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FROM OUR CORRESPONDENTMYANMAR


old regime has left a legacy of poor language and numerical skills. Labour might be cheap, say consultants, but any company looking to invest is most likely to find severe skills shortages, while corruption remains a problem, as does the unresolved ethnic conflict. However, one company that does see significant opportunities and is keen to capitalise on them is Bangkok based The Freight Co, with managing director Patrick Dick personally leading the company’s focus on Myanmar.


Thirty years ago, he was involved in one of the last major energy projects in Myanmar, assisting Siemens to build a hydropower plant. This year he oversaw The Freight Co’s first major project in Myanmar when it was tasked with handling the transport of a power plant, one of two 120 MW power stations donated by the Thai government from Thailand to the Ywama power station outside Yangon, Myanmar. The project was complicated, and Dick believes that Yangon had never seen such a complex move, which required lengthy clarifications with ministries and government authorities to prepare the discharge of the vessel at two different ports, plus the transport of two heavy lifts exceeding 200 tonnes each through Yangon.


Power plants


The general cargo for the first of the two power plants was discharged at Bo Aung Kyaw Port, before the vessel moved to Asia World Port to discharge the heavy lifts, which included the starter unit, turbine, generator and transformer.


Thai engineering firm STFE Company won the contract for the installation, engineering, commissioning and transportation of the turbine, and contracted a consortium, including The Freight Co, Injynn Development Company and Thai heavy trucking company Silamas Transport, to take charge of the cargo transportation from Yangon to Ywama.


Speaking to local media, Dick added that he expected this to be a door-opener for the 70/30 percent joint venture – The Freight Co Myanmar –which has recently been established in Yangon with business partner Captain Soe Min Aung. At the moment, The Freight Co


Myanmar’s main competition comes from Singaporean freight and logistics companies, which are active because Singapore is an oil and gas and a logistics hub with a full array of transport equipment.


Some of the challenges he expected his future clients to come up against include


40 July/August 2013


The Freight Co unloads its


first Myanmar project cargo.


battling for unloading space in Yangon’s bustling port zones and dealing with accumulated transportation costs. The general consensus is that Thein Sein’s government is trying hard to get the right regulatory framework in place to absorb the wall of overseas investment heading in Myanmar’s direction, with the reforming ministries having already passed or drafted many of the laws needed to tilt the economy towards an irreversible openness and liberalism.


It is reported that the Japanese have been involved in drafting new laws for the stock market. The Asian Development Bank is working on new company law and the IMF is helping to reform the country’s Central Bank, where the debate is whether it should


be split off from government and left to manage monetary policy.


A new investment law took effect at the end of 2013. And many are pleased with the government’s pledge to sign up to the New York Arbitration Convention, since no multinational would want to see its commercial disputes resolved under Myanmar’s legal system.


Pros and cons


Weighing up the pros and cons, Myanmar clearly has a great deal of potential for the international investment community and the project cargo business that supports it. Even if it manages to overcome the many pitfalls outlined in this article, and develops the stable and peaceful environment that investors crave, it clearly remains a “frontier” investment destination.


Outsize cargo for one of the last major energy projects carried out in Myanmar 30 years ago.


Patrick Dick at the Shwedagon Pagoda in Yangon during a break from transporting power plant in Myanmar 30 years ago.


The last word goes to Dick at The Freight Co who said that when the investment comes and the heavy project cargoes really start to move investors need to remember that accessing Myanmar’s mountainous upcountry region –where the natural resources are located, and where the geography is suitable for hydropower development –will prove a monumental task. It will also be difficult to exploit the natural resources that are offshore, as no significant offshore supply base structure is in place. There is a single small offshore supply base in Yangon, but this will quickly be outstripped by demand, said Dick. “The more up-country you go and the higher into the mountains, the more logistics challenges you will encounter. So if you are doing business in Myanmar, consult a project cargo expert with your challenge and give them the time to come up with a proper logistics solution,” Dick concluded. HLPFI


www.heavyliftpfi.com


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