The infrastructure and real estate industries are expanding along with the economy of Southeast Asia (SEA), which is assisting in the expansion of the construction industry. Various SEA nations, like Vietnam and Indonesia, where the building industry is expanding quickly, have very different stages of development. The construction industry in countries such as Myanmar and Cambodia is relatively backward. While recovery rates of the construction industry in SEA vary by nation, they are primarily dependent on government funding and the completion of backlogged infrastructure projects.

Companies experience material shortages and rising prices as a result of supply chain failure as the current market remains unpredictable. As economies start to grow again, there is a fear that SEA nations will not be able to meet the rising demand while also working together to address the supply chain problems brought on by the COVID-19 pandemic. Worldwide shortages of raw materials highlight how crucial innovation is to the construction sector. To avoid bottlenecks as global demand increases, businesses must now identify alternatives or innovate in the building industry. Southeast Asia Infrastructure takes a look at some of the construction activities across sectors in the SEA region…

Construction activities across sectors

Transport sector

The Cebu Provincial Government has announced that construction work will commence on the Malapascua Circumferential Road in the Philippines. The work will start on Phase 1 (eastern portion) of the road project. All relevant road right of way documents have been signed for that section. Documents for Phase 2 (western section) are yet to be signed. The 5 km road project was first announced in 2004 as a part of the Capitol’s Malapascua Development Plan which aims to improve transport infrastructure as well as accessibility around Malapascua. The Department of Transportation (DoTr) of the Philippines has awarded a $338 million contract to Japan-based Tokyu Construction and its partners for the construction of stations and tunnels for the Metro Manila Subway. The contract covers the last 3.4 km under the subway project’s first phase.

A joint venture (JV) comprising Tobishima and Philippine-based Megawide Construction, is expected to commence construction work on the stations in July 2022. The JV company will undertake engineering work, tunnel construction, and equipment installation including air conditioning and ventilation systems. The Metro Manila Subway is scheduled to be operational in January 2028. The 36 km subway will be the Philippines’ first entirely underground rail network and will connect the Valenzuela Depot to Pasay City’s NAIA Terminal 3 and the FTI station. During the first years of operation, the line is expected to serve 370,000 passengers per day. Meanwhile, the department has also announced the completion of the section of the Phase 1 viaduct of the Manila Light Rail Transit 1 (LRT 1) extension. The 11.7 km LRT 1 Cavite Extension project was delayed for almost 20 years.

It is a joint project of the DoTr, the Light Rail Transit Authority, and the Light Rail Manila Corporation. The line will cover eight stations and connect Baclaran in ParaÑaque City to Bacoor in Cavite province. Once operational, the project is expected to cut travel time between Baclaran and Bacoor to 25 minutes. It will also increase LRT 1’s capacity from 500,000 to 800,000 passengers daily.

In another development, the Government of Cambodia announced that construction has commenced on a $1.5 billion logistics and multi-purpose seaport in Kampot province. The seaport project will be financed by Kampot Logistics and Port Company Limited while construction works will be undertaken by the Shanghai Construction Group and the China Road and Bridge Corporation. The International MultiPurpose Logistics and Port Centre project will include the construction of a container terminal, a special economic zone, a free trade area, a logistics hub and an oil refinery. The 600 hectare port, which will have a depth of 15 metres, will be able to accommodate boats weighing up to 100,000 tonnes.

The project is expected to take 15 years to complete, and the work will be divided into three phases. The first phase will last from 2022 to 2025 and is expected to cost $200 million. The port’s handling capacity at the end of the first phase will be 300,000 twenty-foot equivalent units (TEUs), to be later expanded to 600,000 TEUs by 2030.Once completed, it will be the third largest port in Cambodia after the Sihanoukville Autonomous Port and the Phnom Penh Autonomous Port.

The Asian Development Bank (ADB) has approved a $175 million loan package to finance the construction of three bridges in Metro Manila in the Philippines. Work on the bridges, located on the Marikina River, commenced in 2022 and is expected to be completed by 2026. The bridges will link some of the arterial roads to the east of Metro Manila. The first bridge will span from the Marcos Highway to Saint Mary Avenue, the second bridge will connect Homeowners Drive to A. Bonifacio Avenue and the route of the third bridge will extend across Kabayani Street and Matandang Balara. All three bridges will be designed to be climate- and disaster-resilient by allowing them to withstand earthquakes as well as mitigate the risk of flood. Construction of these bridges is a part of the Government of the Philippines’ Build, Build, Build programme.

ADB has released approximately $2.3 billion in loans to the Government of the Philippines to aid in the completion of major projects such as the Malolos-Clark Railway and the EDSA Greenways Project. In another development, Tol Jagat Kerthi Bali has announced plans to commence construction work on a 97 km GilimanukMengwitoll road located in Bali, Indonesia. The road project will be executed in three phases – from Soka to Mengwi, from Pekutatan to Soka and from Gilimanuk to Pekutatan. The toll road project is expected to cost approximately $1.72 billion and will be developed by Tol Jagat Kerthi Bali under a 50-year concession deal for the link.

The Ministry of Public Works and Public Housing (PUPR) of Indonesia has commenced construction work on Phase 1 and Phase 2 of the Makassar New Port (MNP) access toll road in Indonesia. The MNP toll road will cover an area of 2.74 hectares. The works will be conducted in three stages and are expected to be completed by June 2023. The first stage will include work on the 1.2 km section of the road from section I toll road to the MNP toll road while the second stage will cover work on the 2 km stretch between section IV of the Makassar toll road and the MNP toll road. The first and second stages will be conducted simultaneously, while a stretch of the MNP connecting to the local airport will be completed in the final stage. PT WijayaKarya has been appointed as the contractor while PT Indo Koei, Nippon Koei, and PT Cipta Strada have been appointed as the joint operation supervision consultants. The project will be developed under an investment of IDR 705 billion. The MNP road is one of the key projects under the National Strategic Projects. Once completed, its service capacity is expected to increase to 900,000 TEUs by 2023.

The Ministry of Transport of Thailand will conduct a feasibility and design study for the construction of a new bridge across the Mekong river linking the country with Laos. The second Thailand-Laos Friendship Bridge linking Nong Khai with Vientiane will be constructed under the third phase of the Thai-Chinese high speed rail (HSR) project. The bridge will accommodate both rail and road transport. The design study, which is expected to cost THB 140 million, will be undertaken by the Department of Highways. These feasibility studies will take 12 months to complete. Additionally, construction of the bridge and auxiliary roads is estimated to cost around THB 4 billion, and the cost will be divided between the Thailand and Laos governments. The entire bridge project is scheduled to be completed before 2028 when the second phase of the HSR project opens for service.

Urban infrastructure sector

Construction on the long-delayed Cebu bus rapid transit (BRT) system in the Philippines is scheduled to commence in January 2023. The DOTr has already selected the winning bidder to oversee the civil works under the project’s package 1. The notice of award is expected to be released soon. Work on package 1 will cover the 2.3 km stretch between Cebu South Bus Terminal and the Cebu Provincial Capitol through Osmena Boulevard. The Cebu BRT system is a 16 km long mass transit system planned for Cebu City. The network will have 33 stations with around 176 buses deployed to serve the route. The expected ridership on the BRT is around 330,000 daily passengers. The BRT was initially meant to open to passenger traffic in 2019 but faced multiple delays due to changing design, routes, and right-ofway. DOTr expects no further delay in completing the project.

San Miguel Corporation has commenced construction work on the MRT 7 train depot in Bulacan, Philippines. The 20 hectare depot will contain essential maintenance and operations facilities for the trains. The depot will be able to accommodate 36 train sets or 108 railcars with an option for future capacity expansion. The trains will be supplied by South Korea-based Hyundai Rotem and delivery is scheduled for the end of December 2022. The MRT 7 is expected to begin partial service by the end of December 2022, with full service beginning in 2023. The line will help to relieve traffic congestion on public roadways, reduce carbon emissions from traffic congestion, increase productivity, and decentralise economic growth to benefit other provinces.

In another development, Kuala Lumpur City Hall (DBKL) has partnered with the Department of Irrigation and Drainage (DID) to construct a high capacity groundwater storage tunnel to counter the risk of flash floods in Malaysia. The storage tunnel will hold floodwater before releasing it into the river during low tide. The project is expected to take around three to five years to complete. DBKL will also undertake a three month-long feasibility study to determine the site and specification of the groundwater storage tunnel. The agency will also be responsible for building flood walls in all high-risk areas.

Further, construction work has started on the Choeung Ek wastewater treatment facility in Phnom Penh’s Meanchey district, Cambodia. The facility will be constructed on 3 hectares of land and the work is scheduled to be completed in November 2023. The cost of the project will be financed from a $20 million loan from the Government of Japan. The treatment station will employ Japanese technology and feature low power consumption, easy structural operations and minimal maintenance requirement. A 420 cubic metre per hour twin-engine pumping station will be installed. The station will be connected to over 2 km of wastewater lines. The Government of Cambodia also has plans to build a second, smaller waste treatment facility in 2025.

In another development, underground work for the Philippines’ Metro Manila Subway project has commenced as the tunnel boring machines (TBM) have been lowered at the Valenzuela depot. The project will employ about 25 TBMs. The 33 km entirely underground metro system will comprise 17 stations between Valenzuela City and Pasay City and is expected to be operational by 2027. During the first year of service, the line is expected to record around 370,000 daily passenger footfalls. The Metro Manila Subway is expected to reduce travel time between Quezon City and the Ninoy Aquino International Airport from 70 minutes to just 35 minutes. The project will be funded in part by a PhP 370.8 billion credit package from the Japan International Cooperation Agency. The Government of the Philippines will cover the remaining 24 per cent of the project cost amounting to PhP 117.7 billion.

Telecom sector

Philippines-based PLDT has commenced construction on the 9,400 km long Asia Direct Cable (ADC) between Southeast and East Asia. The work on the subsea cable network is scheduled to be completed by the end of 2023. The ADC will cover the Philippines, Singapore, Hong Kong, Japan, Vietnam, Thailand and China. The cable network will have a minimum of 200G dense wavelength division multiplexing design, allowing it to provide at least 36 Tbps of additional network capacity for the delivery of hyperscale data. The network will complement the Pangilinan Group’s three landing stations in the region that are scheduled to come online over the next three years, including the Apricot cable system. Once operational, the ADC and the Apricot cable systems will increase international network capacity from the existing 60 Tbps to over 130 Tbps.

The International Finance Corporation has extended an investment of $70 million to Communication and Renewable Energy Infrastructure Phils to finance the construction of over 600 telecom towers by 2023. The total financing package consists of a $25.5 million loan and a parallel facility of $44.5 million.The loan is expected to boost mobile network capacity in the Philippines, allowing operators to expand 4G and 5G mobile networks at affordable rates for consumers. This project is also expected to offset greenhouse gas emissions by reducing the use of diesel fuel on towers connected to the grid.

Energy sector

VinES Energy Solutions, a subsidiary of the Vingroup Joint Stock Company, and Gotion High-Tech have commenced construction work on a $275 million battery plant located in the VungAng Economic Zone in Vietnam. The factory is expected to produce around 30 million lithium-ion phosphate battery cells annually, which will be used for electric vehicle (EV) batteries and energy storage systems. Production is scheduled to commence in quarter three of 2023 and EV batteries produced will be supplied to VinFast, the EV unit of Vingroup. „