Business

The Irrawaddy Business Roundup (Oct. 24, 2015)

By Simon Lewis 24 October 2015

Indian Government Agrees to Inject More Funds Into Kaladan Project

The Indian government has reportedly agreed to increase its funding for an ambitious infrastructure project that will see goods transported through Burma’s Arakan and Chin states on their way to India’s northeast.

The Kaladan Multi-Modal Transit Transport project has been in the works for more than a decade, and work on a new port in the Arakan State capital of Sittwe is already nearing completion, at a cost of an estimated US$120 million.

Even before both states were ravished by flooding earlier this year, the project was already delayed.

Work is still to be done to set up a river link to transport goods from Sittwe to Paletwa, in Chin State, which requires dredging large sections of the Kaladan River and constructing a new river port. The project also includes a further plan to build a 130-kilometer highway on which cargo can be transported on to the Indian border at Zorinpui.

The New Delhi-based newspaper Business Standard reported this month that the Indian government’s cabinet, chaired by Prime Minister Narendra Modi approved a revised cost estimate for the project. The new cost of the development, to be born by the Indian government, was reported as 2,904 crore rupees, equivalent to $447 million.

“The project will provide an alternate access route to the North-Eastern region of India and contribute towards the region’s economic development,” it said. “Being a key connectivity project, it will promote economic, commercial and strategic links between India and Myanmar.”

The revision represents a significant increase from previously reported estimates for the cost of the project.

Business Standard said the original cost estimate for the project, for which studies were completed in 2005, was just $82.3 million. More recent reports have put the cost of the project at $214 million, still less than half the new price tag reportedly approved by the Indian cabinet.

Tech Firms Sign Deals to Offer Payments Through Messaging App

Three tech firms are set to establish a service allowing mobile phone users in Burma to make payments through messaging applications.

Mobile payments firm MyPAY will team up with Singapore-based Fastacash, which is involved in similar services in India, Indonesia, Russia, Singapore and Vietnam, according to an announcement.

MyPAY is connected with London-listed company MySQUAR, which owns Burmese-language messaging app MyChat!, and says it now has a total of 1.5 million subscribers in Burma.

A press release this week said that Fastacash has made a “strategic investment” in MyPAY that will see the Singaporean firm’s technology platform used in Burma to enable “payments through social.”

“fastacash [sic] will also support MyPAY’s go-to-market activities, including market insights and global partnership management. Through the fastacash platform, anyone using MyPAY will be able to transfer money, and airtime with their social connections, and make payments at retail points.”

A controlling interest in MyPAY is held by Eric Shaer, who is also CEO of MySQUAR. “Consumers on MySQUAR will easily be able to transact with their connections on the channel and with merchants,” the press release said.

According to a separate announcement on MySQUAR’s website, that company has simultaneously entered into a “service agreement” with MyPAY “for the integration of MyPAY’s mobile payment services as a feature of MyCHAT, MySQUAR’s free to use, mobile messaging and social networking application.”

“Under the 5-year agreement with MyPAY, MySQUAR will receive US$500,000 in software platform integration fees from MyPAY and then an ongoing 50 percent share of net fees collected from MyCHAT users who make transactions through the mobile payment features integrated in MyCHAT.”

Trade, Production Statistics Available on New Government Data Site

The Burmese government this week launched a new website making available for the first time a raft of data sets containing some of the country’s vital statistics on international trade, domestic production and finance.

The Myanmar Statistical Information Service (MMSIS) database has been developed by the Central Statistics Organization in collaboration with the South Korean aid agency, KOICA.

It contains a range of data drawn from various government departments: from the total number of seats in Burma’s cinemas (16,999) to the number of working elephants being used in the timber trade (815 in Sagaing Division alone).

At a launch event to mark International Statistics Day in Naypyidaw, Minister for National Planning and Economic Development Dr. Kan Zaw admitted that quantitative data was at present in “short supply” in Burma, according to the Global New Light of Myanmar

“He added that collecting data about what Myanmar’s society may look like in 2020 will prove extremely useful in planning for the future,” the state-run newspaper reported.

Local and international businesses will likely be most interested in the details provided about the economic conditions in the country.

Detailed information on the amount of timber processed in the country is available, as are figures for the volume of specific minerals extracted in Burma. Useful trade statistics are also provided in some detail, including the quantities of imports and exports cross the country’s borders.

Data from Burma’s Customs Department, for example, sheds some light on the recent surge in exports in the garment sector following the dropping or suspension of trade sanctions by the West. Exports of “textiles and textile articles” totaled $1.046 billion last year, according to the data, up from just $701.25 million in 2012.

However, some key data on the site appears a little out of date. While a “summary of the Union Budget” is available in the database, that information is only available up to 2010.

American Engineering Firm Joins Magwe Solar Project

US-based engineers Black & Veatch have been hired to work on a major solar power development in central Burma, Energy Business Review reports.

Work on a 220-megawatt solar power plant in Minbu, Magwe Division, is set to begin early next year, with Green Earth Power (Thailand) the lead developer of the project.

Energy Business Review said that Black & Veatch, which opened an office in Yangon recently, had been contracted by Green Earth Power to “provide design and consultancy services” on the project.

The company, headquartered in Kansas City, Missouri, has reported annual revenues of some $3.6 billion, and specializes in infrastructure development projects.

The report quoted Black & Veatch’s general manager in Burma, Pitak Wangvarangkoon, saying that the project would help toward the Burmese government’s goal of building 30,000 megawatts of power generation capacity by 2030.

“Drawing on our deep experience in renewable energy, power generation, water and oil & gas, we are well positioned to support the goal and bring in the full depth and breadth of our regional expertise,” the manager was quoted saying.

Korean Cable Firm Wins Power Ministry Contract

South Korean manufacturer LS Cable & System has won a $13 million contract to supply transmission cables to Burma’s Ministry of Electric Power, according to a Korea Times report.

The outlet reported that the deal represented half of the ministry’s annual cable purchases, and was the largest contract to supply cables ever awarded in Burma. The South Korean firm’s Vietnamese subsidiary signed will sign a deal with the Burmese government, it said.

Citing a statement from the company, the Korea Times said the company won the contract ahead of bidders from China and Indonesia, as well as Burmese competitors.

“We could become the sole contractor as we have been highly rated in technology as well as in price competitiveness, which was secured through the Vietnamese subsidiary,” the company reportedly said. “In the past, Myanmar’s Ministry of Electric Power used to split its orders among three or four cable makers.”

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