US-ASEAN Business Council 2017 Business Mission to the 23 rd ASEAN Transport Ministers Meeting

Transcription

1 US-ASEAN Business Council 2017 Business Mission to the 23 rd ASEAN Transport Ministers Meeting October 2017 Marina Bay Sands Convention Centre, Singapore Mission Report and Notes of Meetings Overview The US-ASEAN Business Council held its second business mission to the ASEAN Transport Ministers Meeting on October in Singapore. The Council s delegation of nine leading U.S. companies was led by Marc Mealy, Vice President- Policy of the Council. The business mission delegation included representatives from eight Council member companies: 3M, Autodesk, Bechtel, Caterpillar, FedEx, Harris Corporation, Uber and UPS: 1. Joe Liu, Vice President, Southeast Asia Region 2. Jannik Broemsoee Termansen, Director, Asia Government Affairs and Markets 3. Nirut Kunnawat, Government Affairs and Markets Director 4. Daniel Green, APAC Director of Government Affairs 5. Ailie MacAdam, General Manager and Global Sector Lead, Rail 6. Michael Patterson, Manager of Infrastructure Marketing and Strategy 7. Jeffrey Hardee, Executive Director, Government & Corporate Affairs Asia Pacific, Singapore Country Manager 8. Budi Irianto, Director, Government and Corporate Affairs 9. Geoffrey C. Siebengartner, Vice President, International Affairs 10. Jackson Pho, Managing Director, Global Business Development, Asia Pacific Region 11. John Shopf, Asia Pacific Global Business Development Manager 12. Emilie Potvin, Head of Public Policy, Southeast Asia 13. Tricia Frank, Senior Public Policy Associate, Singapore 14. Shiumei Lin, Vice President, Public Affairs, Asia Pacific Region 15. Kim Le Thi Ngoc, Public Affairs Lead for North Asia and APAC Partnerships 16. Fatimah Zahrah Alsagoff, Public Affairs Lead for Southeast Asia, Australia & New Zealand The delegation focused on the following overarching themes during the mission: Updates and perspectives from each ASEAN Government on the top transport (land, aviation, maritime) infrastructure projects as prioritized by each country. Promoting favourable infrastructure financing environment Promoting sustainability in development Promoting fair government procurement practices 1

2 Encouraging the institution of life cycle cost assessment in government procurement decisions Discourage used equipment Recognize remanufactured products Promoting the value of using technology in the design and construction of hard infrastructure projects Climate change and disaster resilience Meetings The delegation also conducted individual bilateral meetings with H.E. Mr. Sun Chanthol, Minister of Public Works and Transport, Cambodia; H.E. Mr. Budi Karya Sumadi, Minister of Transport, Indonesia; H.E. U Win Khant, Permanent Secretary, Ministry of Transportation & Communications, Myanmar; H.E. Dato Sri Liow Tiong Lai, Minister of Transport, Malaysia; and H.E. Mr. Arthur Tugade, Secretary of Transportation, Philippines. Besides these meetings, the Council also hosted the ten ASEAN Ministers of Transport, Senior Transport Officials and ASEAN Secretariat to a working luncheon. The discussion paper for the luncheon can be reviewed in Appendix 1. A brief synopsis from the meetings are outlined below. Wednesday, 11 October: Bilateral Meeting with Malaysia, Minister of Transport, H.E. Dato Sri Liow Tiong Lai Opening Remarks by Marc Mealy, Vice President Policy, USABC Honoured that Malaysia is keen to engage with the US, and is optimistic in light of President of the United States of America, Donald J. Trump, recently hosting the Prime Minister of Malaysia, Najib Razak, at the White House to strengthen ties USABC has a full committee focused on infrastructure, and highlighted that such business missions offer a good opportunity for both sides to sit down and highlight current areas of interest The companies at the table as part of the USABC delegation offer the full value chain for transport infrastructure ecosystems, as well as utilizing infocommunications technology for design, construction, services to synergize, execute and finance infrastructure projects Thank, invite colleagues to introduce themselves formally o Minister remarked that 3M has been in Malaysia for 50 years, Caterpillar since 1970 H.E. Dato Sri Liow Tiong Lai, Minister of Transport, Malaysia Expressed his appreciation for the good bilateral relations with the US, and the US strong support for Malaysia and its projects Notes that while Malaysia has only recently been forging ties with China; US and the EU remain a strong priority for Malaysia 2

3 Looks forward to the inspiration and ideas that will be brought on by the USABC delegation in this bilateral Marc Mealy, Vice President Policy, USABC Thanked the Minister and his delegation for taking the time to meet with USABC Reiterated that PM Najib s message to the American business community was that Malaysia wants to work more with the US private sector, with the recent signing of a Memorandum of Understanding (MOU) between Malaysia Airlines Berhad and The Boeing Company One main update in Malaysia s infrastructure scene is the development of the digital free trade zone (DFTZ) From a transportation ecosystem point of view, this DFTZ represents a new hub and initiative for the country Invites 3M and Bechtel to present their interventions 3M 3M has a keen focus on road safety and infrastructure, and has been working with governments for over 75 years Had recently signed an MoU with Malaysian Institute of Road Safety Research (MIROS) Keen on identifying PPPs and projects of unique value for both parties Enquired about Malaysia s road safety plan, because they are aware of a target set on the amount of accidents that the government would like to reduce on Regarding vehicle marking regulations, 3M understands that the regulation has been inactive for the side markings on vehicles and there has not been an announcement of enforcement thus far. The company is keen to know details of progress on this issue, and are willing to share their knowledge with the Malaysian government on best practices (e.g. size of markings based on vehicles) and efficient regulations Follow up response from Malaysia: Agreed that introducing the side marking on vehicles is compulsory. However there has been a temporary delay because of stock restraints. An issue here is that 3M engages with an agent, which adds costs and time, as opposed to their competitors. 3M Have just checked with their Malaysia branch, and compliance issues have all been resolved. Thanked the Minister and appreciates their support in this area. Bechtel Introduced Bechtel as a construction company, with extensive international expertise in transportation (rail, aviation, ports). Gave a rundown of their 3

4 projects, covers spectrum from customers to management, all the way to commission Expressed interest in Kuala Lumpur Singapore High Speed Rail (HSR) project Added that Bechtel has had an office in Kuala Lumpur for 22 years, and is keen to be more active in the country Follow up response from Malaysia: There definitely are opportunities with the KL-SG HSR project, with the Southern Track construction in the pipelines, and they welcome Bechtel s participation Apart from SG KL, there are big infrastructure projects coming up in 5 years that Bechtel might have interests in, and is happy to follow up with them Enquired about their office in KL Uber Commended Malaysia on their national day video Shared that in their 4 years experience, working with Malaysia on their ridesharing regulation framework along with JPJ has been incredible. The reception of riders and drivers are also very encouraging o When talk to government across ASEAN, they do ask which country is the most progressive and forward thinking, and Uber believes its Malaysia Trend in the region has been to think holistically about ride sharing Enquired if there is a way to make licencing easier and more flexible for their drivers, because most of them are part time and they drive for supplementary income Follow up response from Malaysia: The government remains supportive and accommodating of ride sharing technologies, despite protests that have happened At the same time, the government is also finding ways on how to meet taxi drivers needs as well, perhaps by even getting them to join Uber With licencing, they seek Uber s understanding that there are pre-existing laws in the country. Taxis need to obtain commercial licence, while Uber does not. They should try and create an equal platform for both, while ultimately making things easier. o In Malaysia, the drivers are taken care by one department, while commercial vehicles are under another department. The Minister is now empowering the law under his ministry, to create an amalgamation of these departments to get the licences easily Drivers still have to go through medical tests, and there is still a 3-year testing for cars Asks for them to always write to the ministers regarding their areas of concern 4

5 UPS In relation to digital free trade zone: UPS flies in aircraft from Shenzhen to KL every day, through KLIA. Requested for the Minister to share more information on Malaysia s plan for this DFTZ, and the overall plan for air cargo in this area Asked if only e-commerce will be coming into DFTZ Follow up response from Malaysia: Assured that Malaysia welcomes Amazon, UPS, FedEx etc. to Aeropolis (Malaysia Digital Free Trade Zone) KLIA has 3 runways, and more than 400 acres of air site connectivity. Malaysia s chairman of logistic transports is determined to transform KLIA into a logistic hub, to complement Port Klang Ecommerce is a good way to strengthen internet speed, customs, for seamless transactions DFTZ o Ministry of Transport, Ministry of Commerce, Ministry of Customs, are all working together as a one stop agency to develop the DFTZ and attract more companies o The DFTZ is not exclusive for ecommerce, but ecommerce will get special trade taxes. They want to attract more ecommerce companies, more air cargo o Jack Ma promised the PM to have more transhipments coming to KLIA, not just pulling them out of Malaysia. Together they are planning to launch the DFTZ, invite 1500 SMEs to be listed on Alibaba, and open them to the worldwide market o Target is to deliver ecommerce materials within 72 hours o More details in November FedEx Had just opened a new combined office in Malaysia Air and road networks are crucial for them, and they are pleased to hear about the efforts by Malaysia on national programs Physical infrastructure and customs programmes are key to streamlining trade Considering Malaysia s intermodal thinking, from sea to road to air, FedEx feels ASEAN has a great opportunity to engage in cross border commerce via road networks. Would like to know to what extent has the Ministry been considering this, especially in Malaysia with KLIA Hub and access to the South in Singapore, and up north to the rest of ASEAN Interested to hear any updates on the ASEAN Customs Transit Systems that was discussed last year Follow up response from Malaysia: Malaysia works closely with Thai government and their cargo 5

6 Thinking of extending their services further, and to bring up the cargo right to Port Klang From Sumatra side, they work closely with Indonesia to bring the cargo into port Klang On the land cargo transportation, they are currently signing protocols for transits, interstates, for increased convenience Noted that one of these protocols will be signed tomorrow They have dialogue partners, to coordinate and support their initiatives Caterpillar Appreciates Malaysia s business, and it is good to know there are more avenues for collaboration Explained that Caterpillar does rail, marine, and are involved in huge projects in projects in ports, constructions etc. No issues to raise, but are very interested in the opportunities being presented Follow up response from Malaysia: Assured they would like to work with them, and contribute to be good partners Closing Remarks, Marc Mealy, Vice President Policy, USABC PM Najib had highlighted was that there needs to be real interest to compete for the opportunity In that vein, USABC is having conversations with the government of Japan, for the USA and Japan to create partnerships to be more competitive in Southeast Asia There are opportunities, US business community is very open to being creative and to explore ways to compete and win their fair share of projects The Lower Mekong countries are working with USG to beef up private sector in G-to-G conversations about energy, water, infrastructure US companies have experience and expertise to bring to the table, but do it in ways that are more collaborative and on a partnership basis and to bring good practices to the region, through real commitment Highlighted that PM Najib had talked about China being a growing partner, but made it clear that this was not at the expense of the US-Malaysia partnership Reiterated that the US business community is very consistent despite some changes in the US government administration Closing Remarks, Malaysia Is encouraged by this engagement, and hopes for more milestones in the US- Malaysia bilateral relationship, having just celebrating 60 years of successful engagements 6

7 Thursday, 12 October: Breakfast Briefing with U.S. Embassy Singapore Team, Margaret Hanson-Muse, Commercial Service, and Tovan McDaniel, Economic Section Attendees from U.S. Embassy 1. Margaret Hanson-Muse, Minister Counselor for Economic Affairs, ASEAN, U.S. Commercial Service 2. Tovan McDaniel, Economic Unit Chief Opening Remarks by Marc Mealy, Vice President Policy, USABC The Council always makes it a point to sit down with a U.S. government presence during a business mission, and it is highly significant here in Singapore because the US Embassy s Commercial Service in Singapore has an ASEAN regional mandate Valued the Embassy official s perspectives on U.S. government led initiatives, such as U.S. ASEAN Connect, and the status of such projects currently Called for updates and point of views and highlights from the USABC delegation members Indicated that some great examples of being able to make real change and progress have been observed in the region, and our delegation shows how different firms bring different dimensions to the infrastructure development It is important not just to address issues, but to present US companies in a way that gives them a more competitive shot Opening Remarks by Tovan McDaniel, U.S. Embassy, Economic Section Explained how the Embassy sees Singapore and the region at present Prime Minister Lee Hsien Loong s visit to Washington is the main focus now, and should be seen as a sign of U.S. continued engagement in the region Singapore assuming the ASEAN chair next year, provides an opportunity for the U.S. to present itself as a like-minded partner and to use Singapore to get some of their own values out to the region and establish partnerships Singapore s focus on digital economy and cybersecurity is viewed very positively in the U.S. Embassy, and tells a good story with the United States. Digital economy aside, they have world class innovation, and are geared up for a busy host year in 2018 Another thing is the incoming U.S. Ambassador to Singapore, and are hoping to have her here on the grounds soon, awaiting a floor vote from the Senate Another U.S. priority in the Asia Pacific region is DPRK, with the international pressure campaign to change North Korea s belligerent behaviour TPP, TPP-11: Business associations are concerned about the U.S. withdrawal, and even among Singaporeans. PM Lee will probably bring this up, and there is a need to know the U.S. regional strategy, in order to have a better narrative. On China s Belt and Road Initiative (BRI), they are figuring out how many projects are out there, despite the opacity of the projects so far 7

8 Aiming for a balanced approach. There is still a strong security relation between U.S. and Singapore, as observed from Singapore s swift response with USS McCain incident Opening Remarks by Margaret Hanson-Muse, Commercial Service, U.S. Embassy Singapore Background The Commercial Service Department has 7 offices around ASEAN, and is highly interested in infrastructure, one of the five main priorities of Secretary Ross In 2016, the U.S. and Singapore had signed MoU focused on infrastructure, which includes traditional forms as well as fintech and e-commerce The Commercial Service offices in Indonesia and Singapore include people who track developments in the Digital Economy, and they believe it is not only disruption, but also collaboration and innovation Assured that roles are still the same, even with the new administration. The Commerce Department is collectively focused on policy promotion, inward investment, PTO enforcement, review of FTAs etc. Reminded that NAFTA did not have an e-commerce chapter, so it is important to scrutinize and review the actions being taken by the new administration The process is very dynamic, and USTR is trying to advance its thinking. This is why Singapore s focus on the digital economy and cybersecurity is very important In the regional program, there are industry groups with aviation infrastructure, energy infrastructure, focused on smart cities o Big demand in Indonesia and Vietnam Trends and Updates The trend in ASEAN is that there are problems, with a young demographic that have innovative solutions to said problems There are plans to start a digital and cybersecurity industry groups, to evolve along with the industries in the ASEAN region Role of commerce continues to be on trade missions. Secretary Ross is conducting a trade mission in China Enforcement has been improved and more attention/effort put into it, which is a good thing for U.S. businesses, to better understand WTO obligations and companies compliance to it Hopes that these infrastructure companies convey their services as solutions, and view technologies as collaborative instead of disruptive Singapore is having its second Fintech Festival, encourages them to attend as there are a lot of people (including Singapore s Land Transport Authority) who would be interested in hearing solutions from these companies Fintech is migrating to transport tech, with Uber as a good example of the emerging sharing economy. Migration to rail tech and port tech is inevitable in the near future Singapore can be seen as a microcosm of the greater ASEAN, with a growing population, more young graduates, pressure on healthcare, and as 8

9 infrastructure providers, coming up with multi-faceted, collaborative solutions would be highly beneficial With BRI, Singapore s Business Federation is engaged, along with commerce departments in China and Singapore are communicating effectively to share more information across the two offices Asian Infrastructure Investment Bank (AIIB) has commissioned a US company for an audit for the project to provide better governance and to address the looming question of where the money is coming from, environmental impacts of these projects Driverless cars in local university campuses Rail concessions in both Singapore and Malaysia, for KL-SG high speed rail Bechtel Concerned that American companies don t have a similar offering in certain ASEAN countries, and can only bank on private projects Suggestions on how American companies can add value, to bring international best practices in the region, how to compete with G2G offerings PPPs are time inefficient and expensive, with little transparency on cost and benefit of project Follow-up response from Margaret Hanson-Muse The inefficiency is frustrating, because people are not using life cycle costing, and there is limited understanding of the true cost. However, international organizations like the World Bank has moved towards life cycle costing, which is good US companies can avail themselves to feasibility study grants and involve local engineering firms to collaborate Currently, the U.S. is quite preoccupied with recovery efforts from hurricanes. there is doubt if there would be focus on Asia, and encourages companies to develop a response for that SG Airshow is coming up, and Harris Corporation will be having a booth there. Encouraged UPS, FedEx and 3M to participate as well Marc: USABC will piggyback on that Caterpillar Feels the US has missed opportunity by pulling out of TPP, but they support TPP11 Caterpillar embraces BRI, but the availability of projects for American companies to participate is limited. They would like to work with China to provide for more transparency, financing transparency and participation on the local level Urged companies not to see BRI as a threat, but instead come forth with active engagement and a proactive approach 9

10 Follow-up response from Margaret Hanson-Muse The goal for U.S. Companies is to be the middle man, and to bridge that gap because we understand local values well, and our years invested in the region makes a huge difference There are ways to help them adapt, and again adopting the problem-solving approach will help Follow-up response from Tovan McDaniel Chinese projects exist for different reasons, some are strategic reasons, some are bankable reasons, which creates part of the confusion There is opportunity for U.S. companies, and the Economic Section of the Embassy is here on the ground to find out what these specific roles might be, in terms of CSR, experience Autodesk One interesting distinction in Chinese self-contained projects is that they are defining it as social infrastructure With the AIIB promoting transparency and top-notch standards, the Chinese government wants to be affiliated with these high-level standards, and hence companies are being pushed and encouraged to adhere more to such standards The Chinese government still want the world community approval of the world to legitimize themselves, and that is why they commissioned an internal audit Bechtel World Bank s efforts to shine more light on life cycle costs can extend such benchmarking to environmental and social responsibility This might be a necessity because their industry is opaque as of now Follow-up response from Margaret Hanson-Muse One of the ways to compete is to raise the bar, and China really wants to Statistics like WEF rankings are important, and the Chinese are paying attention because as of now, they are not even close Bechtel Another area of concern is safety. Most customers do not understand the stark difference in contracts in the safety performance, in project delivery, operations etc. 10

11 Caterpillar This is why it is so important for governments to insist that they have local participation, suppliers etc Marc Mealy, USABC Given this kind of massive new dynamic at play, where does that lead in terms of the status of ASEAN s own institutions and players? Where in the ecosystem are the ASEAN based entities that were supposed to broaden such goals (e.g. ASEAN Infrastructure fund in KL). Currently we observe mostly PPPs, G2Gs and disjointed institutions, instead of projects being managed and funded by them. Follow-up response from Margaret Hanson-Muse Myanmar s situation presents a seminal moment for ASEAN to assert its leadership. But took a lot of time for ASEAN to react, which brings up the question of leadership People are still fighting for individuality, work they do on standards is great, however, it is not binding Reiterated that the US-SG MoU on infrastructure is for US companies to partner with Singapore and do business in third world countries anywhere o Because of Singapore s governance and IPR protection, most people set up their holding companies here and do their IPR o protection here To Bechtel: Due to their Saudi connections, would be a huge leverage for them to partner with Malaysia and Indonesia, to address on what more can be done Response from Bechtel: Being privately owned, reputation is important. These conversations on projects need to be done in all transparency. That adds credibility to Bechtel and they pick projects based on values, transparency and it s challenging when countries are defensive The US Embassy Commercial Service is actively recruiting family companies that are looking for another way to do business, to bring them to a conference in Silicon Valley Highlighted that the Commercial Service has their normal appointment service, and they do company promotions, events if a CEO is in town Autodesk Autodesk is working with governments to require certain software for infrastructure projects. The Vietnamese government accepted this completely due to their internal mandate, for compliance and transparency, and are pushing back 11

12 Follow-up response from Margaret Hanson-Muse Young people are thinking of different ways With the development of financial blockchains, especially with Singapore as the epicentre, companies need to stay current, and it will affect all their businesses because it s completely transparent and traceable Autodesk Uber GovTech and VCA are announcing the integration of Fintech trackability, being rolled out as part of the smart nation Singapore is self-contained, and these things are considerably easier for the government to do. But on the flipside, once Singapore does it, and they do outreach in 3 rd world countries, and that does leave an impact There is discrepancy is the level of development, and it needs to be calibrated Follow-up response from Margaret Hanson-Muse That is the rate of change in tech in ASEAN, and companies need to see that in order to get these remarkable opportunities PM Lee s visit to the White House, and Trump visiting the region are all very big and important indicators Encourages companies to have their board meetings in the region, to really immerse and understand needs, as well as see the technologies Currently working with the government (LTA and MoT) to get driverless cars Advantage of being here understanding how people and drivers interact and behave on the road Singapore is ahead on infrastructure because it is not only interested in transport and infrastructure, but at the same time are good at regulating it They launched in Myanmar recently, and they want to go straight to driverless cars 3M 3M also offers services in autonomous vehicles, not on the vehicle side but the infrastructure side on how to regulate these vehicles Priority to educate decision makers on the safety aspect, such as investing in technological film with barcodes, or pavement markings 12

13 Autodesk Working on pooling data on road usage, integrating safety features based on this data, for future design on vehicles Caterpillar On the point of encouraging companies to be on the grounds, while that is true, there still are some frustrations. 7 years since first engagement with Indonesia, and they are still nowhere. There is a lot of investments, but no output. Similar in Thailand, with projects remaining on paper. There needs to be coordination and communication, perhaps more engagement of the PPP centres of excellence FedEx Follow-up response from Tovan McDaniel This pattern is not unique to only Southeast Asia Singapore, AmCham here is in the lead of TPP11 and the business communities. Having worked hard on concessions, and the problem now are companies hanging onto these provisions despites U.S. withdrawal Would like their thoughts on this, on protecting what they have established, so U.S. companies do not lose that competitive edge Follow-up response from Tovan McDaniel Singapore has complied with FTAs, and the high standards agreement with Singapore is there, although relatively TPP is higher The Senate s view is that trade relations never die, they only go dormant Singapore wants the seat open at the table for the U.S. to come back Follow-up response from Marc Mealy, USABC There is a debate going on with the TPP11, on whether they wanna keep the standards high or remove all the U.S. components of the TPP Predicts that the consensus will meet somewhere in the middle Follow-up response from Margaret Hanson-Muse Reminded that Chile FTA took 12 years to implement. These things come up and go down The people who have most to gain, are good with the high standards because it increased their manufacturing capability and kept a competitive edge with China It would be smart to keep things as they are 13

14 Follow-up response from Marc Mealy, USABC We should stay engaged on those reforms, the biggest group who do not get a chance to take advantage of the benefits are U.S. companies, due to the tariff disadvantage. But, U.S. companies invested in the region would be at an advantage Follow-up response from Margaret Hanson-Muse Supply chain will go through the roof when it goes forward, so hopefully it works Singapore has a big stake, it wants IPR provisions, and better provisions in financial services, because that is where growth in jobs, especially in Fintech, will come for countries like Vietnam, Malaysia etc. Caterpillar These countries are the ones with the bigger barriers Lost that negotiating level as of now, so it would be interesting to see what happens after the TPP11 is put into place Margaret Hanson-Muse, Commercial Service, U.S. Embassy Singapore Thailand visit, was to discuss Thai investments in the U.S. There is pressure but the conversations are meaningful Elections supposedly in 2018 Marc Mealy, USABC Would like the delegation to transmit some information to their colleagues in the U.S. regarding the Prime Minister s weeklong visit there would be at least 3 business opportunities Council Formulations, focused on strategic issues Washington Economic Club in DC, more public compared to the first, for executives to plug in 3 rd one is to be discussed Encouraged to contact the Embassy directly, put in a request, and tee it up as high as possible Margaret Hanson-Muse, Commercial Service, U.S. Embassy Singapore Encouraged them to schedule themselves in, Secretary Ross is open to meeting with CEOs 14

15 Harris Corporation Would like to know if there are any specific details on Trump s visit to Vietnam, on the engagement level, to understand what kind of talking points and first mover potential there might be Follow-up response from Marc Mealy, USABC APEC, something else in Hanoi but still very much in the pipelines for now There is a window in the Manila trip Regarding first mover potential, the government of Vietnam is rolling out the red carpet for commercial business all around the country, for business development, to meet key officials, state officials. Encouraged to take advantage of these opportunities o There is a conference in Da Nang organized by Ministry of Trade, encouraged to plug into this event Closing Remarks by Marc Mealy, Vice President Policy, USABC - Thanked them for their time and effort Important for Embassy and U.S. organizations to be on the same page, to compare notes and helps to include the competitive environments Have heard a lot of good things from countries in the region about U.S. collaboration with digital/cyber expertise Thursday, 12 October: Working Luncheon with 10 ASEAN Ministers of Transport, Senior Transport Officials and ASEAN Deputy Secretary General During the working luncheon, the Council hosted the following officials: 1. H.E. Lim Hong Hin, Deputy Secretary-General of ASEAN, ASEAN Secretariat 2. H.E. Dato Seri Mustappa bin Haji Sirat, Minister of Communications, Brunei 3. H.E. Sun Chanthol, Senior Minister of Public Works and Transport, Cambodia 4. H.E. Budi Karya Sumadi, Minister of Transportation, Indonesia 5. H.E. Bounchanh Sinthavong, Minister of Public Works and Transport, Laos 6. H.E. Dato' Sri Liow Tiong Lai, Minister of Transport, Malaysia 7. H.E. Thant Sin Maung, Union Minister of Transport and Communications, Myanmar 8. H.E. Arthur Tugade, Secretary of Transportation, Philippines 9. H.E. Khaw Boon Wan, Coordinating Minister for Infrastructure and Minister for Transport, Singapore 10. H.E. Arkhom Termpittayapaisith, Minister of Transport, Thailand 11. H.E. Le Dinh Tho, Vice Minister of Transport, Vietnam 15

16 Opening and Welcome Remarks by Marc Mealy, Vice President-Policy, USABC This is our 2 nd year of dialogue at the ASEAN Transport Ministers (ATM) Meeting. We recognize your continued efforts in air, rail and sea transport development and want to continue conversations from last year. The efforts of senior officials have resulted in protocols being signed today in order to further facilitate cross-border transport, but execution is critical. We want to offer our global expertise to support ASEAN or individual member states in implementation. Our companies cover the full spectrum of infrastructure development: project design, execution and utilization of projects. Prompted the USABC delegation to introduce themselves. Due to time constraint, each delegate mentioned name and company. Prompted H.E. Khaw Boon Wan to make initial remarks and talk about priorities. H.E. Khaw Boon Wan, Coordinating Minister for Infrastructure and Minister for Transport, Singapore In his remarks, he invited discussion on possibilities in technology and transport, agreeing that we can share best practices with each other. He emphasized that there is a need to help incumbents transit into a technological future of transport fairly. At the same time, there must be space for new business models and innovation. This is all to better meet the needs of consumers. In addition, he mentioned Singapore s progress in its airport infrastructure. Changi Airport is opening its 4 th terminal soon and is in the process of building its 5 th. H.E. Lim Hong Hin, Deputy Secretary-General of ASEAN, ASEAN Secretariat Praised the Council for its extensive outreach to different sectors within ASEAN, including finance, telecommunications, trade and transport. He also lauded the Council s efforts in engaging working-level officials as well. He called for more recommendations for sectoral cooperation. Marc Mealy, USABC Noted that technology has resulted in different problems and realities. The connection between infrastructure and technology has evolved. It is no longer about building more infrastructure, but more about the types of infrastructure necessary to maximize the benefits from technology. Industry is beginning to tackle these questions. The delegation wants to share observations and recommendations on these. The dialogue will be organized around three buckets: (1) impact of technology on infrastructure development; (2) changes or trends around logistics at regional level; and (3) the demand for projects in all 10 ASEAN countries. Prompted 3M, Harris, Uber, Autodesk and Caterpillar to propose interventions for first bucket impact of technology on infrastructure development. 16

17 3M Highlighted road safety as an area for increased cooperation and knowledge transfer, and mentioned 3M s Memorandum of Understanding with the Malaysian Institute of Road Safety Research (MIROS). Proposed more collaborations with ministries of transport in ASEAN member states and discuss regulations that are suitable for individual countries while accomplishing goals. Follow-up response from Malaysia: Thanked 3M for working with MIROS, which seeks to be the centre of excellence for road safety in ASEAN. The introduction and implementation of technology for road safety has to proceed in stages so that there will be acceptance. He also noted that enforcement is an important area in road safety, other than awareness and education. Uber Emphasized desire to partner with ASEAN governments to embrace new technology, work with local regulators and provide ideas and solutions for transportation. Noted that Uber is working with taxi services across the region to achieve win-win outcomes. Uber continues to conduct research in autonomous vehicles. Harris Offered System Wide Information Management (SWIM) solutions for air traffic management in ASEAN in order to increase efficiency across aviation systems and facilitate affordable, safe and seamless travel. Autodesk Offered Autodesk s solutions to promote an ecosystem for the growth of infrastructure in a smart, cost-efficient and manageable way. Highlighted Autodesk s recent efforts to cooperate with education facilities and museums and use tools to capture and protect UNESCO heritage sites. Caterpillar Encouraged governments to include life cycle costs in tenders so that products can keep up with technological changes and improvements. H.E. Arthur Tugade, Secretary of Transportation, Philippines Agreed that technology is a game-changer and emphasized that governments accept and embrace technology. There has to be acceptance of technology in societies. Welcomed dialogue with the private sector to adopt win-win solutions. Marc Mealy, USABC Prompted FedEx and UPS to propose interventions for second bucket trends in logistics in ASEAN. 17

18 FedEx Proposed multimodal transportation as a solution to seamless flow of goods. Emphasized the need for a coordinated and integrated customs system in ASEAN to facilitate the movement of products, especially with the rise of e- commerce. UPS Recommended organizations and frameworks to provide sustainability standards and technical assistance for the logistics industry Sustainable transportation as we build up our ground network. Raised the issue of traffic congestion and pollution in big cities, and proposed cooperation to address such problems through delivery models. Marc Mealy, USABC Prompted Bechtel to propose interventions for third bucket regional demand for projects. Bechtel Offered to provide Bechtel s expertise in aviation and high-speed rail to meet the demand for transport infrastructure development in the region. Closing Remarks by Marc Mealy, USABC Closed the meeting with assurance that the Council will seek opportunities to participate in other infrastructure forums and partner with ASEAN ministers. Also noted that there are ASEAN forums that are looking for more private-sector participation. Reiterated the commitment of US companies to add value to infrastructure development. Thursday, 12 October: Bilateral Meeting with Indonesia, Minister of Transport, H.E. Minister Budi Karya Sumadi Opening Remarks, Marc Mealy, Vice President Policy, USABC Thanked Indonesia for meeting with the USABC delegation Opening Remarks, H.E. Minister Budi Karya Sumadi Introduced his delegation, and started by referencing the last meeting with some US member companies in Jakarta Suggested that the US companies present here to engage and discuss with his staff on projects related to railway, land transport and aviation and make connections for follow-ups after the bilateral meeting 18

19 Marc Mealy, Vice President Policy, USABC A few companies present that are vested in road, rail, ports The Council understands the government priorities in wanting to improve the connectivity., and it is one of the more important investments to improve Indonesia s economy and the ability to export, and to attract investments to the country This meeting is a great opportunity to share some perspectives on transport infrastructure initiatives Will be teeing up companies under the main buckets of our mission 3M 3M s main focus is on road safety. More cars on the street has led to more lives being lost under negligence of road safety. As a leader of road safety for 80 years now, 3M would like to align their plans to Indonesia s priorities and offer knowledge transfer and best practices. Albeit time consuming, it is understood that regulations are critical o One thing they have learnt from experience is that the simple placing of markings on vehicles helps reduce collisions significantly o They are currently discussing with Indonesia already, but would like to understand their priorities as well Follow up response from Indonesia: Road safety is a pervasive issue in Indonesia, accident occurrences are 3M has been used in Indonesia, for traffic and road signage Expressed his hope that they can improve cooperation with 3M, to support their needs to import more of such materials and products from 3M Bechtel Updated the Minister that since last meeting, Bechtel has completed feasibility study for a complete, long-term metro rail network in Jakarta. During the Indonesian Business Mission, it was mentioned that Indonesia has identified 10 priority port and airport projects, and would like to know priority projects to launch a program approach to multiple airport projects o This program approach adds a lot of value, and is realized in 3 ways: standardization, leverage procurement, continuity Reiterated Bechtel s experience managing large programs, and are open to sharing their methodologies in developing Indonesia s airport/rail programs Follow up response from Indonesia: Interested in collaborating in the building of their new airports The framework of collaboration is a joint operation for a certain fixed period. Perhaps invest in Indonesian companies The government compiled a book regarding upcoming infrastructure projects, and they urge the companies to revert to them 19

20 Regarding the metro rail, they have many projects for that, especially so in Jakarta. The LRT system has been finalized. The private company was provided equities from the government and subsidized loan For future collaboration prospects, there are three new projects, in Bandung Surabaya and South Sulawesi. The Minister s team will be on the grounds at Sulawesi, and he invites companies to join him Caterpillar Has investments in Indonesia, manufacture hydraulic excavators and hydraulic mining. All this manufacturing is for domestic sales and exports However, port fees and storage fees are uncompetitive to export from Indonesia, and it is cheaper to use factories in China and India for export sources Had sent a formal letter entailing this issue, had a good, formal sit-down discussion, but the fees have still not been changed Request the minister to help with the lowering of port handling fees and to make it more competitive, that would be good for Indonesia and Caterpillar s branch in Indonesia Follow up response from Indonesia: Their aim is aligned with Caterpillar s, to make it easy, better and cheaper, so that companies operate in Indonesia They will research on the price variation with other countries, get in the loop of recent updates, and will be sure to follow up with the Minister for further action Harris Corporation Established that Harris currently has air traffic centres in Bali, and is keen to optimize existing infrastructure by using data to enhance capabilities Expressed their willingness to share their best practices, to help increase capability of new projects using technology, while also ensuring highest efficiency in a safe and secure manner Follow up response from Indonesia: Would want to improve air traffic control, called to engage in a detailed discussion with one official from his delegation UPS Enquired about the role express delivery companies like UPS can play, in lieu of Indonesia s heightened focus on ecommerce Follow up response from Indonesia: 20

21 There is a definite need to collaborate with investors to develop this area, called to engage in a detailed discussion with one official from his delegation Marc Mealy, Vice President Policy, USABC During the Indonesian Business Mission, the Council got to see some priority projects and sectors like tourism, connectivity. We understand these areas of focus and our companies are keen in their opportunities to compete in the sectors articulated by President Jokowi Follow up response from Indonesia: Government is embarking on building of mass transportation in six major cities One priority area is Road Safety, that s costing lives and the economy. The Ministry of Transport has rolled out regulations on how to reduce that, to achieve a target per year Another priority area is the aim to reduce logistical costs, 3% of sea transportation, 4% from land transportation. The Minister is highly keen to follow up with Caterpillar on this. In terms of budget, the government only covers one third, and hope the rest can come from SOEs, private sector and PPPs Marc Mealy, Vice President Policy, USABC While the Indonesian government s recognition for more private sector participation is clearly articulated, one thing that can attract more companies is the degree of transparency, from design, development, financing, executing and management Capital cost of projects and operating costs would also be benchmarks that come into play for these opportunities Follow up response from Indonesia: Procurement process will be improved Caterpillar One Belt One Road Initiative: China is interested in making infrastructure investments in many countries. Caterpillar has participated in over 20 BRI projects, and believes it s a good opportunity However, China can be exclusive and not being open to having local involvement, such as Indonesian companies or companies operating in Indonesia Would like to know if there any requirements on the extent of local/foreign companies that can be involved in these projects 21

22 Follow up response from Indonesia: Indonesia has to maintain bilateral corporations for the time being, there is not enough projects from other countries except China and Japan There is no preference here, the government is open. but they have to look for several sources for building infrastructure/economy etc. There is some expertise that China can provide, hence they collaborate 3M Believes that Indonesia is their future, and sees tremendous progress in the country On road safety, 3M has been working with the highway department Reiterates that vehicle markings are an effective low-cost way, and would like to enquire if they would be interested in collaborating with 3M Follow up response from Indonesia: Agreed and acknowledged that safety is very important. However, the challenge remains that it is that it s easier said than done, especially when collaborating with local level governments Closing Remarks, Marc Mealy, Vice President Policy, USABC Expressed appreciation and thanked the Indonesian delegation for taking the time to sitting down American companies for possible partnerships and project development Many of these companies in the USABC delegation have ventures in Jakarta and other parts of Indonesia, and they look forward to follow-ups after this meeting Friday, 13 October: Bilateral Meeting with Philippines, H.E. Mr. Arthur Tugade, Secretary of Transportation Opening Remarks, Marc Mealy, Vice President Policy, USABC Thanked them for starting the day bright and early The Council is very aware of the Philippines current administration s focus on infrastructure development, with the Build Build Build initiative. There is also a very tax reform package moving through the Senate, to generate more fiscal resources for government investments on infrastructure as well Opening Remarks, H.E. Mr. Arthur Tugade, Secretary of Transportation, Philippines Expressed how he has worked with companies from the USABC delegation, and respects them and likes to be candid 22

23 Right now, there are a lot of opportunities in the Philippines, with the government allocating 7 trillion assets for infrastructure 70% of those is managed between his department and the department of public works The Prime Minister and President will be signing an exchange of notes in November, to officially kick start the constructions and to transform Philippines into a connectivity/logistics hub, that will be beneficial to UPS, FedEx Encourages the private sector to be involved in areas with construction of airports, roads and bridges. Noted that the current ongoing airport construction is already lacking local construction workers There are plans to build Philippines very first subway station as well Declared himself as a proponent of technology, and understands its importance in Philippines infrastructure expansion, and is seeking inspiration for intelligent transport systems, such as those exhibited in the main ASEAN Transport Ministers Meeting Had reached out to Embassy to connect with US businesses who are well versed in airport, seaport, land, sea, but there did not seem to be a follow-up Follow-up response from USABC: The Council has an office in Manila, and we would be happy to establish the channel for the Philippines government to meet with US companies There is interest for collaboration, having attended some meetings in Washington. They are eager to include business as pivotal component of Trump s visit to the region 3M Expressed 3M s commitment to the Philippines, having been established there since 1964, and have over 55 thousand products spanning various sectors like transport, energy, automotive etc. that can provide solutions Appreciate the ongoing collaboration with DoTR, 3M is currently assisting on areas of interests to Philippines Road safety is one of their key areas, would like to explore if they can identify projects of public value and leverage their best practices to help DoTR Expressed their willingness to work and share knowledge with the Philippines delegation and Secretary s office Added that road safety measures not only save lives but also has a positive impact on the GDP Follow-up response from Philippines: The ministry was recently able to secure a spending budget of 400 million for road safety, in terms of education, training and materials They welcome 3M s input here and acknowledge the wide extent of 3M s work and products 23

24 Bechtel Mentioned that Bechtel s main global aviation centre is based in Manila, and there are some discussions about airport projects in the Philippines As Bechtel peaks in oil and gas sector, with 18 thousand workers in the region, these resources provide an opportunity to serve the huge growing demand on infrastructure With rail, they had just completed a feasibility study of a metro rail network in Jakarta, and expressed their willingness to share expertise and help with masterplan or feasibility study Follow-up response from Philippines: Invites Bechtel to pitch these ideas, such as setting up the national broadband with telecommunications With aviation, they are also very open to US companies helping with airport construction for commercial operations, to meet the government s plans to operationalize their air traffic management system by end of this year With railway, at present, 77 kilometers of railway tracks. The current administration plans to complete 1900 kilometers railway tracks by the end of their current term Extends the invitation to the USABC delegation to invest in these projects Harris Corporation Expressed that Philippines support for technology is exciting, because of Harris specialization Suggested leveraging information technology to enhance the pre-existing air traffic management system, such as automization tools, to ease congestion the national airport and increase efficiency in airport management, allocation of gates Singapore, HK has been using their solutions Would like to help the Philippines maximize the current infrastructure they already have Follow-up response from Philippines: Philippines wants solutions to 2 main issues related to information and communication: speed and cost. If any companies have solutions to this, he is willing to listen They also want connectivity, with the goal of all airports and seaports to have 1 gigabyte of Wifi Feels that this national broadband plan is the real game changer Under a platform of freedom of information, the Philippines is willing to share all project details to interested US companies Arranged a follow-up between Harris and his delegate 24