May 5, 2011

BBC report: New Myanmar port 'to become trade corridor'

The BBC's Vaudine England has been finding out why a Thai company is blasting 20 tunnels through the mountains in order to edstablish a crossing through the Thai-Myanmar border.

Thai government says the project will provide a new trade lane between East and West. Ital-Thai Development, Thailand's half-century old construction firm, is building a deep-sea port linked to an industrial estate, with oil and gas pipelines, roads and railways on 40,000 hectares in Dawei, previously called Tavoy, in southern Myanmar.

The project will cost up to $10bn and offer hundreds of thousands of jobs.

Its builders say the Dawei Development Project will change the shape of world trade.

A port on the south-western edge of mainland South East Asia would allow goods which are currently shipped from China, southwards around Singapore and through the Malacca Straits, to reach Suez and Europe by skipping a whole loop of sea travel.

'Trade lane'

The Dawei contract, which gives a 75-year concession, was signed between Ital-Thai and the Myanmar government on 2 November last year - just five days before elections organised by the military, and after only eight months of serious negotiations.

The investors will not be drawn on exactly how much progress has been made on the road, what clients had been attracted or even on who their Burmese partner might be. But that has not stopped them making some bold claims.

Key to the project's inception is what Thailand's Deputy Commerce Minister Alongkorn Ponlaboot calls its "connectivity".

"It is going to be the international trade lane for the East and the West," Mr Alongkorn said.

"It's going to be one of the biggest projects and investments in South East Asia within a decade, but it will [provide] benefits for all, not only Asean (the Association of South East Asian Nations) but in South Asia, in the Middle East, Europe and Africa, and also East Asia and Asia-Pacific," he said.

As such, Dawei carries echoes of a century-old plan, never implemented, to build the Kra Canal - a Panama-like shipping channel across the long narrow peninsula which is home to southern Thailand and north Malaysia.

Somchet Thinapong says his company has faith in the Myanmar political leadership Somchet Thinapong, managing director of the project at Ital-Thai Development, described the Kra idea as "basic logistic flow".

The new project, he said, combined logistic flow with what he called "a strategic production base".

Both Mr Alongkorn and Mr Thinapong point to Myanmar's accession to the Asean Economic Community idea, meant to be implemented by 2015.

They predict the passing of a law to create Special Economic Zones, just as China once did to create what is now the economic powerhouse of the south Chinese coast.

'Trust and confidence'

The project's designers say the nature of the Myanmar state, where decades of military rule have recently given way to a nominally civilian administration, is a good thing.

"That's one part of what I like about [the] army's line...," said Mr Somchet. "When [the] army rules and if they know what they're doing, it seems that they get job done, you see," he said.

Describing the system as "highly comfortable to deal with", he said he did not expect political issues to impact on the project's development.

"We have faith, trust and confidence in the leadership that we did not expect to have ...the project can go on. Nothing political," he said.

The deputy commerce minister, Mr Alongkorn, praised what he called the development of democracy in Myanmar. "We try to separate our economic co-operation [from] politics," he said.

Source: BBC