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October 14, 2019

MoP&F will use Dutch loans for Pyigyidagun Tsp water supply, says Deputy Minister

Photo shows the map of Pyigyidagun Tsp water supply project area in Talingyi Village, Amarapura Township. Photo: MNA

A project that will provide 7 million gallons of water per day to the 70 per cent of Pyigyidagun Township, Mandalay Region, that are not connected to a water supply system, will be implemented using loans from Dutch based Netherlands Development Finance Company (FMO) and ING Bank and financial support from the Netherlands government, said U Maung Maung Win, Deputy Minister for Planning and Finance.
The Deputy Minister made the remark while explaining the directive sent by the President concerning the procurement of Euro 29.96 million from the two Dutch banks, during the eleventh-day meeting of the 12th regular session of the Second Pyidaungsu Hluttaw yesterday.

Outline of the project
The Deputy Minister said the project will be conducted in two phases. The first phase will see the construction of a water purification plant in TalinGyi Village, Amarapura Township, which will draw in water from Dokhtawaddy River.
This will then be connected to a water pumping station and a reservoir with a 1 million-gallon capacity, both to be constructed in Pyigyidagun Township, said the Deputy Minister, adding that the water pipeline will measure 13 kilometres long and 630 millimetres in diameter.
The Deputy Minister said the rest of the project will focus on constructing the primary water distribution pipeline and its branches, district meter area zones to reduce wastage, connecting pipelines into houses, installing 20,000 water meters and 100 fire hydrants.

Costs & timeframe
The Deputy Minister said the project is estimated to cost Euro 59.92 million and will be implemented in two 50 per cent phases. He said the first part of the phase will be funded by the loan from the FMO and ING Bank and the second phase funded by a Euro 29.96 million grant from the Netherlands government.
The loan will have a three-year grace period with the interest fees at Euro 0.707 million per year. After that, repayment must be made within ten years at a rate of 2.36 per cent interest per year (Euro 3.7 million), said the Deputy Minister.
He said the upfront fee will be 0.6 per cent of the loan, the promissory fee will be 0.4 per cent of the remaining amount, and the facility agent fee will be Euro 15,000 per year. Furthermore, calculations show the grant element comes in at 59 per cent and is thus a concessional loan, explained the Deputy Minister.
The Deputy Minister said a feasibility study was conducted from 12 July to 15 November 2018 by Ballast Nedam, a Dutch-based construction and engineering company, and Royal Haskoning DHV, an engineering consultancy firm headquartered in the Netherlands.
He said the findings were submitted to the Mandalay City Development Committee on 29 November of the same year. He said the project is targeted to be complete by 2021 and 1.5 per cent of the project funds (Euro 0.9 million) will be used for consultant fees.

Projected outcome
The Deputy Minister said the project will provide safe drinking water to over 200,000 people in Pyigyidagun Township around the clock once completed. In addition, it will also provide water to factories in industrial zones 1, 2 and 3, workshops and three villages near the project’s water purification station.
The Deputy Minister said having access to a sufficient supply of safe drinking water is one of the basic requirements for upgrading Mandalay into a smart city. He said this will reduce the extraction of underground water from 85 to 70 per cent.
The water supply system in Pyigyidagun Township was first initiated in 2018 with a Yen 1.79 billion from JICA but it is currently only capable of supplying water to 30 per cent of the population. —Ko Min, Mar Mar Soe
(Translated by Zaw Htet Oo)

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