Sky International, a Korean logistics company, has plans to build Myanmar’s first cable car system as the Southeast Asian country seeks to further develop its infrastructure, transportation and desirability as a tourist destination.
A joint venture was formed between Sky International and Asia International Fisheries, a business in Myanmar, to create Sky Asia.
The new venture, of which 80% of it is owned by Sky International, won a 50-year contract from the Myanmar Investment Commission (MIC) in December of 2014. It has since laid out plans to create a cable car project worth US$20 million.
“The cable car will give easier access to Kyaiktiyo Pagoda, better known as the golden rock, located at the summit of the 1,100-metre high mountain,” said Yoo Sun-ha, Sky Asia’s CEO.
“The cable car construction is not a mega-investment project, but it is a landmark deal for Korea, considering the difficulties in getting approval from MIC,” explained Yoo. Sky Asia is one of only two foreign companies that got approval from Myanmar’s investment agency last year.
Sanctions by the United States and the European Union were lifted following Myanmar’s transition from being a military dictatorship to forming a democratically elected government. Subsequently, foreign investment has poured into Myanmar over the past few years.
However, Myanmar’s government still screens and manually approves all proposals made by foreign investors. There is a relatively low approval rate, meaning that foreign companies have had problems investing in Myanmar, and the country itself has some difficulties attracting capital.
Officials have been known to play favorites, and knowing the right people may mean the difference between acceptance and rejection.
“The secret behind winning the government-backed bid was long-term and trust-based relationship with the local community,” said Yoo.
South Korea is the sixth largest trade partner and fourth largest investor in Myanmar. Total trade was valued at over US$3 billion in 2014, while total investment was worth over US$500 million.