Despite the economic chaos sweeping south-east Asia, certain large rail and power projects seen as vital to the region’s recovery look set to go ahead.
Projects already given the green light include an extension to Singapore’s mass transit system, while the Indian government has approved projects worth £1.25bn, as Indian Railways continues work on standardising its gauge.
China has started work on a £385m, 543km line to link the southern island of Hainan to the national system. It is the latest of nine rail projects announced by China this year. In September, the Asian Development Bank agreed to finance 37% of the £233m needed to build a 121km rail line to Guizfiou.
In Taiwan, one of the least affected South-east Asian economies, an estimated £16bn will be spent upgrading the route from the capital to Kaohsiung.
In power generation, the good news is more limited. The Singapore government has confirmed it is to go ahead with tenders for its £1.25bn Tuas gas-fired station. Taipower, the generator, plans to expand into telecommunications.
In the rest of south-east Asia, the sector has been severely hit. Independent power producers face difficulties raising funds on the domestic and international markets, with domestic and industrial power consumption falling.
Six of Thailand’s independent power companies have asked for government permission to postpone projects for three years. In Malaysia, Tenaga Nasional has shelved plans for new stations until domestic demand rises.
South Korea’s industrial electricity use fell another 7% in July, compared with the same month last year. This was the seventh consecutive monthly fall, and all further power expansion has been abandoned.
To improve the country’s economy, finance and economy minister Lee Kyu Sung called, somewhat optimistically, on Asian nations to make bilateral agreements for their export-import banks to provide a guarantee service for import financing.
The Philippines has been less badly hit by recession than many of its neighbours, having accepted International Monetary Fund advice to streamline its economy two years ago.
Its National Power Corporation has been partially privatised by hiving off thermal generation activities. Hydropower remains in state control, but further privatisation is expected.
More generally, the regional crisis has reduced the Asian multinationals’ ability to invest outside their home base.
These companies have lost value on their assets, face an increased debt burden on foreign loans, while profitability has fallen because of lower demand.