Transcript Slide 1

Cross-Border Infrastructure: A Toolkit
Cross Border Infrastructure:
An Introduction
Session on Planning & Policy
Rita Nangia
Asian Development Bank
The views expressed here are those of the presenter and do not necessarily reflect the views or policies
of the Asian Development Bank (ADB), or its Board of Directors, or the governments they represent.
Cross-Border Infrastructure: A Toolkit
Session Description
• The session covers four areas  Major
attributes of network infrastructure that
makes planning and public policy complex;
 Planning
and political economy aspects using case
studies of Indonesia, Thailand, Philippines and
People’s Republic of China (PRC);
 Complexity
inherent in planning for cross-border
infrastructure; and
 Estimates
of infrastructure investments.
Cross-Border Infrastructure: A Toolkit
Overview
• What do recent trends in Asia’s integration mean for
cross-border infrastructure?
• Planning for cross-border infrastructure

What is so special about infrastructure?

Why is it different?

What is needed?
• Inherent complexities of cross-border infrastructure
• Political economy and planning case studies
• The Greater Mekong Subregion
Cross-Border Infrastructure: A Toolkit
Linkages Between Trade and Infrastructure
• Trade - a major driver of economic growth and poverty
reduction in Asia
• Transport infrastructure affects overall costs and value addition

Logistics account for 20% of GDP in PRC compared to
10% in USA

It can amount to two thirds of final costs of industrial and
food production in PRC, but only 10% in USA
• Not only hard infrastructure, but how this is delivered in terms
of logistics services
Cross-Border Infrastructure: A Toolkit
What Do We Mean by Market Economy?
• Prices and quantities are set by market supply & demand

Many suppliers and many consumers

Competition leads to efficiency
• Producers maximize their profits, consumers maximize their
surplus
• Largely decentralized decisions, flexible, practical and
changeable.
• Market economy rests upon the fundamental principle of
freedom of choice for all economic agents, i.e., a consumer,
producer, or worker - accountability for own choices.
Cross-Border Infrastructure: A Toolkit
What Is Different About Infrastructure?
• Capital intensive and economies of scale
• Flows of services from capital goods
• Produces services (ultimately performance of service
market impacts on users, not provision of capital alone)
• Lumpy not incremental (difficult to match supply and
demand)
• Long-lasting (implications for finance and maintenance)
Cross-Border Infrastructure: A Toolkit
What Is Different About Infrastructure?
• Space-specific and use-specific in services provided
(high sunk costs)
• Infrastructure is political
• Source of services for final consumption and as input
to enterprise
• It is like new technology which lowers costs or
promotes market development, (or expansion when
new areas are opened)
• Finally, it is complicated - its impacts depend on other
inputs
Excludable
Non-excludable
Rival
Cross-Border Infrastructure: A Toolkit
Private
goods
Telecommunications
Common
property
Urban Bus
Fossil fuel power generation
Groundwater
Urban Roads
Rural Sanitation
(on-site disposal)
Local power distribution
Rail, airport, and port services
High-voltage transmission
Piped water supply
Surface water irrigation
Sanitary landfill
Urban sewerage
Rail, port, and airport facilities
Rural roads
Street sweeping
Traffic signaling
Interurban highways
(toll roads)
Club goods
Public goods
NonRival
Lower
Higher
Externalities
Note: Excludable means that a user can be prevented from consuming the good or service.
Rival means that consumption by one user reduces the supply available to other users.
Source: World
Development Report, 1994
Source: UNESCAP
Cross-Border Infrastructure: A Toolkit
Cross-Border Infrastructure: A Toolkit
Cross-Border Infrastructure in the GMS
Cross-Border Infrastructure: A Toolkit
The Greater
Mekong
Subregion
Land area
2.5 million km2
Population
316.8 Million
Cross-Border Infrastructure: A Toolkit
The GMS Economic Conditions
Myanmar
Yunnan & Guangxi, PRC
Land area: 677,000 km2
Land area: 624,000 km2
Population: 55.4 M
Population: 93.8 M
GDP per capita: US$ 176
GDP per capita: US$ 842
Thailand
Viet Nam
Land area: 513,000 km2
Population: 64.7 M
GDP per capita: US$ 2,727
Cambodia
Land area: 332,000 km2
Population: 83.1 M
GDP per capita: US$ 622
Lao PDR
Land area: 181,000 km2
Population: 13.8 M
GDP per capita: US$ 393
Land area: 237,000 km2
Population: 6.0 M
GDP per capita: US$ 491
Source: Beyond Borders – Regional Cooperation Strategy & Program Update, 2007-2009; Asian Development
Outlook, 2006; ADB Key Indicators, 2006; FAO/People’s Govt. of Yunnan Province; http://www.china.org.cn
Cross-Border Infrastructure: A Toolkit
GMS Economic Cooperation Program
• 1992: Cambodia, Lao PDR, Myanmar, Thailand, Vietnam
and Yunnan Province of PRC launched the GMS Economic
Cooperation Program with support from ADB. Guangxi
Zhuang Autonomous Region of PRC joined in December
2004.
• Encourages cross-border trade and investment by easing
movement of people and goods across national boundaries.
• Pursues a 3-pronged strategy to achieve their vision of a
peaceful, prosperous and more closely integrated subregion
 Fostering greater Connectivity
 Enhancing Competitiveness
 Building a greater sense of Community
Cross-Border Infrastructure: A Toolkit
GMS Economic Cooperation Program
• Confidence building
• Pragmatism and results orientation
• Building blocks:
 Initial
 Soft
focus on infrastructure
sectors: health, education, HRD, environment
 Policy
and regulatory frameworks
Cross-Border Infrastructure: A Toolkit
Strong Economic
Performance...
Econom ic Perform ance
12
GDP growth rates in %
9
6
3
0
1992
1993
1994
1995
1996
1997
1998
1999
-3
Source: Asian Development Outlook 2005 and Key Indicators, 2005
2000
2001
2002
2003
2004
Economic Performance
Cross-Border Infrastructure: A Toolkit
Openness Is Growing...
90
Trade as % of GDP
60
30
0
1992
1993 1994
1995 1996
1997 1998 1999
Source: Asian Development Outlook 2005 and Key Indicators, 2005
2000 2001
2002 2003
2004
Cross-Border Infrastructure: A Toolkit
A Vibrant Region…
• Total exports are up from about
 $36
billion in 1992 to $130 billion in 2004
• Intraregional trade expansion
 More
than 11 times in past 12 years
 Tourist
 FDI
arrivals has almost doubled to 18 million
has more than doubled
Source: Mekong Economic Review, various issues
Cross-Border Infrastructure: A Toolkit
The GMS
Experience
Cross-border
economic
corridors
Cross-Border Infrastructure: A Toolkit
The GMS
Experience
Infrastructure
Cross-Border Infrastructure: A Toolkit
The GMS
Experience
Infrastructure
Cross-Border Infrastructure: A Toolkit
The GMS
Experience
Infrastructure
Cross-Border Infrastructure: A Toolkit
Greater Mekong Subregion
Myanmar
Yunnan, PRC
Hydro: 100,000 MW
Hydro: 150,000 MW
Coal: 200-230 MT
Coal: 23,580 MT
Gas: 160 BCM
Gas: 32 BCM
Oil: 32 MT
Oil: 226 MT
Cambodia
Viet Nam
Hydro: 15,000 MW
Hydro: 30,000 MW
Gas: 42.5- 99 BCM
Coal: 32,250 MT
Oil: 7- 14 MT
Gas: 144 BCM
Oil: 82 MT
Thailand
Hydro: 12,700 MW
Coal: 2,400 MT
Gas: 943 BCM
Lao PDR
Hydro: 26,000 MW
Coal: 910 MT
Oil: 124 MT
Source: GMS Energy Strategy July 2006 Proceedings, work in progress
115 kV Line
220 kV Line
Cross-Border Infrastructure: A Toolkit
Legend: Generation Projects
1- Jinghong HPP (2013)
2- Nuozhadu HPP (2014)
3- Nam Mo HPP (2009)
4- Sekong 5 HPP (2015)
5- Sekong 4 HPP (2014)
6- Sekaman 3 HPP (2009)
7- Sekaman 1 HPP (2013)
8- Xeset 2 HPP (2008)
9- Nam Kong HPP
10- Xepian- Senamnoy HPP (2012)
11- Nam Ngum 2,3 HPP (2011-2012)
12- Lower Sre Pok HPP (2018)
13- Hongsa Lignite TPP (2013)
14- Mong Duong TPP (2009-10)
15- Quang Ninh TPP (2008-09)
16- Nghi Son (2010-2011)
500 kV Line
Hydropower plant
(HPP)
Thermal plant (TPP)
Gas Field
Energy Scene
2
1
B
14
B
15
13
16
3
11
F
F
4
5
6
M
M
8
C
B
D 10
7
9
C
12
D
Legend: Gas Fields
C- Offshore Blocks (Cambodia)
M- Yadana, Yetagun (Myanmar)
T- Malay, Pattani (Thailand)
V- Bach Ho, Rong, Dai Hung (Viet Nam)
The GMS
Experience
E
A
T
E
E
A
T
C
V
V
V
Hydropower:
333,700 mega watts
Coal:
59,340 million tons
Gas:
1,378 billion cubic meters
Oil:
478 million tons
G
G
Source: Regional Power
Trade Coordination
Committee Proceedings
Cross-Border Infrastructure: A Toolkit
Major Cross-Border Projects
Power Generation Projects
• GMS Power Transmission Project • LAO: Nam Theun 2 HPP
(CAM): ongoing ADB funded
• CAM: Offshore Gas Resource
project (target completion: 2008)
Development
• GMS Power Transmission Line
(PRC- Lao PDR-Thailand):
proposed in place by 2013
• GMS Power Interconnection
Phase II (Bansok-Pleiku):
proposed in place by 2010
• 115 kV Line (Southern Lao PDR to
CAM):
• 115 kV Line (VIE to CAM):
• CAM: Lower Sre Pok HPP
• VIE: Mong Duong TPP
• VIE: Quang Ninh TPP
• VIE: Nghi Son TPP
Cross-Border Infrastructure: A Toolkit
Key Messages
• Investment in cross-border projects and policy planning
requires coordination at multiple levels.
• Cross-border infrastructure projects are time-consuming
and skill-intensive processes.
• Retrofitting solutions is expensive.