A special-purpose vehicle (SPV) and the scale of investment in Myanmar's Dawei megaproject must be settled before a framework for the partnership deal is signed, says Deputy Prime Minister Kittiratt Na-Ranong.
The joint subcommittee on Dawei chaired by Mr Kittiratt agreed on Thursday that consultants should be hired to study a proper location for the management office and whether the SPV should be set up in Thailand, Myanmar or a third country.
The Fiscal Policy Office (FPO) has suggested the SPV be registered in Thailand in the form of a mutual fund or government infrastructure fund.
But Mr Kittiratt, who is also the finance minister, said relevant agencies such as the FPO and the Securities and Exchange Commission are required first to study an appropriate type of investment, the mechanism of fund-raising, the investment scale of the project and where to register the SPV.
"Consultants are needed to make sure Thailand's investment in Dawei is worthwhile," he said.
Mr Kittiratt said the SPV should be set up before a new partnership framework is inked.
Myanmar has sought to modify the Dawei deep-sea port and special economic zone contract, planning to have a holding company handle the investment instead of Italian-Thai Development Plc (ITD).
The new company will probably be formed by Thai state-owned enterprises, Japan's investment organisation, the Myanmar government and ITD.
After a meeting with Japanese Prime Minister Shinzo Abe on Thursday, Prime Minister Yingluck Shinawatra said Japan's government may invest and become a strategic partner in the deep-sea port and industrial estate in Dawei, easing concerns about the project's funding and viability.
Mr Kittiratt said ITD will remain active in the project, as the company will be responsible for building roads linking the Thai border to Dawei, small ports and other facilities.
The latest study by the Thai government's planning unit raised the estimated investment cost for the Dawei project to nearly 325 billion baht from 200 billion projected two years ago by ITD.
Of the total, 249 billion baht would be spent in Myanmar and the rest in Thailand.
The first phase requires 205 billion, with the second phase using the rest.
The project is estimated at US$8.5 billion for infrastructure in the first phase including roads and the port.
When heavy-industry programmes such as refineries and steel mills are included, the cost rises to $50 billion.
About the author
- Writer: Chatrudee Theparat
Position: Business Reporter