By THOMAS KEAN | FRONTIER
YANGON – The Ministry of Construction’s proposal for a 47.5-kilometre elevated ring road in Yangon could require as much as US$1.5 billion in private investment, sources have told Frontier.
In January the ministry unveiled plans to conduct a tender for a 20.5 kilometre elevated highway but last week announced that the project had been expanded to a four-lane elevated ring road.
Sources have put the likely cost of the highway at $20 million to $30 million per kilometre, depending on the number of exits and other technical factors, for a total price tag of between $1 billion and $1.5 billion.
When the 20.5km project was announced in January the cost was estimated at $350 million to $400 million.
On May 18, the ministry invited expressions of interest from local or international companies “interested in designing. engineering, financing, constructing, operating and maintaining” the toll road through a long-term public-private partnership concession agreement.
The EOI will be followed by a tender, most likely at the end of the year.
“The EOI is a first step in that process as it allows the Ministry of Construction to gauge market interest in the project,” said Mr Vikram Kumar, country manager for Myanmar at the International Finance Corporation, which is the ministry’s lead transaction adviser on the project.
The project could be split into multiple sections and tenders to speed up the construction process. The IFC originally said it expected the winning bidder to be selected in early 2019 and the road would be built over two to three years.
“The timeline for the tender and construction will be determined once a decision is taken on whether to divide the project into multiple sections and/or multiple tenders,” Kumar said.
He said the project would be structured in line with international best practice in order to attract qualified investors.
“The expressway project will facilitate millions of dollars of private investment in Yangon’s road infrastructure, helping reduce the capital investment burden on the government.”
The elevated toll road is expected to connect downtown Yangon, Yangon Port, Yangon International Airport, Mingalardon Industrial Park and the Yangon-Mandalay Expressway.
Kumar said it would significantly improve connectivity and mobility in inner Yangon and be “a catalyst for growth and economic opportunities”.