Mismanagement of Land Deals Has Cost Yangon Billions, Audit Finds

By Nan Lwin 24 September 2018

YANGON — The Yangon Region Auditor General’s Office has found that the government’s mismanagement of land leases cost it billions of kyats during the 2016-17 fiscal year, according to the local legislature’s Bill and Public Accounts Committee.

At today’s session of the Yangon Region Parliament, committee chairman U Tint Lwin said many of the companies that leased land did not pay their rents on time and were not fined for late payments, and that their contracts did not even stipulate that they should be fined.

The committee suggested that future contracts make it clear that laggards must pay a fine.

As an example, U Tint Lwin said a company leasing the old courthouse in downtown Yangon was to pay the regional government 400 million kyats ($250,000) a year but has not paid since October.

He said regional officials also broke rules and regulations in awarding a contract for the development of an industrial zone in East Dagon Township.

The government gave two companies permission to develop the zone in 2016. According to the contract, the companies were to receive land grant certificates to the site after they fulfilled their obligations. However, the committee found that one of the companies received its certificate before the contract was even signed and that the other received it only a week after.

“We lost a chance to push them to follow the rules and regulations during the implementation process. The first company paid its rent seven months after the deadline and the second company paid three months late. The government has also not receive late fines because they did not put that in the contract.” U Tint Lwin said.

He said the government was also missing out on revenue from a 547-hectare rubber plantation on the outskirts of Yangon because it has yet to be put out to bid.

According to the committee, the audit further revealed that the company that successfully bid for the Yangon Traffic Control Center failed to pay a penalty for not finishing the project. The regional government awarded the 18.9 billion kyats ($11.8 million) contract to build the center to the Myanmar Shwe Ying International Co. Ltd & China Railway 21st Bureau Group Co. Ltd (China) in February 2016. The company was supposed to complete work in six months but has still not finished because of disagreements with authorities on the installation of cables.

U Tint Lwin said the company agreed to pay 100,000 kyats for every day it was late but paid only 21 million kyats for the 2015-16 fiscal year and later stopped paying altogether.

The committee suggested that the government find another company to finish the project.

In Dagon Seikkan Township, the committee added, a residential development company failed to pay its annual lease of more than 3 billion kyats ($1.87 million).

Last week, a Yangon Region Auditor General’s Office report revealed that two bus companies majority owned by the government lost 3.5 billion kyats ($2.19 million) during the 2017-18 fiscal year.