Infrastructure to Myanmar
Trends and opportunities
As Myanmar continues the process of economic reform and attracting domestic and international investment, the country will require significant development of its infrastructure across roads, rail, ports and utilities.
As new developments such as hotels, malls and office towers rise across major cities like Yangon and Mandalay bring an influx of tourists and businesspeople, communications, power and water supplies will need to be upgraded.
Almost US$23 billion is expected to be invested in road, rail, water and air transport projects in the years leading to 2030. With the National Transport Master Plan (NTMP) allocating US$11.7 billion to road projects, US$6.6 billion to railway development, and US$8.5 billion for inland water, sea and airport projects (Source: Oxford Business Group, The Report, Myanmar 2017).
Myanmar’s national electricity grid is also slated for an overhaul under an ambitious new electrification program launched in September 2015. According to the World Bank, 84 per cent of rural households in the country lack an electricity connection, exacerbating poverty and hindering development.
The National Electrification Project, which was launched by the government in partnership with the World Bank, targets universal electricity access by 2030, which will require 7.2 million new connections. The plan will begin with A$400 million in funding from the bank’s International Development Association, connecting over six million people by 2021, as well as providing grid connections for 23,000 schools, clinics and community centres (Source: World Bank, National Electrification Project, September 2015).
As Myanmar emerges as a location for manufacturing, infrastructure shortages and outdated equipment will remain a major barrier. Economic growth is causing congestion, particularly at ports, which creates price hikes in the form of increased shipping charges. To address some of these issues, Myanmar recently introduced an automated cargo clearance system to speed up trade logistics which was supported through the Japan International Cooperation Agency (Source: JICA, MACCS Opening Ceremony, January 2017).
One of the most significant challenge for potential investors is the country’s unclear regulatory environment. Although there has been positive developments with a number of laws and regulations, the government will need to address urgent concerns around land acquisition, credit access and zoning laws to help the sector regain its stability.
Infrastructure investment will include a broad range of projects funded from bilateral aid programs, through multi-lateral agencies such as the World Bank and the Asian Development Bank, by direct investment from the private sector and through projects funded through public private partnership arrangements.
The expected expansion in investment in Myanmar’s infrastructure over the next 10 to 15 years will create opportunities for Australian companies including:
- power (hydro, renewable energy technologies gas and coal fired power stations and electricity transmission and distribution)
- building construction (commercial, residential and industrial)
- specialist building materials
- transport (airports, seaports, road and rail)
- water supply and waste water facilities
These opportunities are expected to cover engineering services including design, construction and operation of facilities and supply of associated equipment and technology.
The Myanmar Investment Commission permits a foreign investor to own up to 50 per cent of a joint-venture construction company. Additionally there may be opportunities for Australian contracting firms, as the Myanmar Ministry of Commerce announced in July 2016 that it would further relax restrictions on foreign contractors by opening trade in onshore construction materials to foreign-local joint ventures (Source: Myanmar Times, Ministry relaxes import rules for over 250 items, August 2016).
There are a limited number of major international engineering firms that have established a presence in Myanmar to date, particularly from Vietnam, Japan, Korea and China. Most construction and engineering companies are locally based, often part of larger conglomerates that have a broad range of business interests in Myanmar. A growing number of western companies are now active in Myanmar, including several from Australia.
Heavy equipment and technology suppliers that are represented in Myanmar include Japanese, European, Chinese and American manufacturers. Some have direct involvement in their distribution networks, while most use local agents and distributors.
Tariffs, regulations and customs
Myanmar is a member of the ASEAN Australia New Zealand Free Trade Area (AANZFTA). Reflecting its lower level of economic development, Myanmar’s commitments to reduce tariffs under AANZFTA is being phased in at a slower rate than other parties to the agreement. Tariffs on most items are scheduled to begin reducing in either 2015 or 2020. Visit Austrade’s ASEAN tariff finder for specific products.
Marketing your products and services
For suppliers of technology and equipment, local agents and distributors with specialist industry knowledge and established networks are generally the best way to build market contacts, navigate regulatory and procurement processes and identify emerging opportunities.
Services firms should consider establishing a relationship with a local business partner and/or establishing a direct presence in Myanmar.
Austrade Yangon can provide additional information on specific infrastructure projects and can also help to identify potential local partners for interested Australian companies.
Most imported products arrive by sea through Yangon port, Myanmar’s busiest port. Overland road transport from neighbouring countries, particularly China and Thailand, is possible.
Myanmar has three main international airports, in Yangon, Mandalay and Nay Pyi Taw which are all at various stages of upgrades. A new international airport in Hanthawaddy, about 80 kilometres northeast of Yangon, is currently in the early stages of planning (Source: Frontier Myanmar, Waiting for take off at Hanthawaddy Airport, February 2017). Myanmar now has direct air connections with most countries in east Asia, with most of these connections being into Yangon. Mandalay is another international airport.
Links and industry contacts
Asian Development Bank
Department of Civil Aviation
Directorate of Investment and Company Administration
International Finance Corporation
Ministry of Construction
Ministry of Electricity and Energy
Ministry of Natural Resources and Environmental Conservation (Myanmar language)
Ministry of Transport and Communications (Myanmar language)
Myanmar Engineering Society
Myanmar Investment Guide
Myanmar Port Authority
Myanmar Post and Telecommunications (MPT)
Union of Myanmar Federation of Chambers of Commerce and Industry
Please note: This list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.
The Australian Trade and Investment Commission – Austrade – contributes to Australia's economic prosperity by helping Australian businesses, education institutions, tourism operators, governments and citizens as they:
- develop international markets
- win productive foreign direct investment
- promote international education
- strengthen Australia's tourism industry
- seek consular and passport services.
Working in partnership with Australian state and territory governments, Austrade provides information and advice that can help Australian companies reduce the time, cost and risk of exporting. We also administer the Export Market Development Grant Scheme and offer a range of services to Australian exporters in growth and emerging markets.
For more information on how Austrade can assist you, contact us on:
Australia ph: 13 28 78 | Email: email@example.com
A list of Austrade offices (in alphabetical order of country) is also available.