Transport infrastructure: Five things to watch in 2020

As 2020 is an election year, Myanmar Transport Infrastructure Monitor expects that across the sector there will be a visible government push to ensure projects are completed, stalled projects get off the ground and new ones are announced. Investment, however, may remain sluggish as investors enter wait-and-see mode and postpone decisions pending the election outcome. 

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We note the following five projects to watch in 2020.   

Aviation - Chin State’s first airport to open in May

Chin State is often cited as having enormous tourism potential that has yet to be realized because of poor connectivity. It is the only state in Myanmar yet to have an airport, however, that should change in May when the Ks37bn ($25m) Surbung Airport, 15km northwest of Falam Township, is set to open.   

Terminal building construction is now complete, and in October 2019 the Department of Civil Aviation invited bids to pave nylon asphalt for the 1,830m x 30m runway and 76m x 76m apron. 

The airport is situated near the border with the Indian state of Mizoram and will provide access to townships including Falam, Haka and Thantlang, as well as tourist destinations Tiddim Reik Lake and Lonpi Mountain.

Although opening as a domestic airport, the runway can accommodate aircraft such as Boeing 737 and Airbus A320, which are commonly used on international short-haul routes. 

An aerial view of the under-construction Surbung Airport in Chin State. 

Railway - Yangon Circular Railway upgrade completion 

The 46km Yangon Circular Railway was built during the colonial period, with the Central Station opening in 1877. The railway was upgraded to a double-track in 1954, but since then very little changed until a major $300m upgrade began in January 2018. 

Featuring renovated stations, new tracks and train carriages, as well as an automatic signalling system that replaces the manual one, the upgrade is set to be completed in H1 2020. Myanma Railways says passenger numbers will subsequently triple to 300,000 per day and train speeds will double to 60km per hour. 

The upgrade of the entire railway was originally split into two projects, with the Shwe Taung Group winning the right to upgrade the eastern part and A1 Group the western part.

To date, work has been completed mostly in the western part of the railway, including the Danyingon-Insein, Insein-Kyeemyindaing and Paywetseikkon-Mingalardon sections.  The Kyeemyindaing-Payar Lan, Mingalardon-Danyingon and Paywetseikkon-Pazuntaung sections are expected to be completed this month.

Increased railway capacity comes at a critical time for Yangon, as public transport comes under pressure from increasing urbanization, while road congestion worsens every year. 

Yangon Circular Railway Stations

The $5bn Yangon Urban Mass Rapid Transit (YUMRT) project, which will connect to the circular railway, is also scheduled to begin this year. 

Phase 1 of the project will see the construction of an 18km railway stretching from Hlaingtharyar Railway Station in Hlaingtharyar Township to Parami Railway Station in Mayangone Township, both in western Yangon.  

Road - Tender to be issued for Dawei-Htee Kee road upgrade  

The 156km Dawei-Htee Kee earth road that links Dawei SEZ and Dawei Township to Htee Kee, a Myanmar-Thai border town, is to be upgraded this year. Once complete, it will take about two hours to travel from the SEZ to Htee Khee, and a further two hours to Bangkok.

The upgrade is expected to be financed by a THB4.5bn ($137.1m) loan from the Thai government’s Neighbouring Countries Economic Development Cooperation Agency (NEDA). 

The Dawei-Htee Kee Road. Source: Tanintharyi Region government

Thai-based consultancies INDEX International Group, Decade Consultant and PSK Consultant submitted in November the revised technical report on the project to the Ministry of Construction (MoC). 

A tender for the construction will be issued in March 2020, with work expected to start in October. The project is expected to be completed in H1 2023, according to the MoC. 

Water - Progress on deep-sea port still unclear

Myanmar is not served by a deep-sea port, and it is unclear if progress on building one will be made this year. 

While a number of locations have been proposed for such a port, only one will be necessary given the size of the country’s market and medium-term development trajectory.

Three significant candidates are Kyaukphyu in Rakhine State, Dawei in Tanintharyi Region and Pathein in Ayeyarwady Region 

The Kyaukphyu SEZ and proposed deep-sea port would be located on Ramree Island in western Rakhine State.

A framework agreement was signed in November 2018 between the Myanmar government and the CITIC Group-led consortium to develop the project. The agreement saw the price tag of the port scaled down significantly to $1.3bn from the original $7.5bn. 

CITIC Group began the ESIA for the project in July 2019, which could take up to two years to complete. 

In Dawei, any movement on a deep-sea port will be closely tied to progress at the Dawei SEZ, which has faced numerous delays. Italian-Thai Development (ITD) began construction at the SEZ in 2013 but then withdrew from the agreement citing financial difficulties, before re-signing it in 2015. However, the project again ground to a halt. 

A new master plan backed by the Japanese International Cooperation Agency was revealed in 2018, while officials from Myanmar and Thailand have recently reaffirmed their commitment to the SEZ.

In Pathein, the Ks500bn ($370m) deep-sea port proposal has been backed by the Myanmar Construction Development Public Company, an entity formed by members from the Myanmar Construction Entrepreneurs Association.

The Ayeyarwady Region Government reportedly submitted in 2018 a project proposal to the Ministry of Planning and Finance and the Ministry of Construction, however, there have been few updates on the port since. 

Logistics - Tech advance in trucking to intensify 

Tech start-ups Kone Si, Kargo and Gonlolo have been working to transform the trucking industry for a few years now, and significant financing deals inked in 2019 will allow for business expansion in 2020.

The start-ups seek to lower the cost of transporting goods and bring transparency to the logistics industry by directly matching businesses and truckers, as well as helping small fleet owners and individual truckers find regular work. 

Kone Si recently received second round investment to expand operations from Yangon Capital Partners (YCP), a Myanmar-focused venture capital firm under financial advisory Trust Venture Partners, and Nest Tech, a Vietnam-based venture capital company. 

The company will use the new funding, a six-figure sum, to boost the utilisation of its technology platform, talent acquisition, and expansion to other cities.

In March 2019, Kargo and Yoma Bank signed an unsecured financing deal based on the former’s accounts receivable. The deal means Kargo can pay drivers in advance, better manage its cash flow and eventually allow it to expand further into serving border trade.   

 File:Nissan Diesel truck in Myanmar.jpg

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