Halt to coal-fired plant dampens future for Myanmar's Dawei project

Electricity supply has been Dawei's pressing problem since the government abruptly halted construction of a 4,000 megawatt coal-fired power plant on January 10.

The stoppage was based on environmental concerns.

"Up to now the electric power supply for that project is not sure," said Myanmar Energy Minister Than Htay.

Than Htay feels the government may sell out, according to the contract made by the previous government.

Italian-Thai , which signed a 60-year concession to develop Dawei 14 months ago, has brushed aside those comments. Somchet of Dawei Development Co insists the project will go ahead. "It's at the point of no return. They can say whatever they want but the final decision will depend on the special committee chaired by Myanmar's president," Somchet said.

Singapore stock brokerage DBS Vickers Securities highlighted the risks.

"Despite potential to bring economic prosperity to Burma, the project is still in its infancy and clouded with risks," it said. "The sudden call to halt the 4,000 megawatt coal-fired power plant project would make it difficult for Italian-Thai to secure strategic partners to help fund the project."

It described Dawei Development Co's plans to sell land in the area to raise funds for the project as "optimistic" and stressed that without strategic partners and firm funding, Dawei Development would remain a drag on Italian-Thai's earnings this year.

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