Infrastructure Update: Viaduct Collapses in Singapore, Construction Suspended

Infrastructure Update | August 3
Authors: Sunita Kapoor, Jack Myint, Ben Black
 
LOOKING AHEAD
 
 

August 31-September 1: Laos Business Mission: The US-ASEAN Business Council is now registering member executives for the 2017 Business Mission to Laos. Contact Matt Solomon at msolomon@usasean.org with any questions.

August 16-17Health & Life Sciences Mission to Myanmar. The US-ASEAN Business Council is now registering member executives for the 2017 Health & Life Sciences Mission to Myanmar. Contact Ying Hui Tng at yhtng@usasean.org with any questions.

September 7-9: Save the date for the ASEAN Economic Ministers (AEM) Meeting in Manila. 

September 26-28: Mission to 35th ASEAN Ministers on Energy Meeting The US-ASEAN Business Council is now registering member executives for a mission to the 35th ASEAN Ministers on Energy Meeting (AMEM35) in the Philippines.Contact Riley Smith at rsmith@usasean.org with any questions.

 
THE COUNCIL'S TAKE
 
 

Viaduct Collapses in Singapore, Construction Suspended

A viaduct under construction as part of the upper Changi Road East project collapsed on July 14, leaving a Chinese national dead and 10 foreign nationals injured. A Singapore Civil Defence Force team of 60 officers and search dogs were deployed following the incident, and on-site work has stopped. The Land Transportation Authority (LTA) halted all infrastructure projects in Singapore for the day to conduct safety checks. Or Kim Peow (OKP), the construction firm contracted to carry out the project, has been the subject of incidents in the past. On July 11, the company was convicted and fined S$250,000 for the 2015 death of a worker resulting from an incident at the Yio Chu Kang Flyover site and from January to April this year, OKP was blacklisted by the Ministry of Manpower for not meeting safety standards. The other bids for the contract ranged from S$129.7 million to S$193.7 million, but OKP’s contract was valued at S$94.6 million – 27% lower than the next lowest bid. The Building and Construction Authority has revoked OKP’s permit and required a detailed investigation report from project engineers while temporary bypass roads are constructed.

The Funding Behind BRI

While many headlines have announced the multi-trillion dollar estimated totals of China’s Belt and Road Initiative (BRI), the sources of funding and the level of risk associated with some projects has become a topic of interest to analysts and private sector stakeholders in the region. The financial commitments to infrastructure projects totaling between $1.4 trillion and $4 trillion have become a defining project for Chinese President Xi Jinping, but those amounts are long-term estimates, and the reality of state funding for BRI is more complex and limited in the scope perceived by many observers. In May at the BRI Forum, President Xi announced an extra $113 billion in funding, to be distributed through three existing state-owned funds. The first is the Silk Road Fund, which opened in 2015 with $40 billion to invest solely in BRI projects. The China Development Bank and the Import Bank of China, which in 2015 invested $27 billion and $80 billion, respectively, are the two other paths for President Xi’s extra funding for BRI, but it is unclear how much of those banks’ funds will be part of BRI, and whether President Xi’s announcement means their funding will increase, or be redirected to BRI projects. The Asia Infrastructure Investment Bank (AIIB) is another avenue to investment in the BRI, but since it opened in 2015, the bank has lacked the institutional and staffing capacity to conduct large-scale investment. In 2015 it invested $1.5 billion, and in 2016 that amount rose to just above $3 billion. Jin Liqun, President of the AIIB, says the bank plans to invest $10 billion in 2018, most of which is expected to be part of the BRI initiative. Further funding has come from commercial banks privately investing in projects in addition to foreign governments announcing investment in the BRI region, such as Singapore’s Development Board announcing around $20 billion in investments. While the funding that is currently available comes far short of the estimated multi-trillion dollar totals, some experts have cautioned that the returns on some BRI projects may be poor. Tom Miller of Gavekal Market Research Group has reported that Chinese officials are cognizant of potentially high losses for some BRI projects, including an 80% loss in Pakistani projects (specifically, the $46 billion highway from Gwadar to China) and a 50% loss in Myanmar. According to Charles J. Hall, the acting President of the U.S. Export-Import Bank, the BRI initiative ultimately represents the aggregation of existing investments in the wider Asian region with the addition of significant Chinese investment and focus. For Southeast Asia, the BRI initiative will continue to represent increased infrastructure investment and interest in capacity building by China and its regional partners.

Invest in Road Signs for Safer Roads in ASEAN

The United Nations Decade of Action for Road Safety has less than three years until its conclusion in 2020, and significant work remains for ASEAN member states to meet the goals of stabilized and decreasing traffic fatalities. The World Health Organization (WHO) estimates that road fatalities in Southeast Asia will rise to 330,000 in 2020 from 87,000 in 1990 – a 144% increase. In a 2015 status report on the U.N. road safety goals, the WHO noted that there are 17.3 traffic fatalities per 100,000 persons in Southeast Asia, compared to 9.3 in Europe. One avenue to decreased road fatalities is improved legislation to reduce speeds on urban roads to under 50 km/h, which has not been established in the majority of ASEAN member nations. In Indonesian urban centers alone, the WHO estimates yearly traffic fatalities to be 50,000. If fully adopted into a uniform and standardized system, robust markets for road sign manufacturing and high-quality construction could be created. The implementation of improved road signs, specifically in a system that separates high-speed and vulnerable travelers, is an important step to accompany legislation that conforms to international best practices.

 
 
IN THIS UPDATE
 
 
Regional Development Banks
Following China’s debt-paved Silk Road
ADB: Climate Change Threatens Asia’s Development Gains
Joining the AIIB Projects—What You Must Know about Affiliated Debarment and Cross-Debarment
AIIB chief outlines plans to use capital markets
ADB ready to cooperate with AIIB in Asia, insider says

Brunei
Temburong residents eagerly anticipate new bridge completion

Cambodia
Construction investment up by a third
More than $1bn invested in local infrastructure
Lancang-Mekong exhibition opens in Cambodia to promote regional trade, investment
A quantum leap for Cambodia’s telcos
China donates 98 buses, 2 wreckers to Cambodia for Public Transport

Indonesia
Infrastructure in Indonesia: Campaign Promises Kept?
Govt to issue reference price for industrial estates

Malaysia
JB-Singapore MRT link to start passenger service by end-2024, says minister
‘Keep investing in infrastructure’
Uber: MRT growth is helping business
More to come for commuters
Government launches project to reduce Sabah’s power outage woes
SPAD: MRT Line 2 and LRT 3 projects to spur growth
Malaysia hopes opening of MRT line will ease congestion

Myanmar
Transport Co eyes Myanmar links
CCEA clears widening of Manipur-Myanmar highway stretch
Burma: Villagers allegedly ‘trapped’ during land grab operation for Thilawa project
Regional govt to build bridges, underground road system
Cabinet approves road linking Manipur with Myanmar

Philippines
PPP mode proposed for LGU infra projects
Govt studying SMC’s Bulacan airport plan
MPIC mulls bid to operate Clark airport terminal
Big-ticket projects boost B.O.I. approvals
55 big-ticket infra projects await ICC action; 6 pass feasibility stage
Congress to work hard to fund Duterte infrastructure projects
Infrastructure spending target doubted
Clark is preferred airport project because of shorter timeline
BCDA to build momentum for infra push

Singapore
Singapore companies aim to nab high-speed rail project
Safe and free flow of goods key to realising potential of China's Belt and Road Initiative: DPM Teo

Thailand
Chinese interested in EEC link
Thailand, China to move forward on train, EEC projects
Thailand to tap 'domestic sources' for US$5.3b rail project with China — official

Vietnam
Vietnam’s tale of two metros built by the Japanese and the Chinese
Insufficient funds in Vietnam
Vietnam: Joint ventures more preferred for equity investment in real estate
 
ARTICLE CLIPS
 
 
Regional Affairs

Following China’s debt-paved Silk Road World Finance 19th Jul 2017
When Chinese President Xi Jinping unveiled his cherished Silk Road Economic Belt project in 2013, the scale of his ambition was so vast that it hardly seemed credible. China would rebuild its historic trade route, but this time taking it even further than the Han Dynasty did in 206 BC. Xi’s modern Silk Road would stretch all the way to Europe through central and western Asia. For good measure, there would also be a maritime route connecting China with south-east Asian countries, Africa and Europe.

ADB: Climate Change Threatens Asia’s Development Gains The Diplomat 19th Jul 2017
The ADB predicts “drastic changes” that could pose an “existential threat” to some Asian countries. Asia’s hard-won development gains are at risk of being reversed by the effects of climate change, according to the Asian Development Bank (ADB). However, the news is not all bad for the region, with new energy investments expected to cement its leadership in the “clean industrial revolution.”

Joining the AIIB Projects—What You Must Know about Affiliated Debarment and Cross-Debarment Lexology 19th Jul 2017
The Asian Infrastructure Investment Bank (AIIB) is a multilateral financial institution that aims to bring financial support to infrastructure building in Asia. Certainly, AIIB will play an important role in the Belt and Road related projects.

AIIB chief outlines plans to use capital markets The Standard 19th Jul 2017
China-backed development bank, the Asian Infrastructure Investment Bank is in a better position to move ahead with its ambitious plans, not that it has received top ratings by two leading rating agencies, president Jin Liqun, (pictured, second from left) said today in Hong Kong.

ADB ready to cooperate with AIIB in Asia, insider says Asia Times 18th Jul 2017
The Asian Development Bank (ADB) is now open to cooperating with China’s Asian Infrastructure Investment Bank (AIIB), though the potential for more competitive relations lurks in the wings, says a former official for the US-and-Japan-led ADB.

Brunei

Temburong residents eagerly anticipate new bridge completion – Borneo Bulletin Online 26th Jul 2017
The completion of the bridge connecting Bandar Seri Begawan to Temburong is very much anticipated by residents of the district, since it will provide shorter travel and enable the rapid growth of the country’s economy in the field of eco-tourism and small and medium enterprises (SMEs). This was highlighted by YB Haji Emran bin Haji Sabtu, a Legislative Council (LegCo) representative of Temburong District, during the recent Junjung Ziarah and get-together ceremony of His Majesty Sultan Haji Hassanal Bolkiah Mu’izzaddin Waddaulah ibni Al-Marhum Sultan Haji Omar ‘Ali Saifuddien Sa’adul Khairi Waddien, Sultan and Yang Di-Pertuan of Brunei Darussalam at Pekan Bangar, Temburong.

Cambodia

Construction investment up by a third Khmer Times 17th Jul 2017
Construction investment during the first half of the year reached $4.94 billion, up 27.44 percent on the same period last year, according to a senior official at the Ministry of Land Management.

More than $1bn invested in local infrastructure Khmer Times 13th Jul 2017
Cambodia has invested more than $1 billion on infrastructure, especially on transport, a senior official at the Ministry of Economy and Finance says.The figure represents about 80 percent of the government’s annual investment.

Lancang-Mekong exhibition opens in Cambodia to promote regional trade, investment Xinhua 13th Jul 2017
Visitors walk by a model of China's next generation bullet train "Fuxing" during the Economic and Technological Exhibition for Lancang-Mekong Cooperation in Phnom Penh, Cambodia on July 13, 2017. The Exhibition opened on Thursday as part of Lancang-Mekong countries' efforts to boost regional trade and investment. (Xinhua/Sovannara)

A quantum leap for Cambodia’s telcos Phnom Penh Post 13th Jul 2017
As in the rest of the world, everyday Cambodian life is dominated by the use of smartphones, with consumers glued to social media, streaming videos and staying up-to-date with the latest breaking news and spreading viral content.ed.

China donates 98 buses, 2 wreckers to Cambodia for Public Transport Xinhua 13th Jul 2017
PHNOM PENH, July 13 (Xinhua) -- China donated 98 buses and two wreckers to Cambodia on Thursday for public transport service expansion in Phnom Penh, capital of Cambodia.

Indonesia

Infrastructure in Indonesia: Campaign Promises Kept? Brink News 13th Jul 2017
After being overshadowed for decades by debates over the roles that trade policy and financial liberalization play in generating economic growth, developing quality infrastructure has reasserted itself as a top development priority. Success in infrastructure can bring spectacular gains in growth, exemplified by China.

Govt to issue reference price for industrial estates The Jakarta Post 18th Jul 2017
The government will issue a reference price for land in industrial estates in the second half of this year in a bid to curb land-price fixing, the Industry Ministry’s industrial estate director general Imam Haryono has said. There will be two price references: one for industrial estates managed by state-owned enterprises (SOEs) and the other for those managed by private firms. The reference for state enterprise-owned estates will be issued before the privately owned one.

Malaysia

JB-Singapore MRT link to start passenger service by end-2024, says minister malaymail 31st Jul 2017
The Rapid Transit System (RTS) Link is expected to carry up to 10,000 passengers per direction per hour. — TODAY file picISKANDAR, July 31 — A cross-border MRT link that will connect Singapore and Johor Baru in Malaysia is slated to begin passenger service by the end of 2024, ministers from the two countries announced today.

‘Keep investing in infrastructure’ the star 31st Jul 2017
MARAN: Prime Minister Datuk Seri Najib Tun Razak says for the economy to grow, continuous in­vest­ment in infrastructure is needed to spur the country’s deve­lopment progress. He said this included investment in the development of Klang Valley.

Uber: MRT growth is helping business The Star Online 20th Jul 2017
Public transportation projects such as the High Speed Rail project and Mass Rapid Transit extension from Singapore are all good news for Uber. Its Head of Communications (Singapore and Malaysia) Leigh Wong said that presently 25% of all Uber's rides in the Klang Valley start and end at train stations.

More to come for commuters The Star Online 18th Jul 2017
KUALA LUMPUR: The country’s Mass Rapid Transit (MRT) system is a world-class infrastructure project that is just the beginning of more good things to come for Malaysia’s commuters, said Datuk Seri Najib Tun Razak.

Government launches project to reduce Sabah’s power outage woes Free Malaysia Today 17th Jul 2017
The government has initiated a special month-long focus group to come up with strategic and practical plans to reduce interruptions to electricity supply in Sabah. Energy, Green Technology and Water Minister Maximus Ongkili said the “lab” had been tasked with ensuring the state’s system average interruption duration index (Saidi), which indicates power outage in minutes per customer, would be reduced to 100 minutes by 2020. Dubbed the Sabah Saidi 100 Lab, the project is a joint initiative between the ministry and Pemandu Associates Sdn Bhd, and is aimed at providing quality power generation to Sabahans, he said.

SPAD: MRT Line 2 and LRT 3 projects to spur growth the star 17th Jul 2017
PETALING JAYA: Upcoming projects like the MRT Sg Buloh-Serdang-Putrajaya – otherwise known as MRT Line 2 – and the LRT 3 from Bandar Utama to Johan Setia in Klang are expected to unlock more development.

Malaysia hopes opening of MRT line will ease congestion Bangkok Post 17th Jul 2017
A 51-kilometre commuter rail line connecting the Malaysian capital to outlying areas began operating on Monday, with the government hoping it will ease Kuala Lumpur's notorious traffic congestion. The Mass Rapid Transit system, eventually comprising three lines, is Malaysia's biggest infrastructure project to date. The first line -- connecting Kuala Lumpur to Sungai Buloh in the northeast and Kajang in the southwest -- took six years to build and cost 21 billion ringgit (165 billion baht). "As Malaysians, we can stand tall today as we have a world-class project for the people. We are seeing not just the MRT but the shape of the future of Malaysia before our eyes," Prime Minister Najib Abdul Razak said in a speech at the opening ceremony.

Myanmar

Transport Co eyes Myanmar links Bangkok Post 15th Jul 2017
Transport Co, the state-owned public interprovincial bus service provider, plans to expand its routes to link Myanmar and India. Managing director Jirasak Yaowatchasakul said the plan was part of the company’s bid to expand to Asean, especially Myanmar, where tourism was booming, according to a Manager Online report.

CCEA clears widening of Manipur-Myanmar highway stretch - Times of India The Times of India 13th Jul 2017
The government today said it has cleared the widening and upgradation of a national highway stretch from Imphal to Myanmar border that will eventually go up to Thailand and Malaysia under an Asian Highway project. The 65 km Imphal-Moreh stretch in Manipur on NH 39 is part of the project to connect India with Southeast Asian nations.

Burma: Villagers allegedly ‘trapped’ during land grab operation for Thilawa project Asian Correspondent 12th Jul 2017
Some 39 families in Thilawa SEZ are 'trapped' by a heavy police presence, says a rights group. Source: ERI LOCAL police and Thilawa town officials have erected a wall around the homes of 39 families in the port town, purportedly as part of an “aggressive” land confiscation operation for the Thilawa Special Economic Zone (SEZ) project, a rights group claimed on Wednesday.

Regional govt to build bridges, underground road system | Eleven Myanmar Eleven Myanmar 12th Jul 2017
The regional government plans to build bridges and an underground road system to connect Yangon’s older and newer sections, announced Chief Minister Phyo Min Thein on July 11. “Yangon is densely populated, and the regional government plans to expand its area. We plan to build a new town on the opposite side of the Yangon River and the old town. It is not well developed. So we are preparing to build new bridges and an underground road system. We intend to make Yangon beautiful and keep the Yangon River in the middle of town,” said Phyo Min Thein.

Cabinet approves road linking Manipur with Myanmar India.com 12th Jul 2017
The Union Cabinet on Wednesday approved upgradation of a 65-km-long National Highway in Manipur to boost the state’s connectivity with south and southeast Asia via Myanmar. Road Transport and Highways Minister Nitin Gadkari told reporters here that NH-39 from Imphal to Moreh near the Myanmar border would reduce travel time from three-and-a-half hours to one hour and 45 minutes.

Philippines

PPP mode proposed for LGU infra projects philstar.com 22nd Jul 2017
The Public-Private Partnership (PPP) Center is urging local government units (LGUs) to consider the PPP mode as a viable option in implementing their infrastructure projects. The center signed recently with the League of Cities (LCP) of the Philippines a memorandum of understanding (MOU) for the provision of assistance to LGUs in implementing projects via the PPP route.

Govt studying SMC’s Bulacan airport plan The Manila Times 17th Jul 2017
The National Economic and Development Authority (NEDA) said an unsolicited proposal by San Miguel Corp. (SMC) to build a new international airport in Bulacan was still under consideration by the government.

MPIC mulls bid to operate Clark airport terminal Business World 17th Jul 2017
METRO PACIFIC Investments Corp. (MPIC) is interested in taking over the operations and maintenance (O&M) of Clark International Airport’s proposed new terminal when the contract is bid out by the government.

Big-ticket projects boost B.O.I. approvals BusinessMirror 16th Jul 2017
Investments approved by the Board of Investments (BOI) jumped by 30 percent to P273 billion as of mid-July on the back of big-ticket projects, such as San Miguel Corp.’s (SMC) Metro Rail Transit (MRT) 7 project, according to the Department of Trade and Industry (DTI).

55 big-ticket infra projects await ICC action; 6 pass feasibility stage Business World 12th Jul 2017
FIFTY-FIVE flagship infrastructure projects are awaiting action from the National Economic and Development Authority Investment Coordination Committee (NEDA-ICC) as of mid-year.

Congress to work hard to fund Duterte infrastructure projects Manila Bulletin News 12th Jul 2017
House Appropriations Committee chairman, Davao City 1st district Rep. Karlo Alexei Nograles, has vowed to do his best in providing funds for President Duterte’s massive infrastructure projects lined up for the next few years.

Infrastructure spending target doubted Business World 19th Jul 2017
AN international think tank doubts that the government plan to sharply raise infrastructure spending is doable, citing the slow rollout of projects and concerns about the administration’s change in financing mode. Analysts at GlobalSource Partners said that there has been little sign, so far, of the state’s capacity to implement its P8.4-trillion infrastructure spending plan over the next five years, amid uncertainty fueled by questions on the government’s change in preferred funding scheme for these big-ticket projects.

Clark is preferred airport project because of shorter timeline Business World 17th Jul 2017
AMID unsolicited proposals to establish new and modern airports in Bulacan and Sangley Point in Cavite, the government’s chief economic planner still views Clark International Airport as the “superior” option to decongest Ninoy Aquino International Airport (NAIA).

BCDA to build momentum for infra push Business Mirror 14th Jul 2017
Bases Conversion and Development Authority (BCDA) President and CEO Vivencio B. Dizon said the government is creating momentum to realize the full development of Central Luzon, particularly the Clark airport, which is touted to be the next growth driver in the region. Noting that a lot of problems are spawned by lack of infrastructure, Dizon said the BCDA will be prioritizing the Clark-Subic area with multibillion-peso infrastructure projects, like the NorthRail project, Subic-Clark railway, Clark airport expansion and the Clark Green City project.“These projects will not be finished within five years; but the momentum is what’s important,” Dizon added.

Singapore

Singapore companies aim to nab high-speed rail project- Nikkei Asian Review 17th Jul 2017
Six local companies have formed a consortium, hoping to join a project to build a high-speed railway between this city-state and Kuala Lumpur.

Safe and free flow of goods key to realising potential of China's Belt and Road Initiative: DPM Teo TODAYonline 13th Jul 2017
SINGAPORE — The safe and free flow of goods is key to realising the full potential of large investments that have been made to boost connectivity and transport linkages cross four continents under China's Belt and Road Initiative (BRI), said Deputy Prime Minister Teo Chee Hean.

Thailand

Chinese interested in EEC link Bangkok Post 12th Jul 2017
China is considering an investment to link Thailand's Eastern Economic Corridor (EEC) and Kunming's special economic zone (SEZ) as the mainland looks to build a consolidated supply chain.

Thailand, China to move forward on train, EEC projects Bangkok Post 24th Jul 2017
Thailand and China have pledged there will be no u-turn on a long-delayed train project and promised cooperation on the Eastern Economic Corridor (EEC) scheme. Chinese Foreign Minister Wang Yi said he hoped the rail project would "elevate" Thailand's status in the region and said that the two countries would overcome differences to bring the rail project to fruition. Thailand and China are set to build the 179-billion-baht train project linking Bangkok and Nakhon Ratchasima after Prime Minister Prayut Chan-o-cha executed Section 44 of the interim constitution to end the delay last month. The route to Nakhon Ratchasima will be extended to Nong Khai in the future. Plans call for it to link with another train line under construction from southern China to Laos. Thailand and China have mooted the train project since 2014 but progress has been slow, hampered by unsettled issues including loans and technological transfer.

Thailand to tap 'domestic sources' for US$5.3b rail project with China — official The Edge Markets 17th Jul 2017
Thailand plans to get from "domestic sources" most of the funding for a 179 billion baht (US$5.3 billion) high-speed railway project built with China, a finance ministry official said on Monday. The 873-km (542 miles) rail line, which will link Thailand's border with Laos to eastern ports and industrial zones, is part of Beijing's regional infrastructure drive that China originally named "One Belt, One Road". The link, in theory a centrepiece of Chinese-Thai cooperation, has been held up by years of negotiation over everything from cost and loan terms to land development rights. Last month, Thailand's military government invoked an executive order to kick-start the project. Under terms agreed so far, Thailand will fund the project and China will provide technical assistance.

Vietnam

Vietnam’s tale of two metros built by the Japanese and the Chinese South China Morning Post 30th Jul 2017
Delays and cost overruns are to be expected as the nation tries to recreate the transportion systems of its two largest cities, but accidents and mistakes on the Chinese-led project are feeding into some longstanding prejudices

Insufficient funds in Vietnam Asia Times 21st Jul 2017
For a city of eight million and counting, Ho Chi Minh City’s mass transit metro system can only be described as an absolute necessity. Yet construction on the six-line railway, first proposed in 2001, has been dogged by delays caused by insufficient state funds.

Vietnam: Joint ventures more preferred for equity investment in real estate DealStreetAsia 12th Jul 2017
Joint ventures are the most preferred route for investors in the Vietnamese real estate sector since the beginning of this year, as they seek to combine the assets owned by local developers with the capital and expertise of foreign companies.