PROJECT LOGISTICS

3 YEARS LATER

MYANMAR

� 1983 – 1984 Hydro Power Project

� 2013 2x120 MW Power Plant Projects

� J.V. with Injynn

� Injynn = marine offshore supply logistics

� The Freight = onshore project logistics

� Together = offer seamless on- and offshore services

� Project logistics

� Equipment provider

� Tug, barge in cooperation with CHL

� Air, sea, land, warehouse, customs services

OUR BACKGROUND

HISTORY - 3 PERIODS

� Under the British Empire 19th century to 1947

� Infrastructure nearly the same as London

� Vast road and railroad network

� 60+ airfields

� Independence 1948 (1962 military control) to 2011

� A few power plants (mostly hydro)

� 3 new ports

� Upgraded Yangon and Mandalay airport

� 1 highway

� 1 new capital

� Civilian nominated government to now

HISTORY - 3 PERIODS

3 YEARS LATER

What has changed since the opening up of Myanmar?

1. Legal

2. Insurance

3. Health, Safety, Environment, Social

4. Customs

5. Licenses

6. Infrastructure

7. Equipment

LEGAL

LEGAL

� Many laws are still outdated

� For many transportation and lifting issues there are no

laws existing as there was never any need for. � Classic

example is the multi-axle trailer

� The present road law is limited to the 22-wheel truck

� The max. permissible weight is presently 50.5 tons

� The weight varies from type of truck / trailer to the time of

the year

� There is no regulation about the bridges

� Bridges normally don’t carry max. payload signage

LEGAL

� Road transport permits are not regulated

� Many overlapping parts

� Consequently many players (government) involved

� Regional as well as national administration needs to get

involved

� Find your way through the local administration

� This also applies for other areas such as developing a jetty

(river or ocean), etc.

LEGAL

LEGAL

INSURANCE

INSURANCE

� Most local companies do not carry any insurance because

besides life and fire hardly any others available

� This applies to lifting, trucking and shipping

� Exception: Foreign owned vessels working in the O&G

offshore industry

� Marine cargo insurance is also new to Myanmar

� Foreign contractors are advised to buy insurance in their

own backyard

� There is hardly an option to claim from the local logistics

provider

INSURANCE

� Ask your local service provider about their insurance

coverage. They include:

� Forwarders / Logistics Companies

� Truck Operators and Crane Operators

� Warehouse and Yard Operators

� Barge and Ship Operators

� If in doubt ask to see the insurance policy / certificate

� Many insurance companies still shun Myanmar

HEALTH, SAFETY, ENVIRONMENT, SOCIAL

HEALTH, SAFETY, ENVIRONMENT, SOCIAL

� Overall very little regard for HSE&S

� This includes ports, airports, trucking, lifting, etc.

� In many places workers are wearing slippers and

traditional Myanmar sarong and no hard hats

� Exception: Private operated ports

� Operators in all fields don’t train their staff

� Environment and social aspects are largely disregarded

� There is much push from the western world for social

impacts

� Hardly any interest though in environmental impacts

HEALTH, SAFETY, ENVIRONMENT, SOCIAL

� The western world needs to be more patient and give

Myanmar more time

� We can’t expect a country that was locked away for more

than 5 decades to become overnight a global leader

CUSTOMS

� The prevailing customs procedures for Myanmar are

provided in the Sea Customs Act and Land Customs Act

� Types of duties are levied on imported goods are as

follows:

� Import duties

� Commercial taxes

� License fees

� The 1996 Version of the Harmonized System is applied

since 1st January 1996

� Generally we are on the right track. But…

CUSTOMS

� Customs clearance at the seaports is slow and inefficient

� Reason:

� Fast growing import volumes

� Brain drain = older government employees are joining the private

sector

� Customs can’t train and add manpower at the same pace

� All work is done manually

� Most shipments need import licenses

� All shipments are subject to inspection

� Generally a crackdown with a “mobile team” slows down things

further

� Online scheduled for 2016

CUSTOMS

� Temporary import / re-export still an issue

� Carnet ATA / Carnet de Passage should be adopted

� FYI: The Freight Co., has a non bribery policy and has

undergone extensive anti-bribery training!

CUSTOMS

LICENSES

� Most import shipments are subject to import license

� There are three types of trade in Myanmar

� By Sea

� By Air

� By Land

� Sea and Air are considered overseas trade

� Land = cross border trade if payment not through banks

� Under the Ministry of Commerce the Directorate of Trade

issues licenses for overseas trade

� The Dept. of Border Trade issues licenses for cross-border

trade.

LICENSES

� Only trading companies can get import license

� Exception: Foreign companies investing through Myanmar

Investment Commission (MIC)

� For non MIC supported companies only 100% Myanmar

owned companies can get an import license

� Example in our case: import of capital equipment has to

be imported through a trading company

� Licenses must be obtained in NYT = time wasting

LICENSES

INFRASTRUCTURE

� The basic infrastructure is still outdated

� Telecommunication is on its way

� Besides telecom main efforts seem to be focused on

electricity

� Road, bridges and railways do not get much coverage

� Ports are a problem because focus on Yangon and

Yangon’s environment not suitable for deep sea ports

� Other areas slated for deep sea ports (SEZ KYP and Dawei)

remain a problem

� No H/L facilities for air cargo

INFRASTRUCTURE

INFRASTRUCTURE

� Maximum permissible weight on the road

� Bridges not suitable for heavy haulage

� Road conditions particularly of rural roads

� Now adding pedestrian bridges in Yangon

� Government should establish guidelines when building

new roads and bridges

� Container ports all in Yangon

� Inland water ways had no attention for decades

� Ayeryawaddy ranks top 5 globally in carrying sediments

EQUIPMENT

EQUIPMENT

� Lots of cranes coming into the country

� Most are used for construction projects

� Availability of heavy duty trailers is mediocre especially in

the low bed segment

� Barges and LCT’s are abundantly available

� No certification and international classification though

� Generally equipment know-how and manpower training is

very questionable

� As mentioned largely no insurance

� We provided heavy lifting and transportation workshop to

government and EPC’s

EQUIPMENT

� We offer first international standard, classified and fully

insured 210’ barge

� Tug and barge are brand new and NKK classified

� 100-tons brand new crawler crane permanently on deck

� Support equipment low bed trailer to arrive end of this

year and hydraulic trailers to mobilize in the first quarter of

2015

� Hence complete range barging, trucking, lifting at the

highest international standard will be available then

SUMMARY

� Overall not much has changed

� Ports are expanded inside Yangon adding to traffic jam

� Road and bridge constructions are starting but they will

not help for heavy haulage

� Most heavy transports upcountry need a combination of

barge and trailer = added costs

� Equipment, especially cranes are coming into Yangon but

are snapped up by construction projects in town

� Lot remains to do including legislation, road, river, ports

� Private sector needs to import technology and standards

� Government push development and laws

MYANMAR 3 YEARS AND A BIT MORE

1983 - 2014