Myanmar Raises Doubts on Italian-Thais $8.

6 Billion Port Plans

By Flavia Krause-Jackson and Daniel Ten Kate - May 3, 2012 10:02 AM GMT+0630 Myanmar President Thein Seins top political adviser questioned Italian-Thai Development Pcl (ITD)s ability to oversee a planned $8.6 billion industrial zone in the country, raising doubts about the Dawei projects viability. Executives at Thailands biggest construction company havent much experience in developing such a very big special economic zone, presidential adviser Ko Ko Hlaing said yesterday in an interview in Yangon, Myanmars biggest city. We need other big investors. Thein Sein pitched both Dawei, 300 kilometers (186 miles) west of Bangkok, and Thilawa, a port 25 kilometers south of Yangon, to Japanese investors during meetings in Tokyo last month, he said. The trip ended with an agreement for Japan to study Thilawas potential that made no mention of Dawei. Italian-Thai has struggled to win financing to build the Indian Ocean industrial hub that it was awarded a concession to develop in November 2010, before Thein Sein took power as Myanmar shifted from five decades of direct military rule. Earlier this year, Myanmars government told reporters it canceled plans for a 4,000-megawatt coal-fired power plant on the site without informing the company in advance. Italian-Thai helped build the infrastructure for Map Ta Phut, Thailands biggest industrial estate, and can handle the project in Myanmar, according to Somchet Thinaphong, managing director of the Dawei Development Co., a unit of the company. Every project of this scale needs multiple investors to be successful, he said by phone today. Global Project This is a global project, its an international project, Somchet said. One company cannot handle. Italian-Thai shares have climbed 2.2 percent this year, compared with a 21 percent gain for Thailands benchmark SET index. The company has reported a loss three of the past four years, according to data compiled by Bloomberg. Five days before Myanmar held elections in 2010, Italian- Thai signed an $8.6 billion contract with the government to build a deep-sea port and industrial estate, according to Vice President Anan Amarapala. The company expected to secure at least $12.5 billion in loan agreements this year to develop the project, Chairman Premchai Karnasuta told reporters on Dec. 26. The Asian Development Bank would find it hard to lend money for Dawei given concerns about how this project should move forward, Craig Steffensen, the banks Thailand country director who also oversees Myanmar, said in April. To contact the reporters on this story: Daniel Ten Kate in Bangkok at dtenkate@bloomberg.net; Flavia Krause-Jackson in United Nations at fjackson@bloomberg.net To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net