YANGON—Hong Kong-listed China Communications Construction Co. Ltd (CCCC) has nearly finalized its proposal for the development of US$1.5 billion (2.4 trillion kyats) worth of initial infrastructure for the controversial “New Yangon City” project across the Yangon River from Myanmar’s commercial capital, according to a government body established to oversee the project.
New Yangon Development Company announced on Sunday that the final stage of negotiations with CCCC for the preparation of the Pre-Project Documents (PPD) including technical specifications, a financial proposal, a business model and related documents are now under way.
Upon the submission of the documents and approval by NYDC, CCCC will be able to enter the first stage of the NYDC Challenge Model, an adaptation of the global model of the Swiss Challenge for fair competition and transparency, according to NYDC chief executive Serge Pun.
The documents are expected to define the scope of nine initial infrastructure projects in the first phase of the mega-project.
They are: a six-lane bridge spanning the Hlaing River from Kyinmyindine Kannar Road near Bargaya Road to the New City; a two-lane bridge spanning the Pan Hlaing River alongside the existing Pan Hlaing River Bridge; 26 km of arterial roads connecting the major nodes of the new city; basic infrastructure and utilities for the five new Resettlement Village Towns; infrastructure for the first 10 sq. km of a planned industrial Estate; power distribution and transmission facilities; a water-treatment plant for the entire New City; a wastewater-treatment plant; and a water intake facility near the Toe River approximately 32 km from New Yangon City plus a water main distribution line.
NYDC plans to develop 20,000 acres of land in the first phase of the project, and claims this will generate 2 million jobs. The company says the cost of initial infrastructure work in the first phase is expected to exceed $1.5 billion.
The company and the Chinese firm signed a framework agreement in April this year.
As part of the NYDC Challenge, should a second party challenge with a lower bid, CCCC will be allowed to match the offer or forgo the bidding. If CCCC chooses to forgo, the second party will be awarded the contract and will be obliged to reimburse all costs incurred in connection with the preparation and submission of the PPD. Those costs will be agreed between NYDC and CCCC prior to the initiation of the tender process.
The project has come under criticism due to the low-lying topography of the area, which is prone to flooding as it has a maximum elevation of just 5 meters above sea level. NYDC said it had kick-started a flood-risk assessment for the New Yangon City project with Royal HaskoningDHV, a Dutch consultant.
However, Serge Pun said he believed the project will be “a success” if Myanmar is able to take advantage of current trade tensions between the U.S. and China and lure more foreign investors.
He said many factories in China were thinking about relocating to avoid the impact of U.S tariffs, which impose a 25-percent tax on goods made in the country. The property mogul described the situation as “an opportunity” if Myanmar could attract those factory owners to relocate to the New City.