Dawei Economic Zone ‘Lacks Clarity’ as Another Thai Firm Claims Deal

By William Boot 7 March 2014

A little-known private company based in Bangkok is the latest to lay claim to becoming the major electricity provider for the Dawei Special Economic Zone—a project to build a regional economic hub in southern Burma that has generated much talk, but little action.

Andaman Power & Utility Company Limited says it has been chosen by the Burmese government to be the “sole electricity and utility provider” for Dawei and its surrounding district.

“We have also secured the natural gas feedstock from the Gulf of Martaban, thus enabling us to proceed with our power plant project with full confidence,” Andaman Power & Utility chairman Upakit Pachariyangkun in a statement posted on the firm’s website.

It is understood he is referring to the offshore Zawtika gas field in Block 9 of Burma’s territorial waters, which is being developed by Thai government-owned PTT Exploration & Production. The field was originally due to begin producing gas at the end of 2013 but is now expected to start up this in the coming weeks.

Andaman Power will proceed with the power plant development for Dawei “at a fast pace,” Upakit said in the announcement.

Some media reports in Burma last week said the Ministry of Energy was planning this month to sign a memo of understanding with a firm named as “Admin Power & Utility”—likely a mistaken reference to the same company—to build a 500-megawatt natural gas power plant in Dawei, although a first phase target would be for only 50 megawatts.

A 500 megawatt plant would be equivalent to 25 percent of Burma’s entire existing electricity generating capacity and would require investment of several hundred million US dollars, plus specialist construction skills.

Only last November, the leading business news agency in Japan, Nikkei, reported that Tokyo conglomerate Mitsubishi was teaming up with the Electricity Generating Authority of Thailand (EGAT) and Bangkok construction firm Italian-Thai Development (ITD) to build a huge power plant complex at Dawei totaling 7,000 megawatts.

It cited the governor of EGAT, Soonchai Kumnoonsate, as the source of its report, saying the complex would be fueled by a combination of coal and natural gas. More than half of the electricity was to be transmitted to Thailand to help recover the US$9.85 billion cost, said Nikkei.

The first electricity from a first phase start-up would be in 2015, said Nikkei, but nothing more has been heard of this project.
ITD held the main contract for Dawei’s development for several years but failed to find backers to help finance it.

Andaman Power says on its website it is a private company with offices in Bangkok, Naypyidaw, Dawei and Chiang Rai in northern Thailand, and claims to have “vast experience in the electrical and utility supply,” as well as business interests in mining, transportation, communications, hotels and tourism.

It says it supplies electricity to Burma’s northeast border town of Tachileik and claims to be the “top power provider” in Shan State. However, it’s not clear where Andaman obtains its electricity for Shan State. The company is an unknown in Thailand’s electricity generating industry.

Phone calls and emails to the firm’s Bangkok office this week by The Irrawaddy failed to obtain any more information concerning Dawei. Messages sent to Andaman Power’s email address were returned with a “no such recipient here” note.

“The only thing that can be said with any certainty about the Dawei SEZ and power projects is the lack of clarity about who is involved and who is doing what,” regional energy consultant Collin Reynolds in Bangkok told The Irrawaddy.

“I would say that Dawei is a distant third in the [Burma] government’s plans for SEZs after Thilawa in Rangoon and Kyaukphyu in Arakan State.

“There have been a number of foreign businesses involved in negotiations with the [Burma] government to develop power stations at Dawei, which is a prerequisite for the proposed port-industrial project there, but they have all come to nothing,” said Reynolds.

It started with ITD in 2011 proposing a massive 4,000 megawatts coal-fueled power plant as the centerpiece of its ambitious $50 billion complex including a deepwater port, warehousing, a steel factory, petrochemicals production, and a transshipment hub for piping Middle East crude oil to the greater Bangkok region.

That power project was refused by Naypyidaw after President  Thein Sein took office, reportedly on environmental grounds.

Until Thai Prime Minister Yingluck Shinawatra became mired in domestic political crisis with mass street protests against her which have disrupted state business, Thailand’s government had for the past 18 months been trying to push the Dawei SEZ forward, seeing it as offering a gateway to the Indian Ocean close to Bangkok only 300 kilometers away.

But the Thais have consistently failed to attract any major Japanese backing for Dawei beyond expressions of interest, and the SEZ plans continue to gather dust.

“Despite Thailand and the former military-ruled government of [Burma] signing a joint development agreement in 2008, and work on the SEZ beginning in 2010, there is still little to see at Dawei. The site houses a small port and a few simple buildings connected by dusty, unpaved roads,” said the Bangkok Post in a special report on March 2.