Shipping and logistics link between India and S-E Asia could rival S'pore
Nirmal Ghosh Straits Times 27 Jul 11;
BANGKOK: Sleepy, lush Dawei in Myanmar, with its narrow country lanes, crumbling colonial-era cottages and pristine white sand beaches, is set to be transformed in four years into a massive deepwater port and industrial zone connected eastwards to Bangkok by a double-lane highway.
Flying in the face of Western sanctions, the project is funded by Asian investors and aims to turn the rural landscape into a vital shipping and logistics link between India and mainland South-east Asia, and could have an impact on Singapore.
The huge project intends to capitalise on Asean's master plan for regional connectivity, and leverage on Myanmar's position at the crossroads of India, China and Asean.
Basic road-building has begun for the 250 sq km, US$8 billion (S$9.6 billion) complex, which will eventually include a 10,000MW coal-fired power plant, and an expanded eight-lane highway to Bangkok.
The first phase of the project by Bangkok-based Italian-Thai Development (ITD) will be ready in four years.
By 2015, a 230km, double-lane highway to the Thai border will be completed, said Dr Somchet Thinaphong, managing director of Dawei Development Company, which is ITD's vehicle for the project.
Basic infrastructure would be in place, he said, including roads, water, power, and berths capable of offloading heavy commodities such as coal and iron ore.
Myanmar is still hobbled by sanctions that severely restrict business with many Western countries, but the project's mostly Asian investors appear undaunted.
'It would be very much nicer if sanctions were lifted,' Dr Somchet said. 'Sanctions impart a negative image to the project, when we have to deal with consultants, contractors, banks and insurance companies in countries like Japan, and the European Union.'
The port and highway would shave seven days off the time it takes to transport goods between India and Thailand and
Vietnam. The Dawei-Bangkok road link will channel goods between Thailand's Map Ta Phut industrial zone and Laem Chabang port, and ports on the Vietnam coast. To the west, shipping lanes will link to Kolkata and Chennai in India.
Dawei is 1,600km north of Singapore, currently the main conduit for Indian and South-east Asian trade. Whether Singapore loses out will depend on the costs involved in the land route to Dawei as well as Myanmar's stability - particularly in the volatile border area, said Mr Khalid Hashim, managing director of Precious Shipping, Thailand's second-largest dry bulk shipping company.
'I don't think Singapore will lose transhipment traffic,' he said. 'There would be fewer handling charges, and no risk, on the Singapore route.'
Environmentalists and human rights watchdogs say they have concerns about Dawei. They charge that Thailand, already saturated with big power plants and large dams, is now investing in large projects in less-regulated places, like Laos and Myanmar.
A report released this week by the Burma Environmental Working Group said while Myanmar has laws protecting people and the environment, it 'lacks the necessary administrative and legal structures, standards, safeguards and political will to enforce such provisions'.
The project will dramatically alter the natural topography of the place and resettle 10,000 people.
It has already run into problems. Early this month, soldiers of the Karen National Union (KNU) reportedly blocked the construction of the highway to the Thai border. Reports said KNU and ITD representatives have since held talks.
Dr Somchet told The Straits Times in an interview at ITD's head office in Bangkok that 'some lawsuits' had been filed by locals against the company, which have led to renegotiating compensation and other relocation terms.
'We are aiming for a balance of social benefits, the environment and economic returns,' he said.
'Even the top people in Myanmar are concerned about the environment,' he claimed. 'But when you have a beautiful garden, you still have to occasionally mow the lawn.'
