MANILA -- The Asian Development Bank will help Myanmar modernize its transportation infrastructure, such as roads and ports, seeing public-private partnerships as key to promoting projects.
The Manila-based multilateral lender will serve as an adviser assisting the Myanmar government in such matters as drawing up plans, selecting contractors and procuring funds. The arrangement will be made official at a signing ceremony in Myanmar's capital of Naypyitaw on Wednesday.
Although the ADB provides guidance for individual projects, this will be the first time it serves as a strategic and operational adviser to an entire nation's transportation sector.
The ADB's new tasks will include drafting laws concerning public-private partnerships and designing frameworks for subsidies and other incentives. The bank will devise proposals for individual projects and let both domestic and foreign companies bid on them.
Additionally, the ADB will craft fundraising schemes advantageous to both the public and private sectors, where both sides will take on proportional operational risks. The bank will also work to have the Myanmar government establish a cross-agency office that will serve as a point of contact for public-private partnerships.
One goal of the development bank is to have more private companies involved in infrastructure work. Not only will that reduce the fiscal burden on the government, it will also provide private-sector corporations with business opportunities. The ADB will take on the advising role separate from its core financing operation. The Myanmar government will choose funding sources for the infrastructure projects.
Although Myanmar is strategically located for international logistics, infrastructure development ground to a halt under the country's military rule. Major roadways, rails and waterways have lagged especially far behind. Modernization of the rail line serving Yangon, the largest city, is one of the ADB's planned priority projects. Others include the transportation network near the Thilawa industrial park, the Dawei port near Thailand, and projects upgrading transport via the Ayeyarwady River, which bisects the nation.
The bank will draw on its wealth of expertise built up through advising on projects in Sri Lanka and other places. If successful, the organization will boost its competitive advantage, differentiating itself from the China-led Asian Infrastructure Investment Bank, which is struggling to secure talent a year after its launch.
For Japanese companies, the addition of the ADB will smooth the way for entry into Myanmar's infrastructure development. The bank plans to make auctions transparent and fair, and a certain level of technical expertise will be expected from candidates to ensure quality. The absence of government cronyism and similar dealings is seen giving an advantage to compliance-driven Japanese corporations.