Accommodating Growth

Infrastructure development must keep pace with needs of increasing population-

Rapid population growth in Southeast Asia (SEA), along with accelerated urbanisation and industrialisation, has put tremendous pressure on the region’s government authorities to increase capacities and improve operational efficiencies. The urban infrastructure of each country remains primarily within the ambit of its government agencies, and keeping this in mind, most countries have launched focused long-term plans to improve the state of their infrastructure services.

Urban transport and water supply and sanitation are among the segments that have witnessed considerable development, followed by solid waste management. Southeast Asia Infrastructure presents a regional overview of each of these sectors…

Water supply and sewerage: Capacity augmentation and technology penetration

The past year has seen the completion of a number of capacity augmentation projects for meeting the requirements of the swiftly expanding customer base. These projects have created more than 44.35 million litres per day (mld) of additional treatment capacity in SEA. Water utilities and companies in the region are constantly seeking to develop new water supply sources and extend networks to keep up with demand. This has led to the approval and initiation of new water supply and sewerage projects worth more than $4.5 billion, involving a capacity addition of 3,228 mld.

New strategies for improving operational efficiencies and expanding access to freshwater resources are also being devised and adopted. Singapore and the Philippines are among the countries in the region that have made rapid progress in improving water supply services. They are undertaking several initiatives to improve water management by involving the private sector, deploying advanced technologies and introducing new measures for water conservation and wastewater management.

• Distribution and treatment capacity augmentation: The few key water and sewerage projects that were completed in 2014 focused on providing uninterrupted water supply and registering a notable reduction in the discharge of untreated wastewater. One such project was the 10 mld South Daang Hari reservoir project in Taguig City, Manila, which aimed at providing uninterrupted water supply to areas in Taguig City as well as Barangay San Martin de Porres in Parañaque City. The west zone concessionaire, Maynilad Water Services, also commissioned three new sewage treatment plants in Quezon City with a combined treatment capacity of 29,800 cubic metres (cum) per day. Another key completed project was the 4,550 cum per day ceramic membrane bioreactor plant in Singapore. Apart from these, a handful of major projects are expected to be operationalised by end-2014, including the Cebu Bulk Water Supply Project in the Philippines and two integrated wastewater treatment plants in Indonesia.

• Upcoming projects: A number of new water supply and sewerage projects were launched over the past year. Put together, they are expected to entail an investment of more than $560 million. They include Singapore’s second NEWater plant at Changi, which has a capacity of 228,000 cum per day; the Jatiluhur drinking water treatment project in Indonesia; the Ulu Tutong dam project in Brunei; and the Langat 2 water treatment plant in Malaysia. In addition to these, projects worth over $4 billion are in the pipeline or at the planning stage. One such project is the PhP 24.4 billion Bulacan bulk water supply project in the Philippines, which is expected to commence in early 2016. Other projects include the southern Bali water supply project in Indonesia; the Song Duong water supply facility in Vietnam; and the Deep Tunnel Sewerage System Phase 2 in Singapore.

• Focus on NRW reduction strategies: Currently, non-revenue water (NRW) is as high as 30–40 per cent of the water supply in most SEA countries. Such large amounts of NRW affect consumers’ water supply and result in revenue losses for service providers. Hence, water utilities are taking several measures to lower NRW levels. These include establishing district metered areas (DMAs) to manage water distribution networks, replacing pipelines to plug leakages, and mapping assets and underground utilities.

Singapore, Manila, Bangkok, Penang and Kuala Lumpur are among the cities that are taking action with a view to reducing water losses. A few utilities have adopted advanced IT solutions to monitor the distribution system and curb these losses. For instance, the Saigon Water Corporation established 119 DMAs and line meter assemblies to reduce the NRW component in its distribution network. The assistance of major private companies is also being sought for the purpose of adopting some of their best practices. The Yangon City government has signed an MoU with the Manila Water Company (MWC) and the Mitsubishi Corporation for an NRW reduction project.

• Development of bulk water supply projects: The provision of bulk water supply has gathered momentum over the past few years, with many water districts entering into innovative ventures with private players. Countries like Vietnam, the Philippines and Indonesia have been at the forefront of implementing bulk water supply projects to cater to the drinking water requirements of the population in the long term. The Cebu Bulk water supply project in the Philippines, which involves the treatment and supply of 35 mld of water to Cebu province, is expected to be completed by end-2014. Two more bulk water supply projects have also been sanctioned for Davao City and Bohol province in the Philippines. Another major project in the pipeline is the previously mentioned PhP 24.4 billion Bulacan bulk water supply project.

• Use of information and communication technology to enhance access and service delivery: Water supply utilities and companies have undertaken several innovative initiatives to upgrade their information systems, enhance transparency, and improve service delivery. Water utilities such as MWC, Maynilad Water Services and the Phnom Penh Water Supply Authority have launched web-based bill payment systems to reduce customer servicing costs and improve customer satisfaction. In October 2014, the Metropolitan Waterworks Authority, Thailand, launched a credit card payment service to allow customers to make payments through the Android and iOS platforms of their smartphones and tablets.

Earlier, in February 2014, Maynilad Water Services implemented the SAP Fiori system to simplify user experience and improve employee productivity. It has streamlined Maynilad’s business processes and improved employee productivity by providing easy access to key business functions.

Solid waste management: Waste-to-energy and recycling facilities gaining more attention

Factors like rapid urbanisation, higher disposable incomes and changing lifestyles have led to a perceptible increase in the quantity of waste generated over the years. However, the addition in the collection, transportation and treatment infrastructure has not been up to par, implying a widening gap between generation and treatment. Only Singapore and a few metropolitan cities in Indonesia, Malaysia and Thailand have waste collection rates of over 80 per cent. In most cities in the region, collection services have not been extended to unauthorised and remote settlements, which are either inaccessible or lack the capacity to pay for these services.

• Increasing waste generation characterised by changing lifestyle and consumption patterns: The region generates over 90 million tonnes per annum (mtpa) of waste. Among the SEA countries, Singapore has the highest per capita rate of waste generation (1.3 kg per capita per day), followed by Malaysia (1.25 kg per capita per day). Other countries with high per capita rates of waste generation include Indonesia (0.76 kg per capita per day) and Vietnam (0.7 kg per capita per day).

The nature and characteristics of waste generated by the region’s large urban centres differ significantly. About 55 per cent of the waste generated in Singapore comprises construction debris, ferrous metals and paper or cardboard. On the other hand, residential sources contribute the highest portion of the solid waste generated in Malaysia. In terms of material composition, the waste generated by the domestic segment comprises food waste, organics and mixed plastic.

• Energy-producing waste treatment projects slowly gaining acceptance: The region produces over 230 mtpa of biomass, which has the potential to generate 16 GW–19 GW of power. SEA has a treatment capacity of over 20,000 tonnes per day (tpd) across its major cities. A number of waste-to-energy (WtE) facilities have been set up in Singapore, Thailand, Indonesia and the Philippines, which collectively generate over 2,760 MWh of electricity per day. In addition, over 2,700 tpd of capacity is expected to become available over the next one or two years. The upcoming projects include the 1,500 tpd Marunda WtE facility in Indonesia; a $50 million biomethane digestion plant in the Philippines; and two fuel cell system-based gasification plants in Thailand.

• Advanced treatment technologies deployed: Incineration is the most commonly used technology for waste treatment in the region. At present, mass burning systems and refuse-derived fuel (RDF) systems are the two approaches that are used to produce energy through incineration. Singapore has led the way by setting up four incineration plants with a combined capacity of 7,900 tpd. Together, these facilities produce over 2,688 MWh of electricity per day. Indonesia and Thailand are also using incineration technology to treat solid waste. Another method of treating waste through incineration is by converting it into RDF but there are only a limited number of RDF plants for converting waste into alternative fuels.

While the incineration process dominates the WtE market, the anaerobic digestion process is also being used extensively. Bantar Gebang in Indonesia uses the sanitary landfill process with gasification landfill-anaerobic digestion technology to treat waste. A WtE biogas plant has also been set up at the Quezon City integrated disposal facility in the Philippines to treat solid waste dumped at the Payatas landfill site.

• Effective policies for encouraging waste recycling practices: Most governments in the region have come to recognise the importance of formulating and implementing prudent policies to encourage private investment in setting up waste treatment facilities. They have begun to take action to increase waste recycling rates. In Singapore, the government has introduced a national recycling programme and is providing incentives to large hotels, malls and companies, encouraging them to recycle waste. The Thailand government has run a number of campaigns to promote community participation in WtE projects, waste sorting and recycling, and also spread awareness about the benefits of these activities. It has also established the Energy Efficiency Revolving Fund to promote energy conservation by providing financial assistance to operators for setting up WtE facilities.

Urban transport: New projects and increased investments

The urban transport sector in SEA has been experiencing remarkable growth over the past few years, with cities such as Singapore and Bangkok leading the way. With more and more policies and plans under way, development has also been on an upswing in cities like Jakarta and Manila. Vietnamese cities like Hanoi and Ho Chi Minh City, which have lagged behind in terms of public transport, have robust and adequate plans in place and have secured significant financing from international institutions.

At present, SEA’s urban transport network spans over 650 km, of which metro rail accounts for 29 per cent, light rail transit (LRT) systems 22.2 per cent, bus rapid transit (BRT) systems about 34.1 per cent, airport rail links 13.1 per cent, and monorail systems only about 1.6 per cent.

• Policy and fiscal measures: At present, there is no pan-ASEAN policy framework for urban transport development. Most of the countries have a central authority that regulates the development of transport infrastructure, with tax rebates and duty waivers being the most popular policy measures to promote the use of low-emission vehicles. Singapore, Indonesia, Thailand and Malaysia have instituted comprehensive policies to promote sustainable transport solutions. Singapore has agreed to extend rebates for raising the emission standards of petrol vehicles to Euro IV levels. Similarly, low-cost green cars in Indonesia are exempt from luxury tax.

• Restructuring of transport authorities’ ownership patterns: SEA-based transport authorities are focusing on restructuring or changing their ownership patterns to boost efficiency. In August 2014, the Philippines Department of Transportation and Communications (DOTC) announced its plans to completely take over the Manila Metro Rail Transit Line 3 (MRT-3) in 2016 via an equity value buyout. After the buyout, DOTC plans to upgrade MRT-3 with an investment of PhP 6.8 billion. This will include the procurement of 48 light rail vehicles. Earlier, in 2013, Malaysia-based RapidKL had unveiled a major corporate restructuring endeavour to boost efficiency.

• Increased investment plans: The SEA countries have embarked on an ambitious metro rail expansion programme entailing an investment of over $33 billion by 2020. Under the Klang Valley Land Public Transport Master Plan, Malaysia plans to invest MYR 160 billion in railway development between now and 2020, which is equivalent to MYR 23 billion a year. Under Myanmar’s National Transport Master Plan outlined by the Japan International Cooperation Agency (JICA), an investment of 1.166 trillion yen has been planned for improving the basic transport infrastructure (including aviation, roads, rail, harbours and inland water transport) from 2014 to 2020. Meanwhile, the JICA Transport Infrastructure Development for Metro Manila and its Surrounding Areas Plan supports the integration of urban mass transit networks in Metro Manila, as well as the provision of traffic management systems. Under the Singapore Land Transport Authority’s Bus Service Enhancement Programme, 2012 (which was expanded in March 2014), the government will provide S$1.1 billion for procuring 1,000 new buses and adding 80 new bus services between 2012 and 2016.

• New projects: The expansion of existing networks and the creation of cost-effective transport infrastructure, such as LRT and BRT projects, have taken centre stage over the past year. Bangkok is expanding its SkyTrain services by adding about 16 km to its network and  has also identified five new routes to be developed. Similarly, Kuala Lumpur will extend its LRT network by 34 km. Manila is also considering the implementation of an LRT project. The BRT system has been prioritised as a low-cost, low-carbon transport solution in the SEA region. While BRT systems are operational only in Jakarta and Bangkok at present, plans are under way to implement them in the Philippines and Malaysia as well.

Big-ticket projects like the metro are also being implemented and expanded. Currently, metro projects are operational in Bangkok, Kuala Lumpur, Manila and Singapore. The operational metro network in the region is projected to increase to over 770 km by 2020 through the expansion of the existing system and the development of new projects in Jakarta, Ho Chi Minh City and Hanoi.

• Technology integration and AFC: The region has seen significant development in technology deployment to manage traffic and collect fares. While Singapore has led the way with the active use of a vehicle quota system, an electronic road pricing mechanism, and a green link determining system to manage traffic, Bangkok and Jakarta have also launched intelligent transport systems to streamline traffic flows. Singapore has also led the way for automatic fare collection (AFC) methods by evolving from a single-mode to multimode ticketing system, and then from a multi-purpose, single-issuer card system to a multi-purpose, multi-issuer system. Other cities such as Bangkok, Kuala Lumpur and Jakarta have also deployed AFC.

• Future opportunities: According to Southeast Asia Infrastructure Research, around 27 key urban transport projects entailing investments of over $40 billion have been planned for the major SEA countries. Of these, four projects worth over $1.8 billion are at the bidding stage and are likely to be awarded in the near to medium term. Meanwhile, feasibility studies worth $8.52 billion for five projects are currently ongoing and 13 projects worth over $28.21 billion have been proposed. The remaining five projects are at the planning or preliminary stage.