{"data":{"news":{"items":[{"title":"Myanmar’s construction output to shrink by 7.7% in 2021: GlobalData","date":"2021-08-12 08:12:44","id":3017,"author":"","blurb":"","blurb_image_uid":"https://dxfpracgmlczp.cloudfront.net/2021/07/1627543542499_yangon-5050076_1920.jpg","blurb_expanded_image_uid":null,"article":"\n\t\n\n\n

Myanmar’s construction industry output in 2020 was affected by the Covid-19 pandemic induced supply chain disruptions and labour shortages. In 2021, the industry’s weakness is expected to be further compounded by the ongoing political crisis and its impact on foreign investments and construction progress, with the industry output projected to contract by 7.7% in real terms, according to data and analytics company GlobalData.

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GlobalData’s report, ‘Construction in Myanmar – Key Trends and Opportunities to 2025 (H1 2021)’, reveals that after the military seized control in February 2021, construction projects have come to a standstill, resulting in over 500,000 construction workers being made redundant. The cost of imported building materials has increased due to a weakening of the domestic currency, while the price of domestically-produced cement has doubled due to the worsening banking crisis.

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Hence, several government-funded infrastructure projects have been suspended. Several foreign entities, including the World Bank, Asian Development Bank (ADB) and the Japanese and South Korean governments, have halted their aid and ongoing projects. Some multinationals have announced temporary suspensions of developments, including the Yangon hotel project, AEON’s shopping mall, Amata Corporation’s industrial estates and EDF’s Shweli-3 hydropower project.

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“Initially, international sanctions were primarily targeted at coup participants, though this developed to sanctions on state-owned conglomerates. Myanmar Economic Holdings Limited and Myanmar Economic Corporation Limited, the two largest military-linked holding companies in Myanmar, were the first to be sanctioned by the US, the UK and the EU. Both entities have wide ranging business interests in Myanmar, including telecommunications, manufacturing and mining, which are likely to suffer as a result, negatively impacting the construction sector,” explained Willis Rooney, economist at GlobalData.

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“Additional sanctions on other state-owned enterprises have followed, most recently by the UK and EU on Myanmar Timber Enterprise. In March 2021, the World Bank and the ADB temporarily froze funds to Myanmar, further affecting the progress on projects dependent on external financing.”

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GlobalData expects the construction industry to record growth of 2.3% in 2022 and register an annual average growth rate of 7.1% between 2023 and 2025, supported by investments in transport and energy infrastructure, industrial parks and housing projects. This growth is however predicated on Myanmar regaining political stability and the lifting of international sanctions. Highlighting the extent of the downturn in the local construction industry, real output is not expected to surpass its pre-pandemic levels until 2024 at the earliest.

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Image: Myo Min Kyaw/Pixabay

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Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development (JOIN) has announced it will be investing around JPY 5.7 billion in the Yankin Project in Myanmar, in collaboration with Kajima Corporation.

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Planned for completion in 2024, the new urban development project is located in the Yankin area, about 5 km northwest of Yangon Central Station. It will provide offices, hotels, long-term-stay hotels and other commercial facilities. The site area is approximately 2.7 ha, with a total floor area of about 175,000 sq m.

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According to JOIN, the project “will contribute to the creation of prime urban development asset and economic growth for Myanmar through an integrated quality management, which ranges from transfer of technology to government officials, engineers, and students through training to management of facility and operation utilising Japan’s advanced environmental technologies.”

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The project is also expected to contribute to the regional community by facilitating a bus bay in the project site, JOIN said, thereby alleviating traffic congestion of adjacent public road, building one-stop service centre and a children’s library, taking disaster measures and operating community buses.

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Image: JOIN

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The groundbreaking ceremony was recently held for the Yangon-Mandalay Railway Improvement Project Phase I (Contract CP101 – civil works for the Pazundaung-Bago section) and Yangon Circular Railway Line Upgrading Project (Contract CP201 – signalling works). Both projects are being commissioned under the loan scheme of the Japanese Official Development Assistance (ODA), provided by the Japan International Cooperation Agency (JICA).

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The Yangon-Mandalay Railway Improvement Project is being built in two phases, comprising the Yangon-Taungoo Section (Phase I) and Taungoo-Mandalay Section (Phase II). The project aims to rehabilitate and modernise the old facilities and equipment in the section between Yangon and Taungoo, of the existing railway that connects Myanmar's largest and second largest cities (Yangon and Mandalay), as well as to promote safer and faster train service, enhance the capacity for passenger and cargo transport, and eventually contribute to Myanmar's economic growth.

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The loan agreements for Yangon-Mandalay Railway Improvement Project (Phase I) were signed on 5 September 2014 (for JPY 20 billion) and 1 March 2017 (for JPY 25 billion) respectively. The project includes civil and track works, installation of signal and telecommunication systems, and also procurement of rolling stock and consulting services. Phase I is expected to be completed in 2023.

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The Yangon Circular Railway (YCR) Line Upgrading Project aims to improve the efficiency of passenger transport capacity and the safe and comfortable public transport services of YCR Line, by rehabilitating and replacing the existing railway facilities and the rolling stock, thereby contributing to the social and economic development of Greater Yangon.

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The loan agreement for the Yangon-Mandalay Railway Line Upgrading Project was signed on 16 October 2015 for JPY 24.866 billion. Slated for completion in 2023, the project includes improvement of signalling works, procurement of a new diesel electric multiple unit (DEMU) (rolling stock) and consulting services.

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Surbana International Consultants (Myanmar) has signed an MOU with the Myanmar Construction Entrepreneurs Association to become the association’s lead technical consultant for low cost and affordable housing projects in Myanmar.

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Surbana International Consultants (Myanmar) has signed a Memorandum of Understanding (MOU) with the Myanmar Construction Entrepreneurs Association (MCEA) to become the association’s lead technical consultant for low cost and affordable housing projects in Myanmar.

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According to Surbana Jurong, the agreement comes at an important time as the association works with the Union Government to meet the demand for low cost and affordable housing and increasing home ownership in the country. The Government’s Five-Year Plan aims to deliver one million residential units by 2030. Surbana Jurong will assist MCEA in the development of a low cost and affordable housing prototype design that focuses on the 3Cs: community, connectivity and constructability.

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The MOU with MCEA enhances Surbana Jurong’s extensive presence and success in Myanmar since its entry into the market four years ago. Surbana Jurong has provided its expertise in masterplanning, architecture and engineering to various residential and industrial projects including the 220 acre Ayeyarwun – Yadanar affordable housing project in Dagon Seikkan Township. The company, with a track record of building more than one million affordable homes in Singapore, has grown from strength to strength with its acquisition of AETOS Holdings and SMEC Holdings in 2016.

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“Surbana Jurong has built cities and shaped lives for more than 50 years. We have participated in the evolution of affordable housing in different countries. Our experience allows us to offer engineering and design solutions specific to Myanmar’s changing needs. We are delighted that the partnership with MCEA allows us to continue to be part of the Myanmar growth story,” said Teo Eng Cheong, CEO International (Singapore, Southeast Asia and North Asia) of Surbana Jurong Private Limited.

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“The signing of the MOU between MCEA and Surbana Jurong represents an exciting chapter in the development of low cost and affordable housing in Myanmar. With our local knowledge and Surbana Jurong’s international experience, we hope to realise our vision of helping more people own their homes in Myanmar,” said U Tha Htay, president of MCEA.

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