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ADB: 60% OF MYANMAR’S TRUNK ROADS IN POOR CONDITION
October 14, 2016

The Asian Development Bank (ADB) is urging Myanmar to make big investments in its infrastructure and significant policy changes to help it tap its full economic potential. The ADB recommendations were made in a recent Transport Sector Policy Note.

 

Decades of underinvestment and isolation have ensured the Southeast Asian country’s roads, rails, ports and airports lag well behind the infrastructure in other countries in the region, the note said.

 

“Myanmar has not been investing enough in transport,” the note says baldly, before going on to describe just how debilitating the lack of investment has been.

 

Self Photos / Files - Yangon_Butargyi_train_station

 

Sixty percent of the trunk road network is in poor or bad condition, requiring urgent maintenance or rehabilitation. On top of this, poor track conditions means Myanma Railways is forced to operate at 50% of its potential speed.

 

“Myanmar’s road network needs better trunk highways and more rural roads. The network is three times less dense than neighboring Thailand’s. It is also of lower quality – only 20% of the roads are paved, against 53% in Thailand – and the roads are narrower,” the note said in elaboration.

 

The note offers a more muted but no less critical view of the rail network.

 

“Myanmar’s trunk rail lines need modernization, but the tertiary network should be scaled down. The country’s rail network is by far the longest in Southeast Asia, but part of it is unproductive. Neither the current design standards nor the potential demand for over half the network suffices to make commercial operation viable,” the note said.

 

While the ADB is critical of the quality of Myanmar’s existing infrastructure, what is really run up the flag pole is the other big problem – that of what is not there at all.

 

Roads figure prominently in Myanmar. Twenty million people, including half of the rural population and a key consumer market, lack access to basic roads. More tellingly still in a country which is essentially a delta, the main waterways cannot be used for transport for three months a year because they are too shallow, the note added.

 

The ADB, which worked with the Myanmar government to write the note, makes clear what it thinks the lead response should be: investment, and large amounts of it, although it also outlines some significant policy changes to go with the suggested investment.

 

Indeed, one of the problems with the ADB’s scheme is not so much the money needed for infrastructure investment but in persuading a national bureaucracy to adopt both lots of restructuring work, such as the corporatization of some services, and what the organization refers to as “deep cultural change.”

 

Between 2005 and 2015, Myanmar has spent just 1.0% to 1.5% of GDP on infrastructure, the ADB said. Making this low figure even less productive was a spate of badly-targeted projects: “Few investments have been effective and efficient,” the note said. Compared to other nearby countries, which typically invest 3% to 5% of their GDPs in transport infrastructure, Myanmar’s meagre investment is simply inadequate. (Those other countries include regional peers China, Thailand and Vietnam.)

 

Here, the ADB does not pull its punches, and acknowledges a need for some US$60 billion to be spent over the next 15 years. Funding, it says, should come from “from new sources, including development partner loans, bond finance, private sector investment, and investment by state-owned enterprises (once they become financially self-sustainable).” The ADB also urges a broad application of the user-pays principle with levies on fuel and tolls on roads.

 

Money spent needs to focus on key national corridors, Yangon and infrastructure maintenance, the bank added, with short-term priorities, besides public transport in Yangon, being highways and railways.

 

For the former, the ADB suggests allowing trucks on the Yangon-Mandalay Expressway and upgrading to Class II Asian Highway Standards the international highways to Muse and Myawaddy, which carry most of Myanmar’s border trade but are substandard and in poor condition.

 

“A systematic Program of Highway Pavement Maintenance and Improvements could, within five years, bring all major highways to good condition,” the note said, adding the Department of Highways could consider increasing the legal axle load of trucks on main corridors.

 

For the railways, the ADB urges a change of priorities for the national railway away from passengers and to goods, which would signal a significant reversal of priorities.

 

“Myanma Railways should reallocate assets, staff, and resources to developing long-distance rail freight. Myanma Railways has prioritized passenger transport. However, freight trains are much more profitable. With limited investments and some market development, Myanma Railways could double its share of a growing market,” the note said.

 

In a nod to Myanmar’s rivers as potential cargo carriers, the ADB urges development of the Irrawaddy River with the implementation of low-cost navigation aids, channel works, and ports up to Mandalay. It also advocates dredging to ensure a minimum depth of between 1.5 metres and 2.0 metres, as well as developing a more comprehensive network of river ports.

 

 

By Michael Mackey

Southeast Asia Correspondent | Bangkok