Nine Firms Qualify to Challenge Chinese Proposal for Myanmar’s New Yangon City Project

By Nan Lwin 24 November 2020

YANGON—The Myanmar government has issued “request for proposal” (RFP) documents to nine companies—including firms based in India, Singapore, France and Taiwan—interested in competing against a Chinese company’s proposal to develop the initial phase of the New Yangon City project in Myanmar’s commercial capital, which is part of China’s ambitious Belt and Road Initiative (BRI).

The nine firms are now qualified to submit rival plans to compete against the initial development proposal put forward by Beijing-based China Communications Construction Co. Ltd. (CCCC). Moreover, they will be granted access CCCC’s proposal for the industrial park, including such details as the scope of work for essential ancillary infrastructure. They will also receive documents to be submitted by applicants and a timeframe for the “Swiss Challenge” tender process.

Chinese President Xi Jinping has branded New Yangon City as a pillar of the China-Myanmar Economic Corridor (CMEC), a key component of the BRI. Since his trip to Myanmar early this year, he has repeatedly called on the Myanmar government to cooperate on practical implementation of CMEC projects and called on both sides to deepen result-oriented BRI cooperation, particularly projects that are branded as pillars of the CMEC.

The Ministry of Investment and Foreign Economic Relations (MIFER) said that of the 16 companies that submitted an expression of interest (EOI) to develop an industrial park and related infrastructure for the new city project, it invited 15 to purchase RFPs. A total of nine companies bought the RFPs before the final deadline of Nov. 6.

Under the Swiss Challenge tender process overseen by German consulting firm Roland Berger, the details of CCCC’s development proposal are made available to the qualified firms to give them a chance to offer better terms. If a company successfully challenges with a lower bid and better terms, it will be required to reimburse CCCC for the costs incurred.

According to the MIFER, the nine companies are Taiwan’s BES Engineering Corporation; three French companies—BYMA Myanmar Limited, EDF HQ Singapore Pte. Ltd and SUEZ Group—India’s NTPC Limited; Singapore’s Nylect Technology (Myanmar) Ltd; and three local companies—Dragon Power Company Limited Myanmar, Myanmar National Brotherhood Consortium and Southern Metal Industry Co. Ltd.

The MIFER said these nine entities may bid either by themselves or as part of a consortium formed to cover the technical and financial scope of the project. The final deadline to submit proposals is Jan. 18, 2021.

BYMA Myanmar Limited (BYMA) is a joint venture between Bouygues Batiment International, a subsidiary of Bouygues Construction, and Yoma Strategic Holdings (YSH), a Singapore-listed company. YSH is managed by property mogul Serge Pun, who is also CEO of the Yangon government-backed New Yangon Development Company (NYDC), which was formed to implement the New Yangon City project.

BYMA’s status as an associated company of Yoma Strategic Holdings has given rise to conflict of interest concerns. In response to the concerns, Serge Pun said YSH is a minority shareholder and BYMA is managed by Bouygues and not by YSH.

Serge Pun said that neither he nor YSH had been informed of BYMA’s interest in receiving the RFP documents, adding that BYMA’s interest in receiving the RFP documents is not to bid but to gain a better understanding of the urban development vision for the project.

He stressed that during his tenure as CEO, he will not support any bids for any NYDC-related public works projects by the group of companies under his control.

According to the rules and regulations, as the original proponent, CCCC will have the right to match or improve on the proposal of the winning challenger for up to 45 working days from the announcement of the superior challenger bid.

In 2018, NYDC signed a framework agreement with CCCC to draw up a US$1.5-billon (1.96-trillion-kyat) proposal for the initial phase of the New Yangon City project. The entire project is expected to cover an area twice the size of Singapore.

The project is embroiled in controversy due to its flood-prone location and the CCCC’s involvement. The Hong Kong-listed, Chinese state-owned company has been accused of engaging in corruption and bribery relating to development deals in at least 10 countries in Africa and Asia, from the Philippines to Bangladesh to Tanzania, according to international media reports.

In July, Myanmar unbundled the project to reduce its budget to $800 million. The project’s size was reduced to encourage other firms to bid for a contract.

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