Myanmar’s military takeover has ceased almost all construction projects, making over 500,000 workers redundant, according to the Myanmar Construction Entrepreneurs Association (MCEA).
The price of imported building materials has increased as the kyat has weakened. As the banking crisis worsens, the price of domestically produced cement has doubled and government-funded infrastructure projects have been suspended, making it hard for construction projects to continue.
“While the price of building materials has increased, it is difficult to withdraw cash from banks. Some department heads were changed following the takeover and, as government employees have joined the civil disobedience movement, there are long delays when receiving government money,” said U Myo Myint, general secretary of the MCEA.
“Even when we get the money, we are only paid by cheque. But in the construction industry, we make payments in cash every day, so it is difficult for us,” he added.
Since late February, the Central Bank of Myanmar has restricted cash withdrawals from banks and ATMs, affecting both individuals and businesses.
The price of metal rods and cement has doubled. A sack of cement now costs up to 8,000 kyats (US$5).
“There is now a huge gap between the prices we offered in tender and the current costs. Constructors are struggling to continue. Meanwhile, they have taken bank loans and have to pay interest. Only vital projects are continuing and the rest are halted,” said U Myo Myint.
Before the coup, Myanmar had more than 1.4 million construction workers, including daily wage earners. The MCEA estimates between 30 to 50 percent of the workforce have now lost their jobs.
In Myanmar, most constructors rely on government contracts. The military regime did invite tenders for construction projects after the coup, but it has not yet returned firms’ deposits when they submitted bids. Construction companies have since declined to bid for subsequent projects.
“Some constructors are not bidding for new projects because of the crisis, limited profitability and the difficulty in obtaining bank loans,” a Mandalay-based constructor told The Irrawaddy.
Private bank loans have previously funded 30 to 50 percent of the cost of government-funded projects. Private banks ceased offering loans after the coup.
Demand had been rising for apartments and private banks provided mortgages to buyers but COVID-19 and then the coup have hammered demand.
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