Energy, transport in urgent need for sustainable growth

Satyanarayan R, KPMG’s head of government and infrastructure for Asia Pacific, told Myanmar Eleven in an exclusive interview that Myanmar needs urgent investment in the power sector.

"Energy is needed because Myanmar is going to be industrialised very rapidly. The GDP growth from industries is going to increase. That increase can happen only if there is sufficient power to support the industrial growth," said Satya.

KPMG partner pointed out that Myanmar needs to reduce distribution losses in power transmission which are close to 20 per cent. He urged the government to let the private sector support some of the distribution infrastructure by improving the collection and distribution losses. He said that more private firms should invest in improving the lines and delivery infrastructure for the power distribution.

"If you look at it in the long term, the answer is to replace all the infrastructure with higher quality infrastructure. In the medium- and short-term, I think there are solutions to get the private sector to come in and support it," he said.

"Transmission is a bit more complex as the investment is quite large. As the capacity is still so small, I think the focus should be on building new capacity," said Satya, adding that the government needs to ensure that the new capacity has the ability to support the country’s economic development.

To him, technical transmission losses will come down quite soon with the help of World Bank, Asian Development Bank, and private sector participation, and gas can be closer to centre of industrial demand.

"In the interim, Myanmar can also start looking at how it will engage with multi-lateral in upgrading the transmission because the immediate pay-off is to guarantee multilateral investment in transmission infrastructure and provide some payback over a period of time because your transmission losses are going to come down."

The infrastructure expert said that transport plays a crucial role in the nation’s economic growth. He added that Myanmar has one of the lowest efficiency in the logistics supply change. As it is regarded as one of the highest costs of logistics in the world, building up the right transport infrastructure is vital to allow the movement of goods from one place to another, from manufacturing to the consumption sector, he said.

To him, building ports plays an important role in allowing imports of capital equipments, and allowing exports of the materials, commodities, and products in an efficient way.

Myint Aung Kyaw, who has been doing the export/import business since 2000s, echoed Satya’s view.

"Transport is vital to trading. While improving the transport infrastructure, the government needs to find solutions to solve the traffic problems in Yangon, which is emerging day by day. Sometimes, it usually takes more than two hours from Bayintnaung area to get to downtown. That can have an impact on the flow of goods as it is very time-consuming," he said.