Tuesday, March 12, 2013

ITD ‘relieved’ that Dawei project is moving ahead

Tuesday, 12 March 2013 11:59 THE BANGKOK POST

Thai Development (ITD) will hold at least 25% in each of the eight Myanmar joint ventures to develop infrastructure at the massive Dawei Special Economic Zone and deep-sea port.

President Premchai Karnsasuta said the Thai contractor is pleased and relieved the Thai and Myanmar governments are supporting the project in eastern Myanmar so that ITD is not expected to shoulder much of the financial burden.

Both governments agreed a Special Purpose Vehicle (SPV) will be set up with the Thai and Myanmar sides holding a combined 60%, with the rest from Japan and South Korea.

"China has also expressed interest in participating, as have other countries," he said.

These eight Special Purpose Companies (SPCs) would be set up to manage infrastructure projects including the deep-sea port, rod and rail links, power plants, water facilities, industrial estates, a telecom network and the township.

Dawei Development (DDC), which was set up by ITD to manage the project and holds a 99% stake, will be transformed to an SPC, Max Myanmar, one of the country's largest business groups, holds the [remaining] 1% stake in the project.

ITD has invested US $200 million in the Dawei project the past two years and will convert those investments into equity for each infrastructure, said Mr Premchai.

"Japanese lenders are ready to finance the projects that Japanese investors back," he said.

The Japan International Cooperation Agency has agreed to finance up to 80% of the $2.5 billion required for the road link and port, while the Japan Bank for International Cooperation will support power plants that require $10 billion for coal-fired generators only.

Power plants generating 7,200 megawatts are planned, of which 4,000 MW will be used in the SEZ.

Around 3,000 MW will be coal-fired generators and 1,000 MW will be fuelled by liquefied natural gas (LNG).

The remaining output of 3,200 MW still needs to be discussed by the governments.

ITD is scheduled to sign an agreement next week with the world's largest LNG supplier for a joint venture LNG terminal at Dawei.

The 280-MW gas-fired terminal will be operational in 2014, with the first coal-fired unit coming onstream in 2017.

Shares of ITD closed yesterday on the SET at 7.40 baht, up 15 satang, in trade worth 577.96 million baht (US $19 million).

This article first appeared in The Bangkok Post on March 12, 2013.
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