Preliminary Project Evaluation Sheet
JICA, Southeast Asia and Pacific Department,
Southeast Asia Division 4
1. Project nameCountry: Republic of the Union of Myanmar (Myanmar)
Project name: Yangon-Mandalay Railway Improvement Project Phase II (I)
L/A signing date: March 29, 2018
2. Project background and necessity(1) Current state of and issues in the development of the Myanmar rail
sector, and the role of this project
Myanmar's rail network totals 6,072 km in length (as of 2015) and it isentirely managed and operated by Myanma Railways (MR). Within this network,
the Yangon-Mandalay Line is a major line (approx. 620 km, double-track railway)that connects Myanmar’s largest commercial city (Yangon) with the capital of
Nay Pyi Taw and the second-largest commercial city (Mandalay). Around 40% of
the population of Myanmar lives along this route. As the Myanmar economy
develops, the number of passengers on the route is expected to grow from
163,300 per day in 2013 to 887,500 per day in 2030; freight is expected to growfrom 90,100 tons per day in 2013 to 379,900 tons per day in 2030. However,most of the major rail lines were constructed in Myanmar’s era as a Britishcolony, and the deteriorating rail facilities and equipment result in slower rail
speeds, delays, derailment accidents, and other problems. Therefore, therenewal and modernization of existing rail facilities and equipment are now
pressing issues in Myanmar in order to respond to increasing demand and toimprove transport services.
In the Myanmar National Transport Master Plan approved by the cabinet in
December 2015, the Yangon-Mandalay Railway Improvement Project Phase II(hereinafter “this project”) is established as a priority project for rapid
implementation. The current administration, launched in late March 2016, hascontinued the previous administration’s policies focusing on rail development,
and the loan contract for the second period of Phase I was signed in March2017.

(2) Japan and JICA’s collaborative policies toward the rail sector, and therole of this project
The Japanese policy on economic cooperation with Myanmar, formulated inApril 2012, includes “support for the construction of the infrastructure andorganizational systems required for sustainable growth” as an area of priority.
One specific policy to this end included in the policy is the “operationalimprovement and modernization of railroads.” Moreover, this project is inaccordance with “IV. Strengthening of transportation infrastructure to connect
urban and rural areas,” one of the priority sectors in the Japan-Myanmar
Cooperation Program announced in November 2016. This is also included in theproject list of that program. In addition, this project can be considered tocontribute to the achievement of SDGs Goal 9 (“Build resilient infrastructure”),
making it highly necessary for JICA to provide support for its implementation.
In FY 2013, JICA dispatched “rail policy advisors” to Myanmar, and in thesame year implemented the Project on Improvement of Service and Safety ofRailway in Myanmar as a form of technical cooperation. JICA is currently
conducting the Project on Improvement of Railway Service and Rolling Stock
Maintenance, which began in FY 2017. In terms of grant aid, JICA has supported
the Project for Installation of Operation Control Center System and Safety
Equipment (for railways) since FY 2013. In terms of loan assistance projects,
JICA has supported the Yangon-Mandalay Railway Improvement Project Phase I(hereinafter “Phase I”) since FY 2014, and the Yangon Circular Line Upgrading
Project (hereinafter “YCR”) since FY 2015.
(3) Other aid organizations
China provides support for rolling stock (locomotives / passenger cars)
factories, and in May 2015 it provided support to Myanma Railways for eleven200-horsepower locomotives. In November 2015, South Korea agreed toprovide aid for the purchase of 100 new passenger cars. India is also providing
aid for the procurement of rolling stock, etc.
3. Project overview(1) Objective
The objective of this project is to achieve safer high-speed rail service andbuild up capacity for passengers and cargo by improving and modernizing
the deteriorating facilities and equipment on the section of rail between
Taungoo and Mandalay, located on the existing rail route running between
Yangon and Mandalay, thereby contributing to the economic development ofMyanmar.
(2) Project site / Target area name
Bago region, Mandalay region(3) Project overview
This project entails the following improvements and modernizations, focusedon the existing rail route between Yangon and Mandalay (approx. 350 km) on thelarger double-track railway running between Yangon and Mandalay (approx. 620km).
A) Public works (track works [replacement of all rails, rail tracks, roadbeds,sleepers, and clips], replacement of bridges, and Improvement and installationof new signal & telecommunication systems)
B) Rolling stock (procurement of 180 new diesel-electric multiple units(DEMU))C) Train Monitoring System (TMS) procurementD) Track rail fastening procurementE) Power-supply constructionF) Implementation of passenger services (train ticket reservation / issuingsystem)G) Consulting services (bidding support, construction management, etc.)(4) Total project costs
207,281 million JPY (of which 171,556 million JPY is for yen loan)(5) Project implementation schedule
Scheduled for March 2018 through December 2026 (total of 106 months).
The project will be concluded once construction is concluded in December 2024.

(6) Project implementation framework
1) Borrower: The Government of the Republic of the Union of Myanmar

2) Guarantor: None
3) Project-implementing body: Myanma Railways (MR)
4) Operation / Administration / Maintenance / Management: MR has performed
construction and other work on existing lines in the past, and thus it has someexperience with operation, administration, maintenance, and management.
Additionally, there are no particular problems in terms of finances, as the central
government will allocate budget funds to MR for maintenance purposes.
(7) Collaboration and division of roles with other projects, other aidorganizations, etc.
1) Japanese support activities: None
2) Support activities by other aid organizations, etc.: None
(8) Environmental and social considerations / poverty reduction / social
development
1) Environmental and social considerations
1. Category: B
2. Basis for categorization: This project does not classify as alarge-scale project within the railroad sector according to the JICA
Guidelines for Environmental and Social Considerations (publishedApril 2010). This project has been determined to have minimal
undesirable impact on the environment, and it does not feature
characteristics that would make it likely to have an environmental
impact, nor is it located in a region vulnerable to environmental
effects as per the same guidelines.
3. Environmental permits: The Environmental Impact Assessment (EIA)
for this project was submitted to the Environment Conservation
Department (ECD) of the Ministry of Natural Resource andEnvironment Conservation (MONREC) in December 2017, and theplan is to receive approval by August 2018.
4. Pollution countermeasures: Atmospheric pollution and waterpollution expected to be generated during construction will bemitigated through the use of water sprinklers to reduce dust, as wellas the installation of drainage channels and (as necessary) gritchambers. Additionally, noise expected to be generated byconstruction will be mitigated through measures such as byconducting noisy construction that makes use of construction
machinery during the daytime rather than the nighttime. This isexpected to keep the impact of such noise to a minimum.
5. Natural environment: The areas targeted by the project are notenvironmentally vulnerable sites such as national parks, nor are they
located in the vicinity of such sites, and thus there is expected to beminimal undesirable impact on the natural environment.
6. Environmental and social: This project aims to improve existing rail
facilities and equipment, and thus there will be no new landacquisition. However, 24 unauthorized resident households and 103
such individuals will be affected, with 18 of those households and 82
of those individuals expected to be resettled. Resettlement
procedures are to be conducted as per a resettlement plan createdbased on Myanmar laws and ordinances as well as the JICA
Guidelines for Environmental and Social Considerations. No
particular opposing opinions were noted at meetings with residents(public consultations).
7. Other / monitoring: During construction, MR will monitor water quality,noise levels, etc. MR will also monitor noise, etc., during resettlement
and after opening for public use.
2) Cross-sectional items
3) Gender category: Gender Informed (Significant) – gender activity
integration project<Activity content / categorization reason>
With improvement work on station buildings, it is planned to install hygienic
toilets taking a “gender-free perspective,” in addition to gender-separated naprooms. Due to this, this project is categorized as a “project that studies /analyzes gender mainstreaming needs.”(9) Other special notes: None

4. Project outcomes(1) Quantitative outcomes1) Outcomes (Operational / effectiveness indicators)

Indicator name

Reference numbers(2017 estimates)

Target numbers(2026)[2 years after
project
completion]
85

76.6
Train operation rate (%)*
Passenger Transportation (Man-km10,190,618
2,089,247/ day)**
Freight Transportation (Ton-km /2,386,800922,486day) **Number of running trains / day*
28104
Passenger Transportation (Train
7,815
38,125km / day)**
Freight Transportation (Train km /3,2978,824day)**
13,525,493
310,123,288
Passenger Revenue (Kyat / day)**
91,560,700
245,049,315
Freight Revenue (Kyat / day)**
Time required between Taungoo
8 hours, 1 minute 4 hours, 49 minutes
and Mandalay (PasesengerExpress Train) (hours andminutes)**Time required between Taungoo
11 hours, 24
6 hours, 40
and Mandalay (Freight Train)minutesminutes(hours and minutes)***Effects measured across the entire Yangon-Mandalay route.
**Effects measured across the span of track from Taungoo to Mandalay.
(2) Qualitative outcomes
Safe train operation and invigorated distribution / logistics.
(3) Internal rate of return
Based on the assumptions below, this project’s Economic Internal Rate ofReturn (EIRR) is 16.89%. Its Financial Internal Rate of Return (FIRR) is 13.55%.
[EIRR]
Costs: Project costs (excl. tax); operational and maintenance costs
Benefits: Reduction in travel times for rail users; reduction in thenumber of automobile users
Project life: 30 years[FIRR]
Costs: Project costs (excl. tax); operational and maintenance costs
Benefits: Fare income; freight shipping income
Project life: 30 years
5. Prerequisites / External conditions(1) Prerequisites
Procurement of railroad ties, ballasts, and other facilities used on tracks iscovered by MR, and they must pay for these without delay.
(2) External conditions
None
6. Lessons from similar past projects and how those are applied to thisproject
In Phase I as well as YCR, a specific manager has been carried a lot oftasks, which has made the decision-making process very time-consuming inprocurement and other procedures. Although setting a Project Management Unit(PMU) was agreed for Phase I (I) and assigning responsible managers to eachprocurement package in the PMU was proposed for Phase I (II), the PMU does
not work well. The failure to include the management division resulted in a low
appreciation for the importance of organizational management. As a result,responsible managers were only assigned to some personnel, and nosuccessors were assigned after relevant personnel were transferred elsewhere.
For this project, the general managers of the management division, who isresponsible for personnel at MR, shall be assigned as the responsible party(supervisor) for PMU establishment. Supervisor vacancies caused by personnel
transfers shall also be avoided by assigning posts rather than individuals. In theinterest of long-term personnel development, an urban transportation policy
advisor also conducts management training for senior managers at MR (30 to 50
individuals per session).

7. Evaluation results
This project is in line with Myanmar’s development issues and Japan’s
economic cooperation policies. This project also contributes to the constructionof resilient infrastructure by improving rail transport capacity and capabilities,
and can be considered to contribute to SDGs Goal 9. It is therefore highly
necessary for JICA to provide support for the implementation of this project.
8. Future evaluation plans(1) Indicators to be used in future evaluations
As described in 4. (1) to (3).
(2) Future evaluation schedule
Two years after project completion.