Govt, Companies to Build Rangoon ‘Mega City’ of 10 Mln People

By Paul Vrieze 8 May 2013

RANGOON—Government officials, urban planners and construction companies said they are planning to develop Rangoon into a “mega city” of more than 10 million inhabitants by 2040, doubling its current population size.

At the 2013 Urban Development Conference early this week, they laid out plans to reshape the crumbling old city into an Asian metropolis with large foreign investments, huge industrial zones and middle class housing projects, while retaining Rangoon’s main historic features.

But amid the excitement over the city’s economic prospects, there were no signs that foreign investment in Burma has taken off as yet, and some important issues—such as the land rights of those living on project sites—were not discussed. Well-connected construction firms are poised to benefit from the planned project development.

Toe Aung, deputy head of the Rangoon City Development Committee’s city planning and land administration department, told the conference that within 30 years Rangoon would grow into a “mega city” with more than 10 million inhabitants, up from an estimated 5.14 million people now.

The government, he said, is working with the Japan International Cooperation Agency (JICA) to draw up a Greater Rangoon Strategic Development Plan, which would include building new roads, railways and an airport, and the development of green zones and large housing projects several kilometers outside of the city.

The Japanese government is funding some of these urban development plans. In 2012, it also began working with Japanese firms, the Burmese government and the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) to develop the Thilawa Special Economic Zone (SEZ).

Plans for the sprawling industrial complex, located about 25 km south of Rangoon, include a deep sea port, Japanese factories, and large housing projects. The Burmese side owns 51 percent of the project and is responsible for developing a 2,400-hectare core zone.

The massive project would drive Rangoon’s economic and urban growth in the next decades, project developers said.

“We expect to create about 200,000 jobs once the four phases of the project are completed,” said Thurane Aung, an executive member of the UMFCCI commission on Thilawa. “The majority of Yangon’s urban growth will be because of the project; the [city’s] employment will come from Thilawa.”

The total size and cost of the project were still being determined, said Thurane Aung, adding that work on the first development phase, covering 400 hectares, had started.

He said work had also begun on two real estate projects in Rangoon’s Dagon Seikkan Township: the 120-acre Ayeyarwun project and the 100-acre Yadana project. A total of about 17,000 housing units are being built there, along with parks, commercial centers and infrastructure links.

Thurane Aung said the projects would be “a showcase for urban development in Myanmar,” offering “affordable housing” at $20,000 per unit.

The government is funding the infrastructure for the projects, which are being implemented by a consortium of 24 Burmese construction companies, including Thurane Aung’s Dagon International Ltd, Shwe Taung Development Company and IGE Development. The firms were known in the past for having close connections to Burma’s previous military regime.

Dagon International Ltd is a conglomerate with interests in construction, timber trade and agriculture. It is owned by Burmese tycoon and UMFCCI’s chairman Win Aung, who is Thurane Aung’s father. A 2009 US Embassy cable, published on Wikileaks, labeled Win Aung a “regime crony,” who “specializes in the construction of luxury housing projects.”

The government is hoping to attract foreign investment to fund large urban development projects in Rangoon and massive special economic zones such as Thilawa, in order to speed up economic growth and urbanization of the country, which remains impoverished after decades of military rule.

Dr. Aung Tun Thet, of the Myanmar Investment Commission, said such projects offered “huge opportunities” for foreign investors. “This is a big thing, construction. Although you talk about urban development, it’s more about construction [investment].”

So far however, the scale of foreign investment in Burma is still falling short of the government’s expectations. “Foreign investment needs to be fast, it’s still very slow. Investment [projects] needs to be vast, but it’s still small,” Aung Tun Thet said.

The massive projects that are being planned to develop Rangoon are also likely to lead to further disputes over land, a rights issue that is quickly worsening in Burma. Local communities say they’re often powerless to stop land-grabs by well-connected companies that enjoy government support.

The Thilawa project is already marred by a growing land dispute affecting hundreds of farmers. Burma’s military regime confiscated large swathes of land in the area in the 1990s, offering the farmers only a small amount of money in compensation. The regime’s planned industrial project failed to take off and local communities continued to farm their land.

When the project was revived in 2012 with Japanese support, communities were told to leave. But land prices have reportedly soared to as much as US$10,000 per hectare, and many farmers are now demanding higher compensation for their land.

At the Urban Development Conference however, little time was spent discussing land disputes and the matter was only briefly referred to as “a squatters issue.”

In an interview Thurane Aung, of Dagon International Ltd, played down any land dispute concerns, saying that it is unavoidable in Burma and just another project issue to deal with. “Every project everywhere you go there is some sort of squatter issue,” he said.

In the case of the Thilawa SEZ the land dispute was being resolved through “a very fair and transparent approach,” he said, adding that the involvement of the Japanese government “will ensure that it’s properly done, according to international standards.”

Thurane Aung said the two housing development sites in Rangoon’s Dagon Seikkan Township also had “some squatters.” “This is also being handled very carefully and they are checking and making sure that these people claiming land are actually the rightful owner in the first place,” he said.