Dawei seizure claim stuns ITD

Dawei seizure claim stuns ITD

Unaware of any such decision by Myanmar

Italian-Thai Development Plc (ITD) is ready to defend itself if the Myanmar government decides to seize the concession of the Dawei megaproject awarded to the Thai contractor but says it has not been informed about any such decision.

Executives of ITD, Thailand's largest construction company, and Dawei Development Co (DDC) said they are surprised by remarks made by Thai Energy Minister Pongsak Raktapongpaisal that the Myanmar government is preparing to end the concession with ITD.

Mr Pongsak, who was recently named head of a special task force to kick-start the massive project in eastern Myanmar, said the Myanmar government plans to call for international bidding for Dawei early next year.

The Thai and Myanmar governments expect to reach an agreement on a financial adviser at a meeting of the Joint Coordinating Committee on Dawei and surrounding areas this month in order to conduct due diligence of ITD's assets in Dawei, said Mr Pongsak.

ITD was granted a 75-year concession from the Myanmar government to develop a special economic zone and deep-sea port in Dawei, but the project has struggled to get off the ground, given the massive investment required.

"We have no clue about such a decision by the Myanmar government," said DDC managing director Somchet Thinaphong.

"Both governments agreed this is a special-purpose vehicle (SPV) and that special-purpose companies (SPCs) will be set up to handle the investments in Dawei."

The SPV will be a joint venture between the Thai and Myanmar governments, with the Japanese government invited to join.

SPCs can be set up with investors including ITD itself investing in Dawei projects.

"Claims the Dawei project has progressed slowly from its original plan are defensible, I think. There have been delays on both sides, as Myanmar has been slow in granting permits," Mr Somchet told the Bangkok Post.

Kiwamu Honda, a senior adviser to DDC's chairman and an adviser to ITD's president, was also unaware of any news.

"If they made that decision, we should have been informed," he said, adding that so far complaints about project delays have not been an issue.

Mr Pongsak, who went to Dawei last week, said the Myanmar government wants to see progress on the project after several years of delays.

The National Economic and Social Development Board is studying what infrastructures should be developed at Dawei and what should be done next.

The Myanmar government wants only light industries such as textiles, food and electronic parts to be developed at Dawei, said Mr Pongsak.

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