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Study on Economic Partnership Projects
in Developing Countries in FY2013
Study on the Myawaddy – Hpa-an SEZ PPP Project
in the Union of Myanmar
Final Report
February 2014
Prepared for:
The Ministry of Economy, Trade and Industry
Ernst & Young ShinNihon LLC
Japan External Trade Organization
Prepared by:
Japan Development Institute Ltd.
Nippon Steel & Sumikin Bussan Corporation
Stu
dy
on E
con
om
ic Partn
ership
Pro
jects in D
evelo
pin
g C
ou
ntries in
FY
20
13
Stu
dy
on
the M
yaw
add
y –
Hp
a-an S
EZ
PP
P P
roject in
the U
nio
n o
f Myan
mar
Feb
ruary
2014
Th
e Min
istry o
f Eco
nom
y, T
rade an
d In
dustry
Prep
ared b
y
Japan
Dev
elop
men
t Institu
te Ltd
.
Study on Economic Partnership Projects
in Developing Countries in FY2013
Study on the Myawaddy – Hpa-an SEZ PPP Project
in the Union of Myanmar
Final Report
February 2014
Prepared for:
The Ministry of Economy, Trade and Industry
Ernst & Young ShinNihon LLC
Japan External Trade Organization
Prepared by:
Japan Development Institute Ltd.
Nippon Steel & Sumikin Bussan Corporation
Preface
This report describes the results of the specific study, conducted by the Japan Development Institute Ltd. and
NIPPON STEEL & SUMIKIN BUSSAN CORPORATION, responding to the formal directive-“Study on
Economic Partnership Projects in Developing Countries in FY2013” by the Japanese Ministry of Economy, Trade
and Industry.
In order to solve the chronic unemployment problem in Myanmar, this effort -“The Study on the Myawaddy -
Hpa-an SEZ PPP Project in the Union of Myanmar”- seeks to understand the current status of the Myawaddy
Industrial Zone and the Hpa-an Industrial Zone in Kayin State, and to attract greater Foreign Direct Investment by
bringing industrial zone facilities up to international standards.
We hope that this report contributes to the realization of the project, and, provides useful information and
references to stakeholders in Japan.
February 2014
Japan Development Institute Ltd.
NIPPON STEEL & SUMIKIN BUSSAN CORPORATION
Project Site Map
Yangon - Myawaddy : 455km Myawaddy - Bangkok :490km
Myawaddy Industrial Zone
Hpa-an Industrial Zone
Thailand
Bangkok
Yangon
Source: Prepared by the Study Team
List of Abbreviation
Abbreviation Official Name
ADB Asian Development Bank
AFC ASEAN Economic Community
AFTA ASEAN Free Trade Area
AH Asian Highway
ASEAN Association of South-East Asian Nations
BCP Business Continuity Planning
BOI The Board of Investment of Thailand
CBTA Cross Border Transportation Agreement
CDM Clean Development Mechanism
CAPEX Capital Expenditure
CEPT Common Effective Preferential Tariff
CIDKP Committee of Internally Displaced Karen People
CIM Construction Information Modeling
CM Construction Management
DDI Domestic Direct Investment
DFZ Duty Free Zone
DICA Directorate Investment and Company Administration
EGAT Electricity Generating Authority of Thailand
EIA Environmental Impact Assessment
EIRR Economic Internal Rate of Return
EPZ Export Processing Zone
F/S Feasibility Study
FDI Foreign Direct Investment
FIRR Financial Internal Rate of Return
FTZ Free Trade Zone
GDP Gross Domestic Product
GHG Greenhouse Gas
GIS Geographic Information System
GMS Greater Mekong Subregion
GNSS Global Navigation Satellite System
GRDP Gross Regional Domestic Product
IEIA Initial Environmental Impact Assessment
IFC International Finance Corporation
IMF International Monetary Fund
IOM International Organization for Migration
IPP Independent Power Producer
JBIC Japan Bank for International Cooperation
JETRO Japan External Trade Organization
JICA Japan International Cooperation Agency
JV Joint Venture
KNU Karen National Union
LIBOR London Inter-Bank Offered Rate
MIC Myanmar Investment Committee
MIME Ministry of Industry, Mine and Energy
MMK Myanmar Kyat
MNP&ED Ministry of National Planning and Economic Development
MOE Ministry of Environment
MOEP Ministry of Electric Power
MOFA Ministry of Foreign Affairs
MoU Memorandum of Understanding
MP Master Plan
MPD Ministry of Public Works
MPWT Ministry of Public Work and Transportation
MW Megawatt
NCF Net Capital Flow
NGO Non-Governmental Organization
NSDP National Strategic Development Plan
ODA Official Development Assistance
OECD Organization for Economic Co-operation and Development
PEA Provincial Electricity Authority
PP Phnom Penh
PPP Public Private Partnership
SAPI Special Assistance for Project Implementation
SEZ Special Economic Zone
SIBOR Singapore Interbank Offered Rate
SPC Special Purpose Company
STEP Special Terms of Economic Partnership
STS Sub-Township
THB Thai Baht
TS Township
UNEP United Nations Environment Program
USD US Dollar
VAP Vientiane Action Program
WB World Bank
Table of Contents
Preface
Project Site Map
List of Abbreviations
Table of Contents
Executive Summary
(1) Background and Necessities of the Project··········································································· S- 1
(2) Basic policies that determine the details of project ································································· S- 3
(3) Outline of the Project ···································································································· S- 7
(4) Implementation schedule ······························································································· S-13
(5) Feasibility for implementation ························································································· S-15
(6) Advantages of Japanese Companies’ Involvement ································································· S-17
(7) Local area maps of project implementation ·········································································· S-18
Chapter 1 National & Sectoral Overview
(1) Economic and Financial Status of the Nation ········································································ 1- 1
(2) Sectoral Overview ······································································································· 1-12
(3) Present Status of Concerned Area ····················································································· 1-14
Chapter 2 Study Methodology
(1) Study content ············································································································· 2- 1
(2) Methodology and Project team ························································································ 2- 3
(3) Study Schedule ··········································································································· 2- 7
Chapter 3 Justification, Objectives and Technical Feasibility of the Project
(1) Background and Justification of the Project ········································································· 3- 1
1) Project Background ···································································································· 3- 1
2) Project Necessities ····································································································· 3- 2
3) Scope of the Project ··································································································· 3- 2
4) Analysis of the current status, future projection (including demand forecast), and probably negative
consequences if the proposed project is not implemented ····················································· 3- 3
(2) Analysis for the Planning of the Project ·············································································· 3-14
1) Demand Estimation ···································································································· 3-14
2) Creation of employment ······························································································ 3-14
3) Demand for Infrastructure facilities and equipment ······························································ 3-15
4) Analysis of for the planning of the project ········································································· 3-17
(3) Project planning ·········································································································· 3-26
1) Principle of project planning and strategy ·········································································· 3-26
2) Conceptual Design and Specification of Equipment Facilities ·················································· 3-26
3) Project content (project site and investment) ······································································ 3-35
4) The solutions and challenges when adopting the proposed technologies and systems ······················ 3-40
Chapter 4 Evaluation of Environmental and Social Impacts
(1) The Present Status of Environmental and Social Impacts ·························································· 4- 1
(2) Achieving environmental improvement through the project ······················································ 4- 5
(3) Environmental and Social Effectiveness by project implementation ············································· 4- 6
(4) The outlines of regulations regarding environmental and social considerations, and clarification
measures ················································································································· 4-43
(5) The items to realize the project in the country (executing agency and other organizations) ·················· 4-45
Chapter 5 Financial and Economic Evaluation
(1) Estimated project cost ··································································································· 5- 1
(2) Preliminary Summary results of financial and economic analysis ················································ 5- 5
Chapter 6 Planned Project Schedule
Chapter 7 Implementing Organizations
Chapter 8 Technical Advantages of Japanese Companies
(1) Expected participation scheme by Japanese companies (Funding, Supplement of material and machines, and
equipment management, etc.) ································································································· 8- 1
(2) Advantages of Japanese Companies (Technical and economic) ·················································· 8- 5
(3) Necessary measures to promoting participation of Japanese companies········································· 8- 9
S-1
(1) Background and Necessities of the Project
1) Background
a) Myanmar
While Myanmar attracts the world’s attention to its rapid economic development, liberalization, and
democratization as Asia’s “last frontier,” the effects of the country having suffered through 50 years of economic
sanctions and numerous internal ethnic group conflicts have become equally pronounced. The West’s economic
sanctions prevented not only the development of the country but also any Foreign Direct Investment (FDI).
Chronic unemployment and national poverty grip the country. In addition, due to the government’s neglect in
providing basic infrastructure to the nation, Myanmar has a great shortage of power supply -arguably the most
important component of its or any other countries’ industrial development. The issue of power supply is one of the
most pressing to the country.
b) Thailand
A Thai domestic industry has grown along with the nation’s economic growth in recent years, labor-intensive,
low-cost industry has been forced to operate in low-cost areas remote from the capital city, Bangkok. Due to a 300
baht/d minimum wage, introduced in 2013, labor-intensive industries began to plan low-cost operations by
relocating manufacturing facilities in the neighboring countries outside of Thailand to take advantage of those
countries’ cheap labor. Currently, the Thailand Board of Investment (BOI) is considering a policy that would
encourage the transfer of labor-intensive industries to neighboring countries through a new BOI to be enacted in
2015.
2) Necessities
a) Construction of an Industrial Zone (IZ) on the border with Thailand
Understanding the movement of political decision-making on the Thai side, the Kayin State, sharing a border with
Thailand, has decided to construct an IZ in the border town, Myawaddy, in order to create local employment and
comply with the demand of its neighbor, Thailand.
b) Adopting international standards to attract Japanese investment
Kayin State’s original development plan for the envisaged IZ is not sufficiently unique to attract FDI, due to its
deficient infrastructure facilities, power supply, water supply, and sewerage treatment system, and solid waste
disposal system. This project aims to establish an IZ meeting international standards for both in Myawaddy and
Hpa-an. For the development of Myawaddy IZ, Japanese developers also seek to participate in the operation of the
IZ.
S-3
(2) Basic policies that determine the details of project
1) The purpose of this project
This project aims to create jobs in Myanmar by developing Myawaddy industrial zone with international standard
types of facilities to invite not only DDI (Domestic Direct Investment) but also FDI (Foreign Direct Investment).
Hpa-an industrial zone, already in operation, ; aims to achieve international standards in its facility provisions.
2) Comprehensive long-term project development plan
“Kayin State Job Creation Development Plan for 100,000 people (~2030)”
Figure 2 Kayin State Job Creation Development Plan
Source: Study Team
In comprehensive long-term project development plan, the project team is determined to create jobs for 100,000
people in Kayin state. According to data available in Thailand, the average nunmber of employees in a
labor-intensive factory in an industrial zone is 200 people/ha. Therefore, roughly 500 ha. of land is required to
accommodate 100,000 jobs created in the industrial zone.
The project of this scale will be able to meet requirements for Special Economic Zone (SEZ), resulting in
createing 100,000 jobs for people in Kayin state as the long-term goal. The project also plans to breed a new
middle class as one of its long term targets. In this respect, training suitable candidates to comprise a managers
class as a part of this project objectives will be necessary for bringing up the next generation of managers in
Myanmar.
S-4
3) Medium-term project development plan (2025)
Figure 3 Myawaddy~Hpa-an~Mawlamyine Economy Triangle Concept
Source: Study Team
Figure 4 Requirements for SEZ
Source: Study Team
S-5
a) Electric power
To supplement the deficiency in electric power, the Independent Power Producer (IPP) is planning to build a
power plant in Mawlamyain in Mon state. That plant will be partly completed in 2014, and will generate and
transmit 230 MW of power by the year 2015. Plans call for that plant to supply the power to Hpa-an IZ as well.
b) Establishment of a road network
To improve the distribution networks between Myawaddy and Hpa-an, Kayin State has investigated the present
status of road networks and transportation systems in the region. It is expected that new traffic networks
utilizing Official Development Assistance (ODA) will be established to realize efficient traffic flows.
c) Promotion of Myawaddy industrial zone to an SEZ
After Myawaddy industrial zone expands its activities, and develops trade relationships with Thai-based
companies with its operation as a Duty Free Zone (DFZ) maturing over a certain time, a Special Purpose
Company (SPC), a joint operator of the IZ private developers and public sectors, will apply to the relevant
authorities to realize Myawaddy industrial zone as a regional SEZ, so that IZ operations may enjoy a variety of
privileges in the process of their business activities.
4) Short-term development plan (2018)
Figure 5 Globalization of Hpa-an and Myawaddy industrial zone
Source: Study Team
a) Myawaddy industrial zone
The project developers will establish a Special Purpose Company (SPC) and will purchase the land in
Myawaddy industrial zone after a local contractor finalizes the Phase 1 development works, and SPC provides
the very necessary infrastructure facilities to meet the prevailing international standard. Myawaddy industrial
zone grants some privileges to tenant companies in the Duty Free Zone, because it straddles the border with
Thailand, and as a matter of course they will promote processing trades through export and import businesses.
S-6
b) Hpa-an industrial zone
The Project will promote Domestic Foreign Investment (DFI) and Foreign Direct Investment (FDI) for Hpa-an
industrial park, which is already completed and in operation. Then the Project especially need to focus on
meeting a international standard with attractiveness of an industrial zone, by providing infrastructure such as
water supply and water treatment equipment as part of the project.
c) Duty Free Zone in Myawaddy
Myawaddy industrial zone will establish Duty Free Zone (DFZ) by utilizing the customs house facilities in
existing Myawaddy Trade Zone next to it, after acquisition of the permit by Myanmar Investment Committee
(MIC). A tenant companies can enjoy exemption of the import tax on materials, intermediate-processed goods
through transporting, processing, and goods in bond in the DFZ, even though sales tax is to be charged upon
their products delivery.
The DFZ system in Myawaddy IZ is basically referred to one in Thailand. The flow of this system is as follows:
Figure 6 Flowchart of distribution in Duty Free Zone (DFZ)
Source: Rojana Distribution Center
S-7
(3) Outline of Project
Development plan of Myawaddy industrial zone is shown as follows:
1) Districts of Myawaddy industrial zone
Myawaddy industrial zone is mainly developed to accommodate labor intensive industry, and consists of a north
district and a south district.
Figure7 Myawaddy SEZ Development Area Plan
Source: Study Team
2) Land use of Myawaddy industrial zone
The area and land use of the north district and the south district in Myawaddy industrial zone are separated as
follows:
Industrial use: Profit center of the Industrial park business;
Housing use: Accommodation facilities for the employees and their family of tenant companies,
accommodation facilities for those whose works in the service sectors from distant regions and other
ancillary facilities;
S-8
Commercial/service use: the provision of services and other commercial services for the factory workers,
trading partners, and external workers;
Administration and One-stop service use: the provision of administrative services to the employees and
tenant companies operating in the IZ, the provision of administrative consistency services to the existing
and prospective tenant companies;
Park/ Open space use: Reserve land for environmental protection and future expansion of business;
Dry port use: The dry port is not planned to install as there is already “Myawaddy Trade Zone”
established next to each other. Therefore it aims to be linked with the “Myawaddy Trade Zone” for the
purpose of such port functions as cargo traffic in bond, customs clearance, and container freight station.
Table 1 Myawaddy IZ application of land use area (ha)
Area item
Phase
Total
Area
Ratio
(%)
North District South District
1 2 2N 2S 3
The entire IZ land
57.4 23.9 49.9 73.1 122.2 326.5 100.0
Factory lot 48.8 0.0 26.8 35.3 85.0 195.9 60.0
Same as above, by
district 75.6
120.3
0.0
Non-Factory Land 8.6 23.9 23.1 37.8 37.2 130.6 40.0
Same as above, by
district 55.6
75.0
0.0
Breakdown of the non-industrial land area
Roads 8.6
3.6 9.8 11.8 33.8 10.4
Discharge Drains
5.4 0.8 1.6 7.8 2.4
Retarding pond
6.8 3.5 1.9 12.2 3.7
Housing, parks,
education and
training center
20.7 11.3 10.1 42.1 12.9
Business, Service
4.2 2.5
6.7 2.1
Management. OSS 2.2
2.2 0.7
Public facilities
2.5
2.5 0.8
Water purification
plant 2.3 2.3 0.7
Wastewater
treatment plant 3.0
3.0 0.9
Future reserve land
6.0 2.5 9.5 18.0 5.5
Source: Study Team
S-9
3) Layout plan for land use in Myawaddy industrial zone
Layout plan for land use in Myawaddy industrial zone is as follows:
Figure 8 Layout plan for land use in Myawaddy industrial zone
Source: Study Team
【North district】 Industrial area, Commercial area, Public facilities, Housing area, Management office,
Wastewater treatment area, Retarding pond
【South district】 Industrial area, Commercial area, Public facilities, Housing area, Wastewater treatment
area, Water supply, Retarding pond
【Duty Free Zone】Customs house (Import, Export), Bonded warehouse, Bonded factory
S-10
4)Ground elevation map in Myawaddy industrial zone
Ground elevation map in Myawaddy industrial zone is as follows;
Due to the hilly nature of the land, the ground elevation of the industrial zone and its vicinity are depicted in the
topographical map obtained by the study team.
Figure 9 Ground elevation map in Myawaddy industrial zone
Source: Study Team
S-11
5)Myawaddy IZ Development Cost
The table below represents the project cost for the Myawaddy IZ project. It is to be noted that a potential Phase 4
is excluded here as the project site is not yet determined.
Table 2 Myawaddy IZ Development Cost (Unit: Million US$)
No. Name Summary Phase1 Phase2 Phase3
1 Civil engineering infrastructure 1.67 1.01 1.56
Land Development 2.44 5.33 7.59
In-site road 3.25 1.96 3.03
Drainage 2.44 1.77 1.71
Retarding basin
9.80 10.08 13.89
Direct construction cost total 1.96 2.02 2.78
Indirect construction cost total 1.18 1.21 1.67
General and administrative cost
total 12.94 13.30 18.33
Civil infrastructure costs total 0.00 0.00 0.00
2 Power supply Power company burden 1.65 0.57 1.85
3 Water supply Deep well supply 3.90 1.60 2.34
4 Sewerage treatment Aerated Lagoon System 0.40 0.18 0.45
5 Solid waste processing Includes commission fees to
Myawaddy city 0.00 0.00 0.00
6 Telecommunications Telecommunications
company burden 1.16 0.00 0.00
7 Administration and One stop
service Office furniture 20.04 15.65 22.97
8 Total construction cost 0.00 0.00 0.00
9 Interest during construction 2% of construction cost 0.00 0.00 0.00
10 SPC establishment preparation
expense PS 0.33 0.26 0.26
11 Research, survey and design
costs PS
12 Tax and duties 3.01 2.35 3.44
13 Contingency 10% of construction cost 23.35 18.26 25.57
Total project cost
Item Phase1 Phase2 Phase3
Total IZ area (ha) 131.2 73.1 122.2
Project cost for total IZ area
(US$/ m²) 17.8 25.0 21.8
Source: Study Team
S-13
(4) Implementation schedule
The short-term implementation schedule of Myawadi IZ is as follow:
Figure11 The short-term implementation schedule of Myawaddy IZ
Item 2015 2016 2017 2018 2019 2020 2021
Milestone Bypass Road Open ( beginning of 2015), IPP 98MW completion @ Mawlamyine end of 2015)
Establishment of
SPC
Design survey
(Common)
Government
agencies related
work
Dry port facility
Phase1 (131.2ha)
Detailed design
Land development
Road, drainage
Water supply and
sewerage, other
infrastructure
facility
Administration and
One Stop Service
office
Phase2 (73.1ha)
Detailed
engineering design
Land development
Road, Drainage
Water supply and
sewerage
Administration and
One stop service
office
Phase3 (122.2ha)
Detailed
engineering design
Land development
Road, drainage
Water supply and
sewerage, other
S-14
infrastructure
facility
Administration,
One stop service
office
Phase4 (173.5ha)
Detailed
engineering design
Land development
Road, drainage
Water supply and
sewerage, other
infrastructure
Administration and
One stop service
office
2015 2016 2017 2018 2019 2020 2021
Source: Study Team
S-15
(5) Feasibility for implementation
1) Financial analysis Assumptions:
The revenue of the IZ is generated primarily; i) land lease income, ii) water supply charge, iii) wastewater
treatment income, and iv) administration service fees.
The following are the assumptions relevant to the conduct of a financial analysis.
a) Premise 1: To obtain the land for Phase 1 (57.4ha) and Phase 2 (49.4 ha excluding the housing facility, business,
and other service areas facilities) for the first year, of the above lands - with saleable industrial lots fixed at
77.9ha.).
b) Premise 2: the table below indicates the revenue price.
Table 3 Premises for the financial analysis
Land price Phase1: US$45/ m²
Phase2: US$50/ m²
Phase3: US$55/ m²
Water supply charge US$0.80/ m²
Wastewater treatment charge US$0.43/ m²
Services fee Phase1: US$0.03/m²
Phase2: US$0.04/ m²
Phase3: US$0.04/m²
Source: Study Team
c) Premise 3:
No leverage (loan) basis, but rather the use of fully owned equity capital.
d) Presume 4:
Construction cost for each phases are as follows:
Table 4 Construction cost
Phase 1 Phase 2 Phase 3
Total area (ha) 131.2 73.1 122.2
Construction cost per unit area (US$/m²) 17.8 25.0 21.8
Source: Study Team
2) The results of the financial analysis
The results of the financial analysis are as follows.
① Financial Internal Rate of Return (FIRR)
Based on the cost estimations and assumptions described above, the internal rate of return (IRR) for the project
period of 20 years is calculated. The FIRR of 13.91% for the total costs was obtained on the Net Cash Flow
basis as a result.
S-16
② Economic Internal Rate of Return (EIRR)
This EIRR has been calculated from the development costs against the total net income of the tenants in the
industrial park in order to evaluate economic effects in Kayin state. If the tenant companies of Myawaddy
industrial park are assumed to be garment enterprises primarily having business relationships with a variety of
Japanese companies, a net profit of US$1.2 billion could be achieved over a 20 year period - representing an
EIRR of 32.1%.
Reaching this projected net profit of US$1.2 billion will produce many jobs that will, contribute greatly to the
Kayin State economy as a result. Therefore, this project is considered to have a significant economic impact to
the State.
S-17
(6) Advantages of Japanese Companies’ Involvement
The advantages of Japanese companies compared with other foreign companies for Myawaddy Industrial Zone
project are as follows:
a) Regarding the design, construction and management of the industrial zone and SEZ developments in Southeast
Asia, and the other developing countries, Japanese companies have extensive experience in contributing to
national economic growth.
b) Japanese companies have established advanced supply chain systems between manufacturers and logistics
service providers who collaborate in utilizing horizontal international specialization, and consequently have
resulted in efficient business performance..
c) Japanese companies have developed BCP (Business Continuity Planning) systems to minimize and even prevent
devastating losses caused by the frequent occurrence of natural disasters, thereby increasing the safety and
reliability of their supply chain. In addition, they have entered into operative stages to verify the BCP system
against actual natural disasters.
d) Japanese companies have much experience in the fields of global warming countermeasures through Clean
Development Mechanisms (CDM) and the bilateral credit projects, which help reduce the greenhouse gas
emissions that cause global warming.
e) Japanese companies possess advanced technology and systems that achieve energy savings.
f) Japanese companies lead foreign companies over the world in renewable energy technology.
g) Japanese companies are remarkably advantageous in the reliability of their product/service delivery and their
high quality construction ventures. In particular, Japanese companies excel in dealing with maintenance issues
after completion of construction.
h) Japanese companies possess soundness in diagnostic and restoration technologies relative to conventional
infrastructure requiring rehabilitation - thereby helping to increase the functional life of that infrastructure in the
world. Such technologies will be able to contribute greatly to the rehabilitation of Myanmar’s dilapidated
infrastructure, due to its lack of regular maintenance, as the realization of the much-needed development of
Myanmar moves ahead in response to the recent opening of the economy to foreign investment.
S-18
(7) Local area maps of project implementation
Map 1 Local area map (Myawaddy industrial zone, Hpa-an industrial zone)
Yangon-Myawaddy : 455km Myawaddy – Bangkok : 490km
Myawaddy IZHpa-an IZ
Source: Study Team
Map 2 local area map (Myawaddy industrial zone)
Myawaddy Industrial Zone
Myanmar Thailand
Asian Highway
← Hpa-an
Mae Sot
Myawaddy District
Source: Study Team
FIGURE
Figure 1: Background of Project
Figure 2: Kayin State Job Creation Development Plan
Figure 3: Myawaddy~ Hpa-an~ Mawlamyine Economy Triangle Concept
Figure 4: Requirements for SEZ
Figure 5: Globalization of Hpa-an and Myawaddy industrial zone
Figure 6: Flowchart of distribution in Duty Free Zone (DFZ)
Figure 7: Myawaddy SEZ Development Plan Area
Figure 8: Layout plan for land use in Myawaddy industrial zone
Figure 9: Ground elevation distribution map in Myawaddy industrial zone
Figure 10: PPP scheme of Myawaddy industrial zone
Figure 11: The short-term implementation schedule of Myawaddy IZ
Figure 1-1: Gross Domestic product / GDP gross rate (Burma)
Figure 1-2: Gross Domestic Product (Industry Classified: Burma)
Figure 1-3: Gross Domestic Product and Foreign Direct Investment (Burma)
Figure 1-4: Consumer price inflation in Myanmar
Figure 1-5: Gross Domestic Product / GDP gross rate (Thailand)
Figure 1-6: Gross Domestic Product (Industry Classified: Thailand)
Figure 1-7: Gross Domestic Product and Foreign Direct Investment (Thailand)
Figure 1-8: Price escalation rate (Thailand)
Figure 1-9: Comparison of the populations of Burma and Thailand (Million people)
Figure 1-10: Gross Domestic Product (Burma and Thailand)
Figure 1-11: Comparison of nominal GDP per capita between Myanmar and Thailand
Figure 1-12: Kayin State Counterparts
Figure 1-13: Annual rainfall (Mawlamyain, Hpa-an, Mae Sot)
Figure 1-14: East-West Economic Corridor
Figure 1-15: Yangon- Myawaddy (Thai border) Access Route
Figure 1-16: PPP Scheme (Myawaddy IZ)
Figure 2-1: Methodology
Figure 2-2: The flow of the study
Figure 2-3: Team member and organizational structure
Figure 2-4: Study Schedule (1)
Figure 2-5: Study Schedule (2)
Figure 2-6: Study Schedule (3)
Figure 2-7: Study Schedule (4)
Figure 2-8: Study Schedule (5)
Figure 3-1: Project background
Figure 3-2: Comprehensive long-term project development plan
Figure 3-3: Myawaddy~ Hpa-an~ Mawlamyine Economy Triangle concept
Figure 3-4: Short-term development plans
Figure 3-5: Flowchart of distribution in Duty Free Zone (DFZ)
Figure 3-6: Mawlamyine power plant implementation program
Figure 3-7: Mawlamyine Power distribution plan
Figure 3-8: Myawaddy SEZ Development Plan Area
Figure 3-9: Myawaddy SEZ development planning area planar layout diagram
Figure 3-10: Myawaddy SEZ development planning area ground elevation distribution map
Figure 3-11: Waterway discharge standard cross section
Figure 3-12: The Structure of slope protection of the retarding pond
Figure 6-1: Myawaddy Industrial Zone Construction Schedule
Figure 7-1: Kayin State Organizational Chart
Figure 7-2: Myawaddy Industrial Zone Phase 1 Ground Plan
Figure 7-3: Hpaan Industrial Zone Ground Plan
Figure 8-1: PPP scheme of Myawaddy Industrial Zone
Figure 8-2 Environmental considerations surrounding Myawaddy Industrial Zone (Water supply)
Figure 8-3: Environmental considerations surrounding Myawaddy Industrial Zone (Sewage treatment)
Figure 8-4: Environmental considerations surrounding Myawaddy Industrial Zone (Waste)
TABLE
Table 1: Myawaddy IZ application of land use area (ha)
Table 2: Myawaddy IZ development cost (Unit: Million US$)
Table 3: Premises for the financial analysis
Table 4: Construction cost
Table 1-1: Basic information (Myanmar)
Table 1-2: Foreign Direct Investment
Table 1-3: Basic information (Thailand)
Table 1-4: Kayin State Gross Regional Domestic Production (GRDP) (2010-2011)
Table 1-5: Comparison of Myawaddy IZ and Hpa-an IZ
Table 1-6: Yangon-Myawaddy (National highway) Access route
Table 3-1: Requirements for SEZ
Table 3-2: Comparison of Myawaddy IZ and other projects
Table 3-3: Myawaddy IZ job creation (per unit)
Table 3-4: Job creation in Myawaddy IZ
Table 3-5: Myawaddy Industrial Zone Demand by Industrial Lot Area
Table 3-6: Myawaddy Industrial Zone Infrastructure Area Demand
Table 3-7: Myawaddy Industrial Park North District excavated soil volume
Table 3-8: Myawaddy IZ development soil excavation
Table 3-9: Road specifications of Myawaddy industrial IZ North District Phase1
Table 3-10: Myawaddy Industrial Zone cargo volume forecast
Table 3-11: Myawaddy Industrial Zone Generated traffic volume prediction
Table 3-12: Myawaddy IZ Northern District discharge waterway specifications
Table 3-13: Myawaddy IZ Retarding Basin Specifications
Table 3-14: Myawaddy IZ application of land use area (ha)
Table 3-15: Education and training facilities, residential land area, and parks in Myawaddy IZ
Table 4-1: The present status of the land in Myawaddy district/township (2012)
Table 4-2: The JBIC (Japan Bank for International Cooperation) Guidelines for Confirmation of Environmental
and Social Considerations (Environmental Guidelines)
Table 4-3: JBIC Guidelines for Confirmation of Environmental and Social Considerations (Environmental
Guidelines) (Water supply)
Table 4-4: JBIC Guidelines for Confirmation of Environmental and Social Considerations (Environmental
Guidelines) (Sewage treatment)
Table 4-5: JBIC Guidelines for Confirmation of Environmental and Social Considerations (Environmental
Guidelines) (Waste management and disposal)
Table 4-6: Household, Families and Population in Kayin State
Table 4-7: Work force at the north area and the south area in Myawaddy industrial zone
Table 5-1: Project implementation Phase (Area unit: ha)
Table 5-2: Project cost estimate
Table 5-3: Premises for the financial analysis
Table 5-4: financial analysis (45, 50, 55)
Table 5-5: financial analysis (40, 50, 55)
Table 5-6: financial analysis (50, 50, 55)
Table 5-7: financial analysis (EIRR)
Table 8-1: Expected participation of Japanese companies
PHOTO
Photo 1-1: Myawaddy IZ development office
Photo 1-2: Labor intensive factory in Hpa-an IZ
Photo 1-3: National highway (Yangon-Hpa-an: 277km)
Photo 1-4: National Highway (Hpa-an – Kawkareik: 126km)
Photo 1-5: National Road (Kawkareik – Thingannyinaung: 39km)
Photo 1-6: National Road (Thingannyinaung – Myawaddy (National Road): 18km)
Photo 1-7: Second Friendship Bridge
Photo 3-1: IPP Power plant in Mawlamyine (under construction)
MAP
Map 1: Local area map (Myawaddy industrial zone, Hpa-an industrial zone)
Map 2: Local area map (Myawaddy industrial zone)
Map 1-1: Map of Myanmar
Map 1-2: Population density in Myanmar
Map 1-3: Map of Industrial Zone in Myanmar
Map 1-4: Map of Thailand
Map 1-5: Population density in Thailand
Map 1-6: Elevation distribution maps of Kayin State and Mon State
Map 3-1: Logistic Route through Myanmar
1-1
(1) Economic and Financial Status of the Nation
1) Myanmar
a) Basic Information
The Republic of the Union of Myanmar (also known simply as Myanmar) is located in the western part of the
Indochina peninsula. It shares a border with China to the northeast, Laos to the east, Thailand to the southeast,
Bangladesh to the west, and India to the northwest. Myanmar is a multi-ethnic nation with a plethora of ethnic
minorities. Sixty percent (60%) of the total population is Burmese and the following groups are prominent ethnic
minority groups in the country: Karen, Kachin, Kayah, Rakhine, Chin, Mon, and Shan.
Due to its wealth of natural resources and large population exceeding 60 million living on a national territory of
678,330 km² (about 1.8 times the size of Japan), Myanmar attracts global attention as a destination for new
investment. Myanmar has a great potential for large-scale economic development and democratization–a process
that began after the 2010 general election, the first conducted in 20 years.
Map1-1 Map of Myanmar
Source: The Central Intelligence Agency
1-2
Map1-2 Population density in Myanmar
Source: NASA SOCIOECONOMIC DATA AND APPLICATIONS CENTER (SEDAC)
Table1-1 Basic information (Myanmar)
Size of the country 680 thousand km² area (about 1.8 times the size of Japan)
Population 63.67million (2012 IMF)
Capital city Naypyidaw
Ethnic breakdown Burmese (60%),other numerous ethnic minorities
Language Burmese
Religion Buddhist (90%),Christian,Muslim etc.
History Myanmar history dates back to the early 11th Century when King Anawrahta unified
the country and founded the First Myanmar Empire in Bagan more than 20 years
before the Norman Conquest of England in 1066(i.e. 1044 A.D.). The Bagan Empire
encompassed the areas of the present day Myanmar and the entire Menam Valley in
Thailand and lasted two centuries.
The Second Myanmar Empire was founded in mid-16th Century by King
Bayinnaung (1551-1581). King Alaungpaya founded the last Myanmar Dynasty in
1752 and it was during the zenith of this Empire that the British moved into
Myanmar. Myanmar became a British colony but only after three Anglo-Myanmar
Wars in 1825, 1852, and 1885. Myanmar achieved national independence on January
4, 1948.
Source: MOFA Homepage, Myanmar embassy Homepage
1-3
b) Economy in Myanmar
While Myanmar was reluctant to deal with other countries during the period of its military regime, which lasted
until 2010, its GDP (gross domestic product) was showing a growth rate of approximately 10%.
Figure 1-1 Gross Domestic product / GDP gross rate
Source: Asian Trend Annual Report 2013
c) Domestic industry in Myanmar
In regard to the existing industrial structure of Myanmar, agriculture alone occupies 30% of the total share.
According to the government statistics 2010-11, the primary industries (agriculture, livestock, fisheries, and
forestry) accounted for 37.93% of the total. The secondary sector (manufacturing and mining) accounted for
19.43%, and tertiary industry (services such as commercial, construction, trade, construction, communications, etc.)
comprised the remaining 42.64%.
Figure 1-2 Gross Domestic Product (Industry Classified: Burma)
Source: Asian Trend Annual Report 2013
1-4
d) Foreign investment in Myanmar
While Myanmar’s gross domestic product has risen in recent years, investment from other countries into Myanmar
has declined since 2009. However, the lifting of economic sanctions by Western countries together with the new
government’s introduction of an open-door policy in 2010 has affected a gradual increase in direct foreign
investment to Myanmar.
Figure 1-3 Gross Domestic Product and Foreign Direct Investment (Burma)
Source: Asian Trend Annual Report 2013
The breakdown of FDI by country and region in Myanmar can be accounted for mainly by China, Thailand, Hong
Kong, and South Korea in recent years. The industry breakdown demonstrates the predominance of power, oil and
gas, mining and mining for fuel in the country.
Table 1-2 Foreign Direct Investment
Source: Asian Trend Annual Report 2013
1-5
e) Consumer prices in Myanmar
Although consumer prices in Myanmar increased rapidly up to mid-2008, there was also global trend in the
increase of food prices and fuel worldwide. The inflation has calmed down post 2009.
Figure 1-4 Consumer price inflation in Myanmar
Source: Asian Trend Annual Report 2013
d) Map of Industrial Zone in Myanmar
The following map demonstrates the location of Industrial Zone in Myanmar.
Map 1-3 Map of Industrial Zone in Myanmar
Source: Asian Trend Annual Report 2013
1-7
Map1-5 Population density in Thailand
Source: NASA SOCIOECONOMIC DATA AND APPLICATIONS CENTER (SEDAC)
Table1-3 Basic information (Thailand)
Size of the country 514 thousand km² area (about 1.4times the size of Japan)
Population 65.93 million (2010 Thai National Census)
Capital city Bangkok
Ethnic breakdown Thai (Majority), Overseas Chinese merchants, Malay, Mountainous Ethnic Minorities
Language Thai
Religion Buddhism 94%, Muslim 5%
History Foundation of the Kingdom of Thailand was established from Sukhothai dynasty in
the 13th century. The nation passed through the Ayutthaya Dynasty (14-18 century)
and the Thonburi Dynasty (1767-1782), leading up to the current Chuck Lee dynasty
(1782 onwards). A constitutional revolution in 1932.
Source:MOFA homepage
1-8
b) Economy in Thailand
In Thailand, since FDI was actively carried out during the period of attractively high exchange rates of the Thai
currency against the Japanese yen particularly after the Plaza Accord in 1985; the national economic growth is
remarkable in comparison with its neighboring countries. This trend has continued even today and the GDP growth
rate is growing at an average rate of 8%.
Figure1-5 Gross Domestic Product / GDP gross rate
Source: Asian Trend Annual Report 2013
c) Sectoral GDP in Thailand
According to the sectorial GDP in Thailand, manufacturing accounts for about 40% of the total followed by
wholesale, retail, services, transportation, and telecommunications. Among the manufacturing sectors, heavy
industry such as automobile manufacturing constitute central production, with the share of labor intensive
industries, such as textiles and electronics parts, are much less.
Figure 1-6 Gross Domestic Product (Industry Classified: Thailand)
Source: Asian Trend Annual Report 2013
1-9
d) FDI in Thailand
GDP, impacted by the Lehman shock, experienced a decrease in 2009, but recovered by 2010. Regarding the FDI,
the latest flood disaster has left major scars upon the total FDI, which has resulted in net-reduction.
Figure 1-7 Gross Domestic Product and Foreign Direct Investment (Thailand)
Source: Asian Trend Annual Report 2013
e) Consumer inflation rate in Thailand
With the exception of the social transformation experienced in 2009, the annual consumer inflation rate has
maintained a steady 3 % average.
Figure 1-8 Price escalation rate (Thailand)
Source: Asian Trend Annual Report 2013
f) Population of Myanmar and Thailand
The populations of Myanmar and Thailand, taken individually, amount to approximately the same market size.
1-10
Figure 1-9 Comparison of the populations of Burma and Thailand (Million people)
Source: Asian Trend Annual Report 2013
g) GDP Comparison between Myanmar and Thailand
In 2006, the GDP of Thailand was 9 times greater than that of Myanmar. However, in recent years, Myanmar’s
economic performance has reduced that comparative gap to approximately 7 times the size.
Figure 1-10 Gross Domestic Product (Burma and Thailand)
Source: Asian Trend Annual Report 2013
h) Nominal GDP comparison per capita between Thailand and Myanmar
By comparing the nominal GDP per capita between Thailand and Myanmar, Thailand’s GDP was 6 times greater
than that of Myanmar as of 2011.
1-11
Figure 1-11 Comparison of nominal GDP per capita between Myanmar and Thailand
Source: Asian Trend Annual Report 2013
1-12
(2)Sectoral Overview
1) Summary of Kayin State
Kayin state is located in the eastern part of Myanmar connecting with the Mon state, which faces the Andaman
Sea and to the west, and Thailand to the east. Kayin state consists of four districts: Hpa-an, Kawkareik, Myawaddy,
and Phapon and it is divided into seven townships and nine sub-townships (Refer to Figure7-1: Kayin State
Organizational Chart). The 2009 population of Kayin state was approximately 1.79 million which accounted for
about 3% of the total population of Myanmar. According to the data from the Kayin State Government, the
population of Hpa-an, the state capital is approximately 97,000 and the population in Myawadi sharing the border
with Thailand is approximately 60,000.
(Source: JICA)
a) Gross Regional Domestic Production (GRDP)
In Kayin State, about 60% of GRDP is comprised of commodity production (manufacturing) with agriculture
making up 30% of that total. The GRDP per capita of Karen State is 375,490 Myanmar Kyat (MMK). This
corresponds to 56.3% of the per capita GDP of Myanmar as whole.
Table 1-4 Kayin State Gross Regional Domestic Production (GRDP) (2010-2011)
Source: JICA
1-13
b) Kayin State Counterpart
The counterpart for the current project is the Kayin State Government since the focus of the project is Myawaddy
IZ and Hpa-an IZ -with their respective development plans supported by Kayin State. However, as the issues
related to the licensing of a Duty Free Zone (DFZ) for the Myawaddy IZ and the future consideration of a Special
Economic Zone (SEZ) supported by the Myanmar Investment Committee (MIC), the Ministry of Industry of the
central government and MIC are also shown in the organization structural chart.
Figure 1-12 Kayin State Counterparts
Source: Study Team
1-14
(3) Present Status of Concerned Area
1) Weather in Myawaddy and Hpa-an
The figure below depicts the annual rainfall in the southeast region of Myanmar. The annual rainfall reaches up to
4,000~5,000 mm in the lower land in Mawlamyain, the state capital of Mon State. In addition, in the southern part
of Mon State, annual precipitation levels are higher. On the other hand, in the eastern part passing through the
mountainous areas of Karen State, precipitation is less than 2,000 mm/y. Relative to the precipitation data for
Myawaddy, the similar data for Mae Sot is the contiguous area next to the border of Thailand and Myanmar is
provided for reference.
Figure 1- 13 Annual rainfall (Mawlamyain, Hpa-an, Mae Sot)
Source: JICA
1-15
2) Altitude and terrain of Kayin State and Mon State
The map below shows the altitude and terrain of Kayin State and Mon State.
Map 1-6 Elevation distribution maps of Kayin State and Mon State
Source: JICA
1-16
3) Current status of the Myawaddy IZ and Hpa-an IZ
The chart below compares the Myawaddy IZ and the Hpa-an IZ
Table 1-5 Comparison of Myawaddy IZ and Hpa-an IZ
Source: JETRO
Map 1-7 Positions of Myawaddy IZ and Hpa-an IZ
Hpa-an IZ
Myawaddy IZ
Source: Study Team
1-17
a) Myawaddy IZ
Photo 1-1 Myawaddy IZ development office
Source: Study Team
Currently the local general contractor (general construction company) is carrying out construction activities for
Phase 1 in response to the government of Kayin State.
b) Hpa-an IZ
Photo 1-2 Labor intensive factory in Hpa-an IZ
Source: Study Team
Construction of IZ has (phase 1) is completed and garment factory has started the operation. There are a few
tenant companies in the IZ.
1-18
4) Ethnic minority issues (Peace agreement)
The Myanmar government and the anti-government armed groups Karen National Union (KNU) have continued
the military conflict for sovereignty over each other, since the independence of the country in 1948. On January 12th
2012, they finally reached a ceasefire agreement. Since the KNU occupies the border between Myanmar and
Thailand as their own Kawthoolei1), entries of foreigners to the region have been banned for many years, however,
the region opened to visits by foreigners again from April 2013.
5) East-West Economic Corridor
The East-West Economic Corridor connecting four countries in Indochina Peninsula (Myanmar, Thailand, Laos,
and Vietnam) is based on an economic development plan with a foundation of the total length of the road up to
1,450 km.
This corridor connects from Da Nang, Vietnam in the east to Mawlamyain, Myanmar in the west. The eastern end
of Myanmar is Myawaddy, the focus of the current study and as the Myawaddy IZ is located on the East-West
Economic Corridor. It is considered to become the significant focal point of future border trade between Myanmar
and Thailand.
Figure 1-14 East-West Economic Corridor
Source: JETRO
1 Kawthoolei is the Karen name for the state that the Karen people of Myanmar. It has double meaning for the land that must be fought for Karen.
1-19
6) Access Road
a) Summary
The road overpass from Yangon to the Thai border via Myawaddy is the national highway, built by the Myawaddy
government, which runs 455km.
Table 1-6 Yangon-Myawaddy (National highway) Access route
Road City Distance Type of pavement Comment
National Highway
No.1
Asian Highway
(AH1)
Yangon
-
Bago
97Km Emulsion pavement +
Asphalt pavement
(Overlay)
Overlaid asphalt directly on the
surface of the emulsion
pavement. The width of
carriageway is 7.0m.
National Highway
No.8
Asian Highway
(AH1)
Bago
-
Thaton
138Km
Emulsion pavement +
Asphalt pavement
(Overlay)
Overlaid asphalt directly on the
surface of the emulsion
pavement. The width of
carriageway is 7.0m.
National Highway
No.85
(Eindu- Myawaddy)
East West Economic
Corridor
Thaton
-
Myawaddy
174Km Emulsion pavement
Un-paved road
(Crossing Dawna mountain)
Asphalt pavement
By Thai government funding
Road conditions have
deteriorated on both the
emulsion pavement and the
un-paved road.
The bypass road, funded by the
Thai Government, is under
construction.
Total 455Km
Source: Study Team
1-20
Figure1-15 Yangon- Myawaddy (Thai border) Access Route
Source: Study Team
b) Current Status of the Access Road
There are 4 different types of observable conditions of the access road existing between Yangon and Mandalay
(455km). Sectoral details appear below.
① Yangon-Hpa-an 272km
Photo 1-3 National highway (Yangon-Hpa-an: 277km)
Source: Study Team
The composition of the pavement of this road is asphalt concrete directly on the emulsion pavement. Although
the width of carriageway is 7.0m, there is no shoulder of the road. Each of the two driving lanes has a 3.5
meter width. The vehicle hired for the study team was possible to run at 60km/h.
1-21
② Hpa-an – Kawkareik: 126km
Photo 1-4: National Highway (Hpa-an – Kawkareik: 126km)
Source: Study Team
Although the road appears adequately paved, damage is evident along its entire length. The road is so narrow,
nearly all vehicles must veer to the shoulder of the road to avoid collision. Since the shoulder of the road is not
paved, it has become, clearly damaged from consistent wear-and-tear and ubiquitous rainfall. The result is a road
that presents any driver with a dangerous situation. Any driver using this road must travel at a very slow speed to
avoid the potential risk of accident.
③ Kawkareik – Thingannyinaung: 39km
Photo 1-5: National Road (Kawkareik – Thingannyinaung: 39km)
Source: Study Team
This section is a mountain road through the Dawna Mountains. Although there is evidence that the road was treated
with the emulsion pavement once, at the time of the survey when the study team visited, the pavement had been
damaged completely due to heavy vehicle traffic and the impact of the rains. In addition, there are places on this
road that are too narrow to construct two lanes. It operates under the daily reality of restricting traffic to one lane
either going up or coming down. To address this predicament through this section of the road, separately from the
1-22
rest of the mountain road, new road construction has commenced that will result in a two-lane asphalt-paved road.
The new access road will be available for public use during the year 2014.
④ Thingannyinaung – Myawaddy (National Road): 18km
Photo 1-6 National Road (Thingannyinaung – Myawaddy: 18km)
Source: Study Team
Using Thai ODA funding, this 18km stretch of road was developed by the Thai government contractors in 2006. It
is an asphalt-paved two-lane road with shoulders. The road was built in accord with the Thai Ministry of
Transport’s Bureau of Road’s regulations governing road construction. This road is suitable to accommodate
high-speed driving of most vehicles regardless of size. This road forms part of the East-West Economic Corridor
passing through Mae Sot across the Thai border. However, there is problem with the foundation of the Friendship
Bridge where this road crosses the Moei River, along the border between Myanmar and Thailand. Currently, a
second Friendship Bridge is planned by the Thai Government.
1-23
Photo 1-7 Second Friendship Bridge
Source: Study Team
7) Public Private Partnership (PPP) Scheme
Although Kayin State Government has initiated the first phase of construction of the Myawaddy IZ (55ha), their
efforts to date to provide an adequate water supply and water treatment system, do not meet international
standards. The project team concluded that because construction began using Burmese national development
standards that do not match international standard, establishment of a Special Purpose Company (SPC) is crucial
to enable operation as the developer and improve the standard of facilities during the first phase of IZ
development. For development continuity, the SPC should take a part in the second phase of the planning and
implementation of Myawaddy IZ.
The SPC will lease the land from the state government under a long-term lease agreement. Kayin State holds the
rights in terms of leasing the land and also holds the equity in accordance with the lease price for the SPC.
Therefore, this project will operate as a public-private partnership (joint investment into the SPC from both the
host state government and Japanese private companies) throughout its existence.
1-24
Figure 1-16 PPP Scheme (Myawaddy IZ)
Land Users
Sponsors(Investors)
SPC(SEZ operation)
Japanese Companies(Sumikin・Shimizu etc.)
Thai Local CompaniesMyanmar
Local Companies
Lender(Debt Finance)
Private financial institution, Banks
(JBIC etc.)
LoanInvestment
(Inc. in-kind contribution)Dividend
Host Country(Myanmar)
Myanmar Government
Kayin State
EquityLand lease
ShareTaxes
Construction Companies(GC / M&E)
Tenant A Tenant B ・・・
Land subleaseService delivery
LeaseAdministrative expense
Order
Source: Study Team
2-1
(1) Study content
This study attempts to provide both in-depth analysis and an assessment of the current conditions and submit
proposals for further industrial zone development in the Myawaddy region. With the intent of leading relevant
authorities to implement specific actions designed to achieve both Domestic Direct Investment (DDI) and Foreign
Direct Investment (FDI) to the region. Regarding Hpa-an IZ, whereas the IZ construction is completed already,
the study provides an evaluation of its outcomes and further proposals for Hpa-an IZ so as to attract more FDI in
the future. In regard to Myawaddy IZ, as the construction is under progress, the aims of the study include the need
to establish Special Purpose Companies (SPC) to participate in the further development of the IZ and its
management.
The Myawaddy IZ development plan will target the following six components.
1) Research of Special Economic Zone (SEZ)
・Current status and investigation into suitable construction methods;
・Tax incentives in the SEZ
・Study of an access road and research of the national highway and existing state road;
・Approval and license from the MIC (Myanmar Investment Commission);Training facility for workers;
・Estimation of the construction costs (IZ construction, access roads, worker training facility);
・Financial analysis and cash flow projection;
・Study of the possibility of utilizing ODA (to fund an access road).
2) Study of PPP scheme
・Role of government and the private sector;
・Special Purpose Company (SPC) establishment and funding procedure
・Financial analysis and cash resources
・Loan by financial institutions.
3) Survey of infrastructure requirements
・Investigation into the existing underground water as the source of a potable water supply;
・Study of a water recycling system and sewage treatment
・The power transformer station as it relates to the electricity generating authority of Thailand (EGAT);
・Financial analysis and cash flow;
・Telecommunications infrastructure;
・Calculation of construction costs (water supply and sewage treatment, power supply and transformer station, dry
port, industrial waste facility);
・Applicable ODA use;
・Environmental impact assessment standards.
2-2
4) Investigation of the worker population and nearby existing factories
・The working population and the existing plant in Mae sot;
・Forecasts of working population and employment in the Myawaddy IZ.
5) Survey of logistics capacity in an East-West Economic Corridor from the west and east gate
・The traffic demand in the subject area relative to the East-West Economic Corridor;
・Current condition of bridges over the rivers;
・Current status of roads in the East-West Economic Corridor;
・Comparative study of the cost of logistics;
・Confirmation of laws and regulations regarding transportation from Myanmar to Thailand;
・Research of customs clearance systems under the ASEAN Free Trade Agreement (AFTA) after 2015.
6) Others
・Suggestions regarding financial fund;
・Study of a facility involving rain water capture and drain water usage;
・Electricity;
・Effectiveness of the logistics of an East West Economic Corridor;
・Effectiveness of the utilization of ODA;
・Power development planning.
2-3
(2) Study Team Methodology
The Study team visited the project site in both Myanmar and Thailand in order to collect the most current and
accurate data for the study analysis. The main methodology of the study was to conduct interviews with Kayin
State government representatives, local general contracting companies operating in the Myawaddy IZ
development, and tenant textile factories operating in Hpa-an IZ.
Figure 2-1 Methodology
Study Methodology
Industrial Zone
Job Creations
Regulation, Planning
Design, Construction
Operation(OSS)
Sawing, Textile
Energy, Water Supply &Water Sewerage
Distribution
Listening Survey to Local Government
Mission Trip Survey(BCP)
Listening Survey to Local Companies
Listening Survey to Japanese Companies
Listening Survey to Local Government
Mission Trip Survey & Listening Survey to Japanese Companies
Study Methodology
Survey for Soil Volume & Water Resource by CAD
Listening Survey to UN organization & Institute
Regulation, Planning
Source: Study Team
The details of study methodology are as follows:
1) Study on Myawaddy IZ
a) Development Plan
To inform Myawaddy IZ development, as operated by the Kayin State government, the current master
development plan, the current status of tenant companies, and the overview of the Kayin State’s promotion
schemes were collected from the State Minister of Electricity‘s Industrial Development Bureau and other
related state ministries.
b) Construction status
The detailed information relating to construction master developing plan and work condition were collected
from the local general contractor for Myawaddy IZ.
2-4
c) Power supply
The current status for power supply from Thailand and future plans for power supply to the Kayin State were
confirmed from the Kayin State Electricity’s Industrial Development Bureau.
d) Construction conditions
The detailed information relating to construction procedures were collected from the Kayin State Construction
Bureau.
e) Living Environment of Mae sot
The living conditions and the environment were investigated with a view towards Japanese directors staying in
Mae sot in Thailand and working in Myawaddy in Myanmar, and crossing the border every day.
f) Current road conditions
Study was conducted by inspecting certain specific points along the road from Hpa-an, the state capital of
Kayin, to Myawaddy up to Thai border, Mae sot.
2) Study on Hpa-an IZ
a) Development Plan
For Hpa-an IZ operated by the Kayin State government, the master developing plan, the current status of tenant
companies, and the overview of the Kayin State’s promotion schemes were collected from the State Minister of
Electricity, Industrial Development Bureau and other related state ministries.
b) Tenant companies
The Project team conducted a factory visit that included interviews with the CEOs and managing directors.
c) Power supply
The Project team visited the facility construction site for Independent Power Producer (IPP) Power plant and
interviewed the Director.
d) Current road conditions
A study was conducted by investigating certain specific points along the road from Yangon to Hpa-an.
2-6
4) Study team
The figure below shows the team members and the organizational structure.
Figure 2-3 Team member and organizational structure
Source: Study Team
2-7
(3) Study Schedule
The field study schedule is shown as follows:
Mission trip period: 4th October, 2013 – 25
th October, 2013
Figure 2-4 Study Schedule (1)
CITY/AIRPORT Time Transportation Summary
1 4-Oct-13 Fri dept. HND 0:20 TG661 Dept. to Bangkok, Thailand
Bangkok 13:00 MTG Field visit
2 5-Oct-13 Sat 9:00 Dept. Hotel
11:00 Site visit Rojana Industrial Park
3 6-Oct-13 Sun dept. BKK 17:50 TG305 Dept. to Yangon, Myanmar
4 7-Oct-13 Mon 9:00 MTG Myanmar Lighting Manufacturing Co. Ltd. GM Mr. U Htay Min
11:30MTG Mizuho Bank, Ltd. International Corporate Advisory Division Ms.
Obara
13:00 MTG Project team Kickoff Meeting for mission trip
5 8-Oct-13 Tue 5:00 Dept. to Hpa-an, Kayin State
13:00 MTG w/ The Kayin State Government
15:00 Site visit Hpa-an Industrial Zone
6 9-Oct-13 Wed 5:00 Dept. to Myawaddy
11:00Site Visit & MTG Myawaddy Industrial Zone
Mother Construction Co., Ltd. Myanmar General Contractor
13:00 Lunch Kayin State Gust house
14:00Visit Myawaddy Pagoda
w/ State Minister of Electric Power and Industry U Saw Kyi Linn
14:30 Visit Myanmar- Thailand Border Immigration
16:00 Site study Myawaddy Industrial Zone
18:30Dinner w/ State Minister of Electric Power and Industry Mr. Saw Kyi
Linn
7 10-Oct-13 Thu Myawaddy 5:00 Dept. to Hpa-an, Kayin State
10:00 MTG w/ Ministry of Construction of Kayin State
13:00 Dept. to Yangon
8 11-Oct-13 Fri9:00
Visit & MTG Japanese Embassy Secretary w/ Second Secretary Mr.
Watanabe
11:00 Visit & MTG JICA Myanmar Chief Representative Mr.Tanaka,
14:00 MTG Delotitte Yangon, Mr. Kimura
15:30 MTG Project team
9 12-Oct-13 Sat
10:00
Site Visit UMH Yangon Factory & MTG NIPPON STEEL & SUMIKIN
BUSSAN CORPORATION Textile Planning Department, Textile
Company w/ Manager Mr. Inoue, Technical advisor Mr. Tokusaka
18:00Dinner UMH CO., LTD w/Chairman/CEO Myint Htay, Managing Director
Myat San Wynn
10 13-Oct-13 Sun Yangon Office workday
11 14-Oct-13 Mon 9:00 MTG w/ Project team
11:00
14:00 MTG Design Printing Services Ltd.
17:00 MTG w/ ILO Mr. Than Aung Kyaw
12 15-Oct-13 Tue 8:30 MTG w/ Project team
Bangkok 14:55 TG302 Dept. to Bangkok, Thailand
13 16-Oct-13 Wed 9:00 Train Myanmar Embassy in Thailand apply for entry visa
14:00MTG National Exonomic and Social Development Board International
Coodination Office JICA Expert Dr. Taguchi
14 17-Oct-13 Thu9:00
Train
MTG Japanese Chamber of Commerce, Bangkok (JCCB) w/ Secretary
General Mr. Ishii
14:00 MTG THE NIPPON ROAD Co., Ltd. w/ Chairman Mr. Izumi, Mr. Sato
15:00 Myanmar Embassy in Thailand
15 18-Oct-13 Fri10:00
Train
MTG SUMIKIN BUSSAN INTERNATIONAL THAILAND LTD. (SBIT) Textile
Department R&D Asean Texitile Industries w/ GM Mr. Wada
14:00 MTG JETRO Bangkok w/ Director Mr. Asano
16 19-Oct-13 Sat Bangkok MTG Project team & Office workday
17 20-Oct-13 Sun Bangkok MTG Project team & Office workday
18 21-Oct-13 Mon dept. BKK 10:30 DD8116 Dept. to Mae Sot
arrival Mae Sot 11:45 Dept. to Myawaddy
Mae Sot 12:30 Mae Sot - Myawaddy Border Immigration
13:00Site Visit Myawaddy Bonded warehouse, area study, Myawaddy IZ
area, neibouring rivers
15:00MTG Myawaddy Custom Department, Department of Commerce and
Consumer Affairs w/ GM U. Tin Ye Win
15:30 Visit Local Tranport Company w/ Mr.Nay Lin Myint
16:00 Site visit Mae Sot Hotel&Housing Facilities, Shopping Center
19 22-Oct-13 Tue dept. Mae Sot 16:35 DD8121 Dept. to Bangkok
20 23-Oct-13 Wed Bangkok MTG Project team Office workday
21 24-Oct-13 Thu
10:00
Train
MTG The Overseas Human Resources and Industry Developing
Association (HIDA) w/ Senior Deputy Representative Bangkok Office
Mr. Kubota
15:00Train
MTG IOM Labour Migration & Counter Trafficking Programme
Coordinator Ms.Claudia Natali
23:55 TG302 Dept. to Narita
22 25-Oct-13 Fri NRT 8:10 Arrive to Naria
9:30 MTG Project team
Vehicle
Vehicle
Myawaddy Hpa-an Field StudyPeriod: 4th Oct. 2013 - 25th Oct. 2013
Hpa-an
Yangon
Bangkok
Bangkok
Yangon
Maeson
Myawaddy
Bangkok
Bangkok
Vehicle
Vehicle
Bangkok
Date
Vehicle
Vehicle
Yangon
Yangon
Hpa-an
Myawaddy
Hpa-an
Vehicle
Vehicle
Source: Study Team
2-8
Mission trip period: 25th November, 2013 – 1
st December, 2013
Figure 2-5 Study Schedule (2)
CITY/AIRPORT Time Transportation Summary
1 5-Dec-13 Thu dept. Narita 11:45 TG643 Dept. to Bangkok, Thailand
BKK MTG Project team
2 6-Dec-13 Fri 9:00 MTG Project team
11:00Site visit &MTG Rojana Industrial Park Duty Free Zone, Rojana Industrial Park
Public Co., Ltd. w/ Marketing Department General Manager Mr. Hayashi
3 7-Dec-13 Sat BKK 8:00 MTG Project team
9:30 MTG & Office workday Document & Presentation preparation
4 Sun dept. BKK 13:00 TG305 Dept. to Yangon, Myanmar
RNG
5 8-Dec-13 Mon Yangon 5:00 Dept. to Hpa-an, Kayin State
13:00 MTG w/ The Kayin State Government
15:00 Site visit Hpa-an IZ
6 9-Dec-13 Tue 8:00 Dept. to Mon State
10:00 Site visit & MTG Myanmar LIGHTING (IPP) Co., LTD.
Yangon 11:30 Dept. to Yangon
Dept. RGN 19:40 TG306 Dept. to BKK
dept. BKK 23:55 TG642 Dept. to NRT
7 10-Dec-13 Wed NRT 8:10 Arrive to NRT
9:30 MTG Project team
VehicleHpa-an
MonVehicle
Myawaddy Hpa-an Field StudyPeriod:4th Dec.2013 - 10th Dec.2013
Date
BKK Vehicle
Source: Study Team
Mission trip period: 25th November, 2013 – 1
st December, 2013
Figure 2-6 Study Schedule (3)
CITY/AIRPORT Time Transportation Summary
1 25-Nov-13 Mon dept. NRT 10:50 JL707 Dept. to BKK
2 26-Nov-13 Tue Bangkok 9:00 MTG Project team
3 27-Nov-13 Wed Bangkok 13:00 Dept. to BKK
4 28-Nov-13 Thu dept. RGN 13:00 TG305 Dept. to RGN
5 29-Nov-13 Fri 9:00 MTG Japanese Banks
11:00 MTG General Contractors
6 30-Nov-13 Sat 8:00 MTG Japanese Banks
10:00 MTG Foreign-affiliated firm
dept. RGN 14:45 TG302 Dept. to BKK
dept. BKK 23:15 JL702 Dept. to NRT
7 1-Dec-13 Sun NRA 7:00 Arrival to NRA
Vehicle
Vehicle
Yangon
Yangon
Myawaddy Hpa-an Field StudyPeriod: 25th Nov. 2013 - 1st Dec. 2013
Date
Source: Study Team
2-9
Mission trip period: 28th November, 2013 – 29th November, 2013
Figure 2-7 Study Schedule (4)
CITY/AIRPORT Time Transportation Summary
1 28-Nov-12 Thu BKK 10:45 DD8118 Dept. to Mae Sot
Mae Sot 12:00 Arrival
Mae Sot/ Myawaddy 14:00 Visit Textile companies
2 29-Nov-12 Fri Mae Sot 9:00 Vehicle Site Visit Mae Sot & Myawaddy Power
dept. Mae Sot 16:50 Dept. to BKK
arrival BKK 18:05
Vehicle
Myawaddy Hpa-an Field StudyPeriod: 28th Nov. 2013 - 29th Nov. 2013
Date
Source: Study Team
Mission trip period: 28th November, 2013 – 29th November, 2013
Figure 2-8 Study Schedule (5)
CITY/AIRPORT Time Transportation Summary
1 5-Dec-13 Thu dept. Narita 11:45 TG643 Dept. to Bangkok, Thailand
BKK MTG Project team
2 6-Dec-13 Fri 9:00 MTG Project team
11:00
Site visit &MTG Rojana Industrial Park Duty Free Zone, Rojana
Industrial Park Public Co., Ltd. w/ Marketing Department General
Manager Mr. Hayashi
3 7-Dec-13 Sat BKK 8:00 MTG Project team
9:30 MTG & Office workday Document & Presentation preparation
4 Sun dept. BKK 13:00 TG305 Dept. to Yangon, Myanmar
RNG
5 8-Dec-13 Mon Yangon 5:00 Dept. to Hpa-an, Kayin State
13:00 MTG w/ The Kayin State Government
15:00 Site visit Hpa-an IZ
6 9-Dec-13 Tue 8:00 Dept. to Mon State
10:00 Site visit & MTG Myanmar LIGHTING (IPP) Co., LTD.
Yangon 11:30 Dept. to Yangon
Dept. RGN 19:40 TG306 Dept. to BKK
dept. BKK 23:55 TG642 Dept. to NRT
7 10-Dec-13 Wed NRT 8:10 Arrive to NRT
9:30 MTG Project team
VehicleHpa-an
MonVehicle
Myawaddy Hpa-an Field StudyPeriod:4th Dec.2013 - 10th Dec.2013
Date
BKK Vehicle
Source: Study Team
3-1
(1) Background and Justification of the Project
1) Project Background
a) Myanmar
While Myanmar attracts the world’s attention to its rapid economic development, liberalization, and
democratization as Asia’s “last frontier,” the effects of the country having suffered through 50 years of economic
sanctions and numerous internal ethnic group conflicts have become equally pronounced. The West’s economic
sanctions prevented not only the development of the country but also any Foreign Direct Investment (FDI).
Chronic unemployment and national impecuniousness plague the society. In addition, due to the government’s
neglect in providing basic infrastructure to the nation, Myanmar has a great shortage of power supply-arguably the
most important component of the industrial development. The issue of power supply is one of the most pressing to
the country.
b) Thailand
The domestic industry in Thailand had shown dramatic growth, which resulted in its national economic growth in
recent years. As a consequence, the labor-intensive industry, requiring only modest upfront investment, has been
forced to operate in a low-cost area away, distant from the Thai capital. Furthermore, due to a 300 baht/d
minimum wage, introduced in 2013, labor-intensive industries began to plan low-cost operations by relocating
manufacturing facilities in the neighboring countries outside of Thailand to take advantage of those countries’
cheap labor. Currently, the Thailand Board of Investment (BOI) is considering a policy that would encourage the
transfer of labor-intensive industries to neighboring countries through a new BOI to be enacted in 2015.
2) Project Necessities
a) Construction of IZ on the border with Thailand
Understanding the movement of political decision-making on the Thai side, the Kayin State, sharing a border with
Thailand, has decided to construct the IZ in the border town, Myawaddy, in order to create local employment and
comply with the demand of its neighbor Thailand.
b) Adopting the international standard to receive Japanese investment
Kayin State’s original development plan for an IZ is not sufficiently attractive to attract FDI, due to its deficient
infrastructure facilities - i.e. power supply, water supply, and drainage management system, and solid waste
disposal system. This project aims to establish the IZ to international standards for both in Myawaddy and Hpa-an.
For the development of Myawaddy IZ, developers also seek to participate in the operation of the IZ.
c) Solution through a PPP scheme for finance
The business operation of an IZ requires consideration of selling the plot of land to private companies. It enables
the development of an economically efficient IZ by establishing Special Purpose Companies (SPC), which will
work particularly well in the financial aspect under a PPP scheme.
3-2
Figure 3-1 Project background
Source: Study Team
3) Scope of the Project
The scope of the project comprises the development plan of Myawaddy (IZ) and the Hpa-an IZ. Myawaddy IZ is
located next to the Myawaddy Trade Zone. Hpa-an IZ, already in operation, is located near the state’s capital.
Both are being promoted by the Kayin State government. This project seeks to strengthen the goals of Myawaddy
IZ and Hpa-an IZ through the administrative mechanism of SEZ Public Private Partnerships (PPP).
The study team considers that the following three projects have crucial influence to this project; i) Myawaddy
Trade Zone (located in the part of Myawaddy IZ), ii) IPP power plant in Mawlamyine, and iii) the construction of
the bypass road supported by the Thai government.
4) Analysis of the current status, a future projection (including demand forecast), and probable negative
consequences if the proposed project is not implemented.
a) Current Status
[Myanmar]
Whereas industrial development has stalled during the time that the Myanmar military regime has been in power
in the country, there are chronic unemployment issues in the country and numerous Burmese migrant workers
living in Thailand.
[Thailand]
Since the 300 baht daily minimum wage became effective April 2013, the movement to locate branch factories in
neighboring countries to enjoy the benefit of cheap labor has become prominent among labor-intensive industries.
The majority of workers in the labor-intensive industries in Thailand are from Myanmar.
3-3
b) Future projection
[The need for project]
According to the analysis of theorem status indicated above, it is necessary to establish the agglomerations of
labor-intensive industries in the border between Thailand and Myanmar, which will lead to immediate job creation
and also the development of a new middle class.
The following industries are the types of factories under consideration for inclusion into the IZ by the Government
of Kayin State.
Garment
Food-processing factories
Canned food factories (meat and fish)
Chemical fertilizer
Timber factories
Tire factories
Car parts manufacturing
Battery manufacturing
Electronic products
In terms of the industries mentioned above, garment, food-processing factories, canned food factories, timber
factories, and car parts manufacturing are the focus of the Phase 1 invitation to companies to establish such
plants. Battery manufacturing and electric products industries with added value will be the focus of activity
after Phase 2 development.
In other words, this project will satisfy both social and economic needs - present and future - at the border
through the construction of the proposed Myawaddy IZ.
The following figure demonstrates a phased developing plan: long-term, medium-term, and short-term (see
Figure 3-2, Figure 3-3, and Figure 3-4).
① Comprehensive long-term project development plan
“Kayin State Job Creation Development Plan for 100,000 people (~2030)”
In comprehensive long-term project development plan, project plans to create the jobs for 100,000 people in
Kayin state. According to the data available in Thailand, the average nunmber of employees in a labor-intensive
factory in an industrial zone is 200 people/ha. Therefore, roughly 500 ha. of land is required to accommodate
100,000 jobs created in the industrial zone.
The project plans to create 100,000 jobs for people in Kayin state through the development of an SEZ as the
long-term goal. The Project also plans to breed a new middle class as one of its long term targets. Training
managers as a part of this project plan will be necessary for the next generation in Myanmar.
3-4
Figure 3-2 Comprehensive long-term project development plan
Source: Study Team
② Medium-term project development plan (~2025)
Figure 3-3 Myawaddy - Hpa-an - Mawlamyine Economy Triangle concept
Source: Study Team
Electric power
To supplement the deficiency in electric power, the Independent Power Producer (IPP) is planning to build a
power plant in Mawlamyine in Mon state. That plant will be completed in 2014, and will generate and transmit
230 MW of power by the year 2015. Plans call for that plant to supply the power to Hpa-an IZ as well.
Establishment of a road network
To improve the distribution networks between Myawaddy and Hpa-an, Kayin State has investigated the present
status of road networks and transportation systems in the region. The establishment of new traffic networks may
be considered in order to realize efficient traffic flows through utilizing ODA.
3-5
Promotion of Myawaddy industrial zone to an SEZ
As Myawaddy industrial zone expands its activities overtime, and develops trade relationships with Thai
companies while maturing as a Duty Free Zone (DFZ), its developers will promote Myawaddy industrial zone
as a regional SEZ enjoying a variety of privileges in the process.
In order to obtain the SEZ approval, the following requirements need to be satisfied: the provision of
administrative services and exemption of various taxes, enhancement of ancillary services and infrastructure
facilities, the services related to logistics, business operation, and banking, education and training for workers,
management class professionals, satisfying the required elements for industry as well as the satisfying the needs
of housing, schools, health services, police and fire stations, parks, and amenity facilities etc. Table 3-4
demonstrates the major role of Public and Private sector.
Table3-1 Requirements for SEZ
Source: Study Team
Figure 3-4 Short-term development plans
Source: Study Team
3-6
Myawaddy industrial zone
The project will establish a Special Purpose Company (SPC) and purchase the land in Myawaddy industrial zone
after the local contractor finalizes the Phase 1 development works, and provides the very necessary
infrastructure built to meet the prevailing international standard. Myawaddy industrial zone grants some
privileges in the Duty Free Zone, because it straddles the border with Thailand and will promote many export
and import businesses in its processing trades.
Hpa-an industrial zone
The Project will promote Domestic Foreign Investment (DFI) and Foreign Direct Investment (FDI) for Hpaan
industrial park - which is already completed and in operation. It especially focused on meeting an international
standard of attractiveness of an industrial zone by preparing infrastructure such as water supply and water
treatment equipment as part of the project.
Duty Free Zone in Myawaddy
Myawaddy industrial zone established Duty Free Zone (DFZ) utilizing the customs house adjacent to it. A
vendor can escape the import tax on materials and semi-processed goods when it transports them through, and
keeps them in, the DFZ, even though sales tax is charged upon delivery.
Figure 3-5 Flowchart of distribution in Duty Free Zone (DFZ)
Source: Rojana Distribution Center Co. Ltd.
5) The Advantages of SEZ Development
The following attributes of SEZs constitute the most demonstrative advantages of SEZs for further development
in the future. As of December 2013, a revision of the law governing SEZ development was in progress, under the
authorship of the MIC (Myanmar Investment Commission), and the detailed results are still unknown.
Note: (Myanmar Yellow Pages, http://myanmaryellowpages.jp/modules/business/)
The previous administration had passed a "Special Economic Zone Act (SEZ Act)" comprised of 12 chapters on
January 27, 2011. According to this legislative act, any matters relating to SEZ development will be determined
by the approval of the Myanmar government’s Central Working Body and Management Committee.
a) The purpose of SEZ Development (SEZ authorization acquisition):
3-7
The approval of foreign operational investment must be based on a framework that addresses
the maintenance of national sovereignty, national defense, and national protection;
The establishment and operation of SEZ are to promote the economic development of the
country;
SEZs develop national industry and advanced-technology;
SEZs offer opportunities for training in advanced- technology, transfer of technology, and
higher learning;
SEZs create employment opportunities;
SEZs develop the national infrastructure inventory.
b) Business enterprises in SEZs:
Product processing industries, high-tech production industries, manufacturing industries, agriculture,
livestock and marine nutrient industries, mineral industries, and forest products industry, etc.;
Trade, transportation and logistics, warehousing industries, hotels, tourism, education, health,
housing, infrastructure supply support centers, green industries for natural environmental
conservation, development, service industries for recreational resorts, etc.;
Roads, bridge piers, airports, ports, power generation facilities, telecommunications, water supply,
environmental protection, and waste disposal, etc.;
Other projects approved by central organizations with the approval of the government.
c) The preferential incentive towards participants in SEZs
SEZs enable participating tenant companies to open overseas bank accounts - remitting and
receiving the transfer of foreign currency in transactions approved by the central organization. The
operation of the insurance companies of foreign countries is also possible.
Land use rights of SEZs:
The land use rights apply for a minimum of 30 years with SEZ authorization acquisition. Up to 75
years of land use rights may apply for large-scale business investments, 60 years of land rights for
mid-scale business investments, and 40 years of land rights for smaller business investments. Land
use rights of 40 years duration tend to be the longest.
Income tax:
A tax reduction of 50% for overseas sales would be in effect for the subsequent five year period.
After the tax relief period expires, if the product export value exceeds certain values, the following
tax exemptions for corporate income tax apply: i) 50% of the total production value for large-scale
investment projects, ii) 60% for medium-sized investment business, and, iii) 70% for small
investment business.
3-8
d) Other taxes
Commercial taxes for service industries: certain designated period of time exemption from the first
year of operation. Duty-free export commodity exemption for commercial tax and value added tax
(VAT) for the products produced in the SEZ;
Other taxes and export duties;
Exemption of tax for raw materials imported from abroad, machinery, equipment (particularly for
businesses specializing in export processing);
For automobile, machinery, and equipment used in the business investment, the tax exemption
applies for five years from the start of the first business year. For the subsequent five years, the tax
reduction of 50% applies.
6) Verifying the SEZ authorization acquisition possibilities
① In regard to entering into the Myanmar market for foreign companies for their operation as branch offices
(100% owned or joint capital) - The corporate tax for branch office establishment is 35% and for representative
office establishment is 25%.
There are 3 ways of entry into the Myanmar market for foreign companies, through:
Directorate of Investment and Company Administration (DICA)
Myanmar Investment Commission (MIC)
SEZ tenant company
Any of the above 3 options will result in the formal registration of the established business, and, the acquisition of
a DICA-issued business license.
Furthermore, if foreign companies want to receive tax exemptions and investment protections based on the
enabling measures of the Foreign Investment Act, it is necessary to obtain a permit for investment from the MIC.
In addition, investment within the SEZ requires the permission of the Management Committee. However,
regarding SEZs in the early stages of development, regulations are in the process of receiving legal scrutiny
leading to potential amendment. The national law in Myanmar is still under development and there are numerous
opaque issues outstanding especially in terms of the operational aspects. Therefore, the urgent need to acquire the
latest information is always essential to inform decision-making (Futami, 2013: Nikkei construction issued on
2013.12.9).
With a view towards understanding the current status of the legal system in Myanmar regarding SEZ
establishment, the following summarizes short term development plans.
② Verifying the possibility of SEZ authorization acquisition
Currently, Myawaddy IZ is under development of its Phase 1 (57.4ha) by the Kayin State Government. In order to
establish an SEZ in the Myawaddy area, it is necessary to plan and organize a development area of more than
300ha and to provide a reliable power supply apart from the required components (as shown in Figure 3-4).
However, the future development plan of the government will be crucial in order to satisfy the required stable
power supply. Therefore, SEZ authorization acquisition will be the focus of the government’s medium-term plan,
3-9
while in the short-term development plan, the government aims to develop a bonded processing zone.
7) Study of required incentives in the case of SEZ approval has not been taken
If the approval of an SEZ is obtained only in the medium term but not in the short term, the following incentive
measures can be provided for the tenant companies in Myawaddy IZ:
• The grant of an exemption on customs duties, export and import procedures, trade, and other government
regulations on banking;
· Tax exempt status for one-stop service related to various application procedure costs associated with business
operations;
· Partial tax exemption from the public dues of Kayin State. The SPC will negotiate with the Kayin State
Government for applicable additional incentives;
·Possible discounts for the cost of water supply, sewerage treatment, and solid waste disposal fees.
8) The preferential advantages for a bonded processing zone:
The procedure for obtaining an approval for a bonded processing zone to focus on the short term goal for
Myawaddy IZ is the subject of a separate application to MIC;
It is to be noted that both the "Foreign Investment Law" and the "Company Law" are the laws relating to the
incorporation of Myanmar. However, in order to receive preferential treatment when establishing an enterprise
corporation under the Foreign Investment Law, there is a favorable method more than what can be applied through
the Companies Act.
The purpose of the Union of Myanmar’s Foreign Investment Law, and to expediting the enactment of the law,
meets the purpose of Myawaddy IZ SPC by:
① Promotion of exports and expansion;
② Exploitation of natural resources that require large-scale investment;
③ Acquisition and introduction of advanced technologies (high technology);
④ Production that requires large amounts of capital and protection of support service activities;
⑤ Expansion of employment opportunities;
⑥ The development of business contributes to saving energy consumption;
⑦ Regional development
The main points in the amendment to the Foreign Investment Law, effective January 31, 2013, are as follows.
· Extension of the exemption period of the corporate income tax from 3 to 5 years;
· Extension of the land lease period is from 30-50 years;
· Enabling the mortgaging of land;
· Remittance to foreign companies established by the foreign investment law is under consideration;
· Labor-related regulations: 25% skilled workers employed within 2 years of establishment, 50%
within four years’ time, 75% within six years’ time;
· Non-skilled workers must be 100% Myanmar-nationals;
3-10
· Supplement to Training Obligations;
· Supplement to the obligations of environmentally-friendly development
(Ohara, 2013: “5 provided truth in Myanmar economy”, Gentosha Shinsho)
9) Assumed problem when the proposed project is not implemented (Assumed problems and risk through failure
to implement the project)
a) IZ development
・ If the proposed project is not successfully implemented, there is a risk of failure to reach the objective of the
“Myawaddy IZ” as promoted by the Kayin State government in its comprehensive regional development
plan;
・ As the expansion of the economic corridor is expected to reach the state capital of Mon state, Mawlamyine,
failure to implement the project risks hindering further economic development of Myanmar;
・ The “Myawaddy Trade zone” next to the Myawaddy IZ has begun operations. Failure to implement the
project risks negative impact to effective operation of the trade zone.
b) Logistic
Map 3-1 Logistic Route through Myanmar
Thailand Tak
Thailand, Myanmar, China Route
China Kunming
IndiaImphal
India- Myanmar- Thailand Route
Source: Study Team
3-11
・ The logistic from Kumming, China, and Imphal, India to Thailand via Myanmar will pass through
Myawaddy. Such geographical advantage needs to be well utilized.
・ While bypass road construction between Thigannynaung and Kawkareik, and improvement of the
access road to Myawaddy IZ have been carried out under this funding, if the project is not implemented,
these investments will be denied the anticipated economic impact, and may result in an adverse reaction
between the two countries.
・ It will negatively affect the economic integration of ASEAN in 2015.
③ Power supply
As the Myawaddy IZ development plan is completely dependent on a continuous power supply from Thailand
during its first stage of development, if the implementation of the project fails, it may become necessary to revise
the power supply agreement.
d) Effectiveness and impact when implementing the project
① Labor intensive industry
・ Upgrading the Myawaddy IZ enables it to receive the businesses and factories that have been forced to
withdraw from Thailand due to the increase in minimum wages there.
・ In Myanmar, labor-intensive industry would contribute to regional economic development and a reduction in
unemployment which leads to national economic development.
② High-tech industry (Thailand)
・ Thailand, the productive hub of ASEAN, which has grown into a middle-income economy country, can
present a pivotal opportunity to grow through technological innovation.
③ Japanese enterprises
・ In Japan, national domestic demand has reached its saturation point and overseas markets are necessary for
Japanese economic health. It is crucial for Japanese enterprises to enter into the Myanmar market in order to
mitigate the China risk. This view is also compatible with the particular aspect of the Thai-plus-one strategy
that entails a definite response to external economic challenges.
④ Kayin State
・ The prominent characteristic of Myawaddy IZ development plan is the comprehensive regional development
plan incorporating the advantage of geographical proximity to Thailand.
⑤ Logistics
・ The distance between both Yangon and Bangkok, as large consumer markets, is approximately 450km from
Myawaddy respectively. The major advantage of the route through the Asian highway is that industrial goods
and raw materials produced in Myawaddy IZ are not required to pass the Straits of Malacca across the Malay
Peninsula in order to reach to the logistics port of those cities. Therefore, the logistic lead time required to
3-12
transfer the products will shorten considerably.
e) Comparative analysis between the project alternatives
As described above, Myawaddy IZ has great potential for economic development as it has the characteristic
favorable to both economic and geographic location.
The following table shows the comparative analysis among the three major SEZ projects in Myanmar and Mae
Sot in Thailand - located near Myawaddy.
Table 3-2 Comparison of Myawaddy IZ and other projects
Choices Land
Approval
Central
Gov.
Priority
SEZ
Approval
SPC
Establishment
Funding
prospects
Stable
Power
Supply
Stable
Potable
Water
Supply
Difficulty of
Construction
Work
Myawaddy ○ △ - - - △ △ △
Dawei △ ○ ○ ○
Thilawa ○ ○
○ △ ○ ○ ○ ○
Mae Sot - ○ ○ - △ △ - -
(Explanatory notes) ○:High probability △:Possible -:Unknown
Source: Study Team
3-13
(2) Analysis for the Planning of the Project
1) Demand estimation
The demand estimation for this study will focus only Myawaddy IZ for the following reasons:
・ As shown in Figure 3-3, in the Myawaddy- Hpa-an- Mawlamyine economy triangle concept, while the
demand forecast is already completed as the development precedes in Hpa-an, the study team considers
that the Myawaddy IZ project needs immediate further market study;
・ Although it is necessary to revise the demand forecast for Hpa-an, due to time constraints in the current
study, substantial research is not possible;
・ From the viewpoint of industrial development and the perspective of the economic partnership with
Thailand, the study team recommends focusing on “Myawaddy First, Hpa-an Second.”
2) Job creation
Myawaddy industrial park is divided into north and south districts across the national highway No.85. The
development of Northern district is divided into Phase1, Phase2, and Phase 2N. The development of Southern
District is divided into Phase 2S, Phase 3, and Phase 4 for gradual sequential development. The size of the total
development for both Northern and Southern districts is 500ha (See Figure 3-9 Myawaddy SEZ development
planning area layout plan).
The forecast of job creation is calculated based on a unit of land area per plant. The study team utilized the Phnom
Penh SEZ data and the actual results of other SEZs. The numbers of the original unit are shown as below:
Table 3-3 Myawaddy IZ job creation (per unit)
Garment
Consumer
Goods
Auto & Electric
Parts Agro-Food
Employment(person/ha) 300 300 200 300
Source: Study Team
The numbers of non-manufacturing employees are principally workers for commercial and other tertiary industry
service sectors. The study team considered that the numbers of factory workers in Phase 2N of the North District
and Phase 2S of the South District are equivalent accounting for the half of total factory workers.
The following table shows the job creation of phase-specific and industry of Myawaddy IZ.
3-14
Table 3-4 Job creation in Myawaddy IZ
Item Unit North district South district Total
1 2 2N 2S 3 4~5
Industrial Zone Total Area ha 57.4 23.9 49.9 73.1 122.2 173.5
Industrial Zone Sectional
Area
131.2 368.8 500
Factory Area ha 48.8 0 26.8 34.6 85.0 104.8
Factory Area per Sectional
Area
75.6 224.4 300
Infrastructure, Housing,
Service, other non- factory
area
ha 8.6 23.9 23.1 38.5 37.2 68.7
Same as above, per district ha 55.6 144.4 200
Number of industrial
employees
Person 21,300 70,200 91,503
Number of non-industrial
employees
Person 10,650 70,200 80,850
Total number of employees
person 31,950 140,400 172,350
Source: Study Team
3) Demand for Infrastructure facilities and equipment
The team has identified the project infrastructure requirements in the areas of electric power, water supply, and a
sewerage network. The proposal for a solid waste disposal system will not be included in the current study for the
following reasons:
In general, the types of industrial waste are in wide ranges such as: miscellaneous garbage, wood waste,
organic sludge, inorganic sludge, waste plastic, and metal scraps, etc.;
For the case of the labor-intensive industries, depending upon the industry, the types of waste material varies
substantially in the expected total amount of waste material, types of materials, form, and quality, etc.;
In the short term including the construction phase, the waste will be transported to municipal disposal sites in
Myawaddy. In the medium to long term, the waste disposal issues will be handled at the policy level in the
Kayin State Government.
① Demand basis per Industrial Lot Area
The forecast of infrastructure demand upon land is based on a calculation per unit of land area per plant. In
addition, the team utilized the Phnom Penh SEZ data and other SEZs as references.
3-15
Table 3-5 Myawaddy Industrial Zone Demand by Industrial Lot Area
Demand Garment Consumer
Goods
Auto & Elect.
Parts Agro-Food
Water (m³/ha) 50 50 40 100
Waste water (m³/ha) 40 40 32 80
Electric power
(MW/ha) 0.080 0.080 0.100 0.075
Source: Study Team
② Infrastructure Area Demand
The table below shows infrastructure land-demand by phase and industry.
Table 3-6 Myawaddy Industrial Zone Infrastructure Area Demand (/ha)
Item Unit North district South district Total
1 2 2N 2S 3 4~5
Industrial Zone
Total Area
ha 57.4 23.9 49.9 73.1 122.2 173.5
Industrial Zone
Sectional Area
131.2 368.8 500
Factory Area ha 48.8 0 26.8 34.6 85.0 104.8
Factory Area per
Sectional Area
75.6 224.4 300
Infrastructure,
Housing, Service,
other non- factory
land use
ha 8.6 23.9 23.1 38.5 37.2 68.7
Same as above,
per district
ha 55.6 144.4 200
Water Supply m³/d 6,173 20,520 26,693
Sewerage m³/d 4,938 16,416 21,354
Power supply MW
6.7
23.6 30.3
Telecommunicatio
ns
Solid Waste t/d
Source: Study Team
3-16
4) Analysis of the necessary issues
a) Electric Power supply
The most important component for the Myawaddy development plan is securing a reliable and continuous
stable power supply. Below are the findings from the first mission trip regarding power supply:
① EGAT: Ten (10) MW of power at 8 baht/kwh are to be supplied from Thailand until 2016.
The revision of the terms and conditions, such as expansion of the power supply and extension of the period
that will be required depending on the power demand of tenant companies and the projected type of
industries.
② An Independent Power Producer (IPP) is constructing fully self- funded Combined Cycle Power Plant to
supply reliable power. According to the construction plan (see figure 3-6), the following is the power supply
schedule.
43.5MW: January, 2014 ~
98MW: November, 2014 ~
230MW: October, 2015
③ Although there is no confirmation that Myawaddy is included in the IPP power distribution subject area, it is
necessary to inquire about this subject to both Kayin State and the central government so that the implementation
of power transmission can be secured by the national grid in this area.
④ Kawkareik power station construction: 2016 completion
The study team estimates that the Myawaddy IZ can manage the power demand by adequately combining
those power supplies through monitoring the project progress by improvising and improving upon the plan
overtime.
It should be noted that in the case of Hpa-an IZ, the authorities have already installed a substation 66kv/11kv and
20MVA capacity.
Figure 3-6 Mawlamyine power plant implementation program
Source: Myanmar Lighting (IPP) Co,, Ltd.
3-17
Photo 3-1 IPP Power plant in Mawlamyine (under construction)
Source: Study Team
Map 3-7 Mawlamyine Power distribution plan
Source: Study Team
3-18
b) Water supply
① Kayin State
In Kayin State, there are no any water purification plants using surface water, except for the spring water
distribution facility in plateau areas for military camp use, and those water supply facilities are undeveloped. In
the mountainous areas, people use spring water, and in the plains areas, people use underground well water.
(See Chapter 4: Evaluation of environmental and social aspect)
② Myawaddy IZ
As there is no water supply facility in Myawaddy IZ, both water supply for domestic use and water supply for
construction activity are extracted from the aquifer stratum at 200ft down from the ground level; 40,000 liters/d is
used by the North district Phase 1 construction site.
c) Sewerage
① Kayin State (Hpa-an IZ)
There is no public sewerage system for waste water. Although the partially-operating Hpa-an IZ has plans to
build a waste water treatment plant in the future, currently un-treated waste water is discharged to the
surrounded area.
② Myawaddy IZ
While phase 1 construction of this IZ is under operation, there is no sewerage system development plan
currently under consideration. As a general rule of infrastructure planning for underground installation, it is
necessary to complete construction of a sewerage system prior to road construction. Therefore, it is important
to complete the development plan for a sewerage system as soon as possible.
d) Waste disposal
The IZ master developer does not have a waste disposal treatment system plan for both Myawaddy IZ and
Hpa-an IZ.
e) Telecommunications
An advanced telecommunications system plan such as a fixed landline telephone network, a satellite
communications base station, a mobile cellular telephone base station, and an advanced Information and
Communication Technology (ICT) system development plan will be necessary telecommunications infrastructure
to attract FDI in the future. The current development plan for a telecommunications system is uncertain in regard
to the details and quality of its requirements.
f) The Access Road
The government has funded US$140 million to develop the road infrastructure in order to vitalize Tak province in
Thailand. The following are the identified projects:
① Rehabilitation of the Thailand – Myanmar Friendship Bridge
② Improvement of the Thigannynaung – Myawaddy Road
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③ New construction of bypass road Thigannynaung – Kawkareik
④ Myawaddy – Kawkareik road open in 2015.
(It will shorten the duration for two hours connecting two cities)
As of March, 2013, the border of Myawaddy is open and there are numerous large trucks Vehicles are passing the
one way mountainous road through Dawna Mountain. It is highly expected The study team expects that the
implementation of road infrastructure funded by Thai government as described above will improve dramatically
the access road from Thailand to Hpa-an, Myawaddy, and to Yangon.
g) Housing facility
① When the development goal of “job creation for 100,000 people” is achieved through the Myawaddy IZ
development plan, the population will increase in size to 300,000 including the families of the factory
workers and those employed in the service sector;
② As the current population in Myawaddy is only approximately 60,000, housing will be in short supply with
such a drastic increase in population;
③ A housing development policy is a crucial part of the successful implementation of the Myawaddy IZ
development plan.
5) Study of technical method
a) Regional development plan
① The Kayin Sate government nominates the Myawaddy IZ development plan area and the land of
Myawaddy Trade zone as the “greater” “Myawaddy Industrial Zone”. (The east-west 5km, the south-north
4km)
② Although the study team could not receive the details of the regional master development plan as of
today, the study team understand the basic infrastructure development plan and the housing facilities
development plan are to include as part of the plan.
③ It is crucial to coordinate the Myawaddy IZ development plan with the regional master plan. In addition,
the revised plan and its proposal will also be significant when proceeding with the project in order to avoid
implementation delays.
b) Regional Climate Condition
① The main characteristic of climate in Myawaddy, Hpa-an, and Mawlamyine is described in the
publication, “Nature and application of land in South east Asia” (Takaya, 1985). The following is cited
from the above publication:
The land features of Southeast Asia can be characterized by two different features: a mountainous region
and a flat plain region;
The area on the equator is the annual tropical rainforest zone and the other area is the monsoon climatic
zone;
The land area is comprised of hills and flat land without large undulation;
In terms of the climate, the dry season continues through a longer period of months. It is similar to the
3-20
climate in India;
In general, on flat land area there is little water resources available;
The reason there are numerous huge retarding ponds in Myanmar is for the purpose of irrigation in
applying agriculture technology and techniques used in India 1,000 years ago;
The Indian method of land application is adopted particularly for the flat land management, especially
where there is insufficient underground water;
There are five major rivers in the south, from the west, the Ayeyarwaddy, the Thanlwin, the Chao Phraya,
the Mekong, and the Hongshui He.
③ The observed types of stones are as follows: sandstone, shale, limestone, and sedimentary rock on the surface
(Dawna Mountain range).
④ There are cement factories using limestone as a primary material from nearby Hpa-an city.
c) Topography
According to the topography map (1:12,000) obtained during the first mission trip, the main land features are as
follows:
① North district: the overall tendency is that the land slopes toward the northwest from the southeast. The range
of altitude is in between 180m above the sea level to 210m above sea level;
② The Thingyan River located in the northwest at the limit of Phase 2N, runs meandering towards northeast
direction.
③ The South district located next to the national highway root 85, which also refers to Asian Highway 1, the
altitude changes from 195m to 230m above sea level within a distance of 2km.
④ The main characteristic of the South district is that the altitude varies randomly from 185m to 230m above
sea level.
From the findings mentioned above, it is expected that there are numerous stream and small rivers with complex
watercourses in both south and north districts.
d) Soil and geology
① It will be necessary to study the characteristics of the soil, and, the mechanical and physical characteristics
of the geology by taking boring samples in the future.
② The well adjacent to the site management office of Kayin State in the North District indicates that the
aquifers distribute from a depth of 200ft (about 60m).
e) Weather
① There is no observation data for the weather except for the monthly average rainfall record of the last two
years .
② There was a flood report for the Moei, the border river, due to the heavy rains from 29th July to 22nd
August, 2013.
③ There are numerous large and small rivers meandering through the area in a complicated pattern. The
study team expects that there were flood damages in the lowland.
3-21
④ The annual rainfall of 2011 and 2012 in Myawaddy was 1,796 mm and 2,264 mm respectively, the most
of which was concentrated during the three months from June to August. The monthly average of rainfall is in
the range of 300 ~ 650mm/ month.
⑤ The annual rainfall In Yangon is approximately 2,400 mm. The rainy season runs for a period of 6
months (May to October) and the monthly average of the water accumulation is in the range of 150mm ~
550mm.
f) Seismicity
Regarding earthquake activity, seismic intensity of M7.3 has been recorded in 1930 in near Yangon; however, the
damage caused by that earthquake is not confirmed.
① It is widely believed that intensive seismic activity occurs in the mountainous areas of northern Myanmar.
Although the amount of frequency in the occurrence of seismic activity in the plain area around the Salween
River is not very high, it is necessary to conduct further survey in the future to collect necessary data to
inform structural design works etc.
The earthquake records of Myawaddy and Hpa-an have never been kept and are, therefore, unconfirmed.
g) Water Resources
① In general, it is difficult to rely on the water resource from the rain water since there is the difference in
availability between the dry season and the rainy season;
② In an overview of the Myawaddy IZ planning area, the catchment area is assumed to have quite large scale
even in the small to medium river basin. Although the amount of underwater intake differs depending on
the depth of the groundwater table, there appears to be enough potential reserve;
③ In regard to river water intake, although more data is necessary to determine river flow fluctuations over a
longer period, the study team does not consider there is major problems;
④ In regard to the raw water intake from the river, the width of the river and its current change significantly
between the rainy season and the dry season. The construction of a reservoir or dam is necessary for
year-round stable water intake. Further survey of terrain and geology is required for the optimum site
selection, particularly dam and soil surveys.
⑤ Although it is believed that the use of the Moei River, straddling the border between Thailand and
Myanmar, official meetings with Thailand are required for the development of water resources.
h) Zoning on Myawaddy IZ
The zoning on Hpa-an IZ is already determined and some factories are in operation. Some of the points of
consideration for zoning on Myawaddy IZ in light of the nature of the above conditions are:
① The planning area of Myawaddy IZ, as currently determined by the Kayin State government, is total of
326.4ha; north district, 131.2ha across from the national road No. 85 and from the south district 195.2ha.
(The total hectare area is based on the calculation from the topography map, as obtained by the project
team);
② The defined area is comprised of Phase1 (141.6 acres) from the north district and Phase2 (59.9 acres);
3-22
(See Figure 3-8 Myawaddy SEZ Development Plan Area, General Plan, and Figure 3-9 General
Arrangement Plan)
③ The rest of the proposed total area of 500ha of IZ has not been cleared in the first survey point. Therefore,
the survey will focus the targeted area of 326.4ha.
The elements and function of the IZ and land use considerations for zoning purposes are:
Industrial use: For IZ use;
Housing use: Accommodation facilities for the employees and their family of tenant companies,
accommodation facilities for those whose works in the service sectors from distant regions and other
facilities;
Commercial/service use: the provision of services and other commercial services for the factory workers,
trading partners, and external workers;
Administration and One-stop service use: the provision of administrative services to the employees and
companies operating in the IZ, the provision of administrative consistency services to the existing and
future tenant companies;
Park/ Open space use: Reserve land for environmental protection and future expansion of business;
Dry port use: The dry port is not planned to install as there is already established “Myawaddy Trade
Zone” next to each other. However it aims to link with the “Myawaddy Trade Zone” for the purpose of
cargo traffic in bond, customs clearance, and container freight station.
3-23
Figure 3-8 Myawaddy SEZ Development Plan Area
No
rth
Are
a
Mya
wad
dy
Trad
e Zo
ne
Sou
th A
rea
Source: Study Team
3-25
(3) Project planning
1) Principle of project planning and strategy
According to the functional use of Myawaddy IZ, the fore mentioned, the principles of project planning and
strategy particularly from the aspect of reasonable use are:.
a) As the operational earning is created by the rental factory leasing of the land, it i preferable to make the ratio
higher particularly for the factory use. However, there are constraints from the existing infrastructure and the
need to maintain an international standard. The IZ plan intends to reserve 60% of the total land available for
regular upgrades to infrastructure for the future development of Myawaddy IZ into a Special Economic Zone
(SEZ).
b) The IZ project is expected to create employment for 10,000 people when it reaches its targeted number of
total tenant companies. It is impossible to provide the housing facilities to all the employees. Therefore, the
accommodation facilities will be provided only for the targeted new middle class and also for the manager
class of employees from Myanmar and overseas.
c) It is expected that the population will increase approximately to the size of 300,000 by the time Myanmar
SEZ starts operations. It is necessary to develop a Comprehensive Regional Development Plan in order to
accept the increase of population.
d) It is required to secure adequate size of the land particularly for the One Stop Service (OSS) to provide
business support for operations and management in order for tenant companies to operate their businesses
smoothly and also to provide a variety of support services for the employees. The service offered by the OSS
center is crucial in order to support the return and resettlement of migrant Burmese workers in Thailand.
e) If there is any natural forest conservation area within the targeted development area of 500ha, additional
survey will be necessary to consider the most appropriate method to manage that forest.
f) The development procedure for the Myawaddy IZ will be as follows; development commences on the project
starts with the north area (1, 2, 2N), as identified by the state government, and brought to its completion. It
will be followed by development of the south area (2S, 3) as suggested by the state government. In
compliance with the Myawaddy IZ development plan, the project clarifies the specifications and standards of
the land development by addressing the current status of the areas as follows:
・ The predominant geographical feature of the land is flat. The specific points of high ground above sea
level are irregularly distributed from EL (Elevation Level) 210m to EL 180m in the north area, and from
EL 230m to 195m in the south area.
・ The predominant land use is agricultural made up of indigenous types of plantation.
・ Vegetation consists of a few tall trees, and a mixture of thick bushes and green fields.
・ The soil conditions and the geographic features are the next research objectives to be addressed.
・ Considering the existing geographic features, the project presumes that there are small water routes and
small rivers, which have many congested channels in the north and south areas, requiring intervention in
the construction stage.
・ The civil work will be unavoidably suspended from July to September during the rainy season.
3-26
2) Conceptual Design and Specification of Facilities
There are three major components of necessary conceptual plan and design as shown below.
The factory lots of the IZ
The on-site roads of the IZ
The storm water drainage
a) Land Development Plan for an industrial park
① Northern District
Based on the topographic map that has become available during the second survey (first official survey),
earthwork quantity is estimated for the north district based on ground mass. The following figure illustrates the
results.
(See Figure 3-9 Myawaddy SEZ development planning area layout)
Table 3-7 Myawaddy Industrial Park North District excavated soil volume
Phase
Construction
height
Excavation
amount
Enbankment
amount Excavation -
Enbankment
Purpose
(FL+m) (m³) (m³)
1 196.5 931,750 752,625 179,125
Factories,
Management, OSS
center
2 193.5 187,875 487,000 (299,125)
Accommodation facilities,
Park, Business Service
facilities
2N 195.0 650,000 465,500 184,500
Factories,
Infrastructure
Facilities, Retarding
basin
Total 1,769,625 1,705,125 64,500
Source: Study Team
The excavated soil volume is calculated as a measure of what will be needed for use given the anticipated
construction scale - the necessary amount of cut volume, and the fill amount in order to ensure that the height of
such a large land development as the IZ will be uniform throughout the developed area.
According to the actual demands of investors in the Myawaddy IZ, detailed development planning: specifying
small lot sizes, conforming with existing geographical features, water courses and meteorological conditions, all
leading to appropriate construction costs - will be needed.
To improve and maintain the precision of the land developments, new survey and information management
technologies will be introduced into the construction method to be used during implementation of the project - for
3-27
example, the total station system developed and generally used for the high-accuracy surveying of narrow areas,
the Global Navigation Satellite System (GNSS) which is a kind of Global Positioning System (GPS), and
Construction Information Modeling (CIM) which manages the total construction process through combined
information.
In terms of land grading calculation, it is possible to raise 1.5m to make it 195m above sea level by applying the
soil from the road sub-grade construction and excavation of the soil from the retarding pond;
Approximately 1.8 million m³ excavation is the depth of the total area 131ha per average 1.35m of North
District. The height difference occurs in the IZ and outside of the IZ is finished with a slope of 1:2
protected by vegetation.
② Southern District
The total area of southern district is about 195ha, but the altitude is higher overall with fluctuation in comparison
to the north district. From this, soil excavation will be 1.5m depth per unit area in average depth of cut and fill in
the North District. The table below shows the amount of soil excavation and its distribution area allocated to
Phase3 and Phase2S.
(See Table3-11 Myawaddy Industrial Zone Generated traffic volume prediction)
Table3-8 Myawaddy IZ development soil excavation
C
(ha)
Construction
height
(FL+ m)
Excavation
amount
(m³)
Purposes
2S 79.1 200~205 1,186,500 Factories, Management Business Service facilities, Public
facility, accommodation facilities, Park, School, Training
facilities, Retarding pond
3 122.2 215~225 1,833,000 Factories, Accommodation facilities, Park, Water treatment
facilities, Future development area, etc.
合計 195.2 3,019,500
Source: Study Team
3-28
Figure 3-10 Myawaddy SEZ development planning area ground elevation distribution map
Source: Study team
3-29
b) Myawaddy IZ insight road
The insight road (campus road) will be adopted from the development plan of the local contractor as a
cross-sectional structure of the 48Ft Span Main Road and 32Ft Span Secondary Road for the Northern District of
Phase1.
The pavement, including the roadbed of reinforced concrete 22.9cm (9inch), is 61cm (24 inch) for total thickness
for both classes. The summary of the road structure elements is as follows.
Tale 3-9 Road specifications of Myawaddy industrial IZ North District Phase1
Type Unit ROW #Lanes Lane
Width
Road
width
Median
strip
Shoulder
edge
Drainage
mat
Cross
Slope
(%)
Main feet 60.0 4.0 12.0 48.0 None 5.0 5.0 2.0
meter 18.3 3.7 14.6 1.5 1.5
Secondary Feet 43.0 32.0 None 3.5 2.0 2.0
Meter 13.1 9.8 1.1 0.6
Source: Study team
In accordance with the development progress of Myawaddy IZ, the volume of industrial shipping will increase
gradually.
In the case that tenant companies are filled in both the South and North districts from Phase 1 to Phase 3, the
predicted volume of the incoming shipments of IZ are shown in the following table.
Table 3-10 Myawaddy Industrial Zone cargo volume forecast
Phase Area of
IZ (ha)
Annual
cargo
volume
(1000 /ha)
Annual
cargo
volume per
phase
(1000ton)
Annual total
cargo
volume
(1000ton)
Cargo
Growth
rate (%)
Total Cargo
Volume per
hour (ton)
1 48.8 30 1,464 1,464 100 254
2 0 30 0 1,464 100 254
2N 26.8 30 804 2,268 155 394
2S 34.6 30 1,038 3,306 226 574
3 85 30 2,550 5,856 400 1,017
Total 335.6 5,856
Source: Study Team
Note:
1. The cargo weight = volume of arrival + volume of shipment + volume of waste.
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2. The total cargo volume per hour refers to:
1year = 12 x 30 days/ month x 16 hours/d = 5,760 hours
The table below shows the forecast of traffic volume in accordance with the cargo volume forecast as shown
above.
Table3-11 Myawaddy Industrial Zone Generated traffic volume prediction
Phase
Annual
cargo
volume
(1000 tons)
Average
cargo
volume/d
(tons)
Total Average
cargo volume/d
(tons)
Average
Daily traffic
(Vehicles/d)
Average
daily
Total traffic
volume
(vehicles/d)
Traffic volume
for a set time
(vehicles/h)
1 1464 4,067 4,270 407 407 61
2 0 0 0 0 407 61
2N 804 2,233 223 630 95
2S 1038 2,883 288 918 138
3 2550 7,083 7,438 708 1,627 244
Total 9,790 16,267 11,708 1,627
Source: Study Team
Note:
1. The total average amount of cargo is described as an additional 5% of the average cargo volume.
2. Average daily traffic volume is a conversion from the loading capacity of 10t truck.
3. The hourly traffic volume is described as 50% more on average from the daily traffic.
The volume of cargo and the traffic its movement creates is stated in round trip terms. It is assumed that half the
volume can be calculated for as a one-way trip.
With respect to the traffic volume, examination of the widening of the intersection of National Highway No.85,
campus roads, and widening national highway No.85 itself should be determined in the process of further
investigation of future results.
Classification of the premises of the roads is as follows:
Phase1: Determined by the local general contractor
Phase 2: It is planned to include “residential and park", "commercial and service facilities" as entire site
developing plan;
Phase2N: It is considered that Phase2N is the extension of Phase1, the standard of “48Ft Span Main
Road” will apply;
Phase2S and Phase 3:
(See Figure 3-8 Layout plan of Myawaddy SEZ development plan)
* 48Ft Span Main Road: The three roads directly connected to the Asian Highway running from the northwest and
also the most eastern road which curves in the middle towards the south and curves from the direction of the
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northwest (NW) to southeast (SE).
* 32Ft Span Secondary Road: Another one road from NS+NW-SE and six East West (EW) line and 6 roads from
North East (NE) – South West (SW).
c) Stormwater drainage
The rainwater runoff drainage can be classified into two systems: 1) waterways that can be processed through
drainage and discharge facilities in the IZ, and, 2) the waterway that flows in and out from areas outside the IZ.
Judging from the last 10 years of rainfall probability (per hour), a facility that would systematically eliminate
accumulated rainwater would be the rational course of action as in the former case mentioned above. However, in
order to prevent exogenous flooding disasters from occurring in the IZ as in the latter case, the study team
considers it only prudent to carefully survey the path random flowing water takes by producing a river
improvement plan.
In a situation whereby the statistics for rainfall intensity per hour is approaching 100mm/h (last 10 years of
rainfall probability time-series data), the team is compelled to plan for and implement a system that will mitigate
the effects of huge amounts of accumulating water.
In terms of the conceptual design, it will be limited to the purpose of elimination of storm water from accumulated
rain pooling inside the IZ area. The stormwater drainage system relative to water from outside of the IZ will be the
focus of future investigation.
・ The discharge waterway, receiving water drained from the roadside ditch, is intended to minimize any
flooding inside the IZ complex coming from heavy rains overflowing the drainage system along the Main
Road;
・ The discharge waterway is an open channel, and the water will be discharged via a retarding basin to the
river. The open channel will be built as a reinforced concrete structure.
Northern district: According to the condition stated above, the table below indicates the specifications of the cross
section of the waterway discharge of the Northern District.
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Table 3-12 Myawaddy IZ Northern District discharge waterway specifications (unit: m)
Discharge groove type
Inner dimensions
(Width x Height)
side wall thickness
platform
Extension
DD1 2.0 x1.0 0.20 0.25 320
DD2 2.5 x1.8 0.30 0.35 230
DD3 4.0 x2.5 0.35 0.40 440
DD4 4.0 x2.5 0.35 0.40 440
DD5 4.5 x2.8 0.40 0.50 240
DD6 2.0 x1.0 0.20 0.25 330
DD7 2.5 x1.8 0.30 0.35 460
DD8 4.0 x2.5 0.35 0.40 440
DD9 4.5 x2.8 0.40 0.50 240
Source: Study Team
・ To manage the rain water accumulation, the Myawaddy IZ road and construction plans will call for
installation of a gravity draining system which does not use the pump and gate system because the land is
overly hilly with its sloping terrain.
The retarding pond always releases the rain water through the orifice of the dam; however, it holds the surplus
discharge water generated in the development stage, at the end of the water routes for approximately 30
minutes.
① Discharge waterway
Discharge waterway standard cross-section is shown below.
Figure 3-11 Waterway discharge standard cross section
Inside measurement width
Sidewall
Inside measurement height
Bottom plate
Source: Study Team
The drainage other than that depicted above (gutter) will be the one designed by a local contracting company and
3-33
the rainwater of each site within the drainage will be discharged through these waterways. All effluents will be
discharged into rivers via the retarding basin.
South District
The rainwater drainage system in the South district will follow the guidelines similar to those of the North
district.
The construction cost of the discharge water channel is similar to the cost per unit area in the Northern
district.
Retarding basin
・ The scale of the stormwater retarding basin is 0.8 average runoff coefficients for the development area. It is
planned to enable the reception of all the runoff water first, in the retarding basin, once for a 30 minute
period;
・ It is possible to regulate the amount of increased runoff water. When the impact of development activities
towards discharging the stormwater on the downstream rivers is not certain, the retarding basin will receive the
all the discharged water, taking consideration of the flood control safety.
② Retarding Basin
The structure of slope protection of the retarding basin is as follows.
Figure 3-12 The Structure of slope protection of the retarding pond
Width of road management 6m
Vegetation protection surface1:2、
Stone pitching and concrete protection engineering Spillway
Source: Study Team
• The inlet portion of the discharge from the waterway is to be protected from erosion by slope stone pitching and
by a concrete base at the bottom.
• The width of the slope stone reaches 15m at 7.5m respectively to the left and right of the discharge waterway.
• The thickness at the bottom of the concrete-clad is 50cm for a size of 15m x 15m.
• The spillway is concrete and 10m wide gravity dam structure with the pond side vertical top width of 1m at its
crown, a bottom width of 8m, and a depth of 10m in the transverse width depending on the ground condition at
the foundation level, but the basic height will be 10m.
• The slope of both sides will be 5m of surplus water-discharge and will have a stone-clad protection.
• The bottom of the downstream side will be coated with 50cm thick concrete for the same width of the depth
from above to protect from damage.
For the off-site waterway discharge away from the downstream of the retarding basin, it is necessary to conduct
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further study of the detailed geological land feature to understand the pathway of the narrowed river and its flow
path.
The capacity and ground surface area of the retarding basin of each district are as follows.
Table 3-13 Myawaddy IZ Retarding Basin Specifications m²
Area Retarding
ponds
Surface
Width
x
Length
(m)
Retarding
basin
area (m²)
Depth
(m)
Reservoir
Capacity
(m³)
Summary
Northern
District
200
x300
60,000 5.5 300,000 Depth of sedimentation:
0.5m/10years
Southern
District
1 125
x210
26,250 5.5 131,250 Do.
2 100
x100
10,000 5.5 50,000 Do.
3 200
x200
40,000 5.5 200,000 Do.
Source: Study Team
3) Project content (project site and investment)
a) Myawaddy IZ land area
According to the content of the Myawaddy IZ project as described above, the area and its land use will be
determined for the specific application.
The summary of land use for the north and the south district by development phase is shown in the table below.
However, it is to be noted that while the total development area of Myawaddy IZ at the completion phase is 500
ha, the plan is necessarily restricted to a development area of 326.4ha particularly for Phase 3 to Phase 4
excluding Phase 4 and Phase 5 for the current survey.
Development of the ultimate area of Myawaddy IZ is 500ha, as outlined with the exception of 4 ~ 5 Phases of the
South District. The operative development area for Phases 1-3 of this study is 326.4ha.
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Table 3-14 Myawaddy IZ application of land use area (ha) for Non-Factory Area
Area item
Phase
Total
Area
Ratio
(%)
North District
South District
1 2 2N 2S 3
The entire IZ land 57.4 23.9 49.9 73.1 122.2 326.5 100.0
Factory Lot 48.8 0.0 26.8 35.3 85.0 195.9 60.0
Factory Lot by
district 75.6 120.3 0.0
Non-Factory Land 8.6 23.9 23.1 37.8 37.2 130.6 40.0
Non-Factory Land
by district 55.6 75.0 0.0
Breakdown of the non-industrial land area
Roads 8.6 3.6 9.8 11.8 33.8 10.4
Discharge Drains 5.4 0.8 1.6 7.8 2.4
Retarding basin 6.8 3.5 1.9 12.2 3.7
Housing, parks,
education and
training center
20.7 11.3 10.1 42.1 12.9
Business, Service 4.2 2.5 6.7 2.1
Management.
OSS 2.2 2.2 0.7
Public facilities 2.5 2.5 0.8
Water purification
plant 2.3 2.3 0.7
Wastewater
treatment plant 3.0 3.0 0.9
Future reservation 6.0 2.5 9.5 18.0 5.5
Source: Study Team
b) Myawaddy IZ land use plan
The following is a summary of the Myawaddy IZ’s land application
① Factory Lot
・ Due to the focus of labor-intensive factories, 0.5ha ~ 1.0ha can be considered as the unit scale for each
factory lot.
・ For the tenant companies who will require larger factory lots, IZ managers will enable the combining of
adjacent factory lots to accommodate demand.
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② On-site Road:
・ In the North district, in general, the intention is to adopt a 14.63m (48Ft) Span Main Road of four-lanes
from Phase1, and a cross-sectional structure of a 9.75m (32Ft) Span Secondary Road of two-lanes.
・ In the south district, to the plan will accommodate any increases in road width expanding or contracting
according to the total number of tenant companies so as to satisfy the traffic demand.
③ Discharge drain
・ The in-site discharge waterway is planned to handle the rainfall intensity per hour of 100mm/h. (given the
probability rainfall of the past 10 years). The bed slope is designed 2/1000 considering the height of land
development and ground formation level.
④ Retarding basin:
・ The scale of the stormwater retarding basin is 0.8 average runoff coefficients for the development area.
The retarding basin is planned to receive all the initial runoff water in a 30 minute period.
⑤ The housing, parks, education and training center:
・ The housing, parks, education and training center should be treated differently from IZ development.
However, for the purpose of planning the allocation of land, those facilities are placed in the same
district.
・ Although further study is necessary for the detailed design and size, the site area and building floor area,
roads, parking areas are indicated in the table below.
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Table 3-15 Education and training facilities, residential land area, and parks in Myawaddy IZ
District Phase Land
area
(ha)
Housing
area
(ha)
Road, Park
area
(ha)
Education and Training facilities
Land area
(ha)
Building floor area
(m²)
North 2 23.9 13.2 10.7 0.0
South 2S 11.3 4.8 2.5 4.0 5,000
3 12.6 8.2 4.4 0.0
Source: Study Team
・ The rationale behind the calculation is based on the dwelling unit ratio by high, middle, and low income
residents - 10: 30: 60m and the average land area requirement for the housing ratio is 70: 20: 10m² per person
respectively.
・ The dwelling population in the north district is approximately 6,000, and approximately 9,000 in south
district, and the remaining 170,000 on-site workers will travel from the neighboring towns and villages
including Myawaddy City in the short term. Over the middle – long terms, when the development of a new
town is implemented, the commuting route will change in accord with the completion of the town.
⑥ Commercial Services:
・ For the commercial and service facilities, the private sector will be the principal developer of the buildings
and their operation.
・ Considering the land area for non-industrial use necessary to accommodate 80,000 employees, 6.7 ha is
allocated - creating a density of 1.2 people/m².
・ Therefore, there is a need to integrate these services supplied to the "Myawaddy Trade Zone" next to
Myawaddy IZ.
・ The business services such as restaurants, cafeterias, and supermarkets fall into such categories.
⑦ Administration Management and OSS center:
・ The new facility will be constructed next to the current management office of Kayin State.
・ Total floor area of the building is set to be 5,000 m².
・ The building contains administrative services, a one-stop service, office management, a fire station, a police
headquarters office, a post office, and also medical facilities such as clinics.
・ Meeting rooms and convention center to function as public facilities such as a community center will be
established.
⑧ Public Utility Services
・ In terms of the utility infrastructure, a power plant, telecommunications system, and a water supply system
are to be installed. A centralized heat supply system fueled by gas and steam are also considered for
installation - if in-house power generation equipment for the SEZ is established in the future.
⑨ Water Purification Plant
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・ Due to the use of groundwater in the short term, water supply facilities are placed separately.
・ While there is no need for a water treatment plant in the short term, when demand for stable water supply
increases in the medium-long term, water will be taken from the river.
・ The planned site has been secured in the southeast end of the south district on the assumption that
construction of a dam or reservoir will be needed. Further investigation will be needed in relation to the
water source for the projected site.
⑩ Wastewater Treatment Plant
・ While a wastewater treatment plant is a public utility, due to the need to dissipate effluvium, that process
needs to be separated from other public facilities, such as other waste disposal facilities (i.e. industrial waste
disposal facility).
・ In the short term, establishing a basic facility for an aerated lagoon system to process medium effluent levels
of Biochemical Oxygen Demand (BOD) load etc. in the north district, in the future, it will become necessary
to install more advanced methods such as activated sludge process system etc.
⑪ Reserved Future Area:
・ In the short term, the study team does not expect to have to plan the processing of any disposal material
within the IZ site but rather processing is planned, particularly for the waste disposal and various by-products
in the medium to long term – and sufficient land is secured within the site of IZ for that purpose.
⑫ Training facility
・ A training facility is planned to be built during phase 2 of the project. It will be installed in the area allocated
for residences, park, and educational facilities in the South area.
・ The training facility for the mid-level laborers, managers, specialists, and supervisors, is to be developed as
follows:
・ At the first stage of Phase 1, the laborers and mid-level managers will receive on the job training (OJT) at
each factory and company in the development, similar to the garment factories in the Hpa-an IZ.
・ At the midpoint of Phase 1, training sessions will take place in the meeting rooms, or the community center,
or in the operation office, as some companies will conduct systematic in-house training.
・ When certain labor-intensive companies begin operating in the Myawaddy IZ as part of the clustering of
operators, a Special Purpose Company (SPC) will establish the basic planning for the training of laborers and
mid-level managers.
・ At a certain stage of phase 2, that SPC will suggest an Official Development Assistance (ODA) scheme which
will be to build a training facility in Myawaddy IZ for the Myanmar government.
・ As part of the preparations to build such a training facility, the SPC will plan the training curricula, introduce
qualified experienced trainers, and plan the construction works.
・ After the completion of construction, the SPC will oversee all aspects of the training process, and operate the
training business.
・ Estimation: The training facility (Steel construction, 1 floor, 3,000m²)
US$/300 m² × 3,000m² = US$900,000
・ This training facility is not included in the current estimated project cost, because would be built under ODA
support at a later date.
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⑬ Access road
・ The Myawaddy IZ sets back 100m spaces on both of the areas away from the access road so as to install a new
road to respond to anticipated future traffic demand. The purposes of these spaces are as follows:
・ The access road is widened from what had previously been a 2 lane-road to a 4 lane-road, raising the grade of
the road system so as to separate the roadway and the sidewalk, and install a media strip and lighting systems.
・ Signals are to be installed at the crossroads to prevent the traffic accidents.
・ The draining system is improved to prevent the overflow of water as it drains along the road.
・ Public and environmental conservation facilities are developed according to the progress of Myawaddy IZ.
・ These facilities should be funded by the public aid, however, the burden of funds needed for the project will be
considered by the Myanmar Government, the dedicated SPC, and ODA.
4) The solutions and challenges when adopting the proposed technologies and systems
While the advent of a singular system for Myawaddy IZ is regarded as a technological advance, up to the
operational phase of survey design stage, there will be various problems. Further, possible solutions for these
problems could be:
a) Survey and Design Stage
・ In view of the fact that construction is underway, Phase1 research and design is necessary to in preparation
for the establishment of the company SPC.
The main studies required will be as follows:
① Terrain survey
② River survey
③ Soil and geological survey
④ Groundwater survey
⑤ Adequate compensation survey
⑥ Environmental preservation research
These studies should be undertaken as soon as possible.
・ When the topographical survey can conducted with the resolution of S=1/5000, the accuracy of the land
development will increase. That means that despite the increased cost of the topographical survey itself, the
actual land development plan will benefit greatly.
・ The detailed facilities designed for the SPC preparatory organization is not included in the Phase1 design. The
design work can be initiated post establishment of the SPC from Phase 2 onward.
b) Procurement and Construction phase
・ According to the observation of the project site, the key operating organization for the development of
Myawaddy IZ is not yet clear. The role of the main organization in promoting the business needs
clarification.
・ Whereas civil work precedes E&M work, the management process, particularly the very precise construction
management technology, is integral to improving the financial feasibility of the project.
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・ In addition, despite the limited period of the survey, the study team concluded that both the project operator
and local contractors lack the sufficient engineering expertise to design and build either the infrastructure or
the planned facilities of this development.
・ That results in two consequences: either, i) they proceed in doing what they are capable of yet without
sufficient experience, and/or ii) what they do not have enough experience to accomplish themselves, they
leave aside and postpone to a later date.
・ Therefore, in order to achieve the global standard for SEZs in both Myawaddy IZ and Hpa-an IZ in the future,
it is necessary to support and strengthen the engineering capability through the guidance provided by an SPC.
c) Operation and Maintenance Stage
・ To start operations at the outset, in anticipation of demand it is important to prepare for changes in the
economic environment of Myawaddy IZ.
・ For the SPC operators, it is necessary to supply advanced technological equipment for information and
communication with the downstream sector to produce a stable supply of electric power, water supply,
sewerage treatment, and solid waste disposal in the medium to long term consistent with the international
standard of SEZ development.
・ Regarding the development of infrastructure, examining the cost-benefit and time according to the business
requirements, optimal public private partnership appears to be the optimal method for the development to
succeed - such as combining ODA resources with those of a select SPC.
・ For this reason, orienting implementation in this direction with the relevant government agencies is
important.
d) Implementation Process of the Development
・ For Phase 1 of the North District, whereas the local contractors have already begun construction, immediate
engineering support is necessary as described above.
・ The implementation process of the detailed project will be covered in Chapter 6.
e) Suggestion to the Hpa-an IZ
・ The present status of the Hpa-an IZ is assumed to be at the same stage of development as that of the phase 1
in the north area of the Myawaddy IZ - installation of the retarding pond and the management office, with
installation of the non-residential facilities, i.e. for water supply, water treatment, water courses, residents,
park, and training still forthcoming.
・ As the Hpa-an IZ is located near the harbor facility in Mawlamyine; it can utilize the existing water
distribution system. Completing the East West Economic Corridor will expand the distribution areas to
Yangon but also into Thailand.
・ Therefore the Hpa-an IZ should build-out the non-residential facilities, similar to the Myawaddy IZ, after
Phase 2N in the north area as soon as possible, and invite Domestic Direct Investment (DDI) and Foreign
Direct Investment (FDI).
4-1
This project intends to analyze the present status, grasp the problems and seek the solutions for accomplishing
goals of the Myawaddy Industrial area, part of „The Myawaddy Industrial Zone (IZ)‟ developed by Kayin State in
Myanmar, and the Hpa-an Industrial Zone, already in partial operation.
The Hpa-an Industrial Zone (IZ) is exempt from the project‟s environmental and social impacts, because a certain
governmental task force for environment impact assessments is in charge.
The Myawaddy Industrial area has undertaken an evaluation of environmental and social impacts by the project,
because the north area called „Phase 1‟ has begun to develop. However almost all the area including the south area
of the Root 85 is in its natural state as the sparse woods are in the large plain.
(1) The Present Status of Environmental and Social Impacts
1) The present status
a) Outline of the Myawaddy industrial zone
The ground condition of Malady industrial zone is raw and undeveloped forest land. The detailed condition is as
follows:
① The north area:
The north area slopes from the southeast to the northwest, and the height is EL 180-210m from sea level. The
Thingyan River, in the north-west direction of the border of Phase 2N, flows to the Northeast area
② The south area:
The south area has a long and thin shape to it and is located south of the National Highway (NH) 85 (commonly
referred to as the Asian Highway (AH) 1). The height is EL195-230m from sea level and the length is
approximately 2km, and its area has topographical irregularities. It has an irregular slope with ups and downs as
EL185-230m from the southwest to the northeast.
Considering these topographical features, the project team presumes that there are many small tributaries and
other water resources in the south and north areas.
b) The features regarding water resources
The features regarding water resources are as follows:
① Generally it is difficult to utilize the water resource areas, due to the vastly different conditions between the
dry and rainy seasons.
② The project team anticipates no major problem in taking water from the underground aquifer and/or the river
water, because there is plenty in the catchment area in some medium-sized and small rivers in the Myawaddy
IZ.
③ Additional survey is necessary because the amount of water taken from the river depends on the construction
sites of the neighboring dam and retention pond.
④ It is necessary to consult with the Thai government regarding the development of the water resources in
Myawaddy IZ, although the Moei river on the border of the two countries possesses promising resources for
use.
4-2
c) Present status of the land
The present status of the land in Myawaddy district/township is as follows:
Table 4-1 the present status of the land in Myawaddy district/township (2012)
Item Area Percentage
Net Area sown 33,359 4.30
Paddy 10,190
Maize, Peanut, Sesame, and etc. 23,169
Conserved forest 525,583 67.8
Fallow Land 207,202 26.7
Other lands8804 8,804 1.1
(Unit: Acre)
Source:Regional development facts and figures, Myawaddy District, Kayin State Government
This table indicates that approximately 68% of Myawaddy district/township is natural forest, and the sown area is
approximately 4% despite the fact that approximately 27% of the land is fallow.
d) Effects of the river upon the neighboring residents
In the rainy season, almost all areas are covered with water because some rivers run in a meandering pattern and
are flooded. However few farmers in Myawaddy district/township have extensive farm-damage, because the ratio
of the lower area for farmers is very small. Therefore damage to farms in Myawaddy district/township is very
limited.
Generally the development of the industrial zone changes its topography. It is possible to minimize the effect of
the development in Myawaddy IZ by planning a regulating pond with sufficient capacity to withstand the increase
of flowing water in river.
The seed bed for a „Nursery for Greening and Environmental conservation‟ is in Hpa-an IZ - young plants have
been cultivated. These young plants can strengthen the environmental countermeasures, because their existence
contributes to the increase in the ratio of green coverage in the factory area, road and park, etc..
e) Water supply
Kayin State has no water supply facility using surface water except a spring system for military use. Residents in
the mountainous areas use underground water, and residents in the plain area purchase water and transport it in
18-20L bottles.
In the Myawaddy industrial zone, 4 wells work efficiently to supply water, and they have the ability to supply
180m3/d. However, the water from wells is not suitable for drinking, because it is unfiltered and muddy. When
4-3
factories use water, it requires special treatment relative to each type of industry. To achieve a more detailed
assessment of water elements, experts analyze underground water for arsenic and heavy metal content.
From the west side to the north of industrial zone, there is a small river presenting a source of surface water. Some
additional survey would be necessary to measure the volume of water in that river during the rainy and dry season,
because it is as narrow as 5m in certain spots and quite shallow.
The Moei River, located east of Myawaddy IZ and flowing along the border between Myawaddy district/township
and Thailand, is approximately 30m wide and is considered a future water resource..
f) Sewage treatment
Myawaddy IZ will require a sewage treatment plant in the future, but it has not yet begun to be built. It will be a
suitable facility for sewage treatment according to the industrial needs of relevant investors (tenants). The
combined sewage treatment system would not distinguish between rain water and industrial water. This is an issue
of concern because discharging sewage sludge and waste water from a combined sewage/water treatment system
into the river during the rainy season presents a risk - the system controls the inflow of water coming from
inclined collection pipes.
The river into which the Myawaddy IZ community will discharge the sewage water will be used as a source from
which to draw water as well, and it flows in a small volume of water outside the rainy season. In the
implementation stage, the environmental effect is evaluated and it is necessary to verify compliance with not only
the waste water treatment standard but also the environmental standard. And, it is needed to process the sludge
coming from the sewage treatment plant. A comprehensive treatment system regarding sewage treatment and
waste treatment is needed.
g) Waste (Municipal and Industrial)
Myawaddy IZ plans to bury the construction materials and the municipal waste within its land and not to dispose
of the waste. After development is complete, Myawaddy Development Committee will take responsibility for
collecting and disposing of municipal and industrial waste. In the future, it is probable that the project team will
consider a different method of waste processing and biomass-to-fuel conversion within the project site.
2) Social environment
This project site (Myawaddy IZ) is owned by the Myawaddy Development Committee organized in Kayin State
by the Kayin State Government. Interview results indicate that there are no on-site residents and therefore no need
to resettle anyone in this site. At this stage, the project team is postponing direct communication with neighboring
residents, because there are many cases in which such contact results in the difficulties to implement the projects.
For example, one case focuses on a lack of regulations regarding real estate registration in a developing country
and the persons concerned controlling sales prices intentionally; the other focuses on illegal occupation. Therefore,
in the implementation stage, the project team must discuss with the Myanmar central government and Kayin State
about the expropriation and resident settlement. Then the team will peruse the latest regulations and take action in
compliance with international standards.
4-4
(2) Achieving environmental improvement through the project
1) Improvement of the water supply and water treatment system
Myawaddy IZ can spread the service area of water supply and sewage treatment so that it improves general
regional sanitary conditions and prevents diseases in neighboring residential communities.
As a public service, a guaranteed potable water supply enables neighboring residences to enjoy the consumption
of potable water on a constant basis.
2) Biomass power generation system
The industry in the surrounding area is mainly agriculture, and the waste farm products and the sludge from
residential septic tanks can be utilized for biomass generated electric power. The current power is expected to be
expensive, because the loss of power in transmitting power generated in Thailand or Mawlamyaing in Myanmar to
Myawaddy. Therefore, producing energy from a renewable source, i.e. a biomass power generation system, would
realize a reduction in both municipal waste disposal and negative impact to the environment in Myawaddy
district/township.
4-5
(3) Environmental and Social Effectiveness by project implementation
The JBIC (Japan Bank for International Cooperation) Guidelines for Confirmation of Environmental and Social
Considerations (Environmental Guidelines)," are presented below.
1) Dam and reservoirs
Table 4-2 The JBIC (Japan Bank for International Cooperation) Guidelines for Confirmation of Environmental
and Social Considerations (Environmental Guidelines) (Dam and reservoirs)
Category Environmental
Items
Main Check Items Confirmation of
Environmental
Considerations
1 Permits
and
Explanation
(1) EIA and
Environmental
Permits
① Have EIA reports been officially
completed?
② Have EIA reports been approved by
authorities of the host country‟s
government?
③ Have EIA reports been unconditionally
approved? If conditions are imposed on
the approval of EIA reports, are the
conditions satisfied?
④ In addition to the above approvals, have
other required environmental permits been
obtained from the appropriate regulatory
authorities of the host country‟s
government?
① Central government is
drafting EIA regulation. EIA
is implemented at the next
F/S stage.
② Central government is
drafting EIA regulation .EIA
is implemented at the next
F/S stage.
③ Central government is
drafting EIA regulation. EIA
is implemented at the F/S
stage.
④ Central government is
drafting EIA regulation. EIA
is implemented at the next
F/S stage.
(2) Explanation
to the Public
① Are contents of the project and the
potential impacts adequately explained to
the public based on appropriate procedures,
including information disclosure? Is
understanding obtained from the public?
② Are proper responses made to comments
from the public and regulatory authorities?
① There are no residents in
the Myawaddy IZ (IZ),
because the land is owned by
Myawaddy Development
Committee (MDC).
Explanatory meetings for the
benefit of neighborhood
residents will be held in
advance and people‟s
opinions and responses will
4-6
be incorporated into the
project.
② The comments of
neighborhood residents will
be discussed with MDC.
2 Mitigation
Measures
(1)Water Quality ① Do water quality of dam pond/reservoir
comply with the country‟s ambient water
quality standards? Is there a possibility
that proliferation of phytoplankton and
zooplankton will occur?
② Does the quality of water discharged
from the dam pond/reservoir comply with
the country‟s ambient water quality
standards?
③ Are adequate measures, such as
clearance of woody vegetation from the
inundation zone prior to flooding planned to
prevent water quality degradation in the dam
pond/reservoir?
④ Is there a possibility that reduced the
river flow downstream will cause water
quality degradation resulting in areas that do
not comply with the country‟s ambient water
quality standards?
⑤ Is the discharge of water from the lower
portion of the dam pond/reservoir (the water
temperature of the lower portion is generally
lower than the water temperature of the
upper portion) planned by considering the
impacts to downstream areas?
① IZ has no plan to build
dam and reservoirs in the
short term.
② The quality of water
discharged from the dam
pond/reservoir is measured at
the next F/S stage.
③ The quality of water
discharged from the dam
pond/reservoir is measured at
the next F/S stage.
④ The quality of water
discharged from the dam
pond/reservoir is measured at
the next F/S stage.
⑤ The quality of water
discharged from the dam
pond/reservoir is measured at
the next F/S stage.
(2) Wastes ① Are earth and sand generated by
excavation properly treated and disposed of
in accordance with the country‟s standards?
① The earth and sand
generated by excavation is
properly treated and disposed
of at the MDC disposal site.
3 Natural
Environment
(1)Conservation
Areas
① Is the project site located in conservation
areas designated by the country‟s laws or
international treaties and conventions? Is
there a possibility that the project will affect
the protected areas?
① There is no designated
conservation area.
4-7
3 Natural
Environment
(2) Ecosystem
and biota
① Does the project site encompass
primeval forests, tropical rain forests,
ecologically valuable habitats (e.g. coral
reefs, mangroves, or tidal flats)?
② Does the project site encompass the
protected habitats of endangered species
designated by the country‟s laws or
international treaties and conventions?
③ Is there a possibility that the project will
adversely affect downstream aquatic
organisms, animals, plants, and ecosystems?
Are adequate protection measures taken to
reduce the impacts on the ecosystem?
④ Is there a possibility that installation of
structures, such as dams will block the
movement of the migratory fish species
(such as salmon, trout and eel that move
between rivers and sea for spawning)? Are
adequate measures taken to reduce the
impacts on these species?
① There are no primeval
forests in the project area,
that the MDC is developing.
② The effects are identified
by the knowledge of the
people at the next F/S stage.
③The effects are identified
by the knowledge of the
people at the next F/S stage.
④ The effects are identified
by the knowledge of the
people at the next F/S stage.
(3) Topography
and Geology
① Is there a possibility that reductions in
sediment loads downstream due to settling
of suspended particles in the reservoir will
cause impacts, such as scouring of the
downstream riverbeds and soil erosion? Is
there a possibility that sedimentation of the
reservoir will cause loss of storage capacity,
water logging upstream, and formation of
sediment deposits at the reservoir entrance?
Are the possibilities of the impacts studied,
and adequate prevention measures taken?
① The effects are identified
by the knowledge of the
people at the next F/S stage
4-8
4 Social
Environment
(1) Resettlement ① Is involuntary resettlement caused by
project implementation? If involuntary
resettlement is caused, are efforts made to
minimize the impacts caused by the
resettlement?
② Is adequate explanation on relocation
and compensation given to affected persons
prior to resettlement?
③ Is the resettlement plan, including proper
compensation, restoration of livelihoods and
living standards developed based on
socioeconomic studies on resettlement?
④ Does the resettlement plan pay particular
attention to vulnerable groups or persons,
including women, children, the elderly,
people below the poverty line, ethnic
minorities, and indigenous peoples?
⑤ Are agreements with the affected
persons obtained prior to resettlement?
⑥ Is the organizational framework
established to properly implement
resettlement? Are the capacity and budget
secured to implement the plan?
⑦ Is a plan developed to monitor the
impacts of resettlement?
① The project team
confirmed that the project
area (300ha) is forested field,
and MDC confirmed the
absence of residents.
② If the project team
identifies the presence of
residents in the planned area,
it will hold explanatory
meetings.
③ If the project team
identifies residents in the
planned area, it will prepare a
resettlement plan.
④ If the project team
identifies residents in the
planned area, it will consider
paying particular attention to
ethnic minorities.
⑤ If the project team
identifies residents in the
planned area, the project
team and MDC will obtain
the necessary agreements
with the affected persons
prior to resettlement.
⑥ If the project team
identifies residents in the
planned area, the project
team and MDC will prepare a
resettlement plan.
⑦ The impacts of
resettlement will be
monitored during the
implementation of the
project, and the affected
people, methods used, and
intervals of resettlement
actions will be decided in the
monitoring plan.
4-9
4 Social
Environment
(2) Living and
Livelihood
① Is there a possibility that the project will
adversely affect the living conditions of
inhabitants? Are adequate measures
considered to reduce the impacts, if
necessary?
② Is there a possibility that the project will
adversely affect the downstream land uses?
In particular, is there a possibility that
reductions in the supply of fertile soils to
downstream areas will adversely affect
agricultural production? ③ Is sufficient
infrastructure (e.g. hospitals, schools, roads)
available for project implementation? If
existing infrastructure is insufficient, is a
plan developed to construct new
infrastructure or improve existing
infrastructure?
④ Is there a possibility that diseases,
including communicable diseases, such as
HIV will be introduced due to immigration
of workers associated with the project?
Are adequate considerations given to public
health, if necessary?
⑤ Is there a possibility that the existence of
the dam will cause impacts on water
navigation, such as limitations of vessel
traffic and water area uses by local
inhabitants? ⑥ Is the minimum flow
required for maintaining downstream water
uses secured?
⑦ Is there a possibility that reductions in
water flow downstream or seawater
intrusion will cause impacts on downstream
water uses and land uses?
⑧ Is there a possibility that water-borne or
water-related diseases (e.g. schistosomiasis,
malaria, filariasis) will be introduced?
① The project confirmed
that the project area (300ha)
is forested field, and MDC
verified that there are no
residents. However, the
explanatory meetings and
hearings with neighborhood
residents in attendance will
be carried out during the F/S
stage, and the opinions of
relevant people will be
considered.
② Any and all adverse
effects will be discussed with
MDC during the next F/S
stage.
③ Access road has been
rehabilitated by the Thai
government. And, housing is
planned for workers.
④ Not only a hospital but
also clinics are planned.
⑤ The effects are identified
by the knowledge of the
people at the next F/S stage.
⑥ The effects are identified
by the knowledge of the
people at the next F/S stage.
⑦ The effects are identified
by the knowledge of the
people at the next F/S stage.
⑧ The effects are identified
by the knowledge of the
people at the next F/S stage.
(3) Heritage ① Is there a possibility that the project will
damage the local archeological, historical,
cultural, and religious heritage sites? Are
① The project team
confirmed that the project
area (300ha) is forested field,
4-10
adequate measures considered to protect
these sites in accordance with the country‟s
laws?
and MDC verified that there
are no heritage sites.
(4) Landscape ① Is there a possibility that the project will
adversely affect the local landscape? Are
necessary measures taken?
① The project confirmed
that the project area (300ha)
is forested field, and MDC
answered that there will be
no effect to the landscape.
(5) Ethnic
Minorities and
Indigenous
Peoples
① Does the project comply with the
country‟s laws for rights of ethnic minorities
and indigenous peoples?
② Are considerations given to reduce
impacts on the culture and lifestyle of ethnic
minorities and indigenous peoples?
① In 2011, Kayin minority
groups made an agreement
with the Myanmar central
government for peaceful
coexistence without further
dispute.
② The project team felt the
cooperative relationship
between Kayin state and
minorities was a respectful
relationship. The explanatory
meetings and hearings with
neighborhood residents in
attendance will be carried out
during the next F/S stage,
and the opinions collected
will be considered
4 Social
Environment
(6) working
conditions
① Is the project proponent not violating
any laws and ordinances associated with the
working conditions of the country which the
project proponent should observe in the
project?
② Are tangible safety considerations in
place for individuals involved in the project,
such as the installation of safety equipment
which prevents industrial accidents, and
management of hazardous materials?
③ Are intangible measures being planned
and implemented for individuals involved in
the project, such as the establishment of a
safety and health program, and safety
training (including traffic safety and public
① No violation of laws
② The project team will
have tangible safety
measures.
③ The project team will
prepare and conduct safety
training.
④ The project team will
prepare and conduct safety
training.
4-11
sanitation) for workers etc. ?
④ Are appropriate measures being taken to
ensure that security guards involved in the
project do not violate safety of other
individuals involved, or local residents?
Noise, vibrations, dust, exhaust, and wastes
might be generated during the development
works.
5 Others (1) Impacts
during
Construction
① Are adequate measures considered to
reduce impacts during construction (e.g.
noise, vibrations, turbid water, dust, exhaust
gases, and wastes)?
② If construction activities adversely affect
the natural environment (ecosystem), are
adequate measures considered to reduce
impacts?
③ If construction activities adversely affect
the social environment, are adequate
measures considered to reduce impacts?
④ In the case of the projects including
borrow sites, if construction activities
adversely affect the natural environment
(ecosystem), are adequate measures
considered to reduce impacts?
① Noise, vibrations, dust,
exhaust, and wastes might be
generated during the
development works. And no
residents are confirmed to be
at risk of impact at present;
however, if the project team
identifies any residents in the
project area, it and MDC will
prepare appropriate
countermeasures to mitigate
the problem.
②Given the present status
and most current information
from MDC, the project team
has concluded that there will
be no adverse effects on the
natural environment
(ecosystem) from the advent
of the project. However, the
project team intends to
confirm that information in
detail during next F/S stage.
③ Given the present status
and most current information
from MDC, the project team
has concluded that there will
be no adverse effects on the
natural environment
(ecosystem) from the advent
of the project. However, the
project team intends to
4-12
confirm that information in
detail during the next F/S
stage.
④ In case of necessary earth
and sand collection works,
the project will borrow earth
and sand from the sites of the
MDC, however, the details
will be decided at the F/S
stage.
(2) Accident
Prevention
Measures
① Are adequate contingency plans and
mitigation measures developed to cover both
the soft and hard aspects of the project, such
as accident prevention programs, installation
of prevention facilities and equipment, and
safety education for workers? Are
adequate measures for emergency response
to accidental events considered?
② Is a warning system established to alert
the inhabitants to water discharge from the
dam?
① Project will consider such
measures in its construction
plan.
② Not covered
(3) Monitoring ① Does the proponent develop and
implement monitoring program for the
environmental items that are considered to
have potential impacts?
② Are the items, methods and frequencies
included in the monitoring program judged
to be appropriate?
③ Does the proponent establish an
adequate monitoring framework
(organization, personnel, equipment, and
adequate budget to sustain the monitoring
framework)?
④ Are any regulatory requirements
pertaining to the monitoring report system
identified, such as the format and frequency
of reports from the proponent to the
regulatory authorities?
① Project will include a
monitoring program during
implementation.
② Project will include a
monitoring program during
implementation.
③ Project will include a
monitoring program during
implementation.
④ Project will include a
monitoring program during
implementation.
4-13
6 Special
notes
Reference to
Checklist of
Other Sectors
① Where necessary, pertinent items
described in the Forestry Projects checklist
should also be checked (e.g. projects in the
mountains including large areas of
deforestation).
② In the case of dams and reservoirs, such
as irrigation, water supply, and industrial
water purposes, where necessary, pertinent
items described in the Irrigation Projects,
and Water Supply checklists should also be
checked.
③ Where necessary, pertinent items
described in the Power Transmission and
Distribution Lines checklist should also be
checked (e.g. projects including installation
of electric transmission lines and/or electric
distribution facilities).
Special notes on
Using
Environmental
Checklist
① If necessary, the impacts to trans
boundary or global issues should be
confirmed (e.g. The project includes factors
that may cause problems, such as trans
boundary waste treatment, acid rain,
destruction of the ozone layer, or global
warming).
1) Regarding the term “Country‟s Standards” mentioned in the above table, in the event that environmental
standards in the country, where the project is located, diverge significantly from the World Bank Safeguard
Policy as a general rule, or the International Finance Corporation Performance Standards for private sector
limited or non-recourse project finance cases, or other standards established by other international financial
institutions, or other internationally recognized standards or good practices established by developed countries
such as Japan regarding environmental and social considerations, the background and rationale for this
deviation, and the measures to rectify it if necessary, are to be confirmed. In cases where local environmental
regulations are yet to be established in some areas, considerations should be based on comparisons with
international standards such as the World Bank Safeguard Policy, and appropriate standards of other countries
(including Japan).
2) Environmental checklist provides general environmental items to be checked. It may be necessary to add or
delete an item taking into account the characteristics of the project and the particular circumstances of the
country and area in which it is located.
Source: JBIC
4-14
2) Water supply
Table 4-3 JBIC Guidelines for Confirmation of Environmental and Social Considerations (Environmental
Guidelines) (Water supply)
Category Environmental Item Main Check Items Confirmation of Environmental
Considerations
1 Permits
and
Explanation
(1) EIA and
Environmental Permits
① Have EIA reports been
officially completed?
② Have EIA reports been
approved by authorities of the
host country‟s government?
③ Have EIA reports been
unconditionally approved? If
conditions are imposed on the
approval of EIA reports, are the
conditions satisfied?
④ In addition to the above
approvals, have other required
environmental permits been
obtained from the appropriate
regulatory authorities of the
host country‟s government?
① The Central government is
drafting an EIA regulation. An EIA
will be implemented during the
next F/S stage.
② The Central government is
drafting an EIA regulation. An EIA
will be implemented during the
next F/S stage.
③ The Central government is
drafting an EIA regulation. An EIA
will be implemented during the
next F/S stage.
④ The Central government is
drafting an EIA regulation. An EIA
will be implemented during the
next F/S stage.
(2) Explanation to the
Public
① Are contents of the project
and the potential impacts
adequately explained to the
public based on appropriate
procedures, including
information disclosure? Is
understanding obtained from
the public?
② Are proper responses made
to comments from the public
and regulatory authorities?
① There are no residents in the
Myawaddy IZ site area because the
land is owned by the Myawaddy
Development Committee (MDC)
and that agency has kept the land
available for development.
Explanatory meetings will be held
to benefit neighborhood residents in
advance, and the people‟s opinions
will be incorporated into the
project.
② Comments received from
neighborhood residents will be
discussed with MDC.
2 Mitigation
Measures
(1) Air Quality ① Do air pollutants, such as
sulfur oxides (SOx), nitrogen
oxides (NOx), and soot and
① IZ has no effect to air, because
almost all factories in IZ will be
labor intensive industries.
4-15
dust, and dioxins emitted from
various sources, such as
incinerators, and vehicles used
for waste collection and
transportation comply with the
country‟s emission standards
and ambient air quality
standards?
(2) Water Quality ① Do effluents from various
facilities comply with the
country‟s effluent standards and
ambient water quality
standards?
② Does the water quality of
leachates from the waste
disposal sites comply with the
country‟s effluent standards and
ambient water quality
standards?
③ Are adequate measures
taken to prevent contamination
of surface water and
groundwater by these effluents
and leachates?
①There are no quality standards
for effluent discharge into
waterways or ambient water quality
standards in Myanmar. Project
developers will apply the standards
prevailing in the Phnom Penh SEZ
considering all applicable
circumstances in the process.
②There are no quality standards
for effluent discharge into
waterways or ambient water quality
standards in Myanmar. Project
developers will apply the standards
prevailing in the Phnom Penh SEZ
considering all applicable
circumstances in the process.
③There are no quality standards
for effluent discharge into
waterways or ambient water quality
standards in Myanmar. Project
developers will apply the standards
prevailing in the Phnom Penh SEZ
considering all applicable
circumstances in the process.
(3) Wastes ① Are wastes, such as
treatment residues, cinder, and
fly ash generated from crushing
and segregation processes, and
diverted wastes from
composting process properly
treated and disposed of in
accordance with the country‟s
①There are no quality standards
for effluent discharge into
waterways or ambient water quality
standards in Myanmar. Project
developers will apply the standards
prevailing in the Phnom Penh SEZ
considering all applicable
circumstances in the process.
4-16
standards?
② Are hazardous and
dangerous wastes properly
segregated from other wastes,
stabilized, treated, and disposed
of in accordance with the
country‟s standards?
②There are no quality standards
for effluent discharge into
waterways or ambient water quality
standards in Myanmar. Project
developers will apply the standards
prevailing in the Phnom Penh SEZ
considering all applicable
circumstances in the process.
(4) Soil Contamination ① Are adequate measures
taken to prevent contamination
of soil and groundwater by
leachates from the waste
disposal sites?
①The project will discuss adequate
measures to prevent soil
contamination with MDC and
decide appropriate procedures to
take to intervene.
(5) Noise and Vibration ① Do noise and vibrations
generated by the facility
operations (especially
incinerators, waste segregation
and crushing facilities), and
vehicle traffic for waste
collection and transportation
comply with the country‟s
standards?
①There are no standards regarding
noise and vibrations stemming from
industrial activity in Myanmar. The
project team will apply the
standards used in the Phnom Penh
SEZ and consider the applicability
of those standards in detail.
(6) Odor ① Are there any odor sources?
Are adequate odor control
measures taken?
① There are no standards for
mitigating odors emanating from
industrial facilities in Myanmar.
Project developers will apply the
standards prevailing in the Phnom
Penh SEZ considering all
applicable circumstances in the
process.
3 Natural
Environment
(1) Conservation Areas ① Is the project site located in
conservation areas designated
by the country‟s laws or
international treaties and
conventions? Is there a
possibility that the project will
affect the conservation areas?
① There is no designated
conservation area.
4-17
(2) Ecosystem and
biota
① Does the project site
encompass primeval forests,
tropical rain forests,
ecologically valuable habitats
(e.g. coral reefs, mangroves, or
tidal flats)?
② Does the project site
encompass the protected
habitats of endangered species
designated by the country's
laws or international treaties
and conventions?
③ If significant ecological
impacts are anticipated, are
adequate protection measures
taken to reduce the impacts on
the ecosystem?
④ Is there a possibility that the
project will adversely affect
aquatic organisms? If impacts
are anticipated, are adequate
measures taken to reduce the
impacts on aquatic organisms?
⑤ Is there a possibility that the
project will adversely affect
vegetation and wildlife? If
impacts are anticipated, are
adequate measures taken to
reduce the impacts on
vegetation and wildlife?
① There are primeval forests in
the project area where MDC is
focusing its development attention.
However, benefitting from the
knowledge of local cooperative
inhabitants, the project developers
will be able to protect sensitive
habitats in the area during next F/S
stage.
②The project team will become
informed with regard to protected
habitats through concerted
interaction with local
knowledgeable people during the
next F/S stage.
③ The project team will become
informed with regard to protected
habitats through concerted
interaction with local
knowledgeable people during the
next F/S stage.
④ The project team will become
informed with regard to protected
habitats through concerted
interaction with local
knowledgeable people during the
next F/S stage.
⑤ The project team will become
informed with regard to protected
habitats through concerted
interaction with local
knowledgeable people during the
next F/S stage.
(3) Management of
Dumping grounds
①Are environmental protection
and restoration plans (such as
landfill gas and leachate
collection and treatment
systems, prevention of illegal
dumping, and reforestation)
① The project team will discuss
and coordinate an environmental
protection and restoration plan with
MDC.
② The project team will discuss
the formulation of a sustainable
4-18
after facility closure
considered?
②Is a sustainable management
framework for the abandoned
dumping ground sites
established?
③ Are adequate financial
provisions secured to manage
the abandoned sites?
management framework with MDC
for any dumping ground.
③ The project team will discuss
appropriate financial provisions to
manage any dumping grounds
with MD
4 Social
Environment
(1) Resettlement ① Is involuntary resettlement
caused by project
implementation? If
involuntary resettlement is
caused, are efforts made to
minimize the impacts caused by
the resettlement?
② Is adequate explanation on
relocation and compensation
given to affected persons prior
to resettlement?
③ Is the resettlement plan,
including proper compensation,
restoration of livelihoods and
living standards developed
based on socioeconomic studies
on resettlement?
④ Does the resettlement plan
pay particular attention to
vulnerable groups or persons,
including women, children, the
elderly, people below the
poverty line, ethnic minorities,
and indigenous peoples?
⑤ Are agreements with the
affected persons obtained prior
to resettlement?
⑥ Is the organizational
framework established to
properly implement
resettlement? Are the
① The project team confirmed
that the planned area (300ha) is
forested field, and MDC verified
that there are no residents.
② If the project team identifies the
existence of residents in the
planned area, it and MDC will
conduct explanatory meetings.
③ If the project team identifies
the existence of residents in the
planned area, it and MDC will
prepare resettlement plans.
④ If the project team identifies
the existence of residents in the
planned area, it and MDC will pay
particular attention to the welfare of
ethnic minorities.
⑤ If the project team identifies
the existence of residents in the
planned area, together with MDC
input, together with MDC, it will
obtain the necessary agreements
with the affected persons prior to
taking resettlement action.
⑥ If the project team identifies
the existence of residents in the
planned area, together with the
MDC, it will prepare resettlement
plans.
⑦ The impacts of resettlement
will be monitored during the
4-19
capacity and budget secured to
implement the plan?
⑦ Is a plan developed to
monitor the impacts of
resettlement?
implementation of the project, and
the items, methods, and frequencies
will be memorialized in the
monitoring plan.
4 Social
Environment
(2) Living and
Livelihood
① Is there a possibility that the
project will adversely affect the
living conditions of
inhabitants? Are adequate
measures considered to reduce
the impacts, if necessary?
② Are considerations given to
the existing recovery systems,
including waste pickers?
③ Is there a possibility that
waste transportation will
adversely affect the regional
traffic?
④ Is there a possibility that
effluents from the project and
leachates form the waste
disposal sites will adversely
affect fisheries and other water
uses by local inhabitants
(especially drinking water)?
⑤ Is there a possibility that
pathologic insects or other
disease vectors will breed as a
result of the project?
① The project team confirmed that
the project area (300ha) is forested
field, and the MDC verified that
there are no residents. However,
explanatory meetings and
“town-hall” style hearings with
neighborhood residents will be
carried out during the next F/S
stage to collect the opinions of
impacted neighbors.
② The project team will consider
appropriate recovery systems
during the next F/S stage.
③ Any adverse effects of that
nature will be discussed with the
MDC during the next F/S stage.
④ The project team will discuss
any potential ill effects upon
existing water uses and fisheries
with the MDC during the next F/S
stage.
⑤ The project team will discuss
any possible impact of pathologic
insects or associated disease vectors
caused by the development with the
MDC during the next F/S stage.
(3) Heritage ① Is there a possibility that the
project will damage the local
archeological, historical,
cultural, and religious heritage
sites? Are adequate measures
considered to protect these sites
in accordance with the
country‟s laws?
① The project confirmed that the
project area - 300ha - is forested
field, and MDC has verified that
there are no archeological,
historical, cultural, or religious
heritage sites.
4-20
(4) Landscape ① Is there a possibility that the
project will adversely affect the
local landscape? Are
necessary measures taken?
① The project confirmed that the
project area - 300ha - is forested
field, and MDC has verified that
forthcoming development will have
no effect upon the landscape.
(5) Ethnic Minorities
and Indigenous People
① Does the project comply
with the country‟s laws for
rights of ethnic minorities and
indigenous people?
② Are considerations given to
reduce the impacts on culture
and lifestyle of ethnic
minorities and indigenous
people?
① In 2011, Kayin minority groups
have an agreement with the
Myanmar central government for
peaceful coexistence and no
disputes.
② The project team will
implement both the spirit and the
conclusions reached at that
explanatory meeting and hearing
during the next F/S stage, and will
discuss with MDC the timing and
scope of any countermeasures that
may become necessary to act upon
at some later date.
(6) working conditions ① Is the project proponent not
violating any laws and
ordinances associated with the
working conditions of the
country which the project
proponent should observe in the
project?
② Are tangible safety
considerations in place for
individuals involved in the
project, such as the installation
of safety equipment which
prevents industrial accidents,
and management of hazardous
materials?
③ Are intangible measures
being planned and implemented
for individuals involved in the
project, such as the
establishment of a safety and
health program, and safety
① Noise, vibrations, dust, exhaust,
and other wastes might be
generated during the development
works. While no residents are
confirmed at present, if the project
team does identify any residents in
the planned area during
implementation of the project,
together with the MDC, it will
prepare measures to mitigate them.
② Given the present status and
most current information from
MDC, the project team has
concluded that there will be no
adverse effects on the natural
environment (ecosystem) from the
advent of the project. However, the
project team intends to confirm that
information in detail during the
next F/S stage.
③ Given the present status and
4-21
training (including traffic safety
and public sanitation) for
workers etc.?
④ Are appropriate measures
being taken to ensure that
security guards involved in the
project do not violate safety of
other individuals involved, or
local residents?
most current information from
MDC, the project team has
concluded that there will be no
adverse effects on the social
environment from the advent of the
project. However, the project team
intends to confirm that information
in detail during the next F/S stage.
④ The project will conduct safety
training courses.
5 Others (1) Impacts during
Construction
① Are adequate measures
considered to reduce impacts
during construction (e.g. noise,
vibrations, turbid water, dust,
exhaust gases, and wastes)?
② If construction activities
adversely affect the natural
environment (ecosystem), are
adequate measures considered
to reduce impacts?
③ If construction activities
adversely affect the social
environment, are adequate
measures considered to reduce
impacts?
① Noise, vibrations, dust, exhaust,
and other wastes might be
generated during the development
works. While no residents are
confirmed at present, if the project
team does identify any residents in
the project area during
implementation of the project,
together with the MDC, it will
prepare measures to mitigate them.
② Given the present status and
most current information from
MDC, the project team has
concluded that there will be no
adverse effects on the natural
environment (ecosystem) from the
advent of the project. However, the
project team intends to confirm that
information in detail during the
next F/S stage.
③ Given the present status and
most current information from
MDC, the project team has
concluded that there will be no
adverse effects on the social
environment from the advent of the
project. However, the project team
intends to confirm that information
in detail during the next F/S stage.
4-22
(2) Monitoring ① Does the proponent develop
and implement monitoring
program for the environmental
items that are considered to
have potential impacts?
② Are the items, methods and
frequencies included in the
monitoring program judged to
be appropriate?
③ Does the proponent
establish an adequate
monitoring framework
(organization, personnel,
equipment, and adequate
budget to sustain the
monitoring framework)?
④ Are any regulatory
requirements pertaining to the
monitoring report system
identified, such as the format
and frequency of reports from
the proponent to the regulatory
authorities?
① Project will produce a
monitoring program during
implementation.
② Project will produce a
monitoring program during
implementation.
③ Project will produce a
monitoring program during
implementation.
④ Project will produce a
monitoring program during
implementation.
6 Special
notes
Reference to Checklist
of Other Sectors
① Where necessary, pertinent
items described in the Forestry
Projects checklist should also
be checked (e.g. projects
including large areas of
deforestation).
Special notes on Using
Environmental Checklist
① If necessary, the impacts to
transboundary or global issues
should be confirmed (e.g. the
project includes factors that
may cause problems, such as
transboundary waste treatment,
acid rain, destruction of the
ozone layer, or global
warming).
1) Regarding the term “Country‟s Standards” mentioned in the above table, in the event that environmental
4-23
standards in the country, where the project is located, diverge significantly from the World Bank Safeguard
Policy as a general rule, or the International Finance Corporation Performance Standards for private sector
limited or non-recourse project finance cases, or other standards established by other international financial
institutions, or other internationally recognized standards or good practices established by developed countries
such as Japan regarding environmental and social considerations, the background and rationale for this
deviation, and the measures to rectify it if necessary, are to be confirmed. In cases where local environmental
regulations are yet to be established in some areas, considerations should be based on comparisons with
international standards such as the World Bank Safeguard Policy, and appropriate standards of other countries
(including Japan).
2) Environmental checklist provides general environmental items to be checked. It may be necessary to add or
delete an item taking into account the characteristics of the project and the particular circumstances of the
country and locality area in which it is located.
Source: JBIC
3) Sewage treatment
Table 4-4 JBIC Guidelines for Confirmation of Environmental and Social Considerations (Environmental
Guidelines) (Sewage treatment)
Category Environmental Item Main Check Items Confirmation of
Environmental
Considerations
1 Permits and
Explanation
(1) EIA and Environmental
Permits
① Have EIA reports been
officially completed?
② Have EIA reports been
approved by authorities of the
host country‟s government?
③ Have EIA reports been
unconditionally approved? If
conditions are imposed on the
approval of EIA reports, are the
conditions satisfied?
④ In addition to the above
approvals, have other required
environmental permits been
obtained from the appropriate
regulatory authorities of the host
country‟s government?
① Central government is
drafting EIA regulations.
An EIA will be undertaken
during the next F/S stage.
② Central government is
drafting EIA regulations.
An EIA will be undertaken
during the next F/S stage.
③ Central government is
drafting EIA regulations.
An EIA will be undertaken
during the next F/S stage.
④ Central government is
drafting EIA regulations.
An EIA will be undertaken
during the next F/S stage.
4-24
(2) Explanation to the
Public
① Are contents of the project
and the potential impacts
adequately explained to the
public based on appropriate
procedures, including
information disclosure? Is
understanding obtained from the
public?
② Are proper responses made to
comments from the public and
regulatory authorities?
① Due to the fact that the
Myawaddy Development
Committee (MDC) owns the
land upon which the
developers plan to build the
project, and they have kept
the land vacant pending
development intervention,
MDC has verified that there
are no residents living on the
land However, explanatory
hearings will be held to
inform neighboring residents
about the project, solicit
opinions and responses to the
forthcoming development,
and incorporate those
viewpoints into the plans for
the project.
② Any and all comments
and opinions of local
neighborhood residents will
be shared with MDC.
2 Mitigation
Measures
(1) Water Quality ① Do pollutants, such as SS,
BOD, COD, pH contained in
treated effluent from a sewage
treatment plant comply with the
country‟s effluent standards?
① There are no quality
standards for effluent
discharge into waterways or
ambient water quality
standards in Myanmar.
Project developers will apply
the standards prevailing in the
Phnom Penh SEZ considering
all applicable circumstances
in the process.
(2) Wastes ① Are wastes, such as sludge
generated by the facility
operations properly treated and
disposed of in accordance with
the country‟s standards?
① There are no standards
regarding the treatment and
disposal of wastes in
Myanmar. The project team
will discuss the applicability
of certain sets of relevant
standards and implementation
4-25
procedures with MDC and
reach a decision.
(3) Soil Contamination ① If wastes, such as sludge, are
suspected to contain heavy
metals, are adequate measures
taken to prevent contamination
of soil and groundwater by
leachates from the wastes?
① The project will discuss
adequate measures to prevent
soil contamination with MDC
and decide appropriate
procedures to take to
intervene.
(4) Noise and Vibration ① Do noise and vibrations
generated from the facilities,
such as sludge treatment
facilities and pumping stations
comply with the country‟s
standards?
① There are no standards for
mitigating noise and
vibrations caused by the
operations of industrial
facilities such as treatment
plants or pumping stations in
Myanmar. Project developers
will apply the standards
prevailing in the Phnom Penh
SEZ considering all
applicable circumstances in
the process.
(5) Odor ① Are adequate control
measures taken for odor sources,
such as sludge treatment
facilities?
① There are no standards for
mitigating odors emanating
from industrial facilities in
Myanmar. Project developers
will apply the standards
prevailing in the Phnom Penh
SEZ considering all
applicable circumstances in
the process.
3 Natural
Environment
(1) Conservation Areas ① Is the project site or
discharge area located in
conservation areas designated by
the country‟s laws or
international treaties and
conventions? Is there a
possibility that the project will
affect the protected areas?
① There is no designated
conservation area.
4-26
(2) Ecosystem and biota ① Does the project site or
discharge area encompass
primeval forests, tropical rain
forests, ecologically valuable
habitats (e.g. coral reefs,
mangroves, or tidal flats)?
② Does the project site
encompass the protected habitats
of endangered species designated
by the country‟s laws or
international treaties and
conventions?
③ If significant ecological
impacts are anticipated, are
adequate protection measures
taken to reduce the impacts on
the ecosystem?
④ Is there a possibility that the
project will adversely affect
aquatic environments, such as
rivers? Are adequate measures
taken to reduce the impacts on
aquatic environments, such as
aquatic organisms?
① As MDC is developing
there, the presence of
primeval forests in the
planned area, is well known
to MDC. The project team
will collect all necessary and
sufficient information about
protected habitats from local
knowledgeable people during
the next F/S stage.
② The project team will
become informed with regard
to protected habitats through
concerted interaction with
local knowledge people
during the next F/S stage.
③ The project team will
become informed with regard
to protected habitats through
concerted interaction with
local knowledge people
during the next F/S stage.
Thereafter, the project team
will consider appropriate
countermeasures as
necessary.
④ The project team will
become informed with regard
to protected habitats through
concerted interaction with
local knowledge people
during the next F/S stage.
Thereafter, the project team
will consider appropriate
countermeasures as
necessary.
4-27
4 Social
Environment
(1) Resettlement ① Is involuntary resettlement
caused by project
implementation? If involuntary
resettlement is caused, are efforts
made to minimize the impacts
caused by the resettlement?
② Is adequate explanation on
relocation and compensation
given to affected persons prior to
resettlement?
③ Is the resettlement plan,
including proper compensation,
restoration of livelihoods and
living standards developed based
on socioeconomic studies on
resettlement?
④ Does the resettlement plan
pay particular attention to
vulnerable groups or persons,
including women, children, the
elderly, people below the poverty
line, ethnic minorities, and
indigenous peoples?
⑤ Are agreements with the
affected persons obtained prior to
resettlement?
⑥ Is the organizational
framework established to
properly implement
resettlement? Are the capacity
and budget secured to implement
the plan?
⑦ Is a plan developed to
monitor the impacts of
resettlement?
① The project team has
confirmed that the project
area - 300ha - is forested
field, and, MDC has verified
that there are no residents
living on the land designated
for the project.
② When and if the project
identifies any residents living
in the planned area, together
with the MDC, it will conduct
explanatory public meetings
to discuss the implications
with relevant individuals.
③ When and if the project
team identifies any residents
living in the project area,
together with the MDC, it will
prepare a resettlement plan.
④ When and if the project
team identifies any residents
living in the planned area,
together with the MDC, it will
consider paying particular
attention to ethnic minorities.
⑤ When and if the project
team identifies any residents
living in the planned area,
together with MDC, it will
obtain all necessary
agreements with the affected
persons prior to resettlement.
⑥ When and if the project
team identifies any residents
living in the planned area,
together with the MDC, it will
prepare a resettlement plan.
⑦ All items, implementation
methods, and action intervals
would be made explicit in a
4-28
resettlement monitoring plan,
and, all impacts of
resettlement activity would be
monitored during the
implementation of the project.
(2) Living and Livelihood ① Is there a possibility that
changes in land uses and water
uses due to the project will
adversely affect the living
conditions of inhabitants?
② Is there a possibility that the
project will adversely affect the
living conditions of inhabitants?
Are adequate measures
considered to reduce the impacts,
if necessary?
①The project team confirmed
that the project area - 300ha -
is forested field, and, MDC
verified that there are no
residents living on the project
land. However, the
explanatory meetings and
hearings involving
neighborhood residents will
be conducted during the next
F/S stage, and all opinions
collected will be incorporated
into the project plans.
② Any adverse effects of
development will be
discussed with MDC during
the next F/S stage.
(3) Heritage ① Is there a possibility that the
project will damage the local
archeological, historical, cultural,
and religious heritage sites?
Are adequate measures
considered to protect these sites
in accordance with the country‟s
laws?
① The project team
confirmed that the project
area - 300ha - is forested
field, and, MDC verified that
there are no archeological,
historical, cultural, or
religious heritage sites.
(4) Landscape ① Is there a possibility that the
project will adversely affect the
local landscape? Are necessary
measures taken?
① The project team
confirmed that the project
area - 300ha - is forested
field, and, MDC verified that
there will be no ill effect to
the landscape.
(5) Ethnic Minorities and
Indigenous Peoples
① Does the project comply with
the country‟s laws for rights of
ethnic minorities and indigenous
① In 2011, Kayin minority
group made an agreement
with the Myanmar central
4-29
peoples?
② Are considerations given to
reduce the impacts on culture and
lifestyle of ethnic minorities and
indigenous peoples?
government for peaceful
coexistence without further
dispute.
② The project team will
conduct explanatory meetings
and hearings during the next
F/S stage, and discuss with
MDC if it becomes necessary
to consider appropriate
countermeasures.
4 Social
Environment
(6) working conditions ① Is the project proponent not
violating any laws and
ordinances associated with the
working conditions of the
country which the project
proponent should observe in the
project?
② Are tangible safety
considerations in place for
individuals involved in the
project, such as the installation of
safety equipment which prevents
industrial accidents, and
management of hazardous
materials?
③ Are intangible measures
being planned and implemented
for individuals involved in the
project, such as the establishment
of a safety and health program,
and safety training (including
traffic safety and public
sanitation) for workers etc.?
④ Are appropriate measures
being taken to ensure that
security guards involved in the
project do not violate safety of
other individuals involved, or
local residents?
① The project team will
conduct explanatory meetings
and hearings during the next
F/S stage, and discuss with
MDC if it becomes necessary
to consider appropriate
countermeasures.
② The project team will
conduct explanatory meetings
and hearings during the next
F/S stage, and discuss with
MDC if it becomes necessary
to consider appropriate
countermeasures.
③ The project team will
conduct explanatory meetings
and hearings during the next
F/S stage, and discuss with
MDC if it becomes necessary
to consider appropriate
countermeasures.
④ The project team will
conduct explanatory meetings
and hearings during the next
F/S stage, and discuss with
MDC if it becomes necessary
to consider appropriate
countermeasures.
4-30
5 Others (1) Impacts during
Construction
① Are adequate measures
considered to reduce impacts
during construction (e.g. noise,
vibrations, turbid water, dust,
exhaust gases, and wastes)?
② If construction activities
adversely affect the natural
environment (ecosystem), are
adequate measures considered to
reduce impacts?
③ If construction activities
adversely affect the social
environment, are adequate
measures considered to reduce
impacts?
① Noise, vibrations, dust,
exhaust, and other wastes
might be generated during the
development works. No
residents have been
confirmed to be living on the
land at present. However, if
the project identifies any
residents living in the project
area during the course of
work on the project, together
with the MDC, it will take all
appropriate measures to
reduce and/or eliminate these
types of impacts to residents.
② At present, given the
information received from
MDC, the project team
concludes that there will be
no adverse effects on the
natural environment
(ecosystem). However the
project team and MDC will
confirm any and all updated
information received in detail
during the next F/S stage.
③ At present, given the
information received from
MDC, the project team
concludes that there will be
no adverse effects on the
social environment. However
the project team and MDC
will confirm any and all
updated information received
in detail during the next F/S
stage.
4-31
(2) Monitoring ① Does the proponent develop
and implement a monitoring
program for the environmental
items that are considered to have
potential impacts?
② Are the items, methods, and
action intervals included in the
monitoring program determined
to be appropriate?
③ Does the proponent establish
an adequate monitoring
framework (organization,
personnel, equipment, and
adequate budget to sustain the
monitoring framework)?
④ Are any regulatory
requirements pertaining to the
monitoring report system
identified, such as the format and
frequency of reports from the
proponent to the regulatory
authorities?
① Project will produce a
monitoring program during
implementation.
② Project will produce a
monitoring program during
implementation.
③ Project will produce a
monitoring program during
implementation.
④ Project will produce a
monitoring program during
implementation.
6 Special
notes
Special notes on Using
Environmental Checklist
① If necessary, the impacts to
transboundary or global issues
should be confirmed (e.g. The
project includes factors that may
cause problems, such as
transboundary waste treatment,
acid rain, destruction of the
ozone layer, or global warming).
1) Regarding the term “Country‟s Standards” mentioned in the above table, in the event that environmental
standards in the country, where the project is located, diverge significantly from the World Bank Safeguard
Policy as a general rule, or the International Finance Corporation Performance Standards for private sector
limited or non-recourse project finance cases, or other standards established by other international financial
institutions, or other internationally recognized standards or good practices established by developed countries
such as Japan regarding environmental and social considerations, the background and rationale for this
deviation, and the measures to rectify it if necessary, are to be confirmed. In cases where local environmental
regulations are yet to be established in some areas, considerations should be based on comparisons with
international standards such as the World Bank Safeguard Policy, and appropriate standards of other countries
4-32
(including Japan).
2) Environmental checklist provides general environmental items to be checked. It may be necessary to add or
delete an item taking into account the characteristics of the project and the particular circumstances of the
country and area in which it is located.
Source: JBIC
4) Waste management and disposal
Table 4-5 JBIC Guidelines for Confirmation of Environmental and Social Considerations (Environmental
Guidelines) (Waste management and disposal)
Category Environmental Item Main Check Items Confirmation of Environmental
Considerations
1 Permits
and
Explanation
(1) EIA and
Environmental
Permits
① Have EIA reports been
officially completed?
② Have EIA reports been
approved by authorities of the
host country‟s government?
③ Have EIA reports been
unconditionally approved? If
conditions are imposed on the
approval of EIA reports, are the
conditions satisfied?
④ In addition to the above
approvals, have other required
environmental permits been
obtained from the appropriate
regulatory authorities of the host
country‟s government?
① Central government is drafting
EIA regulation.
An EIA will be undertaken during
the next F/S stage.
② Central government is drafting
EIA regulation.
An EIA will be undertaken during
the next F/S stage.
③ Central government is drafting
EIA regulation.
An EIA will be undertaken during
the next F/S stage.
④ Central government is drafting
EIA regulation.
An EIA will be undertaken during
the next F/S stage.
(2) Explanation to the
Public
① Are contents of the project
and the potential impacts
adequately explained to the
public based on appropriate
procedures, including information
disclosure? Is understanding
obtained from the public?
② Are proper responses made to
comments from the public and
regulatory authorities?
① There are no residents living
on the land designated as the site
for Myawaddy IZ (IZ). This has
been verified by the owner -
Myawaddy Development
Committee (MDC). Explanatory
meetings with neighborhood
residents will be held in advance
of development, and all opinions
solicited will be incorporated into
the project.
4-33
② All comments received from
neighborhood residents will be
shared with MDC.
2 Mitigation
Measures
(1) Air Quality ① Do air pollutants, such as
sulfur oxides (SOx), nitrogen
oxides (NOx), and soot and dust,
and dioxins emitted from various
sources, such as incinerators, and
vehicles used for waste collection
and transportation comply with
the country‟s emission standards
and ambient air quality
standards?
① IZ will have no effect upon air
quality because almost all
factories in IZ will be labor
intensive.
(2) Water Quality ① Do effluents from various
facilities comply with the
country‟s effluent standards and
ambient water quality standards?
② Does the water quality of
leachates from the waste disposal
sites comply with the country‟s
effluent standards and ambient
water quality standards?
③ Are adequate measures taken
to prevent contamination of
surface water and groundwater by
these effluents and leachates?
① There are no quality standards
for effluent discharge or ambient
water in waterways in Myanmar.
The project team will apply
appropriate standards in place on
the Phnom Penh SEZ considering
all relevant and applicable details
in the process.
②There are no quality standards
for effluent discharge or ambient
water in waterways in Myanmar.
The project team will apply
appropriate standards in place on
the Phnom Penh SEZ considering
all relevant and applicable details
in the process.
③ There are no quality standards
for effluent discharge or ambient
water in waterways in Myanmar.
The project team will apply
appropriate standards in place on
the Phnom Penh SEZ considering
all relevant and applicable details
in the process.
4-34
(3) Wastes ① Are wastes, such as treatment
residues, cinder, and fly ash
generated from crushing and
segregation processes, and
diverted wastes from composting
process properly treated and
disposed of in accordance with
the country‟s standards?
② Are hazardous and dangerous
wastes properly segregated from
other wastes, stabilized, treated,
and disposed of in accordance
with the country‟s standards?
① There are no quality standards
regarding the treatment and
disposal of wastes in Myanmar.
The project team will discuss
alternative measures with MDC
and decide what procedures may
be appropriate under the
circumstances of the project.
② The project team will discuss
the potential need to segregate and
dispose of hazardous and
dangerous waste with MDC and
decide what actions and
procedures to take to reduce their
impact.
(4) Soil
Contamination
① Are adequate measures taken
to prevent contamination of soil
and groundwater by leachates
from the waste disposal sites?
① The project will discuss
adequate measures to prevent soil
contamination with MDC and
decide appropriate procedures to
take to intervene.
(5) Noise and
Vibration
① Do noise and vibrations
generated by the facility
operations (especially
incinerators, waste segregation
and crushing facilities), and
vehicle traffic for waste
collection and transportation
comply with the country‟s
standards?
① There are no standards
regarding noise and vibrations
stemming from industrial activity
in Myanmar. The project team
will apply the standards used in
the Phnom Penh SEZ and
consider the applicability of those
standards in detail.
(6) Odor ① Are there any odor sources?
Are adequate odor control
measures taken?
① There are no standards
regarding the mitigation of
industrial-produced odors in
Myanmar. The project team will
apply the standards of dealing
with such public nuisances in the
case of the Phnom Penh SEZ
considering the applicable
circumstances in detail.
3 Natural
Environment
(1) Conservation
Areas
① Is the project site located in
conservation areas designated by
① There are no designated
conservation areas.
4-35
the country‟s laws or
international treaties and
conventions? Is there a
possibility that the project will
affect the protected areas?
(2) Ecosystem and
biota
① Does the project site
encompass primeval forests,
tropical rain forests, ecologically
valuable habitats (e.g. coral reefs,
mangroves, or tidal flats)?
② Does the project site
encompass the protected habitats
of endangered species designated
by the country's laws or
international treaties and
conventions?
③ If significant ecological
impacts are anticipated, are
adequate protection measures
taken to reduce the impacts on the
ecosystem?
④ Is there a possibility that the
project will adversely affect
aquatic organisms? If impacts are
anticipated, are adequate
measures taken to reduce the
impacts on aquatic organisms?
⑤ Is there a possibility that the
project will adversely affect
vegetation and wildlife? If
impacts are anticipated, are
adequate measures taken to
reduce the impacts on vegetation
and wildlife?
① MDC, the owner and
developer of the land, is quite
knowledgeable of the fact of
primeval forests existing in the
planned area. Detailed
information about the protected
habitats will be shared by
knowledgeable people during the
next F/S stage.
② Detailed information about the
protected habitats will be shared
by knowledgeable people during
the next F/S stage.
③ During the next F/S stage, the
project team will address the
potential for the development to
have significant impacts to the
local ecosystem. The project team
will consider measures to counter
such impacts on an as needed
basis.
④ During the next F/S stage, the
project team will address the
potential for the development to
have adverse effects upon aquatic
organisms. The project team will
consider measures to counter such
impacts on an as needed basis.
⑤ During the next F/S stage, the
project team will address the
potential for the development to
have adverse effects upon
vegetation and wildlife. The
project team will consider
measures to counter such impacts
4-36
on an as needed basis.
(3) Management of
Dumping grounds
① Are environmental protection
and restoration plans (such as
landfill gas and leachate
collection and treatment systems,
prevention of illegal dumping,
and reforestation) after facility
closure considered?
② Is a sustainable management
framework for dumping grounds
established?
③ Are adequate financial
provisions secured to manage
dumping grounds
① The project team will discuss
with MDC regarding the necessity
of an environmental protection
procedure and restoration plan in
place during the project.
② The project team will discuss
with MDC regarding the necessity
of having a sustainable
management framework for
dumping grounds during the
course of the project.
③ The project team will discuss
with MDC the need for financial
provisions secured to manage
dumping grounds.
4 Social
Environment
(1) Resettlement ① Is involuntary resettlement
caused by project
implementation? If involuntary
resettlement is caused, are efforts
made to minimize the impacts
caused by the resettlement?
② Is adequate explanation on
relocation and compensation
given to affected persons prior to
resettlement?
③ Is the resettlement plan,
including proper compensation,
restoration of livelihoods and
living standards developed based
on socioeconomic studies on
resettlement?
④ Does the resettlement plan
① The project confirmed that the
project area - 300ha - is forested
field, and, MDC verified that
there are no residents.
② When and if the project team
identifies the presence of residents
living in the planned area,
together with the MDC, it will
conduct explanatory meetings to
determine optimal ways of
dealing with the discovered
circumstances.
③ When and if the project team
identifies the presence of residents
living in the planned area,
together with the MDC, it will pay
particularly careful attention to
4-37
pay particular attention to
vulnerable groups or persons,
including women, children, the
elderly, people below the poverty
line, ethnic minorities, and
indigenous peoples?
⑤ Are agreements with the
affected persons obtained prior to
resettlement?
⑥ Is the organizational
framework established to
properly implement resettlement?
Are the capacity and budget
secured to implement the plan?
⑦ Is a plan developed to
monitor the impacts of
resettlement?
ethnic minorities.
④ When and if the project team
identifies the presence of residents
living in the planned area,
together with the MDC, it will pay
particularly careful attention to
ethnic minorities.
⑤ When and if the project team
identifies the presence of residents
living in the planned area,
together with the MDC, the team
will obtain the necessary
agreements with all affected
persons prior to any resettlement
action.
⑥ When and if the project team
identifies the presence of residents
living in the planned area,
together with the MDC, the team
will obtain the necessary
agreements with all affected
persons prior to any resettlement
action.
⑦ The impacts of any
resettlement activity will be
monitored during the
implementation of the project. All
items, implementation methods,
and action intervals will be
explicit in the monitoring plan.
4 Social
Environment
(2) Living and
Livelihood
① Is there a possibility that the
project will adversely affect the
living conditions of inhabitants?
Are adequate measures
considered to reduce the impacts,
if necessary?
② Are considerations given to
the existing recovery systems,
including waste pickers?
③ Is there a possibility that
① The project has confirmed that
the project area - 300ha - is
forested field, and, the MDC has
verified that there are no residents
on the designated project site.
However, explanatory meetings
and hearings with neighborhood
residents will be conducted during
the next F/S stage, and the
opinions collected will be
4-38
waste transportation will
adversely affect the regional
traffic?
④ Is there a possibility that
effluents from the project and
leachates form the waste disposal
sites will adversely affect
fisheries and other water uses by
local inhabitants (especially
drinking water)?
⑤ Is there a possibility that
pathologic insects or other
disease vectors will breed as a
result of the project?
incorporated into the project
plans.
② Potential adverse effects will
be discussed with MDC during
the next F/S stage.
③ Potential adverse effects will
be discussed with MDC during
the next F/S stage.
④ Potential adverse effects will
be discussed with MDC during
the next F/S stage. The project
team will discuss with the most
appropriately knowledge people
regarding the needs.
⑤ Potential adverse effects will
be discussed with MDC during
the next F/S stage. The project
team will discuss with the most
appropriately knowledge people
regarding the needs.
(3) Heritage ① Is there a possibility that the
project will damage the local
archeological, historical, cultural,
and religious heritage sites? Are
adequate measures considered to
protect these sites in accordance
with the country‟s laws?
① The project team confirmed
that the project area - 300ha - is
forested field, and, the MDC
verified that there are no local
archeological, historical, cultural,
and religious heritage sites.
(4) Landscape ① Is there a possibility that the
project will adversely affect the
local landscape? Are necessary
measures taken?
① The project team confirmed
that the project area - 300ha - is
forested field, and, the MDC
answered that there will be no
effect to the local landscape.
(5) Ethnic Minorities
and Indigenous
People
① Does the project comply with
the country‟s laws for rights of
ethnic minorities and indigenous
people?
② Are considerations given to
reduce the impacts on culture and
lifestyle of ethnic minorities and
indigenous people?
① In 2011, Kayin minority
groups made an agreement with
the Myanmar central government
for peaceful coexistence without
further dispute.
② The project team will conduct
explanatory meetings and public
hearings during the next F/S
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stage, and discuss all relevant
issues related to this subject with
the MDC as the two parties
consider the situation.
(6) working
conditions
① Is the project proponent not
violating any laws and ordinances
associated with the working
conditions of the country which
the project proponent should
observe in the project?
② Are tangible safety
considerations in place for
individuals involved in the
project, such as the installation of
safety equipment which prevents
industrial accidents, and
management of hazardous
materials?
③ Are intangible measures
being planned and implemented
for individuals involved in the
project, such as the establishment
of a safety and health program,
and safety training (including
traffic safety and public
sanitation) for workers etc.?
④ Are appropriate measures
being taken to ensure that
security guards involved in the
project do not violate safety of
other individuals involved, or
local residents?
① Noise, vibrations, dust,
exhaust, and wastes might be
generated during the development
works. While no residents living
on the land have been confirmed
to date, if the project identifies the
presence of residents living in the
planned area, it will prepare
measures to mitigate the situation.
② Given the present status and
information from MDC, the
project team concludes that
there will be no adverse effects of
the project on the natural
environment (ecosystem).
However, the team will seek to
confirm that in detail during the
next F/S stage.
③ Given the present status and
information from MDC, the
project team concludes that
there will be no adverse effects of
the project on the social
environment. However, the team
will seek to confirm that in detail
during the next F/S stage.
④ The project will prepare a
safety training program
5 Others (1) Impacts during
Construction
① Are adequate measures
considered to reduce impacts
during construction (e.g. noise,
vibrations, turbid water, dust,
exhaust gases, and wastes)?
② If construction activities
adversely affect the natural
environment (ecosystem), are
① Noise, vibrations, dust,
exhaust, and other wastes might
be generated during the
development works. No residents
have been confirmed to be living
on the land at present. However, if
the project identifies any residents
living in the project area during
4-40
adequate measures considered to
reduce impacts?
③ If construction activities
adversely affect the social
environment, are adequate
measures considered to reduce
impacts?
the course of work on the project,
the project team together with the
MDC will take all appropriate
measures to reduce and/or
eliminate these types of impacts to
residents.
② At present, given the
information received from MDC,
the project team concludes that
there will be no adverse effects on
the natural environment
(ecosystem). However, together
with the MDC, it will confirm
any and all updated information
received in detail during the next
F/S stage.
③ At present, given the
information received from MDC,
the project team concludes that
there will be no adverse effects on
the social environment. However,
the project team, together with the
MDC, will confirm any and all
updated information received in
detail during the next stage.
(2) Monitoring ① Does the proponent develop
and implement monitoring
program for the environmental
items that are considered to have
potential impacts?
② Are the items, methods and
frequencies included in the
monitoring program judged to be
appropriate?
③ Does the proponent establish
an adequate monitoring
framework (organization,
personnel, equipment, and
adequate budget to sustain the
monitoring framework)?
① Project will produce a
monitoring program during
implementation.
② Project will produce a
monitoring program during
implementation.
③ Project will produce a
monitoring program during
implementation.
④ Project will produce a
monitoring program during
implementation.
4-41
④ Are any regulatory
requirements pertaining to the
monitoring report system
identified, such as the format and
frequency of reports from the
proponent to the regulatory
authorities?
6 Special
notes
Reference to
Checklist of Other
Sectors
① Where necessary, pertinent
items described in the Forestry
Projects checklist should also be
checked (e.g. projects including
large areas of deforestation).
Special notes on
Using Environmental
Checklist
① If necessary, the impacts to
trans boundary or global issues
should be confirmed (e.g. the
project includes factors that may
cause problems, such as trans
boundary waste treatment, acid
rain, destruction of the ozone
layer, or global warming).
1) Regarding the term “Country‟s Standards” mentioned in the above table, in the event of significant
divergence from the World Bank Safeguard Policy as a general rule, or the International Finance
Corporation Performance Standards for private sector limited or non-recourse project finance cases, or other
standards established by other international financial institutions, or other internationally recognized
standards or good practices established by developed countries, such as Japan, regarding environmental and
social considerations, the background and rationale for this deviation, and the measures to rectify it if
necessary, are to be confirmed. In cases where local environmental regulations are yet to be established in
some areas, considerations should be based on comparisons with international standards such as the World
Bank Safeguard Policy, and appropriate standards of other countries (including Japan).
2) Environmental checklist provides general environmental items to be checked. It may be necessary to add
or delete an item taking into account the characteristics of the project and the particular circumstances of
the country and locality area in which it is located.
Source: JBIC
4-42
(4) The outlines of regulations regarding environmental and social
considerations, and clarification measures
1) The regulations for Environmental Impact Assessment (EIA)
The regulations regarding EIA in Myanmar are as follows;
・Forestry Law (1992)
・Protection of Wildlife and Wild Plants and Conservation of Natural Areas Law (1994)
・Factory Act(1951)
・Territorial Sea and maritime Zone Law(1977)
・National Environment Policy(1994)
・Mines Law(1994)
・Freshwater Fisheries Law(1991)
・Marine Fisheries Law(1990)
・Law on Aquaculture(1989)
・Irrigation Laws and Regulations(1982)
・The Conservation of Water Resources and Rivers Law(2006)
・Environmental Conservation Law(2012)
・Environmental Conservation Rules(2013, February Diet passed the bill)
・EIA Procedures(currently drafting)
① Environmental articles in the Constitution of the Republic of the Union of Myanmar (2008)
Constitution of the Republic of the Union of Myanmar (2008) obliges the government to conduct the protection of
environment (Chapter 1. Article 45). However, this needs clarification because it appears to accept the
environmental destruction occurring and allows restoration of the natural environment (Chapter 4. Article 96). It
requires the people to cooperate in the protection of the environment (Chapter 8. Article 390). However it does not
include a clause guaranteeing a healthy environment. It does not include clauses addressing sustainable
development or information enjoyment, participation in managing environmental resources, conventional
ownership, social communication with the traditional language, and distribution of social wealth.
② The Protection of Wildlife And Conservation Of Natural Areas Law (1994)
It does not include the concrete standards regarding wild animals and the protection of the environment, but rather
the policies and conduct of research development by the government, because it regulates only the Ministry of
Environment and Forestry as the responsible organization.
③ The Conservation of Water Resources and Rivers Law (2006)
It regulates not only the protection of the water resource and the rivers, but also the system of the water resources
4-43
and the contributions to national economic development. However it regulates the Ministry of Transportation as
the responsible organization, because it focuses the safety water traffic and its development as well. Additionally
it does not describe the numerical criteria for environmental conservation.
④ Environmental Conservation Law (2012)
This Environmental Conservation Law was enacted in March 2012 and was responsible for the Ministry of
Environment and Forestry established in September 2011. It consists of 14 Chapters, regulating rights, division of
duties, environmental standards, preservation of environment, preservation of natural resources and cultural
heritage, urban environmental management, permission and authorization of business entities affecting the
environment, and the infringement of rule and penal provisions.
The Environmental Conservation Law will enforce Environmental Conservation Rules approved by the Ministry
of Environment and Forests in February 2013, subject to Parliamentary approval for enforcement.
2) Environment Impact Assessment (EIA) system in Myanmar
In Myanmar EIA Procedures are being drafted, because the fields of investment requiring EIA were put into place
by the detailed regulation of the Foreign Investment Law. (As of February 2012)
4-44
(5) The items to realize the project in the country (executing agency
and other organizations)
1) Securing the distribution roots
As the previous chapter explained, the Myawaddy industrial zone will develop an area of 326.4 ha in its third
phase of implementation and handle the cargos of 6,000,000 t/y. When it develops the last of its total area of 500
ha, the scale will be 1.5 times as large as its phase 3 scale, processing cargos of 10,000,000 t/y. These cargos are
only for materials, distribution, and manufacturing wastes, however, the other cargos and nonmanufacturing
wastes for nonmanufacturing should be counted.
It is difficult to estimate the ratio of waste in cargos because the type of waste and the amounts vary by industry.
The separation of waste into categories will affect the volume of cargos as well.
Assuming the basic units of the waste are 250 tons/ha/year in manufacturing waste and 0.25 tons/person/year in
commercial and residential waste, the north area will generate approximately 20,000 tons/year of waste after
completion. When the scale of the industrial zone is developed to the full build-out of 500 ha and all areas are
fully occupied by tenants, the total volume of the north and the south area will become approximately 100,000
tons of waste /y.
Kayin State needs the basic waste management countermeasure of a Regional Development Plan because it is
impossible to consider that Myawaddy district/township is capable of disposing of all its waste including the
waste from the Myawaddy industrial zone.
From the distribution viewpoint, and, that of environmental and social considerations, garbage collection during
daytime hours with vehicles using local roads is undesirable.
2) Procurement of work force Population statistics by Industrial Zone Report in Kayin State are as follows;
Table 4-6 Household, Families and Population in Kayin State
District Household Families population Total (people)
Male Female
Hpa-an 118,391 125,746 476,855 493,267 970,122
Kawkareik 64,901 70,045 279,407 281,787 561,194
Mywaddy 12,428 12,744 29,759 30,277 60,036
Hpa-pon 14,219 14,478 79,543 77,552 157,095
Total 219,939 223,013 865,564 882,883 1,748,447
Source: Government of Kayin State, Industrial Zone Report
4-45
Work force at the north area and the south area in Myawaddy industrial zone are as follows;
Table 4-7 Work force at the north area and the south area in Myawaddy industrial zone
area North South
Total (people) Phase1~2N Phase2S~5
Manufacturing 21,303 70,200 91,503
Non-manufacturing 10,652 70,200 80,852
Total 31,955 140,400 172,355
Source: Study Team
Population Pyramid of Myanmar for 2010 indicates that the population of working age (15 - 64) is approximately
70% of the total population. There are approximately 42,000 workers (total population 60,000 x 70%) in
Myawaddy district/township. Myawaddy district/township has not disclosed its unemployment rate. Assuming it
is 35%, the unemployed population is 15,000. However, additional research is needed to estimate the number of
factory workers.
The report says that the number of Kayin migrants in Thailand is approximately 1,130,000. (Job Creation by
Border Area Development between Thailand and Myanmar; Dr. Kitti Limskul, Dr. Hiroyuki Taguchi,
Chulalongkorn University funded by JICA Thailand Office, Dec.2012) There are approximately 400 factories in
Mae Sot in Thailand adjacent to Myawaddy; and approximately 20,000 migrants from Kayin are working there.
Assuming the north area opens in 2016 and the south area opens 2015, the work force will reach 170,000 workers.
Approximately 10,000 workers will move to Myawaddy; increasing 20,000 – 30,000 inclusive of accompanying
family members. While it is possible to estimate the workforce as the north area once lot sales are underway, it
will be difficult to estimate the workforce after that, because the demand and supply will not be balanced. Finally,
Myawaddy industrial zone have to attract Kayin migrants in Thailand by 2018 or 2019 when the south area opens.
It is impossible for Myawaddy district/township to accommodate a job creation level of 170,000 jobs and a
population increase of 300,000 people by 2030. Therefore Kayin State needs to commission a new township
development plan based on a long term vision, and come up with the strategy and tactics that will encourage the
smooth return home of oversea workers
5-1
(1) Estimated project cost
As explained earlier regarding current project targets, concerning Myawaddy IZ and Hpa-an IZ, the Hpa-an IZ is
already in operation, leaded by Kayin State Government. Therefore, in this project the financial and economic
analysis for Hpa-an IZ will not be included. On the other hand, the Myawaddy IZ with the exception of the Phase1
construction on north district already underway, most of the planning area is in an undeveloped condition. This
study will focus on the Myawaddy IZ.
① Pre-conditions on Project Cost Estimate
Considering land acquisition costs and the compensation necessary to relocate residents from the proposed site to
enable development, where indicated by the Kayin State Government, those costs are excluded from the overall
project cost estimation.
The project cost estimation in Phase 1 includes the electric power distribution, on-site road, and the road side
drains. However, the cost of design, construction, operation, and maintenance regarding other infrastructure
facilities are not included in the project cost estimation.
1) The Cost Items Out of the Project Scope
Although it is linked to the development of Myawaddy, the indirect cost for survey, design, and construction, are
necessary to be executed separately from the project. Those costs should be handled separately under the scope of
the regional economic development process.
・ The following is a list of the short to medium term cost items out of the project scope.
・ Planning and review of a “New Town Master Plan for the Myawaddy Industrial Zone Development” and its
related survey;
・ Topographical Map for the Myawaddy Industrial Zone Development;
・ River survey, meteorological observation, geological/soil property/ aquifer exploration,
compensation/dilapidation survey;
・ Environmental conservation area survey;
・ Improvement and implementation plan for the discharge channel and downstream river;
・ Sectional improvement of National Road (NR) No.85, along with the crossings and diversions included for
in-flowing rivers and watercourses;
・ Preparation for dry port facilities within Myawaddy Trade Zone for Myawaddy IZ;
・ Survey and design for a dam facility, reservoir facility, and water supply facility as part of a regional water
supply master plan;
・ Survey and design for power plant, substation, and power transmission as part of a regional power supply
master plan.
2) Project Implementation Phase and Schedule
The project implementation process is in accord with the Chapter 8 Implementation Schedule. The
5-2
implementation phase of the project is divided into two parts - North district and South district. The north district
will be carried out in a single phase, and, the undeveloped south district will be carried out in four phases.
Table 5-1 Project implementation Phase (Area unit: ha)
Item
Project cost by phases Total
North district South district
Phase 1 Phase 2 Phase 3 Phase 4
1 2 2N 2S 3 4~5
The entire area of the
Industrial Zone 57.4 23.9 49.9 73.1 122.2 173.5 500.0
Same as above by Phase
131.2 73.1 122.2 173.5 500.0
Industrial site 48.8 0 26.8 34.6 85.0 104.8 300.0
Same as above by phase
75.6 34.6 85.0 104.8 300.0
Same as above by Ratio
(%) 25.2 11.5 28.4 34.9 100.0
Road site 8.6 3.6 10.5 11.8 17.4 51.9
Same as above by Phase 12.2 10.5 11.8 17.4 51.9
Same as above by ratio
(%) 9.3 14.4 9.7 10.0
Utilities/ housing/
services/ other land 0 23.9 19.5 28.0 25.4 51.3 148.1
Same as above by phase
43.4 28.0 25.4 51.3 148.1
Source: Study Team
3) Basic items in the cost estimate
a) Three cases of possible construction contracts
There are three possible cases of construction contract as follow:
① The local consultant and the local contractor will carry out overall survey, design, procurement, and
construction;
② The Thai consultant and Thai contractors will carry out survey, design, procurement, and construction; or,
③ The local consultant and the local contractors, in cooperation with Japanese contractors, will carry out
survey, design, procurement, and construction.
In the case of ① operation by local contractors, only they might exclude the area throughout survey and design,
5-3
procurement, and construction works just in the North District Phase 1.
In the case that ② Thai contractors act as the main operator - they have a proven track record in bypass-road
construction, described above. However, the construction of the IZ will be extensive, it is necessary to verify the
licensed design and construction area in Myanmar and to investigate the approval process including the necessary
taxation expenses and other required costs.
In the case of ③ operation by a mixed group of contractors including Japanese contractors - a joint venture and a
construction management (CM) sub-contract is one practical approach. It is necessary to investigate all applicable
taxation expenses and other required costs as mentioned above in the case of operation by Thai contractors.
b) Quantity and unit cost / Price
The quantity and unit cost/price are calculated based on the preliminary design for “Chapter 3 Justification,
Objectives, and Technical Feasibility of the Project” and the performance of the Phnom Penh SEZ (PPSEZ).
While the civil work, particularly for the cut and embankment volume, is to be balanced throughout the
phases in principle, the unsuitable soil and excavated surplus soil will be disposed of in an area 3km away.
The unit cost for construction equipment, Energy & Machine (EM) facility equipment, and the labor cost
quotations are based on an interview conducted with the local general contractor in October to November
2013, the unit cost survey for feasibility study on PPSEZ, and others.
c) Construction Cost
・ The direct construction cost for the civil engineering work is based on the construction process productivity
standard in Japan and the outline design quantity as mentioned above.
・ The indirect cost and general and administrative expenses (home office overhead) are calculated for the
pro-rata costs from the direct construction costs stemming from the above assumptions.
d) Tax and duties
・ The taxation system of the central government and the state government of Kayin State, and, the tax
exemption and subsidy tax incentives of that state government as the operator of Myawaddy IZ were
unknown during the survey period at the time.
・ In general, although it is required to record the expense that reflects the taxes of future policy for the project,
the tax and the duty cost are not reported in the calculation due to the fact that this project will be carried out
in the PPP scheme lead by Kayin State.
4) Myawaddy IZ Development Project Cost
The table below represents the project cost for Myawaddy IZ development
It is to be noted that a potential Phase 4 is excluded here as the project site is not yet determined.
5-4
Table 5-2 Project cost estimate (M US$)
No. Name Summary Phase1 Phase2 Phase3
1 Civil engineering infrastructure 1.67 1.01 1.56
Land Development 2.44 5.33 7.59
In-site road 3.25 1.96 3.03
Drainage 2.44 1.77 1.71
Retarding basin
9.80 10.08 13.89
Direct construction cost total 1.96 2.02 2.78
Indirect construction cost total 1.18 1.21 1.67
General and administrative cost
total 12.94 13.30 18.33
Civil infrastructure costs total 0.00 0.00 0.00
2 Power supply Power company burden 1.65 0.57 1.85
3 Water supply Deep well supply 3.90 1.60 2.34
4 Sewerage treatment Aerated Lagoon System 0.40 0.18 0.45
5 Solid waste processing Includes commission fees to
Myawaddy city 0.00 0.00 0.00
6 Telecommunications Telecommunications company
burden 1.16 0.00 0.00
7 Administration and One stop
service Office furniture 20.04 15.65 22.97
8 Total construction cost 0.00 0.00 0.00
9 Interest during construction 2% of construction cost 0.00 0.00 0.00
10
SPC establishment
preparation expense
PS 0.33 0.26 0.26
11 Research, survey and design
costs PS
12 Tax and duties 3.01 2.35 3.44
13 Contingency 10% of construction cost 23.35 18.26 25.57
Total project cost
Item Phase1 Phase2 Phase3
Total IZ area (ha) 131.2 73.1 122.2
Project cost for total IZ area
(US$/ m²) 17.8 25.0 21.8
Source: Study Team
5-5
(2) Preliminary Summary results of financial and economic analysis
1) Financial analysis Assumptions:
The revenue of the IZ is generated primarily i) land lease income, ii) water supply fee, iii) wastewater treatment
income, and, iv) service fees.
The following are assumptions relevant to the conduct of financial analysis.
a) Premise 1: To obtain the land for Phase 1 (57.4ha) and Phase 2 (49.4 ha excluding the housing facility, business,
and other service areas) for the first year (among them, the 77.9ha will be up for sale as the IZ).
b) Premise 2: the table below indicates the selling price.
Table 5-3 Premises for the financial analysis
Land price Phase1:US$45/m², Phase2:US$50/m², Phase3: US$55/m²
Water supply fee US$0.80/m²
Drainage fee US$0.43/m²
Service fees Phase1: US$0.03/m², Phase2: US$0.04/m², Phase3: US$0.04/m²
Source: Study Team
c) Premise 3: No use of bank financing, but rather the use of fully owned capital.
2) The results of the financial analysis
a) Financial analysis
In order to conduct a proper financial analysis, the land sales price from each phase is set at US$45/m² for
Phase 1, US $50/m² for Phase 2, and US$55/ m² for phase 3 respectively as a basis for the calculation. These
base figures were determined based on the comparison among the unit of land cost of a particular IZ in
Thailand and another IZ in Cambodia. Furthermore, on the basis of the selling land price per square meter, the
Financial Internal Rate of Return (FIRR) and Economic Internal Rate of Return (EIRR) are estimated for each
phase with a margin for difference of (±) US$5/m².
b) Financial Internal Rate of Return (FIRR)
With regard to revenue management, the IZ is anticipated to be independently and fully operating income from
the project’s third year, with 10% of total revenue devoted to general operational expenses.
The inflation rate is expected to be set at 5% year-on-year plus versus the previous year. According to the
Internal Rate of Return (IRR) calculation, from the condition mentioned above for the Net Cash Flow (NCF) for
the period of 20 years, the base case suggested 13.91% without a leveraged loan. This equation suggests great
potential success in the profit-making business f realizing this project. It is to be noted that this relatively simple
financial projection does not include a calculation of CAPEX (Capital Expenditure) or the analysis of exit price.
5-6
c) Economic Internal Rate of Return (EIRR)
① The net income per square meter of Myanmar companies:
・ One informative example of the annual net income per square meter of Myanmar local enterprises is
US$ 15.34/m²/y.
・ It is to be noted that the above figure was provided from one of the related factories in the project team’s
analysis.
② The total factory area (building) within Myawaddy IZ.
・ The building-to-land coverage ratio is set at approximately 60%. (This percentage refers to the prevailing
building/land ratio of general tenant companies in Rojana Industrial Park, which has no plan for future
expansion)
・ The total building floor area in Myawaddy industrial park: the total salable area * 60% = 1,629,600 m²
③ This EIRR is calculated from the industrial park development costs against the net income of the all tenant
companies in order to evaluate the economic effects in the Kayin state. .
・ The development cost is $69,630,000.
④ EIRR Conclusion:
If the tenant companies of Myawaddy industrial park are assumed to be primarily garment enterprises having
business relationships with a variety of Japanese companies, a net profit of US$1.2 billion could be achieved
over a 20 year period – representing an EIRR of 32.1%. Reaching this projected net profit of US$1.2 billion
will produce many jobs that will, contribute greatly to the Kayin State economy as a result. Therefore this
project is considered to have a significant economic impact to the State.
5-7
① Projection: Phase 1, 2, 3: (Base) US $ 45 /m² · US $ 50 /m² · US $ 55 /m²
Table 5-4 financial analysis (45, 50, 55)
Source: Study Team
・ Financial Internal Rate of Return (FIRR): 13.91%
・ Net Present Value (NPV): US$ 95,180,000
5-8
② Conservative case: Phase 1, 2, 3: (Base) US $ 40/ m² · US $ 50/ m² · US $ 55/ m²
Table 5-5 financial analysis (40, 50, 55)
Source: Study Team
・ Financial Internal Rate of Return (FIRR): 12.22%
・ Net Present Value (NPV): US$ 89,690,000
5-9
③ Optimism case: Phase 1, 2, 3: (Base) US $ 50/ m² · US $ 50/ m² · US $ 55/ m²
Table 5-6 financial analysis (50, 50, 55)
Source: Study Team
・ Financial Internal Rate of Return (FIRR): 15.82%
・ Net Present Value (NPV): US$ 100,670,000
5-10
④ EIRR
Table 5-7 Economic Analysis (EIRR)
Source: Study Team
・ EIRR:32.1%
・ NPV: US$1,182,082,000
6-1
(1) Myawaddy Industrial Zone Construction Schedule
The short-term implementation schedule of Myawady IZ is as follows:
1) Myawady industrial park development plan
a) Overview:
The implementation schedule is set based on the area ratio putting 57.4ha as a standard measure for the
Phase 1/I as determined by the local construction company (Mother Construction Co., Ltd. (MC)).
The earth work will be suspended during the three months of the rainy season.
Phase1, 2, and 3 are divided into two sections, Phase 4 has an additional contact part, making three
contacts in total.
There are common and particular matters regarding survey and design works. Those must be handled
separately.
The survey and design for the common issues will take 12 months while addressing specific issues will
take 6 months.
The survey and design work includes preparation of tender documents and also evaluation of tender
appraisal.
The design for operator SPC (Enterpriser SPC) is up to basic design, while the construction will be a
Design-Build contract, including the detailed design by MC.
Electric and Machinery (E&M) works procurement and installation will be managed in the manner
similar to that of the civil infrastructure construction work.
Figure 6-1 Myawaddy Industrial Zone Construction Schedule
Item 2015 2016 2017 2018 2019 2020 2021
Milestone Bypass road will open (early 2015), IPP 98MW will be completed @ Mawlamyain (late
2015)
Establishment of
SPC
Design survey
(Common)
Government
agencies related
work
Dry port facility
Phase1(131.2ha)
Detailed design
Land
development
Road, drainage
6-2
Water supply and
sewerage
infrastructure
facility
Administration
and One Stop
Service facility
Phase 2 (73.1ha)
Detailed design
Land
development
Road, Drainage
Water supply and
sewerage
Administration
and One stop
service facility
Phase 3
(122.2ha)
Detailed design
Land
development
Road, drainage
Water supply and
sewerage
infrastructure
facility
Administration,
One stop service
facility
Phase 4
(173.5ha)
Detailed design
Land
development
Road, drainage
Water supply and
sewerage
infrastructure
Administration
and One stop
service facility
2015 2016 2017 2018 2019 2020 2021
Source: Study Team
7-1
1) Kayin State Organizational Chart
The following is the Kayin State organizational chart
Figure 7-1 Kayin State Organizational Chart
State Parliament
State High Court
State GovernmentOffice
(Deputy Director)
Parliament Office(Deputy Director)
General AdministrationOffice
(Deputy Director)
General Administration Department of the State(Deputy Director General w/ Deputy Director)
70 Department Level Entities
Townships
Districts
Sub-Townships
Essential Service Departments (18)
Necessary Service Departments (18)
Coordination Admin Management
Coordination
Kyainsekkyi(Asst Director)
Kawkareik(Asst Director)
Hpa-an(Asst Director)
Hlaingbwe(Asst Director)
Kyaikdo
n
Payath
onezu
Sukali
Walle
y Myain
g
Thadaunggy(Asst Director)
Hpa-an(Deputy Director)
Kawkareik(Deputy Diretor)
Myawaddy(Deputy Director)
Pa-pun(Deputy Director)
Myawaddy(Asst Director)
Pa-pun(Asst Director)
Shan
ywath
it
Baw
gali
Leikth
o
Kam
amau
ng
Payin
gkyon
Ele
ctric
ity & In
dustry
Social A
ffair
City D
eve
lopm
ent
Fore
st & M
inin
g
Tran
sportatio
n
Agric
ultu
re &
Live
stock
Fin
ance &
Reve
nue
Plan
nin
g & E
conom
ic D
eve
lopm
ent
Security &
Borde
r Affairs
9 Ministers
Chief Minister
Audito
r General
Advo
cate
General
Min
isters fo
r Eth
nic
Min
oritie
s
Union Goverment
Source: JICA
The Kayin State Government appoints a Chief Minister who is the decision maker together with nine subordinate
ministers responsible for distinct portfolios. The Kayin State Government has the ability to develop industrial
zones, because they already have 2 large-scale industrial zone development projects well exceeding 300ha of total
area, - Hpa-an Industrial Zone and Myawaddy Industrial Zone.
Hpa-an Industrial Zone is currently in development, with its Phase 1 already complete; some of its planned
factories have commenced operations.
Myawaddy Industrial Zone is also under development, with its Phase 1 scheduled for completion in April 2015.
However, with regard to planned Duty Free Zones (DFZ) and Special Economic Zones (SEZ), Kayin State needs
additional approval from the Myanmar Investment Committee (MIC).
7-2
2) Myawaddy Industrial Zone
(Owner) Kayin State
(Design) Local contractor (Mother Construction Co., Ltd.: MC)
(Construction) Local contractor (MC)
【Present status】Local contractor is under consideration.
【Problems】Potential power supply shortages: Lacking the necessary equipment to guarantee a consistent water
supply, water treatment, and waste treatment systems.
Figure 7-2 Myawaddy Industrial Zone Phase 1 Ground Plan
Source: Mother Construction Co., Ltd.
7-3
3) Hpa-an Industrial Zone
(Owner) Hpa-an Industrial Zone Company
(Design) Local general contractor
(Construction) Local general contractor
【Present status】 Some labor-intensive factories are under operation.
【Problems】 Potential power shortages: Lacking the necessary equipment to guarantee a consistent water
supply, water treatment, and waste management systems.
Figure 7-3 Hpa-an Industrial Zone Ground Plan
Source: JETRO
8-1
(1) Expected participation scheme by Japanese companies (Funding,
Engineering/Procurement/Construction, Supply, and Management/
Operation, etc.)
1) PPP scheme of Myawaddy Industrial Zone
Figure 8-1 PPP scheme of Myawaddy Industrial Zone
Source: Study Team
2) Expected participation scheme of Japanese companies (Funding, Engineering/Procurement/Construction (EPC),
Supply, and Management/Operation, etc.)
According to the development time span for the Myawaddy Industrial Zone, the possibility of the expected
participation by Japanese companies is as follows;
8-2
Table 8-1 Expected participation of Japanese companies
Phase Field/Items Type Time Span In charge Remarks
Plan Produce a comprehensive regional
development master plan
Study ○ ○ △ Need review
current plan
Review industrial standards Same as above ○ ○ Need
current
situation
survey
Introduction of an international
units system
Same as above ○ ○ Present:
yard/
Pound
system
Survey Make topographic maps Survey ○ △ ○ Aerial/
satellite
surveying
Set Observatory station
(river, watercourse system)
Construction
Operation
○ ○ ○ Need
current
situation
survey
Set Meteorological observatory
station
Same as above ○ ○ Same as
above
Study EIA standard Study ○ ○ Same as
above
Design Develop design software and
application
Supply/
Operation
○ ○ Need
current
situation
survey
(Private
companies
initiative)
Set Design standard/specification Study ○ ○ Need
current
situation
study with
Mid
termm
mm
Sh
ort T
erm
Kay
in
inin
Ce
ntral G
ov.
inin
8-3
support by
academy
institute
Procurement/
Construction
Application software for
procurement, scheduling and
quality control etc.)
Study, Supply, and
Management
○ ○ ○ Applicable
to the
Project
Materials Supply/
Finance
○ ○ ○ ○ Same as
above
Machinery
Same as above
○ ○ ○ ○ Machinery
to IT
technology
developmen
t
Construction/
Management/
Maintenance
Water supply plant Supply/
Finance/
Management
○ △ ○ ○ Apply to the
Project
Advanced wastewater treatment
plant
Same as above ○ ○ ○ Same as
above
Solid waste incineration plant Same as above /
Management
Same as
above
Solid waste disposal management
manifest system
Same as above /
Management
○ △ ○ Same as
above
Biomass thermal generation plant Same as above /
Management
○ ○ △ ○ Same as
above /
Pilot plant
operation
Photovoltaic and/or solar thermal
power generation plant
Same as above /
Management
Same as
above /
Pilot plant
operation
Medium/Small hydroelectric power
generation plant
Same as above ○ ○ ○ ○ Same as
above
Machinery of power
generation/transformation/transmiss
ion/distribution
Same as above/
○ ○ △ ○ Same as
above
Regional telecommunications
center
Same as above
○ △ △ ○ EPC and
finance,
operation
8-4
managemen
t
Materials for information and
telecommunications
Supply/Finance ○ ○ △ ○ Same as
above
Machinery for information and
telecommunications
Same as above
Management
○ ○ △ ○ Same as
above
Gas supply plants Same as above /
Management
○ △ △ ○ Same as
above
Materials for gas supply plants Supply/
Finance
○ ○ ○ ○ Included
above
Machinery for gas supply plants Supply/
Finance
○ ○ ○ ○ Same as
above
Container handling vehicles Same as above /
Management
○ ○ ○ △ Applicable
to the
Project
Crane, lifter
etc.
CFS system EPC/
Management
○ ○ ○ △ Same as
above ,
machinery
and the
system
Customs processing system Same as above /
Management
○ ○ ○ ○ Same as
above
Cargo transport vehicles Supply/Finance ○ ○ ○ △ Same as
above ,
private
company
initiative
Special cargo vehicles with
cooling/heating equipment)
Same as above /
Management
○ △ ○ △ Same as
above
Mass transit buses Same as above ○ △ ○ △ Same as
above ,
trans.
company
Mass transit bus system Same as above /
Management
○ △ ○ △ Same as
above
(Legend) ○:Leading role, △:Supporting role
Source: Study Team
8-5
(2) Advantages of Japanese Companies (Technical and economic)
The Project Team categorizes the advantage enjoyed by Japanese companies into three areas: industrial zone
development, training by private sector practitioners and the social and environment aspect with main items as
follows:
1) Technical
The advantages of Japanese companies compared with other foreign companies in Myawaddy Industrial Zone
project are as follows:
a) Regarding the design, construction and management of the industrial zone and SEZ developments in
Southeast Asia, and other developing countries, Japanese companies have extensive experience in contributing to
national economic growth.
b) Japanese companies have established advanced supply chain systems between manufacturers and logistics
service providers that collaborate in utilizing horizontal international specialization, resulting in highly efficient
and effective business performance.
c) Japanese companies have developed Business Continuity Planning (BCP) systems to minimize and even
prevent devastating losses caused by the frequent occurrence of natural disasters; thereby increasing the safety
and reliability of their supply chains. In addition, they have entered into operative stages to verify the BCP
system against actual natural disasters.
d) Japanese companies have much experience in the fields of global warming countermeasures through Clean
Development Mechanisms (CDM) and bilateral credit projects and which help reduce the greenhouse gas
emissions that cause global warming.
e) Japanese companies possess advanced technology and systems that achieve energy savings.
f) Japanese companies lead the world in renewable energy technology.
g) Japanese companies are remarkably advantageous in their reliable product delivery and high quality
undertaking in construction ventures. In particular, Japanese companies excel in dealing with maintenance issues
after completion of construction.
h) Japanese companies possess sound diagnostic and restoration technologies relative to conventional
infrastructure requiring rehabilitation - thereby helping to lengthen the functional life of that infrastructure in the
world. Such technology will be able to contribute greatly to the rehabilitation of Myanmar’s dilapidated
infrastructure inventory that has resulted from a lack of regular maintenance. as the realization of Myanmar’s
development moves ahead in response to the recent opening of the economy to Western investment.
8-6
2) Environmental considerations
Environmental considerations relative to this project by Japanese companies are as follows:
Figure 8-2 Environmental considerations surrounding Myawaddy Industrial Zone (Water supply)
Source: Study Team
8-7
Figure 8-3Environmental considerations surrounding Myawaddy Industrial Zone (Sewage treatment)
Source: Study Team
8-8
Figure 8-4 Environmental considerations surrounding Myawaddy Industrial Zone (Waste)
Note: Phase division and the area shown in this figure are indicative ones, so these differ from those in both
Chapter3 and Chapter5.
Source: Study Team
8-9
(3) Necessary measures to promoting participation of Japanese
companies
1) Measures by public and private sectors
The measures taken by public and private sectors to promote participation of Japanese companies are as follows;
【Public sector】
① Establishment of privileges in Duty free Zones
② Administration of One Stop Service provision
③ Renewal of logistics network infrastructure
④ Collaboration with educational organizations
⑤ Comprehensive Development of New Towns
⑥ Establishment of a streamlined immigration system in border areas
⑦ Protective countermeasures against water flooding
⑧ Establishment of a security system
【Private sector】
① Development of infrastructure (water supply, water treatment, waste water treatment and solid waste disposal
management)
② Stable power supply
③ Rental factories provision
④ Human resource development and worker employment diversification policy such as part-time, dispatched,
fixed term
For the purpose of promoting the involvement of Japanese companies, SPC or Pre-SPC organization should take
place seeking assistances from both governments - Japan and Myanmar - so as to encourage Japanese company
participation.
2) Suggestion to Kayin State
The competitive power of Japanese companies has decreased in terms of pricing, in the face of strong Chinese and
Korean companies that have developed competitive pricing power in recent years. Thus, it has become difficult
for Japanese companies to maintain or improve their market share of commodity goods in the international market.
To overcome this situation, Japanese companies have to increase their competitiveness by specializing in:
Quality reliability
Punctual delivery times
Reliability of performance over product/service life time
Faithful after care for goods and performance
New measures for sales promotion by integrating the above specialties relative to the international
competition
8-10
Since the following measures are considered effective in order to ensure Japanese company participation, it will
be important that the Japanese Government extend advice, suggestions, guidance on legislation, and regulation,
responding to requests from the Myanmar Central Government and the Kayin State Government.
① To enhance the involvement of Japanese companies, the state and central governments would need to consider
adoption of the concept of a tendering system including total evaluation being introduced in any competitive
tendering. This would be a system that would reward the punctuality and high quality of Japanese companies’
performance, and offering a high tendering price. This tender evaluation system would also overcome excessive
total costs brought by high interest rates under the progressing inflation-prone economies of development
countries.
・ Tenderers would be able to propose project finance as well as conventional criteria of technical and tender
pricing matters.
・ Tenderers would be able to propose life cycle cost over project life of operation and maintenance in addition
to construction cost.
・ Tender evaluations can accept alternative technical proposals as well as a specific owner’s technical
requirements.
② To enhance FDI in industrial zones in Myanmar, industrial zone developers or SPCs need not only receive
technical assistance on an ODA basis, but also the international financial support of JICA and/or JBIC to develop
infrastructure in industrial zones,
In this regard, it is necessary for companies who plan to participate in industrial zone development projects to
establish SPCs in an early stage of their project, and partner with the counterpart authorities of Kayin State. Both
players can collaborate to form PPP schemes to receive technical and financial support on an ODA basis.
Thus, PPP scheme will produce a variety of incentives that will create an environment conducive to the
introduction of foreign investment.
③ To promote the Myawaddy Industrial Zone, and become a Special Economic Zone (SEZ) of international
quality standard in the future, anxiety about the deficiency of a stable power supply in Myanmar must be resolved.
The investment in electric power generation sector is a matter of urgency. JBIC has introduced a Special Terms for
Economic Partnership (STEP) loan system for ODA focusing on the use of Japanese companies’ advantageous
technology. It is an important institutional policy that the terms of eligibility for STEP loans would be extended to
urge the general adoption of Japanese companies’ unique technology.
While there is very limited knowledge available of the topographical, meteorological, and hydrological conditions
in Myawaddy district, a combined system of solar thermal power generation with appropriately scaled hydro
power generation is worth studying and investigating.