VZCZCXYZ0000
RR RUEHWEB
DE RUEHBD #0247 2890740
ZNR UUUUU ZZH
R 160740Z OCT 09
FM AMEMBASSY BANDAR SERI BEGAWAN
TO RUEHC/SECSTATE WASHDC 4675
INFO RUCPDOC/USDOC WASHDC
UNCLAS BANDAR SERI BEGAWAN 000247
SIPDIS
STATE PASS USTR WASHDC
E.O. 12958: N/A
TAGS: ETRD ECON BX
SUBJECT: BRUNEI ECONOMIC DEVELOPMENT BOARD UPDATES DIPLOMATS ON
ECONOMIC DIVERSIFICATION PROGRESS
SUMMARY
-------
1.(SBU) Ambassador Todd recently attended a briefing for members of
the Diplomatic Corps held by the Brunei Economic Development Board
(BEDB). The briefing was to update Heads of Missions on the
continued progress made with BEDB's projects, and provide new Heads
of Missions with information on Brunei's economy and the initiatives
that the BEDB is undertaking towards economic development. The
overall presentation, while impressive on paper, still lacks the
long term roadmap for real economic development so critical to
Brunei's advancement beyond the oil and gas industries. End Summary.
ECONOMIC DIVERSIFICATION PROGRESS
---------------------------------
2.(SBU) In his presentation "Opportunities in Brunei Darussalam",
BEDB's CEO, Vincent Cheong, updated the diplomatic corps on the
current status of BEDB's key initiatives:
* Sungai Liang (SPARK) petrochemical hub
Methanol Export Facility for Brunei Methanol Company is currently
under construction, with plant operations expected to commence in
2010
* Pulau Muara Besar (PMB) deepwater port, logistics and
manufacturing hub project
Master plan for the development of PMB deepwater port is expected to
be submitted by Surbana-GMAPS (Singapore) for approval in the year.
A tender for dredging, reclamation, bridge and infrastructure works
will be called for in 2010, with port operations expected to begin
in 2012. PetroBru Sdn Bhd (Brunei company with Malaysian TRC Synergy
Bhd holding 26% stake) has completed a feasibility study on building
a refinery on PMB, with a proposed start-up in 2014 at a cost of
US$4.3 billion.
* iCenter ICT knowledge based enterprises
Phase 2 of Anggerek Desa Tech Park knowledge hub is ongoing.
Construction of the knowledge hub is forecast to be completed by
2010.
* property and infrastructure projects
With the implementation of the Strata Act Chapter 189 which allows
foreign investment in high rise buildings, BEDB is offering new
opportunites for investor takeowver and refurbishment for leasing or
renting of 9 blocks (242 units) of the Ong Sum Ping Apartments
(formerly 1999 SEA Games/2000 APEC Village).
The construction of 2000 houses for the National Housing Scheme is
ongoing and expected to be completed in 2011 as scheduled. Tenders
for an additional 4000-houses project is currently under evaluation
with an award to be announced before the end of the year.
Tenders for building an 18.6km dual carriageway in the main
throughfare between the capital city of Bandar Seri Begawan and the
oil town of Seria is under evaluation.
BEDB's waste management projects include ongoing rehabilitation of
the existing Sg. Akar dumpsite, building a transfer station (tenders
are being evaluated), and a new modern engineered landfill to be
built in Sg. Paku. The new landfill project is being tendered with
an award to be announced in the year. A PPP for energy efficient
waste management system is a potential future development for BEDB.
Q WITH DIPLOMATIC CORPS
-------------------------
3.(SBU) The highlight of the briefing was a discussion in which a
number of key issues and suggestions were raised by the diplomats.
Ambassador Todd specifically asked for updates on the development of
clear and transparent guidelines for investors on existing
procedures to improve "the ease of doing business in Brunei"; and,
the development of consistent procurement rules across government
agencies and ministries. Other issues discussed included the BEDB's
strategy for improving the ease of doing business in Brunei, as well
as the importance of incentives in shaping the nation's future
direction.
COMMENTS
--------
4. (SBU) While the list of projects and timelines above appear to be
extensive and impressive, Ambassador Todd found the overall lack of
any master strategic plan highly concerning. It appears BEDB is
focused on a series of one-off projects and when questioned, Vincent
Cheong admitted there is not any roadmap in place for real economic
development. Despite efforts to streamline procurement and
contracting systems within BEDB, they meet a steady stream of
resistance and roadblocks from other ministries who perceive BEDB as
encroaching on their portfolios without the respective expertise
needed to provide any more value than themselves. The ability to do
business in Brunei as either a westerner or American business entity
is still an uphill battle at best and no sign of improvement on the
horizon.
TODD