Rangoon Expansion Plan Clouded by Company’s Shady Past

By Kyaw Phyo Tha 2 September 2014

RANGOON — Old habits die hard, especially in Burma.

With the recent revelation that Rangoon Division’s chief minister secretly awarded a multi-billion dollar development project in the former capital to a little-known company, it seems clear that Burma hasn’t yet shaken off the chronic nepotism that its former military rulers embraced for decades.

In his message to lawmakers in the divisional parliament on Aug. 22, Chief Minister Myint Swe said his government had awarded the contract for the Rangoon city expansion project to Myanmar Say Ta Nar Myothit company because the company was financially strong.

However, sources close to the project plans, government officials and businesspeople interviewed by The Irrawaddy tell a different story.

A minister in the Rangoon divisional government said the company, which has since had the contract revoked following a public outcry, is run by two low-profile Chinese businessmen, Xiao Feng and Xiao Sen, who have a close relationship with Myint Swe. Their names do not appear on the US sanctions list.

The minister said the Chinese executives have lived in Burma for many years, including back when ex-Rangoon Mayor Aung Thein Lin—the predecessor to the current mayor, Hla Myint—was head of the Yangon City Development Committee (YCDC), a government municipal body that also oversees land use in Rangoon.

“They were introduced to Aung Thein Lin via a middleman. When Aung Thein Lin was gone in 2011 and Myint Swe became the chief minister of Rangoon, they approached him through his son. Xiao Sen is always around him [Myint Swe],” said the minister, requesting anonymity given the sensitivity of the case.

Before becoming chief minister, Myint Swe served as a lieutenant-general in the Burmese army in 2005 and was involved in the crushing of the Saffron Revolution in 2007.

Widely known as a favorite of Burma’s then-dictator, Snr-Gen Than Shwe, the chief minister was even nominated for vice president in 2012 but could not take the position because of a family member’s Australian citizenship. Burma’s Constitution forbids people from serving in either of the country’s two highest offices if they have family members who are foreign citizens.

A high-profile businessman in Rangoon confirmed that the Chinese executives were friendly with the chief minister, and wondered whether they received the multi-billion-dollar contract fairly to develop and expand the city.

“They are very close to Myint Swe as well as ex-Construction Minister, Khin Maung Myint, a former major-general in the army. They are Chinese. Given the opaque manner in which they were chosen for the project, it might be nepotism,” the businessman told The Irrawaddy.

Myint Swe was not available for comment. But last week, after facing criticism from lawmakers for a lack of transparency, the Rangoon divisional government backpedaled on its decision to grant Myanmar Say Ta Nar Myothit the contract. Instead, it said it would put the development project to tender in the near future and would give all private companies a chance to participate. It did not specify dates for the tender.

According to a company registration list available from the Ministry of National Planning and Economic Development, Myanmar Say Ta Nar Myothit was registered as a public company last year. When The Irrawaddy visited the company’s official address in Shwe Pyi Tha Township, it found an apartment building with no office spaces inside.

Interestingly, although the company had vowed to complete 70 percent of the development project within three years at a cost of US$8 billion, with an initial investment of 1 billion kyats ($1 million), The Irrawaddy found that it has not yet received an operating license number yet.

And even though it registered with the Burmese government as a public company only last year, Myanmar Say Ta Nar Myothit has been an active business in Burma for several years under different names.

According to members of Rangoon’s business circle, during Aung Thein Lin’s mayoral term from 2003-11, the company signed a deal with him to convert People’s Park into a glitzy shopping mall. Aung Thein Lin previously served as a brigadier-general and currently sits in the Lower House of Parliament.

The Chinese executives behind Myanmar Say Ta Nar Myothit are also believed to be running other companies in the country, including Natural World Company, which developed a controversial handicrafts center in People’s Park. The center was so tall that members of the public complained about its proximity to Shwedagon Pagoda, the most famous Buddhist monument in the country, and as a result its third floor was demolished in 2013.

Natural World, which said the YCDC approved its application to build the handicrafts center in 2009, declined to respond to rumors that it was owned by Chinese executives, the Myanmar Times newspaper reported.

Earlier last year, under the name Crown Advanced Construction, Myanmar Say Ta Nar Myothit won an 8.6 acre plot of land owned by the YCDC to develop a residential complex on the grounds of a used-car market in front of Junction Square shopping mall in Rangoon. An official from the construction project confirmed to The Irrawaddy that his company is owned by Xiao Sen.

“We also belong to Myanmar Say Ta Nar Myothit public company, which is run by the same owner,” he said under the condition of anonymity, adding that Xiao Sen was in charge of Natural World as well.

The Rangoon expansion plan will see the city’s official limits expanded by some 30,000 acres, into Kyee Myint Daing, Seik Gyi Kha Naung To and Twante townships, right across from the Rangoon River. The plan will include the construction of affordable apartments, a school for 1,000 students, a home for the aged, and five six-lane bridges.

In Alat Chaung village, Kyee Myint Dine, Myanmar Say Ta Nar Myothit had urged residents to leave their homes by October to make way for a river-crossing bridge that would connect to Rangoon.

During a recent public consultation meeting with the residents, Thet Oo, the Burmese managing director of Myanmar Say Ta Nar Myothit, said the company would provide new housing by January, according to a video of the meeting viewed by The Irrawaddy.

But when The Irrawaddy contacted Thet Oo to inquire more about the development project, the managing director declined to comment.

As for the leadership of Myanmar Say Ta Nar Myothit, he said, “I’m the president of the company.”

Htet Naing Zaw and Thalun Zaung Htet contributed to this report.