Myanmar: $9.5b for transport projects

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Much of Myanmar’s transport is done on waterways

The Myanmar government has allocated a total of 7.8 trillion kyat ($9.5 billion) to the construction and renovation of roads and bridges in the periods between 2012 and 2031, the Ministry of Construction recently disclosed to the public. This initiative is divided into four phases, the first of which from 2012 to 2016 will require 2.823 trillion kyat ($3.3 billion) of the budget, Thura Swiss, a Yangon-based consultancy, has reported.

In addition to being on the top of Myanmar’s investment agenda, the Asian Development Bank (ADB) has also placed the maintenance and construction of infrastructure on the top of their list of priorities for its country partnership strategy with the formerly junta-ruled country.

The lack of fundamental groundwork and transport connections are large concerns of foreign investors as well.

Infrastructure projects, the reformist government has stated, will play a crucial role in bridging Myanmar’s rural and urban divide and give the floundering economy more connectivity with its ASEAN neighbours.

PPP water and roadway possibilities

The infrastructure expansion portion of the government programme foresees 28 companies working with the government under build, operate and transfer (BOT) arrangements to complete 60 main roads measuring a distance of 4,700 kilometers. Companies entering into these contracts with Myanmar will be exempted from incomes tax for 30 years.

Beyond the development of domestic roads, Myanmar is looking to link up with international transport systems, preparing itself for the formation of the ASEAN Economic Community (AEC) in 2015.

Japan and South Korea have already signaled their interest to help expand three interstate highways in Myanmar from 3.6 to 7.2 meters.

For all of Myanmar’s size and vast economic potential in natural resources, it lags drastically behind other ASEAN nations in terms of roadway length. Compared to the 60 kilometers of road per 1,000 square kilometers in Laos and the 480 kilometers in Vietnam, Myanmar has only 40 kilometers.

The lack of water infrastructure in the country has also come under scrutinisation. Nyan Htun Aung, Minister of Transport, stated on October 28 that the ministry will partially privatise the Inland Water Transport Corporation, which is currently under the purview of the ministry.

Joint ventures will be formed to make some companies that are under the large Inland Water Transport Corporation economically independent entities.

Because inland waterways are already a major form of transport in Myanmar, which is endowed with one of the largest river networks in the world, this privatisation measure will offer opportunities for investors to tap into a socially accepted form of transit that is cheap for commuters. Inland waterways carry an estimated 25 million passengers and 4 million tonnes of cargo every year in Myanmar.

 

 

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Reading Time: 2 minutes

Much of Myanmar’s transport is done on waterways

The Myanmar government has allocated a total of 7.8 trillion kyat ($9.5 billion) to the construction and renovation of roads and bridges in the periods between 2012 and 2031, the Ministry of Construction recently disclosed to the public. This initiative is divided into four phases, the first of which from 2012 to 2016 will require 2.823 trillion kyat ($3.3 billion) of the budget, Thura Swiss, a Yangon-based consultancy, has reported.

Reading Time: 2 minutes

Much of Myanmar’s transport is done on waterways

The Myanmar government has allocated a total of 7.8 trillion kyat ($9.5 billion) to the construction and renovation of roads and bridges in the periods between 2012 and 2031, the Ministry of Construction recently disclosed to the public. This initiative is divided into four phases, the first of which from 2012 to 2016 will require 2.823 trillion kyat ($3.3 billion) of the budget, Thura Swiss, a Yangon-based consultancy, has reported.

In addition to being on the top of Myanmar’s investment agenda, the Asian Development Bank (ADB) has also placed the maintenance and construction of infrastructure on the top of their list of priorities for its country partnership strategy with the formerly junta-ruled country.

The lack of fundamental groundwork and transport connections are large concerns of foreign investors as well.

Infrastructure projects, the reformist government has stated, will play a crucial role in bridging Myanmar’s rural and urban divide and give the floundering economy more connectivity with its ASEAN neighbours.

PPP water and roadway possibilities

The infrastructure expansion portion of the government programme foresees 28 companies working with the government under build, operate and transfer (BOT) arrangements to complete 60 main roads measuring a distance of 4,700 kilometers. Companies entering into these contracts with Myanmar will be exempted from incomes tax for 30 years.

Beyond the development of domestic roads, Myanmar is looking to link up with international transport systems, preparing itself for the formation of the ASEAN Economic Community (AEC) in 2015.

Japan and South Korea have already signaled their interest to help expand three interstate highways in Myanmar from 3.6 to 7.2 meters.

For all of Myanmar’s size and vast economic potential in natural resources, it lags drastically behind other ASEAN nations in terms of roadway length. Compared to the 60 kilometers of road per 1,000 square kilometers in Laos and the 480 kilometers in Vietnam, Myanmar has only 40 kilometers.

The lack of water infrastructure in the country has also come under scrutinisation. Nyan Htun Aung, Minister of Transport, stated on October 28 that the ministry will partially privatise the Inland Water Transport Corporation, which is currently under the purview of the ministry.

Joint ventures will be formed to make some companies that are under the large Inland Water Transport Corporation economically independent entities.

Because inland waterways are already a major form of transport in Myanmar, which is endowed with one of the largest river networks in the world, this privatisation measure will offer opportunities for investors to tap into a socially accepted form of transit that is cheap for commuters. Inland waterways carry an estimated 25 million passengers and 4 million tonnes of cargo every year in Myanmar.

 

 

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