Brunei Darussalam: Strengthening Infrastructure Backbone

On my birthday, 10th July 2014, the Oxford Business Group had this following update on Brunei:

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Economic Update
Brunei Darussalam strengthening infrastructure backbone 

Brunei Darussalam | 10 Jul 2014

Greater investment and an increased pace of new project launches should see Brunei Darussalam’s transport and logistics reinforced over the next few years, building on recent improvements to the Sultanate’s infrastructure.

A series of reports earlier this decade identified deficiencies in Brunei’s transport and logistics infrastructure chain, which were seen as holding back economic development and diversification. A 2011 comparative study compiled by the Singapore-based Asia Competitiveness Institute on the economic merits of the ASEAN bloc countries found Brunei had structural weaknesses within its logistics infrastructure, in particular its ports.

In addition, the World Economic Forum (WEF) ranked Brunei 57th out of 144 countries for the standard of its ports, 61st in terms of the competitiveness of its air services infrastructure in its “Global Competitiveness Report 2012-13”. It also noted that the inadequate supply of infrastructure was a major inhibiting factor in conducting business in the country.

But a steady stream of new projects is targeting some of the identified weaknesses, as well as building on existing strengths, boosting connectivity within the Sultanate and across the broader region.

The increased flow through the project pipeline was reflected in the WEF’s 2013-14 report, which found a significant improvement in two out of the three key sectors. Though the study found that road infrastructure had slipped slightly down the ratings, dropping to 35th overall, the quality of Brunei’s port infrastructure had pushed it up to 49th globally, while for aviation the climb was nearly as marked, rising to 55th.

Building links

Several years ago, the government laid out some of its infrastructure goals under the “Brunei 2035” vision , a long-term development plan aimed at diversify the country’s economy with a focus on public-private sector partnerships in the infrastructure sector. One example of projects under the initiative is Brunei’s transport master plan, which will overhaul the public transport system in a bid to develop a sustainable transport service network across rail, road and river.

Another infrastructure project being rolled out is an expansion of the Muara Port facility. The increased wharf will allow for larger container ships to berth and boost the port’s cargo handling capacity. There is also a focus on improved road connectivity between logistics hubs, including the 2.7-km bridge to link the Pulau Muara Besar port and manufacturing centre with the mainland. The Temburong Bridge and associated roadwork will connect Temburong district directly with the rest of the country.

Another mega bridge project, which has already started construction and will be the first of the bridges due to be completed in 2016, is the 607-metre Sungai Brunei Bridge which will connect Jalan Residency in Bandar with Kg Sungai Kebun in Lumapas as well as help reduce transit times between regions.

Bobby Chua, vice-chairman of building firm Swee, which last year signed a $139m joint venture contract alongside South Korea’s Daelim Industrial to build the Sungai Brunei Bridge, said the transport developments will help open up the regions, bringing with them economic expansion, tourism and trade. “Business will be generated along these corridors, showing that infrastructure projects such as these go a long way towards the sustained growth in these regions,” Chua told OBG. “The Bruneian construction sector will have no shortage of projects in the next decade,” he added.

Aviation lift-off

The aviation sector is also benefitting from the surge in infrastructure development. Despite improvements having already been felt, Brunei’s International Airport is in the final stages of further upgrades. When completed by early next year, the B$150m ($120.24m) upgrade will see the passenger handling capacity of the airport doubled to 3m a year, with a new arrivals and departure halls, luggage handling facilities and expanded parking.

Despite proposals, plans for a second runway have been put on-hold for now, which could impose restrictions on air traffic in the years to come. If the Sultanate wants to develop into a transport and logistics centre further down the road, a secondary facility may have to be developed, as has previously been flagged by government ministers.

While there has been a general improvement in Brunei’s transport and logistics infrastructure, its ratings in this category are still well short of its overall ranking, with the WEF assessing the Sultanate’s competitiveness as being 26th out of 148 countries in its latest report.

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