The Myanmar Times
Slow progress on Dawei economic zone
Tanintharyi Region government officials say Japanese interest in the Dawei Special Economic Zone is mounting, but the project’s private developers want contracts tweaked.
PLODDING progress is being made on the long-delayed Dawei Special Economic Zone, according to Tanintharyi Region government officials, who are hoping the project will restart soon.
Regional government officials visited Japan last month to discuss that country’s potential participation in the SEZ and reported strong interest.
Tanintharyi Region Chief Minister Daw Lae Lae Maw and other region government officials visited Japan in January, and a special advisor to the Japanese Prime Minister Shinzo Abe visited Nay Pyi Taw on January 29 to discuss the zone, according to Daw Lae Lae Maw’s office.
Japanese Prime Minister Shinzo Abe confirmed back in 2014 he would support the economic zone, a joint project between Thailand and Myanmar that aims to link the Andaman Sea to Bangkok and the Gulf of Thailand.
But there has been no specific announcement on Japan’s investment in the zone.
Tanintharyi Region finance minister and vice president of the Dawei SEZ Management Committee U Phyo Win Tun, who was part of the Japan delegation, told The Myanmar Times that Japan was becoming more interested in the project, which would likely restart soon.
“We can’t announce what was discussed in the meetings with the Japanese government as there are still further discussions to take place between the SEZ committee and the regional government,” said U Phyo Win Tun. “But it is very obvious that Japan has become more interested in the project, and that’s a sign that we should restart it after its pause.”
In the last few months the SEZ committee has also had more interaction with Italian-Thai Development (ITD) Public Company, one of the firms forming a consortium of private developers that signed a concession agreement with the government in 2015, U Phyo Win Tun said.
The consortium includes ITD, Japanese-Thai joint venture Rojana Industrial Park Public Company and LNG Plus International Company, also from Thailand.
The Daiwei SEZ has been in the works for years. Myanmar and Thailand first signed a memorandum of understanding to develop the area in 2008, and two years later Myanmar granted a 60-year concession to ITD to develop a deep sea port, industrial estate, and road and rail links to Thailand.
ITD then withdrew from the agreement in 2013 citing financial difficulties, before resigning the concession agreement in 2015.
U Lay Lwin, a founder of local civil society group Dawei Development Association (DDA) that has campaigned for a transparency development process, said there has been no activity on the ground since 2013.
Although talks with the developer are moving forward, ITD “wants to amend some of the facts inside the contracts”, said U Phyo Win Tun, adding that the possibility of amending the contract had been discussed in the last two meetings between the committee and ITD, but exactly what the amendments would be is yet to be decided.
U Htay Aung, a spokesperson from the SEZ Management Committee President’s office, also said that Japan would likely get involved during the final phase of the SEZ’s development, but not the initial phase.
Consultant Roland Berger, which announced the new consortium in 2015, said at that time that the initial phase would focus on labour-intensive industries like garments. In the later phase development will move towards higher value-added sectors like electronics, fertilisers, and pharmaceuticals.
“Japan will get involve during the master plan’s final phase,” U Htay Aung said. “Before that the Myanmar and Thai sides have to fulfil some of the commitments they agreed in the past, such as interested companies submitting their environmental assessment reports. After that, the process will be implementing according to the contract between Myanmar and Thailand.”
DDA founder U Lay Lwin said that “if they are preparing to start development again, they have to make sure the compensation and relocation for the community is clear.”
The DDA published a report in March 2016 urging the SEZ’s Thai and Japanese investors to resolve problems affecting local communities before they continue.
The report highlighted a lack of transparency, dialogue with the local community and a clear policy on compensation.
A majority of households in the area depend on agriculture and natural resources including land, fish and forests, which provide food, income and employment to hundreds of families. The DDA report estimated that between 22,000 and 43,000 people from up to 36 villages will be affected.