Danish company seeks long-term role in Myanmar’s water security
4 August 18 - While issues like aquifer depletion, groundwater contamination, overpopulation, extreme flooding and droughts grab headlines in coverage of a global water crisis that has been long in the making, one area that gets significantly less attention is water that is lost before it reaches consumers – most commonly attributed to leaking pipes, theft and inaccurate metering.
Known as non-revenue water (NRW), it is especially prevalent in places with decaying infrastructure serving a population much larger than it was intended for. Yangon is a prime example.
With estimates from the Yangon City Development Committee that at least 60 percent of the 201 million gallons of water supplied daily to the city falls under the category of NRW, this is an issue that has gathered international attention.
Japan International Cooperation Agency (JICA) and the government of Myanmar have signed on for a Yangon water supply improvement project to the tune of around $200 million in concessional loans. The French Development Agency (AFD) provided grants of around $1.5 million last year for a pilot project in Tarmwe Township to address NRW, and Philippines utility Manila Water in partnership with Mitsubishi is eyeing a major role in managing Yangon's water supply system.
How these complex public-private partnerships will play out remains to be seen, but bringing Yangon's water infrastructure into the 21st century will require high-tech solutions. The majority of drainage systems and underground piping currently in place in the city center date back to 1888 and were intended by British engineers to serve around 40,000 residents, according to Tea Circle Oxford. To say that these systems are stressed would be to put it lightly.
Another country reaching out to Myanmar in terms of water-related issues is Israel, known for its embrace of innovations in areas like drip irrigation, desalination and leakage detection to address chronic water shortages. A whole startup ecosystem has sprung up around water in Israel, part of a high-tech sector affectionately known as Silicon Wadi.
Israeli Ambassador to Myanmar Daniel Zonshine told Mizzima that Myanmar is in a position to harness the power of youth for coming up with innovations of its own including water issues. He also mentioned his embassy's partnership with the Myanmar Computer Federation in bringing the Startup Israel competition to the country for the third consecutive year on August 9.
"Encouraging people to look for solutions to problems in water issues or others, even with some public participation in financing it, could lead to good ideas and startups," Zonshine said.
Whether public or private, as Yangon struggles to manage its water effectively and cut down on NRW, it will need all the help that it can get.
One company that has made a name for itself in water management in the Asia Pacific region is leading water pump manufacturer Grundfos. With modest post-World War II beginnings in the Danish countryside, the company has expanded to more than 19,000 employees with an annual production of more than 16 million pump units. Their products can be found in nearly every corner of the world, and over the past 15 years they have added Myanmar to the long list of countries they do business with.
For the sake of full disclosure, this writer was hosted along with journalists from Cambodia, Malaysia, Singapore and Sri Lanka for an all-expenses paid trip to Singapore and Denmark in June – touring the company's Asia Pacific regional headquarters in Singapore, the main headquarters in Bjerringbro, Denmark, and water treatment facilities in Copenhagen.
LAND OF EFFICIENCY
Being hosted on this press junket by one of the world's largest water pump manufacturers was odd in light of the water situation in my third-floor apartment in Yangon, where I was reliant on a cantankerous pump subject to the city's frequent blackouts during those short hours when water was even available to be sucked up from street level.
After spending our first day of the trip at the regional headquarters in Singapore meeting with Grundfos managers and touring the factory where pumps bound for Myanmar are assembled and tested, we departed for the small town of Billund, Denmark – birthplace of Lego, and nestled within the idyllic rolling green plains of the Jutland peninsula.
From the airport we wove our way through the countryside on highways completely free of litter, and heard stories about how most Danes happily pay massive income taxes, support strict gun laws and live in a country consistently ranked as one of the "happiest" in the world.
Staying at the company's expansive Frisholt guesthouse located 10 km from the Bjerringbro headquarters, we had the chance to meet with Kim Jensen, appointed in January 2018 to serve as regional managing director of Grundfos Asia Pacific region. Between questions from journalists, he touched on just how efficient Denmark had become as a country with some of the highest water and electricity prices in the developed world.
"On the mainland where we are now, the water table is so high that we have water issues because we don't use it. Our wastewater contains so little water that normal sewage systems are struggling," Jensen said. "Our wind turbines are so effective now that when it's very windy we have to pay for the electricity we put in because nobody knows what to do with it."
As you might expect from a company bred in this environment, Grundfos pumps are state of the art, and as the company will gladly admit, not cheap. The question is: In an area that accounts for around 10 percent of global energy consumption, how can the impeccable standards of a Danish family-run company possibly apply in a developing country like Myanmar?
To try to answer this question, Mizzima spoke with the Asia Pacific regional business director of water utility for Grundfos, Tan Chee Meng, about the "double-digit growth" that the company has seen in Myanmar in recent years.
What specific projects are Grundfos pumps being used on in Myanmar and how are these products entering the Myanmar market?
Grundfos has supplied pumps to recent projects including the Thilawa Port expansion, Junction City, Diamond Inya Palace Condominium, Pyay Township (Bago Region) water supply projects, and Myanmar International Airport Terminal 1, just to name a few. Since 2014, we've worked closely with our distributors JJ-Pun and DKSH and a few project-specific partners.
Can I get any figures about the number of pumps being produced in Singapore bound for Myanmar?
Grundfos supplies hundreds of pump units to Myanmar, including water booster sets and wastewater handling pumps for large to small housing developments, processing pumps for industries, and solar pumps for non-governmental organisations. We help to supply water to millions of people in Myanmar every day throughout the year.
What are the challenges related to doing business in Myanmar and what does Grundfos hope to accomplish there?
As a newly opened economy, Myanmar is an exciting place to be with vast potential. However, it also presents some challenges for an international business. A leading pump manufacturer in Myanmar, Grundfos has been supplying world-class pumps to the country for more than 15 years. We have witnessed the ongoing political and economic transformation, where it has been key to adapt to business conditions by introducing new technology and business models that suit changing circumstances.
One significant challenge is the lack of infrastructure, which remains a key barrier for growth for a pump company like Grundfos. The limited supply of electricity outside of major urban areas means pumps can lose access to power and water networks for homes, businesses and municipalities can be disrupted. For developing countries in Southeast Asia, such as Myanmar and Cambodia, as high as 82 per cent of rural communities do not have electricity, which has a drastic impact on living standards including access to clean water.
This means our solutions need to remain flexible. For example in the face of Myanmar's electrification struggle, a potential solution from Grundfos is a water pumping system powered by solar energy that does not need to connect to the main electricity grid.
A second issue sees Myanmar needing more water as its economy develops, with the demand for water expected to increase up to 525 million gallons by 2040 in Yangon alone. Despite having the second largest amount of renewable water sources per inhabitant in Southeast Asia, the country sees several challenges in meeting its growing water needs and providing access to clean water for its citizens.
Looking ahead, there are two areas where Grundfos' wide range of solutions can play a part in contributing to the country's water security. One is to address the loss of resources in the form of water leakage, or non-revenue water through intelligent systems such as our Demand Driven Distribution that automatically adjusts water flow through the use of remote sensors, reducing excessive pressure in the water pipes and subsequently limiting water leakages and losses. The second is to help Myanmar deal with extreme weather events, coping with the heavy demands of both flood management and water scarcity.
Despite the long-term benefits, in a very poor country like Myanmar, what can Grundfos do to convince government and the private sector to invest in a significantly more expensive product?
While industries have made great strides in switching to newer technology, adoption is still a challenge. However what companies need to realise is that while advanced intelligent technology can cost more upfront, the benefits in the long run will exceed the upfront investment. As these innovations are further developed on a larger scale and with affordable distribution, an education process needs to take place and cost will be less of a barrier in the near future.
Across developing countries, governments have turned to public-private partnerships (PPPs) as one mechanism to provide much needed funding and investment. Such collaborations can also create interdisciplinary co-operation across utilities, authorities and companies like Grundfos, introducing technologies that can improve the performance and financial sustainability of the water sector. PPPs are also an option when raising water tariffs might not be as accessible an option for a country.
One of the new business models we are looking at is using money customers save on water and energy to pay for new pump solutions and systems. Here, instead of paying for an entire pump or system upfront, customers pay annual installments, financed by the savings they have achieved by upgrading.
Also, in addition to looking at measures such as PPPs and water tariffs, developing countries can look to institutions, such as the Asian Development Bank, that have expressed long-term interest in backing water infrastructure development for the region. For example, ADB's Water Financing Partnership Facility (WFPF) finances activities that are designed to improve access to safe drinking water and better sanitation, and provide some financial relief for developing countries that are struggling to build up adequate infrastructure.
What is the next step that Grundfos hopes to take in Myanmar, and what are its hopes for the future of water infrastructure in the country?
With rapid urbanisation driving population growth in Asian cities, the region can expect about one billion more people becoming "water-stressed" over the next 35 years. Myanmar is no different, especially with its non-revenue water rate being more than 40 percent due to its underdeveloped urban infrastructure.
With that, our water supply and wastewater management systems play an important role in ensuring water security for all, which faces complications brought about by the consequences of climate change and the vulnerability of aging water distribution facilities.
In order to achieve sustainability in water supply, countries like Myanmar need to look at innovative solutions that break with conventional thinking and take on a holistic and long-term approach. This includes understanding the complete water cycle, and how each process needs to be clearly defined with a clear water policy, while supported with strong enforcement. Each process should also be followed with market best practices and equipment.
Myanmar should also look towards digital technology, big data, and intelligent products and networks to determine new ways to distribute water resources efficiently, and solve large-scale environmental challenges. Technology such as our Demand Driven Distribution can help better control water pressures in pipes and limit extensive leakage issues, leading to better water management. Grundfos understands the chain of importance in the water cycle, and this is where we contribute with efficient energy solutions with our pumps.