Irrawaddy Business Roundup

By Nan Lwin 17 October 2020

YANGON — Although the spread of COVID-19 is not under control in Yangon, Myanmar’s government has allowed garment factories in the city to reopen after receiving criticism from investors. It also announced new rules for investors submitting unsolicited proposals to give clearer investment procedures.

The government this week announced 21 billion kyats (US$16.1 million) of loans for more than 1,200 businesses to ease the impact of coronavirus. The union tender committee has also invited investors who want to challenge Chinese proposals under a transparent tender process to develop the giant Yangon new city, which is part of China’s Belt and Road Initiative (BRI).

Yangon factories allowed to reopen

Although Yangon remains at the center of Myanmar’s COVID-19, the Ministry of Health and Sports has allowed garment factories in the city to reopen amid concerns about the loss of foreign investment.

The government initially ordered garment factories in Yangon to stop operations until Oct. 21 to slow the spread of coronavirus. Following complaints from factory owners that they faced canceled foreign orders due to prolonged lockdowns, State Counselor Daw Aung San Suu Kyi said the authorities are working to allow the resumption of operations for the long-term health of the economy.

The health ministry said allowing operations would prevent employees from losing their jobs and help sustain economic growth but factories must conform to COVID-19 preventative guidelines if they want to reopen.

All factories are instructed to set up temperature checks and to turn away any workers with a fever. They must allow workers to wash their hands and arrange physical distancing to avoid crowding. The ministry instructed factories to use pamphlets or an intercom to communicate with workers to avoid meetings to share information about COVID-19.

Investment rules set out

Myanmar’s Ministry of Planning, Finance and Industry says rules for investors submitting unsolicited project proposals worth more than 2 billion kyats ($1.5 million) are being set out.

The ministry said, as a preliminary procedure, companies submitting unsolicited proposals without an invitation from the government must provide documents, including financial statements, establishing their financial capability, a track record of previous work and other details to the government.

The authorities will review the documents submitted and whether the proposals are in line with the 2018 Myanmar Sustainable Development Plan.

Under the new procedures, if a proposal is found to have potential benefits to the country and the company has strong corporate data and solid work experience, a “Swiss challenge” tender process will be launched. A Swiss challenge is a form of public procurement, which requires a government which has received a bid for a public project or services to be provided to the government to publish the bid and invite third parties to compete for the contract.

If a proposal is deemed beneficial to the state but the company provides insufficient information or evidence of experience, the government will call for tenders under its established procedures. However, the government must obtain advice on projects from the Center for Public-Private Partnership and approval from the Myanmar Project Bank.

More loans to ease COVID-19 impact

In the latest move to ease the COVID-19 impact on Myanmar’s business, the government approved 21 billion kyats in loans to 1,041 enterprises.

The government said it is planning to provide 15 billion kyats ($11.5 million) in loans to the film, music and media sectors. It said it created a fund of 100 billion kyats ($77 million) in April following the setting up of the first COVID-19 relief fund, handing loans to 3,393 enterprises.

The authorities say they have since added another 100 billion kyats to the fund and approved 20.8 billion kyats ($16 million) in loans to 1,041 enterprises. The government plans to spend 200-500 billion kyats ($154-384 million) to ease the economic impact of COVID-19.

New Yangon City Project open to fresh bids

The government has invited firms to challenge Chinese proposals to develop the industrial sector and infrastructure at the New Yangon City Project under Beijing’s sweeping BRI.

Myanmar’s Swiss Challenge Tender Committee invited expressions of interest to implement the project under scrutiny by German consulting firm Roland Berger.

Under the Swiss challenge process, the initial proposal submitted by the Beijing-based China Communications Construction Co. Ltd. (CCCC) will be challenged by firms potentially offering better terms. If a company can challenge CCCC with lower bids and better terms, it will need to compensate CCCC for the costs incurred.

Companies from any country can participate in the transparent Swiss challenge process, the committee said.

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