Ports in and around Yangon are looking set to develop rapidly as Myanmar opens up, attendees at the 15th ASEAN Ports and Shipping conference heard and saw.
Leading the way here is Hutchison Ports’ Myanmar International Terminals Thilawa (MITT), which is positioning itself as the gateway against its handful of city port rivals.
MITT is some 32 nautical miles from the pilot station and, according to a briefing by the company, ships can berth direct from sea within four hours. The facility is some 25 kilometres or 16 miles south of Yangon, Myanmar’s commercial centre. Its jetty is 1,000 metres and can take vessels of up to 200 metres in length overall.
With a maximum draft of 9 metres, the facility is good for ships of between 30,000 and 35,000 DWT and feeder vessels up to 2,000 TEUs. The five berths are split two-to-three containers to other cargo.
Inbound, Thilawa is moving all the things expected in the early stages of national development: steel, cement, machinery and project cargo. Exports are largely commodities such as timber and plywood and agricultural products such as rice. Throughput is fairly evenly split between exports and imports, but containers are 70% imports and 30% imports, Than Tun, MITT’s marketing manager, told Asia Cargo News.
Growth, though, is sharp as befits a country just opening up and a city that is the conduit for some 90% of its trade. Container growth was 26% last year with the expectation that it will grow between 15% and 25% this year, Tun said. This is 20% of Yangon’s container market, which the Myanma Port Authority puts at 1,057,888 for the 2016-17 fiscal year.
Bolstering Thilawa’s claim to gateway status is what is going in around the port: the 2,400-hectare special economic zone (SEZ). This is being pitched at light industry, with half of the investors expected to come from Japan and the cheaper Thilawa Industrial Zone. “They are very close to our jetty,” Tun pointed out to attendees at an MITT briefing.
Also helping is the scope there is to expand locally as this is not so much a greenfield but a green rice-paddy site. “We have so much empty land,” said Tun.
In terms of facilities, a power plant is already on site generating 50 of a planned 150 megawatts – an important consideration in a country where power cuts still occur regularly. There is a ro-ro yard as well as trucking and container barging services to the western side of Yangon. The barge can move 80 TEUs. There are plans for a one-stop service centre set to offer extensive help. “Even your visa application you can do here,” said Tun.
One of the criticisms made about Thilawa, besides cost, is that it’s a fine facility but with poor connectivity. There is, for example, a rail link but no appropriate rolling stock. A particular problem is the bridge connecting Thilawa to Yangon over the Bago River, which has a 25-ton loading limit. Given the weight of truck equipment, the limit makes moving containers difficult.
“I think you can probably get an empty container across,” Allan Davidson, general manager of Yoma Fleet, a self-drive hire-haulage company, told Asia Cargo News. The weight limit is being addressed with Japanese funds building another bridge further upstream.
“The new bridge will make a huge difference and it’s parallel to the existing one,” Davidson added.
While the bridge may solve one problem, it doesn’t tackle the broader and bigger issue of the outlook for the clump of city ports lining the Yangon waterfront.
Politics complicate the waterfront. Thilawa is government-backed with international investors – and it’s the only one of its kind in Yangon – whereas the city ports are local investments, as Tun noted – and they are spread over four sites and have multiple backers.
The city ports will not give up without some sort of fight. “We can extend another wharf,” said an official with Asian World Port Terminal, which already has a 1,054-metre quay.
More tellingly, the upriver Myanmar Industrial Port is planning a tripartite response: expanding its area, going techy to improve turnaround times and bringing in an international partner. “We are looking at strategic options with other global operators,” Chris O’Connor, advisor to MIP’s chairman and also its CFO, told Asia Cargo News.
Its expansion plans are bold and big. Phase one brings in another jetty of 450 metres and a back-up area of 34 acres. Phase two has two parts, one seeing a 42-acre container terminal and container freight station added to the existing facility as well as 800 metres of container wharfs, bringing total jetty length to 1,400 metres, while the second part will see a 35-acre container yard and container freight station added on the other side of the existing facility. All this extra space could make the extended facility a future rival for Thilawa.
Underscoring this is a plan to decrease the turnaround time from two-a-and-a-half days to one day by increased use of technology. O’Connor mentioned specifically implementing the use of Navis IFS and training up the staff.
Against this, though, is the logic that has befallen so many city ports. Development makes city centre land a precious commodity, one better used to support tourism and high-end services than cargo. That, rather than the merits of specific facilities, might decide where it all ultimately goes.
By Michael Mackey
Southeast Asia Correspondent | Yangon