Myanmar’s huge Dawei project falls asleep

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DaweiThe $10.8-billion industrial zone project plus deep-sea water port in Myanmar’s southern town of Dawei has stalled because of financing uncertainties and a potential miscalculation of the return on investment.

Thailand’s transport minister Chadchat Sittipunt, who heads a committee on infrastructure development in Dawei – as the project is spearheaded by Thailand’s construction giant Italy-Thai Development – admitted on February 11 that there are major disagreements between Thailand and main Dawei investor Japan.

There are also no clear strategies for fundraising for the the project, the minister added. The Japanese government was “no closer” to making an investment commitment and it would take at least a year before Japan can make a decision on investing.

Thailand’s Office of Transport and Traffic Policy and Planning has said it will have to conduct a new feasibility study on several aspects of the projects, as Japan disagrees on Ital-Thai’s planning of the location of the port and infrastructure details.

There is also missing information from the Myanmar government, for example to calculate utility rates which potentially affects the time in which a return on investment can be made.

The Dawei project has been long in discussion over exploding costs. Originally, the first project phase was set to be completed by 2015 at an investment of $6.8 billion while the second phase from 2016 to 2020 would need an additional $4 billion, see our earlier story.

 

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Reading Time: 1 minute

The $10.8-billion industrial zone project plus deep-sea water port in Myanmar’s southern town of Dawei has stalled because of financing uncertainties and a potential miscalculation of the return on investment.

Reading Time: 1 minute

DaweiThe $10.8-billion industrial zone project plus deep-sea water port in Myanmar’s southern town of Dawei has stalled because of financing uncertainties and a potential miscalculation of the return on investment.

Thailand’s transport minister Chadchat Sittipunt, who heads a committee on infrastructure development in Dawei – as the project is spearheaded by Thailand’s construction giant Italy-Thai Development – admitted on February 11 that there are major disagreements between Thailand and main Dawei investor Japan.

There are also no clear strategies for fundraising for the the project, the minister added. The Japanese government was “no closer” to making an investment commitment and it would take at least a year before Japan can make a decision on investing.

Thailand’s Office of Transport and Traffic Policy and Planning has said it will have to conduct a new feasibility study on several aspects of the projects, as Japan disagrees on Ital-Thai’s planning of the location of the port and infrastructure details.

There is also missing information from the Myanmar government, for example to calculate utility rates which potentially affects the time in which a return on investment can be made.

The Dawei project has been long in discussion over exploding costs. Originally, the first project phase was set to be completed by 2015 at an investment of $6.8 billion while the second phase from 2016 to 2020 would need an additional $4 billion, see our earlier story.

 

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