Auditor General: Rangoon Losing Tens of Billions to Previous Govt’s Lease Agreements
By Moe Myint 6 April 2017
RANGOON — A report from the auditor general’s office for Rangoon Division has revealed that the divisional government suffered a whopping 57.923 billion kyat loss from long-term reduced rent leasing agreements for land within public parks, agreed to by the previous government and private companies.
The report for 2015-2016 fiscal year shows that five parks, including the landmark People’s Park, Karaweik Garden, and the controversial Mya Kyun Tha Garden, have been leased to private companies at rates well below standard commercial rents for the area, since as early as 2010.
Topping the list was Mya Kyun Tha Garden, situated near Rangoon’s famous Inya Lake, with an annual loss of 21.629 billion kyats. Eight private companies received more than 42 acres of land in the garden in 2013, at a rental rate of one million kyats per acre monthly, under a 60-year contract with the Yangon City Development Committee (YCDC).
“The government got only 25 kyats per month for one square foot, as the land was rented out at one million kyats per acre per month. Even if we got 1,000 kyats for one square foot, we would still lose 21.629 billion kyats annually,” said the regional auditor general Daw Khin Than Hla at the Rangoon parliament on Wednesday during the report’s launch.
The second location on the list was Karaweik Garden, where YCDC has leased 18.731 acres of the park’s land to the Zaykabar conglomerate, owned by Burmese tycoon U Khin Shwe, for 30 years starting from 2010.
According to the contract, the company paid 30 million kyats annually to rent the land for the first five years. This five-year period ended in August 2015, the company is now under contract for next five years at a rental rate of 60 million kyats per year.
“Even if we count the current land price of the area where the park is located—2,000 kyats for one square foot—Zaykabar is paying 6 kyats per square foot per month now. We lose 19.92 billion kyats per year,” the report says.
Rangoon’s previous mayor U Hla Myint leased 76.36 acres of the People’s Park to the Natural World Company for 25 years in 2011. The report stated that the YCDC received a total of 147.65 million kyats in total for first five years (2011-2015), meaning that “the government got less than 1 kyat per square foot during those years.”
Despite an increase in the rent for the 2016-2017 fiscal year to 2.5 billion kyats, the report said that the government still loses 14.280 billion kyats, as it only gets 6 kyats per square foot, while the current rent prices would more realistically be around 1,000 kyats.
Apart from land rented out to eight restaurants in Myaing Hay Wun Park and Kandaw Mingalar Park as well as in the Kandawgyi area, the leases to private companies have not turned out to be profitable for the regional government. During the 2015-2016 fiscal year, the YCDC lost nearly 2.1 billion kyats, the report said.
Chief auditor Daw Khin Than Hla remarked that this had occurred due to a lack of transparency.
MP U Kyaw Kyaw Tun urged the government to review all parks rented out by the previous government in order to analyze the terms and conditions with the private companies in question, and to negotiate long-term leases that can be affordable and profitable for businesses.
“More than 50 billion kyats is a huge amount of money,” the parliamentarian said. “I think if we examine the entire report, we would see other issues which remain as well.”
“All these problems,” he added, “are happening because of the previous government’s red tape.”