The companies – Special Purpose Vehicle (1) and (2) – would take over the project’s development from Italian-Thai Development Co., U Aye Myint, who also is the Union Minister for Labor, Employment and Social Welfare, told the news conference at the Myanmar Port Authority.
ITD would be allowed to continue participating in the project but would have to compete for bids against other potential investors, U Aye Myint said.
Tenders would be invited from other investors and companies because the amount needed to develop the project was huge, he said.
U Aye Myint said the suspension of work on the project did not mean that ITD was withdrawing completely. It was being suspended temporarily while a re-evaluation was being undertaken of the investment needed for the project.
The estimated cost of the first stage of the two-phase project – building infrastructure due to be completed by the end of 2015 – is US$8.6 billion.
The chair of the Dawei Special Economic Zone Project and Related Works Procedural Drafting Sub-committee, U Set Aung, said a due diligence audit would be needed on the work completed so far by ITD before other investors could be invited to participate in the project.
“No company in the whole world can do this project as the sole developer,” U Set Aung said, referring to the cost of the project, which has been affected by delays over financing.
“We need to determine how much the Italian-Thai company has invested in this project by a due diligence assessment,” he said.
Dawei Special Economic Zone Management Committee chairman and Union Deputy Minister of Transport Han Sein said the due diligence assessment would be conducted by world standard companies and the tender invitations would be issued next May.
The project involves building a deep-sea port and petrochemical and heavy industry facilities on a 250 square kilometre site.
The first phase of the project involves building a two-lane road, small port, and preliminary industrial zone, power plant, residential buildings and water supply system, as well as a city plan, and communication networks.
ITD would be allowed to complete the work it has begun on the preliminary residential buildings and water supply network, city plan and two-lane road but would have to compete against other tenderers for the other infrastructure, U Set Aung said.