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Deeper port needed in Yangon to become a logistics hub in Asia

EUROPEAN and Japanese logistics businesses in Myanmar have called on the government to build a deep-sea port with access to the commercial capital to cater for significant volume increase in trade if the nation aspires to develop into a ompetitive import-export economy.

According to a report by the European Chamber of Commerce in Myanmar (EuroCham), the lack of port infrastructure and congestion present a significant constraint for sea trade. It called for the establishment of a deep-sea port together with a Special Economic Zone (SEZ) at the delta region in order for the country to realise its geographical advantage and become a logistics hub in Asia.



Members of the EuroCham logistics advocacy group include Maersk LineMyanmar, Santa Fe Mobility Services, Dextra Transport, Damco Logistics Myanmar, Kuehne + Nagel, Rhenus Myanmar, Royal Haskoning DHV, Myanmar DHL and CMA CGM, The Myanmar Times reported.



"The existing facilities of ports are questionable for the traders as there have been serious port congestion problems at the terminals in the past. For the time being, the current main terminals are all river terminals which means that shipping lines are unable to bring in larger-sized vessels," the report stated. It recommended that a feasibility study on the construction of the port be conducted within 12 months.



Tatsuya Ueki, head of MOL in Myanmar and chair of the logistics group under the Japan Chamber of Commerce and Industry in Myanmar (JCCM), agreed that Myanmar's economy needs a deep-sea port.



"Without a deep-sea port, a country cannot grow its economy if we take a long-term view - let's say 10 or 20 years. For the next five to 10 years, Thilawa Port (TP) will remain very important, but that has its limitations," he said.



The deep-sea port will be located in the area where Yangon River meets the Gulf of Martaban. Whether the port will be constructed on Thilawa's side or the opposite has been a subject of intense interest among investors, particularly those based in Thilawa SEZ, which is the country's only SEZ in operation.



The estimated throughput of the port depends on many variable factors, for example, market developments, infrastructure and connectivity, according to the group. Assuming all things were in place and Myanmar's markets continue to develop in a positive trend similar to its neighbours, a seaport should be planned for long-term growth.



"For Myanmar, the first deep-sea port phase can be around the 2-3 million TEU mark with options of expansion since we still have the river terminals and MITT terminal that will still play a dominant role for the foreseeable future.



"Vessel sizes are increasing due to the need to lower slots costs. The current biggest size is 21,000+ TEU and soon to reach 22,000 TEU.



"However, for Myanmar the current largest vessel size is only 1,600 TEU due to both market demand and the river limitation of draft and LOA restrictions (vessel length overall).



"So it's a very long way for Myanmar to go but we can target to have 8,000 TEU vessel size for Myanmar for the deep-sea ports for the first phase with options of accommodating larger vessel sizes if the demand of the market is there," EuroCham said.



Yangon River has a depth of 9 metres, allowing vessels of more than 1,000 TEU, whereas the delta region has a depth of 10 metres with a potential capacity for 2,000 TEU vessels. The latter is still significantly shallower than other deep-sea ports in the region, with some catering for 5,000 or even more than 10,000 TEU.
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