Italian-Thai Development Pcl, Thailand’s biggest construction company, signed an $8.6 billion contract with Myanmar’s government to build a deep-sea port and industrial estate, Vice President Anan Amarapala said.
The project will be located in Dawei, less than 300 kilometers (186 miles) west of Bangkok, offering another route for exporters to ship goods to Europe and the Middle East. Financing for the agreement is still under discussion, Anan said.
“Thailand’s government has said they want to support the project, so Italian-Thai will discuss details with them,” Anan said by phone. “There have been no official talks yet.”
The planned project would be 10 times bigger than Thailand’s main port and industrial estate, according to Tanit Sorat, vice chairman of the Thai Chamber of Commerce, who has studied the proposal. Nippon Steel Corp., Japan’s largest steel maker, and PTT Plc, Thailand’s largest energy company, are also considering an investment in the project, Tanit said last month.
The project will include a coal-fired power plant, an industrial center, oil and gas pipelines and an eight-lane highway, according to Thailand’s National Economic and Social Development Board. It may benefit automakers and petrochemical companies looking to expand in the region, it said.
“Many private companies from Thailand and overseas would like to be involved in the Dawei project as developers or investors,” Chompunuch Ramanvongse, an NESDB analyst, said last month. “There is a possibility that Ital-Thai will form a holding company for the purpose of co-financing with those developers.”
Investors from China, Japan and Thailand have expressed interest in the project, Porametee Vimolsiri, the NESDB’s deputy secretary-general, said last month. The concession periods for the roads, ports and industrial estate would vary from 40 years to 60 years depending on the project, he said.
Italian-Thai’s shares have risen 85 percent this year, more than double the gain in the benchmark SET Index. The company’s shares increased 0.9 percent to 5.45 baht as of 10:48 a.m. after climbing 7 percent yesterday.
Italian-Thai executives signed the contract with Myanmar’s government on Nov. 2 at a ceremony in Naypidaw, the capital, Anan said. They can start minor construction work immediately while they complete the design work, which must be submitted for approval, he said.
Myanmar has struggled to contain dozens of armed ethnic groups, including the Mon National Liberation Army, which operates in the area of the proposed highway. The United Nations maintains a camp in Thailand near the planned route that is home to 5,000 refugees from Myanmar.
Italian-Thai was founded in 1958 through a partnership from business executives from Italy and Thailand. It oversaw the construction of Bangkok’s main international airport and elevated train line and operates in about a dozen countries around the region.