Thai Developer Touts Burma Port Project – The Irrawaddy

June 8th, 2011

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http://www.irrawaddy.org/article.php?art_id=21452

Premchai Karnasuta talks to journalists in Bangkok on Wednesday (Photo: Simon Roughneen)

BANGKOK — “A gateway to Indochina and south China” and “a short-cut pioneer of global transformation”—that is how the Thai conglomerate responsible for developing the Dawei (known as Tavoy in Burma) port project in southern Burma described the complex in Bangkok on Wednesday.

Speaking at a conference organized by the Italian-Thai Development Public Company, which was selected to run the US $8 billion project on Nov. 2, 2010, the company’s president, Premchai Karnasuta, painted an impressive picture of what it will mean for Thailand and the region.

“When completed, Dawei will save time and money, cutting four to five days off import and export calendars,” said Premchai.

As things stand, Thailand’s overseas exports are sent around Singapore via the Strait of Malacca—a narrow and congested sea lane through which 50 percent of the world’s maritime trade passes—before being shipped to the West and elsewhere.

Three and a half years after the Burmese and Thai governments signed an agreement to jointly develop a port project at Tavoy in southern Burma’s Tenasserim Region, Italian-Thai is billing it as a major turning point for Burma and its more economically advanced neighbors.

If completed according to current plans, the facility will measure 250 square kilometers (100 square miles) and comprise deep-water harbor facilities, an oil refinery and an industrial estate—all linked by road to Thailand’s capital Bangkok, with transport infrastructure running alongside oil and gas pipelines.

“It could be the world’s biggest industrial estate,” said Somchet Thinaphong, the managing director of the Dawei Development Co Ltd, a subsidiary of Italian-Thai.

Officials from Thailand’s Ministry of Finance and National Economic and Social Development Board spoke of the project as a potential global fulcrum for trade, linking East and Southeast Asia to distant markets and investors, from India to the Persian Gulf and beyond.

The project’s backers hope to link into Chinese rail projects underway or proposed for mainland Southeast Asia, as well as port development plans close to Vietnam’s commercial capital, Ho Chi Minh City.

The Tavoy port and its oil and gas facilities could also provide a new route for energy supplies coming from the Middle East and Africa, akin to the pipeline being built to link the port of Kyaukpyu in western Burma’s Arakan State with Yunnan Province in southern China.

With this in mind, Somchet said the project would have “geo-economic and geopolitical implications,” highlighting the growing importance of the Indian Ocean in world affairs.

Though the details were left unexplained, it was claimed that the new project would also result in an increase in tourism for this remote part of Burma, which features pristine white-sand beaches.

The discussion made only passing reference to the social and environmental impact of the project, which some observers fear will be enormous. Speaking to journalists and others in attendance today, the developers cited only plans for a waste-water management system as part of a proposed gated-community-style residence for workers who will move to Tavoy once the project is fully operational.

However, in its promotional literature, Dawei Development Co discussed a relocation plan for Burmese residents of the area who will be affected by the project, saying that “the relocation assessment plan will be conducted with the support of the Myanmar [Burmese] Government” and will be “developed with the local people based on a two-way communication scheme.”

Italian-Thai estimated that the project could generate 100,000 jobs, and officials today said that one of the attractions of Burma was its low-cost labor force, described as “the cheapest in Asia, even less than in Bangladesh.”

Despite being listed as the opening speaker, Burma’s ambassador to Thailand, Aung Thein, did not address today’s event, leaving the entire discussion to Thai representatives.

Among the issues discussed was the Dawei Special Economic Zone Law, which was promulgated by the Burmese regime on Jan. 27. The law aims to create a China-style foreign investment magnet around Tavoy, promising tax breaks for companies as well as speedy work- and trade-permit facilitation, and a promise from the Burmese government not to nationalize any industry or project established in the special economic zone.

Consultancy firm KPMG gave an overview of the legal context for investment in Burma, including a list of restrictions on foreign investment. However, no mention was made of Western sanctions on Burma, some of which prohibit investment in the country.

On the contrary, Premchai said that Burma is “beginning to open up,” adding that the Tavoy project “will help bring the country more investment.”

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