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Session: Planning & PolicyTopic 1.6. Infrastructure Development: A Regional Perspective
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The views expressed here are those of the presenter and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Directors, or the governments they represent.
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Session on Planning & Policy
Rita NangiaAsian Development Bank
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Session Description
• The session covers:
Cross-border initiatives in Asia
Important challenges and opportunities facing the GMS region
Examples of well-known initiatives
Session: Planning & PolicyTopic 1.6. Infrastructure Development: A Regional Perspective
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The views expressed here are those of the presenter and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Directors, or the governments they represent.
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Overview of the Session
• Asian Highway Network
• Mekong river
• GMS power trading
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Asian Highway Network
• UNESCAP as lead agency Helping address the region’s transport needsConceived in 1959To promote regional cooperation and tradeBecoming an integrated, international transport systemProvides transport to all
• Criteria for identification of routes Maximize use of the existing networksCapital to capital linksIndustrial and agricultural centersSea, river and air ports Container terminals & depotsTourism attractions
Session: Planning & PolicyTopic 1.6. Infrastructure Development: A Regional Perspective
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The views expressed here are those of the presenter and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Directors, or the governments they represent.
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Formalization of Asian Highway
• Intergovernmental agreement Seoul Ministerial Declaration, 17 November 2001
1st Regional drafting meeting,11-12 November 2002
Subregional seminars to review draft
Intergovernmental meeting adopts on 18 November 2003
Open for signature at 60th session of UNESCAP Commission (26 April 2004, Shanghai)
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Formalization of Asian Highway (continued)
• Contracting partiesAdopt AH network
Negotiating procedures
Conform to AH design standards
Display AH signs
• Working group on the Asian Highway Provides negotiating forum
Session: Planning & PolicyTopic 1.6. Infrastructure Development: A Regional Perspective
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The views expressed here are those of the presenter and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Directors, or the governments they represent.
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Source: UNESCAP
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Conformity to Asian Highway Standard
Unreported 2%
2,700 km
Class III 29%
41,600 km
Class II - 30%
42,900 km
Class I - 8%
11,000 km
Below III 17%
23,700 km
Primary - 14%
19,600 km
Source: UNESCAP, Presentation on Asian Highway Projects
Session: Planning & PolicyTopic 1.6. Infrastructure Development: A Regional Perspective
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The views expressed here are those of the presenter and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Directors, or the governments they represent.
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Investment Costs - Asian Highway Priority Projects
17,42525,587Total
2,2513,434South Asia
7,30112,038Central & South West Asia
3,2356,546North East Asia
4,6383,569South East Asia
Cost in US $ millionsKilometers of road covered
Countries covered:South East Asia = Cambodia, Indonesia, Lao PDR, Myanmar, Philippines, Viet NamNorth East Asia = PRC, Mongolia, Russian FederationCentral & South West Asia = Afghanistan, Armenia, Azerbaijan, Georgia, Iran, Kazakhstan, Kyrgyzstan, Tajikistan, Turkey, UzbekistanSouth Asia = Bangladesh, Bhutan, India, Nepal, Pakistan, Sri Lanka
Source: Asian Highway Network, UNESCAP
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Source: UNESCAPSource: UNESCAP
To Europe
To East Asia and beyond
Session: Planning & PolicyTopic 1.6. Infrastructure Development: A Regional Perspective
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The views expressed here are those of the presenter and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Directors, or the governments they represent.
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Trans-Asian Railway
• Formalization of TAR network Focus on collaboration and combined transport
• Demonstration runs of container block trains along the TAR Northern Corridor
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To Europe
Source: UNESCAPSource: UNESCAP
Session: Planning & PolicyTopic 1.6. Infrastructure Development: A Regional Perspective
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The views expressed here are those of the presenter and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Directors, or the governments they represent.
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Future Collaboration on AHN
• Asian Highway/Trans-Asian Railway
• Intermodal connections
• Harmonization of facilitation agreements
• Trade/transport facilitation committees
• Forecasting traffic demands
Data collection/sharing
Identification of bottlenecks
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ECONOMIC INTEGRATION IMPROVED MEKONG NAVIGATION
Session: Planning & PolicyTopic 1.6. Infrastructure Development: A Regional Perspective
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The views expressed here are those of the presenter and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Directors, or the governments they represent.
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Mekong Navigation
• The countries of the Mekong are increasingly inter-dependent in terms of trade, economic development and political cooperation. Regional initiatives for cooperation in economic development in the Greater Mekong Basin:
ADB sponsored Greater Mekong Sub-region (GMS) initiative; Programs under ASEAN (Association of South-East Asian Nations)Mekong River Commission (members: Cambodia, Lao PDR, Thailand and Viet Nam)
• Bilaterally, China is an important economic partner for all the Lower Mekong countries
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Mekong River Commission
• According to the 1995 Agreement, MRC’s role is to promote -“Cooperation in all fields of sustainable development, utilisation, management and conservation of water and
related resources of the Basin.”
• The population in the basin is growing rapidly, at 2% per year. It will increase from 73 million at present to 120 million in 2025.
Session: Planning & PolicyTopic 1.6. Infrastructure Development: A Regional Perspective
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The views expressed here are those of the presenter and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Directors, or the governments they represent.
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Mekong River CommissionArticle 9: Freedom of Navigation
• “ On the basis of equality of right, freedom of navigation shall be accorded throughout the mainstream of the Mekong river without regard to the territorial boundaries, …”
• “ The Mekong river shall be kept free from obstructions, measures, conduct and actions that might directly or indirectly impair navigability, interfere with this right or permanently make it more difficult.”
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Energy Efficiency and Pollution
• Distance in miles to move 1 ton of freight with 1 liter of fuel and pollution in terms of CO2
71 km 41 g t/km
182 km 42 g t/km
(Source: 3rd World Water Forum – Water and Transport, MTS, US Department of Transportation
21 km 207 g t/km
Session: Planning & PolicyTopic 1.6. Infrastructure Development: A Regional Perspective
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The views expressed here are those of the presenter and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Directors, or the governments they represent.
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New Trends
• In 2000, the Governments of China, Lao PDR, Myanmar, and Thailand have signed an agreement for commercial navigation for the stretch between Simao(China) and Luang Prabang (Lao PDR)
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Simao
Tachilek
Chian Saen
Chiang Khong
Houay Say
Jing Hong
Pak Beng Louang PrabangChiang Rai
Boten
Muang Xai
MYANMARMYANMAR
CHINA
VIET NAM
THAILAND
LAO PDR
Session: Planning & PolicyTopic 1.6. Infrastructure Development: A Regional Perspective
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The views expressed here are those of the presenter and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Directors, or the governments they represent.
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Challenges to Enhanced Mekong River Navigation
• Physical and non-physical impediments for regional trade
• Lack of awareness of potential and possibilities
• No regional transport planning In cases, no national planning Poor regional navigation agreements - no frameworks
• Limited human capacity for water resource planning
• Training provided only in Vietnam
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Challenges to Enhanced Mekong River Navigation (continued)
• No safety regulations either - more than 3400 lives lost in last ten years
• Need simultaneous work on safety regulations, legal framework and environmental regulations
• Large investments needed
Session: Planning & PolicyTopic 1.6. Infrastructure Development: A Regional Perspective
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The views expressed here are those of the presenter and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Directors, or the governments they represent.
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Building the Mekong Power Market
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Regional Power Market
• Through power trade, GMS countries will be able to:
Reduce investments in power reserves to meet peak demand
Achieve more reliable supply
Reduce operating costs
Reduced greenhouse gas emission and pollutants
Increase consumer access to the cheapest power sources available
Session: Planning & PolicyTopic 1.6. Infrastructure Development: A Regional Perspective
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The views expressed here are those of the presenter and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Directors, or the governments they represent.
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Current Physical Status
• Big disparity in the size countries’ markets.
• Four countries (PRC, Thailand, Vietnam and Myanmar) have transmission systems that interconnect most of their internal demand centres. Two countries currently have no nationwide transmission systems (Lao PDR and Cambodia).
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Current Physical Status (continued)
• Three countries (Myanmar, Lao PDR and Cambodia) have internal demand levels that do not allow for the development of large-scale generation projects that are only based on internal load. Therefore the possibilities of obtaining energy at low (competitive) prices are linked to cross-border trading.
• Constraints to develop new hydro power in Thailand and there is a growing concern that natural gas reserves are not sufficient to satisfy future load growth. Coal resources are also limited to lignite, which has historically been associated with significant environmental problems.
Session: Planning & PolicyTopic 1.6. Infrastructure Development: A Regional Perspective
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The views expressed here are those of the presenter and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Directors, or the governments they represent.
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Current Regulatory Status
• Power sector structures: All GMS countries are organized wherein there is a single buyer (implicit or explicit) in their generation and transmission activities.
• Transmission ownership: The single buyer is usually the Transmission Facilities Owner (TFO), which operates and maintains the national transmission network.
• Independent power producers: All GMS countries allow for the development of stand-alone privately owned IPPs.
• No direct sale to large consumers: possible exception of PRC and some industrial zones within Thailand.
• Centralized government power sector planning
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Current Regulatory Status (continued)
• IPP framework through power purchase agreements
• International transmission interconnectors: Construction of international transmission lines also requires case-by-case negotiations between the governments and domestic TFO and single buyer of the GMS countries.
• Absence of transmission access regime
• Formal regulatory regimes: There are therefore no formal legal and regulatory frameworks for the power sectors in the GMS countries.
• No congestion management
Session: Planning & PolicyTopic 1.6. Infrastructure Development: A Regional Perspective
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The views expressed here are those of the presenter and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Directors, or the governments they represent.
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Institutional Arrangements
• Providing the policy and institutional framework to promote opportunities for extended cooperation in power trade
• Developing the grid interconnection infrastructure through a building block approach allowing cross-border dispatch of power
• Undertaken through: Electric Power Forum (EPF) Experts Group on Power Interconnection and Trade (EGP)
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Stages of the GMS Power Market
Integrated Operation
Regional Coordinated Operation
Regional Coordination by RTC
Coordination Inter-TSO
Operation Security
Independent Regulator
Limited Independent Regulator
Extended Consensus
ConsensusRegulator
Full Competition Limited Competition
Share of BenefitsShare of Limited Benefits
RPTOA
Central America by 2007
Continental Europe
Central America/ South Africa
Argentina- BrazilInternational Experience
Fully Functional Regional Network
Regional Network: Higher Cap.
Regional Network: Limited Capacity
Country to CountryCross-Border Transmission
Stage 4Stage 3Stage 2Stage 1
Session: Planning & PolicyTopic 1.6. Infrastructure Development: A Regional Perspective
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The views expressed here are those of the presenter and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Directors, or the governments they represent.
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Next Steps:ADB Technical Assistance for Regional Power
Trade Coordination and Development
• Develop action plan on regional power trade (2005-2006)
• Create institutions for initial stages of power trade (2005-2007)
• Undertake capacity building / human resource development (2005-2007)
• Develop platform and database for information exchange and communication (2006-2007)
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Source: ADB Regional Indicative Master Plan on Power Interconnection in the GMS
Possible Regional Master Plan on Power
Interconnection
• “Blocks” of power interconnection lines that can stand on their own merits
• Phased cross-border connections to meet power demand forecasts and generation system planning scenarios
Session: Planning & PolicyTopic 1.6. Infrastructure Development: A Regional Perspective
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The views expressed here are those of the presenter and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Directors, or the governments they represent.
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Financing GMS Grid InterconnectionInfrastructure: A Challenge
• Investment needGrid interconnections - part of overall infrastructure requirements of the GMSGMS power infrastructure investment need - $10-15 billion over next 5-10 years
• Financing sourcesGovernment budget - not sufficientMultilaterals and bilateral - for high priority projects; include policy advice, capacity building, and guarantees
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Financing GMS Grid InterconnectionInfrastructure: A Challenge (continued)
• Financing sourcesPrivate sector (developers and lenders) - can fill the financing gap and provide technology and management
• Environment conducive to private sector participationEnabling policy, legal and regulatory frameworks
Transparency and predictability
Session: Planning & PolicyTopic 1.6. Infrastructure Development: A Regional Perspective
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The views expressed here are those of the presenter and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Directors, or the governments they represent.
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ADB & Regional Cooperation
• Honest broker - bringing together various countries and getting involved in a neutral way
• Technical advisor - providing knowledge and expertise to ensure effective implementation of projects
• Financier - providing loans and technical assistance for high priority projects
• Coordinator - facilitating the involvement of other development partners
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Key Messages
• Borders can divide or expand opportunities. Overall outcomes depend on the ability of the leadership of the region to overcome challenges and enable communities to gain from the economic expansion through cross-border infrastructure
• GMS experience and vision of three Cs: about greater connectivity to enhance competitiveness that will help build a prosperous, cohesive community.
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