Burma's president Thein Sein agreed Monday to jointly develop with Thailand a multibillion-dollar deep-sea port and industrial zone in Dawei, on the southern Burmese coast.
On the second day of his visit to Thailand Monday, Thein Sein and Thai prime minister Yingluck Shinawatra witnessed the signing of a memorandum of understanding for the development of a special economic zone for Dawei, with Bangkok agreeing to provide assistance in areas such as security and infrastructure.
The two leaders told a joint news conference in Bangkok they had agreed to connect the strategically located Dawei Economic Zone with industrial areas along Thailand's eastern seaboard, including the Laem Chabang deep sea port.
Bilateral ministerial-level contacts will be established to address issues related to the mammoth project from August, officials said.
Key details have not been revealed, including what level of support the governments would provide to the 250 sq km (97 sq mile) Dawei complex, a private initiative with plans to include steel mills, refineries, a petrochemical facility, and power plants.
A working group will look into issues related to the development of the project, including the securing of additional land needed for the development, taking into account the interests of communities living in and around the project areas, Prime Minister Yingluck Shinawatra was quoted by the Bangkok Post as saying.
"In this connection, the two sides agreed there would be connectivity between Dawei deep-sea port and Laem Chabang seaport in Thailand. This is in the joint interests of Thailand and Myanmar [Burma] and in the interest of the region," Yingluck said.
Thai plans to develop the port in Dawei on the Andaman Sea have been in limbo since the project's Burmese partner Max Myanmar pulled out of the venture earlier this month. Thein Sein's government also blocked a coal-fired plant to be built at the site and the project as a whole had faced resistance from local villagers.
In addition, according to the Irrawaddy online journal, Burmese officials have publicly questioned the viability of Dawei, with other port and economic zone projects under development inside the country at Kyaukpyu in the Bay of Bengal near the Shwe Gas pipeline, and at Thilawa outside Rangoon while India is backing a new port and jetty at Sittwe in conflict-ridden Rakhine State.
The Dawei project was approved at the tail end of the Burmese military junta rule three years ago, before Thein Sein's nominally civilian administration took over in March 2011 and began implementing political and economic reforms.
On Sunday, Thai authorities took Thein Sein on a visit to the Laem Chabang port, about 100 kilometers (62 miles) southeast of Bangkok.
Linking Laem Chabang by road to the proposed Dawei deep seaport and industrial estate can cut transport time between central Thailand and India's Chennai port by avoiding the Malacca Straits straddling Malaysia, Indonesia, and Singapore, Thai officials have said.
Italian-Thai Development Pcl ITD.BK, Thailand's largest construction firm, which won a 60-year concession to build and operate the port and industrial estate in Dawei, is in talks with new investors to replace Max Myanmar Group in the project.
Italian-Thai was also seeking loans from Japanese investors to help finance the project.
Thein Sein's first trip to Thailand since taking power marks "a significant milestone" in bilateral relations, particularly in Bangkok's support for Burma's economic reform and development efforts, the Thai foreign ministry had said.
Thailand is Burma's second-largest trade partner after China.
Human rights groups have urged Thailand and other nations to be cautious in pushing investments into Burma, whose human rights record remains a concern.
"Prime Minister Yingluck should be cautious about encouraging more Thai investment in the absence of a functioning human rights safeguards and legal framework in Burma," U.S.-based Human Rights Watch said.
In the construction and maintenance of large-scale infrastructure projects, the Burmese military has a long record of carrying out serious violations, including forced relocations of civilians and systematic use of forced labor, it said.
Reported by RFA's Burmese service. Written in English by Parameswaran Ponnudurai.