RAIL DEVELOPMENTS IN ASEAN 1.2.2016 2008-2009: LEARNED THEIR - - PowerPoint PPT Presentation

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RAIL DEVELOPMENTS IN ASEAN

1.2.2016

2019 PERCENTAGE CHANGE IN GROSS DOMESTIC PRODUCT

BUSINESS SWEDEN 8 FEBRUARY, 2016 2 SOURCE: INTERNATIONAL MONETARY FUND, BUSINESS SWEDEN ANALYSIS

8 6 4 2

• 2
• 4
• 8
• 6

1980 1990 2000 2010 2019 G7 EU Latin America and the Caribbean Middle East and North Africa ASEAN 6 1998 2008 2009 Sub-Saharan Africa 2010

1960S-1997: TIGERS ARE DRIVING ASEAN

MALAYSIA, THAILAND, SINGAPORE AND INDONESIA

1997-1998: THE ASIAN CRISIS DEVASTATES ASEAN 1999 – 2008: FAST RECOVERY TO STABLE GROWTH 2008-2009: LEARNED THEIR LESSON IN 1997 OUTSTANDING PERFORMANCE IN DELIVERING STABLE GROWTH

Opportunities Challenges

BUSINESS SWEDEN 8 FEBRUARY, 2016 3

ASEAN - PAPER TIGER OR SUCCESSFUL REGIONAL INTEGRATION?

Cambodia

Thailand

ASEAN

Malaysia Vietnam Laos

Cambodja

Indonesia Philippines Singapore Brunei

SOURCE: BUSINESS SWEDEN

BEYOND AEC, ASEAN’S MAJOR ACCOMPLISHMENT IS THAT IT HAS PROVIDED A PLATFORM TO RESOLVE CONFLICTS ENABLING STABILITY AND ECONOMIC GROWTH

• Intra ASEAN tariffs

eliminated

• Strong growth in intra

ASEAN trade

• Access to regional

and global supply chains

• Unification of standards

and procedures are lagging

• Many trade and

investment barriers remain

• National agendas over-

ride regional

Myanmar

BUSINESS SWEDEN 8 FEBRUARY, 2016 4

MORE FTA’S WILL FURTHER STRENGTHEN ASEAN POSITION WITHIN REGIONAL/GLOBAL SUPPLY CHAIN

SOURCE: BUSINESS SWEDEN ANALYSIS

TRANS PACIFIC PARTNERSHIP REGIONAL COMPREHENSIVE ECONOMIC PARTNERSHIP ASEAN

CHINA S.KOREA INDIA SINGAPORE BRUNEI VIETNAM MALAYSIA LAOS CAMBODIA THAILAND MYANMAR PHILIPPINES INDONESIA UNITED STATES CANADA CHILE MEXICO PERU JAPAN NEW ZEALAND AUSTRALIA

RESULTING IN LIBERALIZATION OF TRADE IN GOODS AND SERVICES AS WELL AS ATTRACTING MORE FDI’S

GDP GROWTH DEVELOPMENT (2000 – 2014) 0% 2% 4% 6% 8% 10% 12% 14% 16% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

BUSINESS SWEDEN 8 FEBRUARY, 2016 5

ASEAN 6 KEEPING PACE WITH WORLD’S FASTEST GROWING ECONOMIES

SOURCE: WORLD BANK

5,2% 7,0% 9,7%

Average growth

ASEAN 6 China India

VALUE OF FOREIGN DIRECT INVESTMENT INFLOWS USD BILLION 20 40 60 80 100 120 140 2007 2008 2009 2010 2011 2012 2013 2014

8 FEBRUARY, 2016 BUSINESS SWEDEN 6

FDI INTO THE ASEAN6 ASEAN6 HAS SURP SURPASSE ASSED D CH CHIN INA A FOR THE PAST TWO YEARS

SOURCE: ASEAN FOREIGN DIRECT INVESTMENT STATISTICS DATABASE, UNCTAD

EUROPEAN UNION AND JAPAN ARE THE BIGGEST INVESTORS IN THE ASEAN6 REGION

ASEAN 6 China India ASEAN 6

(excl. Intra-ASEAN)

• 30
• 20
• 10

10 20 30

BUSINESS SWEDEN 8 FEBRUARY, 2016 7 SOURCE: WORLD BANK – EASE OF DOING BUSINESS

Philippines Vietnam Thailand Indonesia Singapore Malaysia

Rank 2015 Rank change 2006 - 2015

SIGNIFICANTLY IMPROVED BUSINESS CLIMATE IN MOST ASEAN COUNTRIES OVER THE LAST DECADE…

India

Improving Can’t keep pace

China

40 80 120 160 1 EASE OF DOING BUSINESS INDEX RANKING 2006 VS. 2015 ASEAN6

• 40
• 20

20 40

BUSINESS SWEDEN 8 FEBRUARY, 2016 8 SOURCE: WORLD BANK – TRANSPARENCY INDEX

Philippines Vietnam Thailand Indonesia Singapore Malaysia Rank 2014 Rank change 2006 - 2014

…HOWEVER CORRUPTION STILL REMAINS A MAJOR HURDLE IN THE OVER

India China 40 80 120 160 1 CORRUPTION PERCEPTION INDEX RANKING 2006 VS. 2014 ASEAN6

Improving Can’t keep pace

Implications for Swedish Companies

• Government bureaucracy red tape

(applying for permits, import licenses etc.)

• Custom services have traditionally

been a challenge in majority of the markets

• Local content requirements in some

product categories

• Local partners required by law in

certain countries/segments “Southeast Asia is home to some of the richest, fastest-growing economies, as well as some of the planet’s poorest people. Battling corruption is an integral part to sustainable growth and reducing income inequality”

Natalia Soebagjo, Chair of Transparency International Indonesia.all regional

SWEDEN VS MAJOR EUROPEAN ECONOMIES EXPORT TO ASEAN 2004-2014 BILLION USD 5 10 15 20 25 30 35 40 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

BUSINESS SWEDEN 2016-02-08 9

SWEDEN IS LOSING GROUND IN EXPORT TO ASEAN IN COMPARISON TO OTHER MAJOR EUROPEAN ECONOMIES

SOURCE: INTERNATIONAL TRADE CENTRE 2015

SWEDEN HAS EXPERIENCED SLOW GROWTH OVER THE PAST DECADE

GROWTH er

8 4 5 9 10 20 8

Germany France Sweden Austria 98% 133% 173% 30%

1,2 1 0,6 0,6

3,4

ASEAN 31 19 19 18 13 6 25 14 9 10 4 11 6 20 10 10 13 7 7 4 13 17 13 9 18 12 12 13

72% 51% 51% 47% 43% 28% 71% Singapore Malaysia Thailand Vietnam PhilippinesIndonesia Benchmark Water Telecom Power Transport

8 FEBRUARY, 2016 BUSINESS SWEDEN 10

INFRASTRUCTURE STOCK IS STILL FAR BEHIND GLOBAL BENCHMARK FOR DEVELOPED COUNTRIES…

% OF GDP IN INFRASTRUCTURE STOCK 2012 Investment needed to reach 70% by 2030 Trillion USD

SOURCE: INTERNATIONAL TRANSPORT FORUM; GLOBAL

TRANSPORT AND ENERGY IN OF 2,2 TRILLION USD INVESTMENTS IN THE NEXT 15 YEARS

1,35 0,45 0,4 0,35 0,35 0,3 0,25 Indonesia Philippines Thailand Malaysia Vietnam Singapore Rest of ASEAN*

8 FEBRUARY, 2016 BUSINESS SWEDEN 11

…THE INVESTMENT OF USD 3,4 TRILLION UNTIL 2030 IS NEEDED

INVESTED NEED UP TO 2030 USD TRILLION

SOURCE: INTERNATIONAL TRANSPORT FORUM; GLOBAL *LAOS, BRUNEI, CAMBODIA AND MYANMAR

MAJORITY OF INVESTMENTS WILL BE CONCENTRATED TO INDONESIA

BUSINESS SWEDEN 8 FEBRUARY, 2016 12

EXTENSIVE INVESTMENTS IN RAIL INCLUDING HIGH SPEED RAIL

SOURCE: PHILSTARGLOBAL, PEOPLE'S DAILY, ADB, SPAD, JOC.COM, MRT CORP, THE STAR MALAYSIA

Hanoi Ho Chi Minh Bangkok Yangon Mandalay Kunming Chiangmai Singapore Kuala Lumpur Jakarta Multiple MRT lines under

• construction. Network will

double in length by 2030 Surabaya 900 km Integrated Luzon Railway has been proposed Manila Legazpi La Union Kuala Lumpur – Singapore high speed rail approved and in planning stage now Phnom Penh Kunming Rail will connect China, Singapore and all the countries of mainland Southeast Asia Ubon Ratchathani Plans to dual-track the country’s railways; electrical train to connect Kanchanaburi to Bangkok and Aranyaprathet Aranyaprathet

Existing Line Proposed Line

Nanning Bandung MRT2 is now at tendering stage and is expected to be

• perational in 2022

MRT is under construction in Jakarta, operational in phases by 2019 – 2027. High speed rail proposed from Jakarta to

• Surabaya. In Jan 2016,

construction has commenced on the US5.5 billion link between Jakarta and Bandung

MRT Line

 The government’s strategic direction is to improve the country as a services and transport hub  There is a plan to double the city-state’s metro system as a part of improving urban rail connectivity for the populace  An investment of SGD 900 million between 2012 – 2019 in phases to improve the quality of rail services offered by SMRT  Between 2011 to 2020, the investment in the metro system amounts to SGD 60 billion

BUSINESS SWEDEN 8 FEBRUARY, 2016 13

URBAN RAILWAY GROWTH WILL DRIVE SINGAPORE’S INFRASTRUCTURE INDUSTRY

SOURCE : LTA, SMRT CORPORATION, BUSINESS MONITOR INTERNATIONAL

DESPITE MATURITY, SINGAPORE IS INVESTING HEAVILY IN INFRASTRUCTURE TO INCREASE URBAN CONNECTIVITY

Singapore’s Infrastructure Masterplan 2013 Open Downtown Line Stage 1, Marina-Coastal Expressway 2014 Open North-South Line 1km-extension to the Marina South Pier 2016 Open Downtown Line Stage 2, Tuas West Extension 2017 Open Downtown Line Stage 3 2019 Open Thomson Line 1 2020 Open Thomson Line 2, Complete North-South Expressway 2021 Open Thomson Line 3 2021 - 2025 Open Eastern Region Line, Jurong Region Line, Circle Line Stage 6, Downtown Line Extension, Complete seven new Integrated Transport Hubs 2025 - 2030 Open Cross Island Line, North East Line Extension

Strategic government ambitions Singapore Singapore’s infrastructure masterplan

 Malaysia has railways stretching a total of 1,849km with most of Malaysia's urban railway network is located in the Klang Valley, a region that includes the capital city, Kuala Lumpur, and adjoining cities and towns located in the state

• f Selangor.

 Malaysia's railway industry is expected to provide significant opportunities

• ver the next few years

 A strong urbanization trend to the Greater Kuala Lumpur/ Klang Valley region prompts investment through the 2014 Economic Transformation plan in addition to the country’s goal to attain a developed nation status by 2020

BUSINESS SWEDEN 8 FEBRUARY, 2016 14

INFRASTRUCTURE DEVELOPMENTS TO CATCH UP WITH STRONG URBANIZATION TRENDS IN THE CITY

SOURCE : LTA, SMRT CORPORATION, BUSINESS MONITOR INTERNATIONAL

GOVERNMENT INVESTS THROUGH ECONOMIC TRANSFORMATION PLAN TO DEVELOP THE COUNTRY Immense growth potential

Malaysia rail infrastructure projects LRT3 Linking Bandar Utama, Shah Alam and Klang RM 9.0 billion 45 km Second MRT Line from Selayang to Putrajaya RM 23.0 billion Upgrade of East Coast Railway RM150.0 million

Malaysia rail infrastructure projects

 Thailand has been on the forefront of rail development in the early 1900s with the first railway line being constructed in 1889  There has been discussions around a regional railway connecting Kunming and South East Asia  The routes cut across other neighbouring countries however, must pass through Thailand to reach the Malaysian peninsula  The Thai government has shown that it is prepared to modernize its old infrastructure, willing to invest for economic growth, and open to partner with

• ther countries

 In May 2015 Thailand signed a MOU with Japan to jointly build three high speed lines  Most recently, Thailand’s Cabinet approved the draft cooperative framework between Thailand and China on the development of rail infrastructure, under Thailand's Transport Infrastructure Development Strategy, 2015-2022

BUSINESS SWEDEN 8 FEBRUARY, 2016 15

THAILAND IS THE KEY NODE CONNECTING NORTH ASIA TO SOUTH EAST ASIA BY LAND

SOURCE : LTA, SMRT CORPORATION, BUSINESS MONITOR INTERNATIONAL

THAILAND IS MOTIVATED TO DEVELOP ITS INFRASTRUCTURE TOGETHER WITH FOREIGN GOVERNMENTS Crucial link in land transportation

 Vietnam’s rail network consists of seven lines, all of which are single track, and most of which are in need of upgrading.  There is currently no railway between Vietnam and Cambodia or Laos, the latter of which have their own dilapidated railway networks.  Improved infrastructure in these countries will help forge closer trade ties with neighboring countries, which in turn will boost economic growth and help alleviate poverty.  Thailand has also under-invested in its rail infrastructure. Derailments are common, and poor cross-country connections have placed a strain on the capital, Bangkok, which is densely populated and the source of the country’s economy.  Indonesia has similar congestion problems, with connections between services poor and certain cities difficult to access. While Indonesia’s annual growth in 2014 was 6-6.5%, this could be as high as 7-9% if basic infrastructure was improved.

BUSINESS SWEDEN 8 FEBRUARY, 2016 16

A NUMBER OF SOUTHEAST ASIA’S RAIL NETWORKS ARE IN DRASTIC NEED OF MODERNIZATION

SOURCE: GLOBAL RISK INSIGHTS

High potential for growth INFRASTRUCTURE INVESTMENTS WILL HAVE TO BE PUT IN PLACE FOR FURTHER GROWTH

BUSINESS SWEDEN 8 FEBRUARY, 2016 17

KUALA LUMPUR-SINGAPORE HIGH SPEED RAIL PROJECT ATTRACTED MUCH INTEREST AND ATTENTION

SOURCE : LTA, SMRT CORPORATION, BUSINESS MONITOR INTERNATIONAL

Feb 2013

High-speed rail project announced by Malaysia and Singapore

Oct 2015

Request for Information (RFI) in October – November 2015 where 98 companies responded 14 companies and consortiums had been invited to present their ideas for the project, following the RFI

Dec 2015

Finalize commercial model and procurement approach and land handover in Singapore

2016

Start of planned construction works

2017

Targeted completion of high speed rail

2022 Stakeholders: Land Transport Authority (LTA) Land Public Transport Commission (SPAD)

• Est. value: SGD14.8 billion

 A 6,617 km rail project to link Southeast Asia to China is planned to be an efficient and economical mode of cross-border cargo transportation, estimated project value of US$15 billion  The proposed network consists of three main routes from Kunming, China to Bangkok, Thailand:  the Eastern Route via Vietnam and Cambodia;  the Central Route via Laos, and  the Western Route via Myanmar  The project has been delayed given the many countries and stakeholders involved in addition to technical issues, but takes strides forward with more countries coming on-board  Mainly Chinese and Japanese interest in the different new and upgraded lines although tenders see international competition

BUSINESS SWEDEN 8 FEBRUARY, 2016 18

KUNMING LINE VERY MUCH A CHINA EXTENDED INFRASTRUCTURE PROJECT

SOURCE: GLOBAL RISK INSIGHTS

High potential for growth INFRASTRUCTURE INVESTMENTS WILL HAVE TO BE PUT IN PLACE FOR FURTHER GROWTH

BUSINESS SWEDEN 8 FEBRUARY, 2016 19

EXAMPLE OF TEAM SWEDEN - SWEDISH SMART CITY STAKEHOLDERS

ACADEMIA INCLUDING MAJOR UNIVERSITIES PUBLIC SECTOR STAKEHOLDERS

SYMBIOCITY SYMBIOCARE SAFETY & SECURITY SYMBIOCITY URBAN TRANSPORT SYMBIOCARE SAFETY & SECURITY

TEAM SWEDEN PRIVATE COMPANIES

BUSINESS SWEDEN AIMS TO BRIDGE SWEDISH COMPANIES WITH KEY STAKEHOLDERS IN THE BEST WAY