The investment cost for the Dawei megaproject in Myanmar has been increased to nearly 325 billion baht to reflect higher construction costs, according to the latest study by the government's planning unit.
The National Economic and Social Development Board (NESDB) yesterday reported to the House Standing Committee for Industry that the new cost for the deep-sea port and special economic zone is estimated at 325 billion baht, up from 200 billion baht projected two years ago by Italian-Thai Development Plc (ITD).
NESDB deputy secretary-general Chanvit Amatamatucharti said 249 billion baht will be spent in Myanmar and the rest in Thailand.
The first phase of the massive project requires about 205 billion baht, while the cost for the second phase is 120 billion.
These include eight projects including the first phase of the deep-sea port costing 45 billion baht.
A road link from Dawei to Ban Phu Nam Ron in Kanchanaburi will cost 35 billion baht, while 5 billion baht is required for telecommunications.
Reservoirs will cost 14.2 billion baht, while 65 billion will be spent on double-track railways.
About 20 billion baht will be spent on industrial estates, with 32 billion earmarked for power plants.
The investment in Thailand includes 45.5 billion baht for a motorway from Bang Yai in Nonthaburi to Kanchanaburi and 9.87 billion for a motorway from Kanchanaburi to Ban Phu Nam Ron border checkpoint.
About 20 billion baht will be invested in double-track railways.
Mr Chanvit said special purpose vehicles for investments in Dawei will be set up within three months.
Myanmar is seeking to modify the Dawei contract to have a holding company or special purpose vehicle set up to handle the investment instead of ITD.
The new company will probably be formed by Thai state-owned enterprises, Japan's investment organisation, the Myanmar government and ITD.
Myanmar is worried about the long delay to the project.
"The investment is the initial projection. During the project implementation, the actual cost might be higher than that," Mr Chanvit said.
Ekniti Nitithanprapas, deputy director-general of the Finance Ministry's Fiscal Policy Office, said the ministry plans to finish finalising investment mechanisms for the Dawei project within two months.
Chalermkiat Salukkum, the managing director of Laem Chabang port, said Dawei is a very interesting project, as its port will be more than 20 metres deep and will link the Indian and Pacific oceans.
He said a preliminary feasibility study showed the project's priority industry should be steel, followed by petrochemicals and supporting sectors.
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Article source: http://www.thethailandlinks.com/2013/01/10/dawei-cost-estimate-up-to-b325bn/
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