Japan Takes Over Yangon Rail Project from China

Myanmar, Yangon, China, Japan, rail, infrastructure

Yangon Central Station project artist view. The rail station is located east of the new rail station (round structure)

Japan’s Sumitomo Corporation will act as the financial partner for the Yangon Central Railway Station Development Project, replacing a Chinese consortium which is under investigation…

While Chinese companies have been leading in the last decade investments in the Greater Mekong Sub-region by multiplying projects and financing for large infrastructure – rail, dams and highways in Lao PDR; airports, ports, highways or hotels in Cambodia, railways and ports in Myanmar, some cracks start to appear in China’s ambitions to dominate the area.

Myanmar has been always cautious about China’s push, a feeling shared also by Vietnam. Authorities in both countries feel that they should not become too dependent of their giant neighbour- the example of Cambodia being certainly a reminder.

Myanmar for example suspended and cancelled a dam project in Kachin State back to 2011. It scaled back last year a US$5.5 billion Kyauk Pyu deep water port’s project on the western tip of Myanmar’s Rakhine state. In Yangon, regional lawmakers are voicing concern about the attribution of the new Yangon City project – a 28 km2 of land attributed to the private China Communications Construction Company. CCCC is considered the world’s largest highway and bridge design and construction company as well as Asia’s largest international contractor.

Now, the State railways company, Myanma Railways has decided to attribute the project of Yangon Central Railway Station to a Japanese company, sidelining China’s investor Sino Great Wall, according to U Ba Myint, Managing Director of Myanma Railways. Sino Great Wall is facing financial difficulties and is under investigation in China.

“Sumitomo approached us as a new investor in the Yangon Central Railway Station project while we were seeking a new partner to replace Sino Great Wall,” explained U Ba Myint to local newspapers.

artist's impression of the completed redevelopment of the Yangon Central Railway Station
Artist’s impression of the new rail station.

U Aung Thu Latt, General Manager of Myanma Railways, said the decision to choose Sumitomo came after advise from international consultancies. He added that the original terms and design of the project will remain unchanged. 

Yangon Central Railway project is a huge investment of US$2.5 billion covering not only the renovation of the station but also the complete redevelopment of the area. The 1877 Central Station –rebuilt in the 1920s- will be preserved and restored, integrating a rail museum. But the consortium will also develop around condominiums, a mall as well as hotels and offices on 257 m2 of land. The redevelopment faced local opposition, In 2016, the Yangon Heritage Trusts recommended that the land be converted into public green space and avoid high-rise towers that would block views of Shwedagon Pagoda and other historic buildings.

The Yangon Central Railway Station project will take at least eight years to complete. It is expected to link the south of Yangon to the downtown business district and bring a new dynamism to a neglected area of the former capital. The project was first open to bidding in 2015.