Yangon’s new city vastly ambitious but government role called into question


Source: Myanmar Times

Date: 2 April 2018

YANGON'S government has formed a company to develop a landmass twice the size of Singapore as a re-launch of the "new city" development project abandoned last year. While officials has gone as far as comparing the project's ambition with the urban development of China's Shenzhen, a business leader has called into question why the government is entrenching itself in the commercial activities.

On March 31, the regional government launched the New Yangon Development Company (NYDC). NYDC was incorporated under the Special Companies Act and 100pc owned by the regional government. Infrastructure works related to Phase 1 are expected to amount to a sum in excess of US$1.5 billion. This will include the construction of five village townships, two bridges, 26km of artery roads, 10km2 of industrial estate, power plant, transmission and distributions facilities as well as fresh water supply and wastewater treatment plants.

The development for New Yangon City will be primarily based on a Public-Private Partnership model, with businesses contributing in equity investments. The project planners aspire to rival the likes of Shenzhen, South Korea's Incheon and Malaysia's Iskandar, according to NYDC.

The total area of New Yangon City, encompassing Phase 1 and Phase 2, will cover 1,500 km2. Phase 2 will stretch all the way down from Dala to the Gulf of Martaban. In comparison, Shenzhen covers a landmass of 2,050 km2, Pudong 1,220 km2 and Incheon 1,029 km2.

For Phase 1, NYDC will develop 20,000 acres of land west of central Yangon across from Kyeemyindaing into an urban industrial district.

Chief Minister U Phyo Min Thein said Phase 1 will create two million jobs, support local businesses and attract foreign investments. The venture will have trickle-down benefits for other sectors and over time benefits families and the country.

Serge Pun, vice chair and CEO of NYDC, said that the organisation looks forward to "working closely with the government on issues and policies related to land management, labour, education, government administration procedures and all related regulations," alongside private sector investors and partners.

Mr Pun pledged that, during his tenure as CEO, he will not support any bids for any NYDC related public works projects by the group of companies under his control. This is to address the issue of any potential conflict of interests. "All my companies will not be participating in business opportunities in New Yangon City".

NYDC will be governed by a board of directors, consisting of ministries and independent directors. Daw Nilar Kyaw, regional minister of electricity, industry, transport and communication, is the chair, while U Tun Myat, former UN Security Coordinator and independent non-executive director of Yoma Bank, and Singapore's former foreign minister George Yeo are the independent directors. Another director is U Han Tun, regional minister of agriculture, livestock, forest and energy. Mr Yeo noted that transparency is the most important for this project to earn the trust of all stakeholders.

But not everyone is impressed.

U Zaw Naing, managing director of Mandalay Technology, has strong reservations about the project, questioning why the government is getting involved in commercial activities.

"Daw Aung San Suu Kyi said PPP must be encouraged. On that basis, this kind of so-called government-owned or government-private joint venture companies have been created or are in the pipeline, especially in Yangon Region," he said, arguing that these enterprises risk misleading government policies, creating monopolies in sectors and stifling businesses.

In addition, he said, the NYDC and similar partnerships have not provided any transparency in the selection process. Many questions remain unanswered.

"The current government and a handful of business tycoons just have a few discussions, and then those projects come about. There's no transparency in how the board or partnerships is formed, and the justification on why those people are selected to be involved." The businessman also asked how the project will move on when government officials who are involved in the NYDC have left office, and how current office-holders are juggle their responsibilities between this partnership and their official duties.

But U Zaw Naing's criticism touched on a more fundamental aspect: government should focus on governing and not confuse the public and the private.

"This regional government has good will but little knowledge when it comes to businesses. This is dangerous," he commented. He is worried that the partnerships or enterprises involving the government will eventually become entities akin to Myanmar Economic Corporation (MEC) and Union of Myanmar Economic Holdings (UMEHL), which are accused of imposing monopolies.

U Zaw Naing made it clear his comments are directed at the regional government, and not Mr Pun or other directors.

This "new city" project is a re-boot of the original one. The region government flagged the original project in July 2017 by scrapping the results of a tender carried out under the previous government.

Yangon mulls construction of sea port at river
Thilawa builds $65m bulk terminal to diversify por...


Comments are not available for users without an account. Please login first to view these comments.

Providing you the latest news, insights, opportunities and events from the Myanmar water sector.

Myanmar Water Journal