The halted multibillion dollar Dawei Special Economic Zone (SEZ) project is expected to resume by November as the government has invited two companies to submit closed tenders to complete the first phase of the project, a minister said.
U Han Sein, deputy union minister for transport and also the chairman of the Dawei SEZ management committee, told Myanmar Business Today that Italian-Thai Development (ITD) Pcl from Thailand and a Japanese company have been invited in a “select tender” process. A select tender is only open to a select number of parties as opposed to an invitation to tender by public advertisement in case of an open tender.
ITD got involved in the Dawei project in the 2010-11 fiscal year and agreed upon a framework of understanding with the Myanmar Port Authority to implement the project.
However, Thailand and Myanmar seized control of the project in November last year from ITD as the latter struggled to secure private financing for the ambitious project. Despite losing concession rights ITD still has the right to join auctions in several projects.
“Italian-Thai halted project activities due to its lack of capacity to manage the whole project. We have announced a select tender instead of an open tender and invited both ITD and a Japanese company.
“The tender is for seven projects, which the two companies should be able to handle jointly. The project is currently suspended to address compensation issues and will resume in October or November,” U Han Sein told Myanmar Business Today.
Phase one of the project includes building a deep-sea port, an industrial zone, commercial and residential infrastructure, hospitals and schools, markets, a highway and railway linking Thailand and Myanmar, and a gas pipeline along the highway route.
ITD, Thailand’s largest construction group, will be reimbursed for the work it has completed, officials said earlier. “The calculation of the value of ITD’s previous investment will be conducted before the end of August,” U Han Sein said.
Located along the Thai-Myanmar peninsular with highway links to industry hubs near Bangkok, initial cost for the Dawei Project was estimated at $8 billion, which later jumped up to somewhere between $50 to $200 billion. Myanmar and Thailand for long have courted Japan to be a partner for the project mostly because of the massive investment that is required for the project.
While Dawei languished because of lack of investor interest and the dearth of financing, another Japanese-backed SEZ project 25km from Yangon, Thilawa SEZ, is currently going ahead in full swing.