Tavoy Coal Plant Green Light if Electricity not Exported

One of the potential Thai partners in developing the planned special economic zone (SEZ) on Burma’s southeast coast says the Naypyidaw government has revised its ban on building a giant coal-fueled power station.

Bangkok’s state energy conglomerate PTT said the Burmese government is now prepared to permit a 4,000 megawatt capacity plant as long as none of the electricity is exported to Thailand.

In late January, the Burmese Energy Ministry shocked the chief concessionaire for the Tavoy SEZ construction giant Italian-Thai Development by blocking plans for the coal power plant on the grounds that it was an environmental hazard.

Burmese environmentalists petitioned the government to stop the plant. The decision has threatened to undermine the SEZ plans, which include a deep-see port, oil transhipment facilities and a petrochemical complex.

Italian-Thai had said it would consult potential development partners, which include PTT, to consider alternative energy sources to fuel the construction and operation and Tavoy, also known as Dawei.

PTT Chief Executive Pailin Chuchottaworn told Bloomberg financial news agency on Wednesday that the Burmese government is only “against the idea of exporting coal-based power to Thailand, but they will allow coal-based power for internal use.”

The Burmese government has not commented on PTT’s statement.

PTT’s subsidiary PTTEP, an exploration and production company, is developing several new gas fields in Burma’s offshore waters, notably the Zawtika block in the Gulf of Martaban.

Development Donors Queue to Offer Assistance

Two major potential economic reconstruction donors have made positive announcements this week about re-engaging with the Burma authorities.

The Asian Development Bank (ADB) said it is preparing to fund projects in the country after an absence of 25 years in the wake of recent political reforms.

“We have started exploratory work,” said ADB Managing Director General Rajat Nag.

“The development challenges of the country are huge [including] infrastructure and the social sector. They need a lot of support and capacity building,” Nag told Bloomberg financial news agency this week.

Separately, a delegation from the European Union Parliament has been visiting Burma to make assessments regarding the possible lifting of economic sanctions.

The visit, by 11 EU legislators, comes ahead of Brussels’s annual review of its sanctions imposed on Burma and its former military leaders.

The [EU] ministers of foreign affairs are scheduled to meet in April and I would bet that they would lift [the sanctions] gradually, especially if Aung San Suu Kyi will be elected,” legislator Robert Goebbels from Luxembourg told New York-based NTD Television on Wednesday.

“That would be a boost to relations between the European Union and Myanmar,” he said, adding that he believed there are no other hurdles.

The EU has already announced a two-year US $200 million aid package, but is expected to greatly bolster this with economic development help.

Nag said he was now seeking approval from the bank’s shareholders to provide assistance for infrastructure and development projects in Burma.

‘Formidable’ Infrastructure Problems Hamper Burma Revival

Despite having an economy in tatters, an incoherent exchange rate regime, weak investment laws and a crippled banking system, “there are no doubts about [Burma’s] potential,” says a report by a European think tank.

As governments and international donor organizations beat a path to Burma’s door, the European Union is especially well placed to help, the Brussels-based Friends of Europe study said.

“Europe has strong experience in implementation of poverty-alleviation projects and offers a lucrative market for [Burma’s] exports of timber, oil and gas, textiles, seafood, gemstones and manufactured goods,” it said.

However, poor infrastructure such as transport and low productivity in an agricultural sector which still employs two-thirds of the working population present formidable problems to resolve, said report authors Patricia Diaz and Shada Islam.

Asean Offers no Model for Burma on Rule of Law

Burma can expect little guidance from the Association of Southeast Asian Nations (Asean), which it will chair in 2014, as it embarks on major political and economic reforms, claims a regional legal expert.

“There is a disturbing lack of interest, or self-delusion, about the absence of the rule of law regionally,” said Barry Wain, of the Institute of Southeast Asian Studies in Singapore.

“Despite the adoption of a charter by Asean, the rule of law in the grouping is still more aspiration and ideal than reality,” he wrote for a conference on the rule of law.

“Since its founding in 1967, Asean has preferred what has become known as the ‘Asean Way’—informality and loose arrangements rather than treaties and formal agreements, consensus and dependence on personal relations among leaders, ministers and officials.”

Years after the Asean Charter was agreed in 2007, giving the organization a legal character, barely half of all economic agreements between the ten member countries have been implemented.

Burma Needs Experts to Build Two New Airports

Burma’s main airport in Rangoon will be inadequate to handle the growing volume of passenger traffic within two years, according to Civil Aviation Department Deputy Director Win Swe Tun.

He said a new international airport was needed and a site north of Rangoon at Hantharwaddy is being considered. Burma would also need an airport in the Tavoy area in the southeast to cater for the planned special economic zone development there.

Win Swe Tun said the government would welcome foreign investment and technical help in achieving the proposed new airports because “companies here have little experience in construction work for aviation projects.”