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Myanmar needs to scale up transport investment: ADB

Posted by pakin On July - 25 - 2016

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.

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