Wednesday, May 24, 2017
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YANGON – Myanmar needs to invest US$45 billion to $60 billion in transport projects over the next 15 years, to improve connectivity with neighbours and ensure equitable distribution of economic growth, Asian Development Bank officials have said.

“Every year, Myanmar will need about $4 billion. This is a big number. That is why we have the transport policy note, especially to help the government address some problems for projects over the next couple of years,” Bambang Susantono, ADB vice president for knowledge management and sustainable development, said.

ADB last week launched a new report entitled “Myanmar: Transport Sector Policy Note”, which has recommendations for the civilian government. The report says 20 million people, or about half of rural population, live in villages without access to an all-season road, as the country only invested 1 to 1.5 per cent of gross domestic product (GDP) in transport improvement over the past decade.

New investment could save logistics costs by 30 per cent and save lives lost every year due to poor road safety.

Susantono said the ADB was ready to allocate at least $100 million per year over the next five years. Better transport would mean higher economic growth and equitable distribution of development to all Myanmar people. Rural road development was as important as urban transport infrastructure, he said.

Adrien Veron-Okamoto, ADB transport economist for Southeast Asia, noted that at a similar level of development, other countries in this region typically invest 3-5 per cent of their GDP in transport infrastructure.

With a higher budget, Myanmar should allocate the money to key national corridors, Yangon infrastructure and maintenance work. Yielding the highest impact on the public would be investment in bus rapid transit lines, parking and traffic management and circular railways in Yangon. Equally important was the upgrade of national and international corridors, like the road link from Myawaddy to Muse, the modernisation of the rail link from Yangon to Mandalay, implementation of low-cost navigation aids in the Ayeyarwaddy River, plus improving access to rural areas.

Myanmar was also urged to explore new water transport options.

He stressed that Myanmar needs a new policy to increase transport investment. A unitary ministry should take charge of the job, and state-owned enterprises should be corporatised for greater autonomy.

Myanma Railways which is supervised by the Transport and Communications Ministry should be corporatised as soon as possible, as its revenue covered only half of operating costs and losses during 2013-15, amounting to about $80 billion. The report urged the government to seek funds from development partners for mega-projects.

ADB country director for Myanmar Winfried Wicklein said the bank planned to provide aid of about $350 million per year to Myanmar, 85-90 per cent of which goes into infrastructure, notably transport and energy. Better connectivity with neighbouring countries is a priority.

“We are focusing on big cities like Mandalay… Aside from Mandalay, we work in other regions and states, mostly in the nation’s economic corridors (eg Mon State near the East-West economic corridor). We are trying to support local governments to improve infrastructure there,” he said.

Wicklein said the ADB was considering co-financing models in infrastructure projects and providing grants for environmental issues and climate change. The bank has worked on several projects with the France Development Agency.

“We are very open to other partners in our discussions. The AIIB [Asia Infrastructure Investment Bank] has just started operations. So we do not have any concrete updates in this regard. But we are open to work with all partners,” he said.

Pantip Plaza to reopen following renovation

Posted by pakin On July - 15 - 2016 ADD COMMENTS

Pantip Plaza, Bangkok’s most famous electronics mall, will completely open its doors to customers early next month after embarking on a massive two-year, 300-million-baht renovation.

Dubbed the Tech Life Mall, the renovation is intended to demonstrate the transformative power of the emerging Internet of Things.

Asset World Estate, the operator of Pantip Plaza, announced it will open its new Tech Life Mall on Aug 8.

“The renovated mall will provide a variety of revolutionised electronic products in order to serve the rapid transformation for consumers moving to a digital lifestyle,” said Sansern Na Patthalung, asset manager of Asset World Estate, which is under the umbrella of TCC Land.

The 36,000-square-metre mall will boast 300 IT dealers occupying half of the total space. The remaining display space has been reserved for gadgets, gaming, a co-working space for startup companies, enterprise solution products and restaurants.

Mr Sansern said the new Pantip will for the first time provide what it called a Syn Hub, featuring a co-working space for tech startups, an e-sports area powered by Intel Microelectronics (Thailand), business solutions supplied by Com Seven Co, and a Microsoft experience store.

“We expect our renovated mall to attract more teenagers, and not just hardcore computer consumers like previously,” he said.

“We expect the average time our customers spends in our mall to increase from 1.5 hours to 3.5 hours.”

The company expects the number of visitors to increase to 35,000 per day after that number dropped to 20,000 during the renovation period and a general slowdown of shopping malls for computers.

“We expect our renovated project to break even within five years,” he said, adding that the company has raised its rental fee by an additional 3-5%.

Mr Sansern said Pantip also hopes to become a mall without pirated software.

Niti Mekmok, managing director of Synergy Technology, the owner of Syn Hub, said digital technologies are creating new paths for manufactures and reshaping most industries.

The 20-million-baht Syn Hub provided various innovative technologies ranging from 3D printers, mechanics supporting the Industrial Internet of Things, embedded electronic systems design, and radio frequency identification systems.

Syn Hub also features a co-working space with 60 seats. The company charges 280 baht a day to use the space.

“It’s the right time to invest as the Thai government is pushing for the development of a digital economy,” said Mr Niti.

Krungsri shifts focus to digital banking

Posted by pakin On July - 7 - 2016 ADD COMMENTS

DIGITAL disruption in the financial industry has forced Thailand’s fifth-largest commercial bank by assets – Bank of Ayudhya, which is branded as Krungsri – to consider new services to cope with an increasingly complex global financial ecosystem, for which it has revamped its e-business organisation accordingly.

“New financial technology is coming [to play a bigger role in the financial industry], and we [risk] not catching up with it,” Thakorn Piyapan, head of Krungsri Consumer Group, said during a recent interview with The Nation.

Like its peers, Krungsri has been shaken by the pace of development of fintech (financial technology), a disruption of financial-transaction technology that is connected to smartphones and involves a rapidly growing number of start-ups focusing on applied fintech.

It has therefore decided to shift its business focus to digital banking, for which the bank has restructured its e-business unit.

Fintech is related to new ways of conducting financial transactions such as payments, money transfers, fundraising and asset management via an information-technology revolution and the rapid development of mobile phones and mobile applications.

According to a report by Accenture, the level of investment in fintech business globally surged from US$930 million in 2008 to $12 billion (Bt422 billion) last year.

Thakorn said that previously, Krungsri had talked solely about its six flagship lending products – finance for cars, motorcycle finance, First Choice, personal loans, credit cards and mortgages – when considering expansion abroad in neighbouring countries such as Cambodia, Laos, Myanmar and Vietnam (CLMV).

The bank felt it was able, therefore, initially to apply the business models used in Thailand for these six products to those nearby markets.

“The point is that banks and financial institutions are looking for technology to help reduce their operating costs, as it is not comfortable for banks to manage their costs amid very low interest rates,” he said.

In Myanmar, the government has recently enacted a law on banking allowing peer-to-peer money transfers – that is, such transfers no longer have to be conducted via banks – as well as supporting all players, he said, while in Cambodia, mobile loading was now allowed for microfinance.

“We think there is no need to open a bank branch in these markets … However, the bank is looking for any business model that suits each country,” he explained.

“At present, the bank perhaps is not limited to just the six flagship products as planned earlier, if we pursue business expansion in the CLMV market, as the fintech environment is increasingly permitted in these countries,” Thakorn said.

Japan-based UMFG MUFG (Mitsubishi UFJ Financial Group), the bank’s parent, is investing in the fintech field, he added. He speculated there might even be no need for any bank branches, automated teller machines or manpower in the future, if virtual transactions became the preferred means of doing banking business for most people and entities.

However, the consumer-banking chief expressed concern about money transfers when using fintech as money could be transferred to any form of receiver, such as bitcoin, which could present difficulties in terms of tracing and checking such transactions.

Currently, almost all banks use the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network, which is a system for money transfer among banks under which any transactions can be checked back.

Meanwhile, unlike other banks, Krungsri’s credit-card business operates as a separate entity, as opposed to an in-house unit, making it harder to deliver messages to all 23,000 staff at the bank and “for them to see the same direction” he said.

Under the bank’s new structure, Thakorn is also head of its digital banking and innovation unit, which will focus on new technology and fintech start-ups.

In addition, one of his missions is to fix its organisational culture.

“Now we have a project, and we will seek approval from the Bank of Thailand to use the new technology throughout our network, to offer our clients [the choice of] not having to go to any of our branches, and to be able to open any Krungsri bank account [remotely],” he said.

“The [government’s] PromptPay or ‘Any ID’, which is a system of money transfers using any bank-account number to tie up with a person’s ID or mobile-phone number, will help shopping online to boom, but it is possible it will have an impact on banks’ normal business,” he said.

Thakorn said Krungsri’s overall results for the first half of this year had been on target. Non-performing loans for credit cards stood at 1.4 per cent at the end of the period, while NPLs for personal loans were 3.4 per cent.

PTT Plc has set aside capital expenditure of 25 billion baht to develop its oil business over the next five years. The national oil and gas conglomerate is also conducting a feasibility study regarding a potential listing of its oil business on the Stock Exchange of Thailand (SET).

Auttapol Rerkpiboon, executive vice-president for oil business, said PTT planned to expand its number of petrol stations to 1,575 in the second half of this year, up from 1,450.

For its overseas market, the number of petrol stations will be increased to 200 by year-end, up from 160. That number is expected to reach 500 by 2020.

Mr Auttapol said petrol stations could also be installed in Cambodia, Laos, Myanmar and the Philippines.

PTT also plans to upgrade its existing petrol stations to be more accessible for handicapped people, with 100 such stations expected to be rolled out by the end of this year. Also, the company plans to design its own in-town petrol stations under its “Garden in the City” concept, especially in Bangkok’s central business districts, said Mr Auttapol.

For its non-oil business, the company plans to expand its number of Amazon Coffee shops to 1,700 by year-end up from 1,500. It also plans to increase its number of 7-Eleven stores at petrol stations to 1,400, up from 1,270.

For the commercial sector, PTT plans to increase its jet fuel service network with major airlines. The company hopes to expand the network to 10 countries in the next few years from the current six — Hong Kong, South Korea, Indonesia, Japan, China and Malaysia.

The plans are part and parcel of its strategy to compete with other oil retailers after the sharp drop in global oil prices, which pushed up demand for the commodity.

Demand for fuel in the first five months of this year increased 6% — virtually unchanged year-on-year. That rate was well above the conservative growth rate of around 2% each year before oil price collapse in 2014.

PTT raised its sales promotion budget to 400 million baht this year, up from the usual 300 million, he said.

“We need to keep our oil retailing market share at 40%, as competition has been stiff over the past two years,” said Mr Auttapol.