Govt Needs Hotels' Consent to Raise Lease Rates, Mandalay Mayor Says

By Zarni Mann 3 April 2019

MANDALAY — Mandalay Mayor U Ye Lwin told local lawmakers on Wednesday that the government could not raise lease rates on hotels that cut sweetheart deals with the previous administration without the hotels’ consent.

At a session of the Mandalay Region Parliament, lawmakers raised questions about three hotels — Mandalay City Hotel, Hotel Mandalay and Minthargyi Hotels —leasing land at very low rates, following an auditor report that revealed what they were paying.

Responding to the lawmakers, U Ye Lwin said the municipal department responsible for leasing the land was in negotiations with the hotels.

“Since 2017 we have been working under instructions from the President’s Office to negotiate with hotels that have contracts with unreasonable prices to amend the contracts,” the mayor said.

“However, there are laws that we cannot amend on our own. We should not break the law while we are still negotiating with the hotels,” he added.

U Ye Lwin said the government did convince Minthargyi Hotel to up its annual lease rate from 5 million kyats to 300 million kyats during negotiations last month.

“Agreements with Mandalay City Hotel and Hotel Mandalay have not been reached yet and we cannot do it [raise rates] without agreement from their side,” he said.

The 2017-2018 fiscal year audit stated that monthly income from leasing land to Mandalay City Hotel, Minthargyi Hotel and Hotel Mandalay was 800,000 kyats, 630,000 kyats and 500,000 kyats, respectively.

Although the contract terms range from 20 years to 70 years, lawmakers said the deals were nonetheless out of synch with local market rates, which start at 2 million kyats for 100 square feet.

Mandalay City Hotel is leasing 1.327 acres in the heart of the city, while Hotel Mandalay sits on 1.69 acres and Minthargyi Hotel on 6.25 acres.

Mandalay City Hotel has a contract for 20 years, Mandalay Hotel for 30 years and Minthargyi Hotel for 70 years.

Minthargyi Hotel’s contract was renewed on March 29, 2016, two days before a new national government administration took office.

Lawmakers said they have been raised the issue in Parliament since April 2017 and that a committee to tackle it led by the deputy mayor has since been formed. But the audit report showed no signs of change.

After Wednesday’s session, lawmaker U Myint Aung Moe, to raised the issue, said he still had many questions.

“We are not blaming the government for the slow progress, but we want to end the unreasonable contracts while we are in power. There are still questions about whether the previous government signed those contracts accordingly to the law and why they did so just before stepping down,” he said.

The Irrawaddy’s Myat Pyae Phyo contributed to this story.