Dawei SEZ draws investor interest, but lacks infrastructure

Fishermen carry the fishing nets at the Maung Ma Kan village in Dawei city, Tanintharyi. Photo – EPA


Businesses from China, Thailand, Korea and Japan, including those from the power and logistics sectors, have said they are keen to invest in the Dawei Special Economic Zone (SEZ) in Tanintharyi, which is near the Thai border.

Investor interest in Dawei, which has yet to be developed, has been on the rise since Myanmar and Thailand agreed to speed up development of the SEZ during the 9th Myanmar – Thailand Joint Coordinating Committee meeting last month.

“Power companies from China, steel firms from Thailand and logistics firms from South Korea have said they want to make site visits as they are interested to invest,” said U Myint San, vice chair of Dawei SEZ Management Committee.

Although official invitations have yet to be sent out, China’s V Power, which will import liquefied natural gas (LNG) into the country next year, has voiced interest in the SEZ, as has China National Technical Import and Export Corp (CNTIC), which is also interested in selling LNG to Myanmar and its neighbours.

“CNTIC has had discussions with the government on supplying LNG which can be converted into energy due to the electricity shortage in Myanmar. They plan to transport the LNG to Myanmar using gas tankers and set up base in Dawei SEZ,” U Myint San said.

The other Chinese energy and power firms are Power China International Group, China Tianchen Engineering Corporation and TBEA Xi’an Electric Technology Co.

Korean logistics firm Hyundai Glovis is keen to offer logistics and transportation services to the SEZ, linking it to Bangkok via land and to Thilawa SEZ in Yangon via and land and sea, it said.

Meanwhile, Thai firms are interested in steel production at the SEZ. “Given that steel requirements in both Thailand and Myanmar are high, they want to build steel mills in Myanmar,” said U Myint San.

Unlike the Thilawa SEZ, which draws investors from the manufacturing sectors, Dawei SEZ is expected to become a hub for heavy industries, such as steel and petrochemical processing to operate.

Investors keen to operate in Dawei now will have to contend with the lack of infrastructure though. “We have so far not been able to provide the infrastructure that investors require. We are taking efforts to develop basic infrastructure like roads over the next 3-5 years,” said U Myint San.

The government says preparations are being made for basic infrastructure such as roads connecting the SEZ to Thailand. Meanwhile, necessities like electricity will be prioritised and carried out simultaneously with as little delay in between as possible.

Currently, Myanmar is building a 138-kilometer, two-lane highway linking Dawei to Htee Khee at the Thai border using funds borrowed from Thailand. Meanwhile, work will start to extend and link the national grid to Mawlamyine, Ye and Dawei by 2021-22, enabling Dawei SEZ will to enjoy access to electricity. Funding will be provided by the Asia Development Bank.

In the meantime, land lease rates at the SEZ will be reduced for investors. “We have to provide basic infrastructure such as roads and water and electricity supply. It will take about three years to complete. Investors will need to build their own power and water generation facilities if they want to operate now. For these companies, we will reduce the land lease price at the SEZ,” U Myint San said.

In Thilawa SEZ, the land lease price is US$80 per sq m, so prices at the Dawei SEZ will be much lower for investors who want to come in now, as it is unable to provide infrastructure, said U Myint San.“They can also invest three years later, when the infrastructure is ready.”

The Dawei SEZ, which includes a deep sea port, will be developed across 196 sq km of land in two phases. It was first announced in 2008 but failed to start when the developer, Italian-Thai Development Co, ran short of funds. Besides the port, other projects to be developed in the initial phase include an industrial estate and supporting infrastructure such as a power plant and LNG terminal. – Translated


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