Sufficient time
needed to do it right
The
capital-intensive Dawei project in Myanmar needs time to ensure adequate
preparation, while investment and assurance from relevant governments are also
critical, says the Asian Development Bank.
The
ADB, which is part of the Greater Mekong Subregion secretariat, has concluded
that the GMS's Southern Economic Corridor should be extended to include Dawei
on Myanmar's eastern coast, said Arjun Goswami, the bank's director of regional
cooperation and operations coordination in Southeast Asia.
But
he said this type of large infrastructure project requires time for good
preparation and careful planning.
For
example, the preparation stage for the Nam Theun 2 hydropower project in Laos
lasted 10 years.
"The
project needs to complete all feasibility studies including environmental and
social impact assessments as well as due diligence. You should not rush into
it," Mr Goswami told Euromoney's Greater Mekong Investment Forum.
The
two-day event ended yesterday at the Centara Grand & Bangkok Convention
Centre at CentralWorld.
Dr
Goswami added that the Dawei project is critical for the GMS's credibility, as
failure will damage the group's reputation.
However,
the Dawei project may not need all of the planned elements to succeed, said
Kenneth Stevens, the managing partner of Leopard Capital LP, an investment
manager providing financial and operational support to small and medium-sized
enterprises in frontier markets.
He
said while the deep-sea port and roads are important, a coal-fired power plant
may not be the right option, what with renewable energy becoming "more
interesting", said Mr Stevens.
The
power plant could even be located somewhere else in Myanmar besides Dawei.
High-profile
Italian-Thai Development (ITD) is under pressure to move the Dawei project
forward, or else Myanmar could turn away from Thai contractors and look to
Japan or South Korea instead, said Mr Stevens.
ITD,
Thailand's largest contractor, has been awarded a concession to develop the
Dawei Special Economic Zone including infrastructure such as a deep-sea port,
power plant and steel mill.
The
company earlier admitted it has tried its best to "involve" other
Asean governments in the project, especially Singapore, as well as Europe.
Financial
support from international institutions such as the World Bank is also being
sought.
The
ADB's Dr Goswami said the Dawei project will require public investment and
assurance from relevant governments in order to attract multilateral agencies
and private investors.
Myanmar
is the only Asean country that is not a member of the Asean Infrastructure
Fund, which was set up last year to invest in regional Dawei-scale projects.
The
latest developments in Myanmar are encouraging, but the final shape of reforms
has yet to be seen, said Dr Goswami.
Helen
Han, the head of International Finance Corporation's Bangkok office, said
despite retrenchment from the European debt crisis, huge amounts of equity
remain available for Asean infrastructure projects.
"There
is a lot of capital out there if we want to raise funds, but it lacks bankable
projects," she said.
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