Burma Business Roundup (Friday, February 17)

Will Rangoon Subway Plan Fare Better than Chinese Train Project?

Rangoon residents will be hoping that proposals for a Bangkok-style city rail network fare better than the grand plan for a high-speed railway linking Burma’s coast with China.

The Burmese government says it’s talking with specialist construction companies from Singapore, Japan, the US and Germany about an elevated suburban system and also a subway system.

Railways Minister Aung Min said his department favored the systems now operating in the Thai capital, which suggests that German conglomerate Siemens is in the negotiations for a build-operate-transfer (BOT) agreement.

Siemens built Bangkok’s popular “Skytrain” and is currently constructing a railway in Malaysia. It has also supplied electronic systems for Singapore’s subway.

Asked how soon a Rangoon rail network could get under way, Aung Min told Reuters this week “it depends on the terms” for a BOT deal.

A BOT deal with China for a fast railway between Rangoon and Muse, on the China-Burma border, was mooted in late 2010. Between then and now, there have been three false start dates, and the Burma destination has changed to Kyaukpyu on the west coast, where the Chinese are building an oil transhipment port.

Aung Min said last August that construction of the railway, carrying freight trains at 200 kph, could start last December. Nothing has happened.

Singapore Trade Mission Seeks Better Conditions for Foreign Investors

Leaders of a large Singapore business mission visiting Burma this week stressed the need for a “more business friendly environment” for foreign investors.

The Singapore Business Federation, which marshaled 70 Singaporean firms on the mission to Rangoon and Naypyidaw, said it discussed “shared steps taken to create a more business friendly environment in Myanmar, through the revision of foreign investment laws and introduction of tax incentives, amongst others.”

The mission, which also included representatives from International Enterprise Singapore, follows a visit to Singapore in January by Burma’s President Thein Sein during which he asked for help to rebuild the Burmese economy.

During Thein Sein’s visit the two countries’ governments signed an agreement for Singapore to provide training in legal, banking and finance reforms, and assist in improving tourism and urban planning in Burma.

The Singapore group has this week also been highlighting its know-how in building industrial parks.

“We have different companies that can build, manage the park, provide the power and utilities, process and manage the waste and also the logistics services,” Singapore’s Channel News Asia quoted International Enterprise Singapore’s Southeast Asia Group director Tan Soon Kim as saying.

India Eyes Tavoy as Italian-Thai Rethinks Port Development Plan

While the huge port-industrial complex idea on Burma’s southeast coast at Tavoy faces a rethink from Thai industrial conglomerate Italian-Thai Development, India is being seen as a possible savior for the shuddering project.

The Thai developer is suffering a hiccup as potential investors hesitate following the decision by the Burmese government to ban plans for a big 4,000 megawatt power plant, which was meant to be the engine for the entire US $50 billion project.

The question facing Italian-Thai is what alternative energy source can they use to fuel the essential power plant? The Burmese have implied that gas would not be available.

But India’s media see a modern port at Tavoy as a vital link between South Asia and the countries of the Association of Southeast Asian Nations (Asean).

Urging India’s big companies to get involved in Tavoy (also known as Dawei), The Pioneer newspaper in Delhi comments:

“The biggest impetus to India’s Look East Policy could be the Dawei project in Burma. This strategically important deep-water port, being touted as the biggest infrastructure project ever in Southeast Asia, would outmatch China’s showpiece Gwadar port project in Pakistan offers a viable chance to unite the fast-growing South India region with the Asean.”

And a leading regional expert on strategic affairs in Singapore has described the Tavoy plan as pivotal to India’s growth eastwards.

 “[India] realizes the economic significance of this coastal city which could give it a much quicker access to Southeast Asian markets, therefore enhancing the Asean-India Free Trade Agreement,” said Pavin Chachavalpongpun of the Institute of Southeast Asian Studies in Singapore.

In a research paper he points out that India proposed a port development at Tavoy eight years ago.