CONFIDENTIAL

FOR INTERNAL USE WITHINCLIENT COMPANY ONLY

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

0

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 20082009

Sub-Saharan

Africa

2010

1960S-1997: TIGERS ARE DRIVING ASEAN

MALAYSIA, THAILAND, SINGAPORE AND INDONESIA1997-1998: THE ASIAN CRISIS DEVASTATES ASEAN 1999 – 2008: FAST RECOVERY TO STABLE GROWTH2008-2009: LEARNED THEIR LESSON IN 1997OUTSTANDING PERFORMANCE IN DELIVERING STABLE

GROWTH

Opportunities Challenges

BUSINESS SWEDEN 8 FEBRUARY, 2016 3

ASEAN - PAPER TIGER OR SUCCESSFUL REGIONAL

INTEGRATION?

CambodiaThailand

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

PARTNERSHIPREGIONAL

COMPREHENSIVE

ECONOMIC

PARTNERSHIP ASEANCHINA

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

0

20

40

60

80

100

120

140

2007 2008 2009 2010 2011 2012 2013 2014

8 FEBRUARY, 2016BUSINESS SWEDEN 6

FDI INTO THE ASEAN6 HAS SURPASSED CHINA 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 0 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

ImprovingCan’t keep pace

China

40

80

120

160

1

EASE OF DOING BUSINESS INDEX RANKING 2006 VS. 2015

ASEAN6

-40 -20 0 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

IndiaChina

40

80

120

160

1

CORRUPTION PERCEPTION INDEX RANKING 2006 VS. 2014

ASEAN6

ImprovingCan’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

0

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

bigger

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 1813

6

25

14

9 104 11

6

20

10

1013

77

4

13

17

139

18 12

12

13

72%

51% 51%47%

43%

28%

71%

Singapore Malaysia Thailand Vietnam Philippines Indonesia Benchmark

Water Telecom Power Transport

8 FEBRUARY, 2016BUSINESS 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, 2016BUSINESS 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

operational 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

of Selangor.

Malaysia's railway industry is expected to provide significant opportunities

over 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

other 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