Burma Business Roundup (Saturday, March 9)

By William Boot 9 March 2013

US Hotel Groups to Add Rangoon to their Global City Chains List

Two major American hotel brands plan to add Rangoon to their international hotels chain in developments which will change the city’s skyline.

Hilton Worldwide has signed an agreement to take on the management of a 300-room 21-story hotel being built by LP Holding Company as part of major development called Centrepoint Towers which includes an office suites tower and shops.

“Hilton believes [Rangoon] is positioned to grow much faster than many other emerging city hotel markets in Asia, mainly on the back of business travel as corporations seek investment opportunities,” said Bangkok-based travel magazine TTR Weekly magazine.

Rangoon is desperately short of accommodation got business visitors, tourists and local people alike. Centrepoint is only 14 km from Rangoon’s international airport.

“It will be one of the tallest commercial buildings in the city, offering impressive 365-degree views of greater Yangon and hints of the impending real estate boom that will turn the low-rise almost garden-style environment of Yangon into a high rise mass of concrete and glass,” said TTR Weekly on March 6.

The more budget lodgings-orientated US group Best Western meanwhile confirmed it is negotiating also to build a hotel in the city.

Best Western “is close to signing a deal on a hotel” but told TTR Weekly it was “too early to give details or confirm the deal other than to say negotiations are on-going.”

Best Western is a global franchise of over 4,000 hotel, most of which are locally owned.

The tallest development announced to date is the 34-storey Diamond Inya Palace scheduled to be built by Burmese firm Mandalay Golden Wings Construction. The US $60 million block, housing 400 upmarket apartments, will tower over Rangoon’s pretty Inya Lake.

April Date Tipped for Offshore Gas Exploration Blocks Announcement

Speculation continues that the Ministry of Energy will finally put up 20 or so offshore exploration blocks for auction to foreign oil and gas companies a few weeks from now.

The European oil industry magazine and website Upstream International said on March 6 that the auction—postponed last September amid controversy of the continue involvement of the military-linked Myanma Oil & Gas Enterprise—will be in April.

“Foreign companies will be allowed to bid for full control of offshore blocks to be offered in a Burma licensing round set to be launched in April,” Upstream said.

The offshore blocks are believed by industry players to offer the best prospects for major discoveries since all Burma’s productive gas fields are in the Bay of Bengal of the Andaman Sea.

Meanwhile, 18 onshore blocks offered in January have attracted less excitement and may not all find buyers by the closing date on March 16.

Air Asia’s Fernandes to Co-Chair World Economic Forum in Burma

One of the region’s most colorful and prominent businessmen will be co-chairman of what’s being billed as the biggest-ever World Economic Forum in Asia to be held in Naypyidaw in June.

The chief executive of Malaysia-based Air Asia, Tony Fernandes, will be one of a team of prominent people to lead the three-day forum on June 5-7.

They include Yorihiko Kojima, chairman of Mitsubishi Corporation, Indra Nooyi, chairman of PepsiCo, and John Rice, a Hong Kong-based vice-chairman of General Electric.

“We expect this to be the largest World Economic Forum in Asia in our history,” said Sushant Palakurthi Rao, the Asian chief of the World Economic Forum. “Our objective is to support what we will call the creation of a moral economy. A moral economy is about responsible investing to benefit all stakeholders in Myanmar,” he said.

Burma Has Poor Ability to Handle Natural Disasters, Says Risk Assessor

In a new assessment of risks in establishing businesses and investments, an analysis company warns that Burma’s ability to deal with natural disasters is “limited” and “challenging”.

The survey by the British assessors Maplecroft has listed Burma as an extreme risk country for coping with disasters such as floods, cyclones and earthquakes, citing the failure of government after the earthquake last November which killed at least 26 people in the Sagaing and Mandalay divisions.

“Disaster response systems in [Burma] are limited. Communication and information sharing is exceptionally challenging, and as a result in some affected areas relief supplies took several days to materialize,” said the Maplecroft assessment.

Death and injury from the earthquake, which wrecked gem stone and gold mines and a new bridge being constructed over the Irrawaddy River, would have been much higher if it had not happened on a Sunday. The absence of mains electricity in many of the damaged homes also reduced losses.

Russia’s Arms Sales Fishing Trip to Naypyidaw Linked with Trade

Russia is offering to improve trade and educational training links with Burma in a thinly veiled tie-in with a bid to renew weapons sales too.

The proposals was outlined to Burmese government ministers during a visit to Naypidaw on March 4 by Russian Defense Minister Sergei Shoigu as part of a regional tour that also included Vietnam.

Russian firms have supplied MiG-29s and other weaponry during the years of sanctions by the US and the European Union, which are still maintaining a ban on weapons sales to Burma.

Among sweeteners suggested by Shoigu was a proposal to allow Burmese students to study at Moscow State University, the Russian news agency Novosti reported.

Twenty Russian MiG-29s were bought at the end of 2010 by the Burmese military at a cost of over US $500 million, according to Flight International magazine.

China has been Burma’s main weapons supplier but military equipment has also been bought from Poland—before it joined the European Union—Ukraine and Belarus.