to the soft loans offered to Laos and Cambodia to build roads and airports.
He said businesses could also ask for loans from the Asian Development Bank or the Japan International Cooperation Agency.
Somchet Thinaphong, the managing director of Dawei Development Co, which Ital-Thai set up to manage the project, reiterated the government needs to invest in infrastructure such as roads connecting Dawei and Bangkok.
“We're just waiting for money to be provided by the government in accordance with the memorandum of understanding signed in July,” he said.
In a related development, Viboon Kromadit, the director and chief operating officer of Amata Corporation Plc, said the company is conducting a feasibility study for setting up an industrial town in Myanmar.
“We're studying many options including Dawei—which is very interesting. But the politics must be stable first,” he said, adding that the study could be finished next year.
“What we are looking for is a good location that is convenient and near infrastructure.”
He said Thai industries appropriate for investing in Myanmar include those that Thailand is not able to support such as steel and petrochemicals.
This article was first published on November 9, 2012, in the Bangkok Post.