Yangon Gov’t Abused Its Power by Investing in Controversial New City Project: Lawmaker

By Kyaw Phyo Tha 2 October 2018

YANGON—The Yangon Regional government was accused of abusing its power by investing 10 billion kyats ($6.5 million) in a controversial new city project on the western bank of the Yangon River without the parliament’s prior approval.

In March, the Yangon government launched New Yangon Development Company (NYDC) which is to be the developer of the New Yangon City project to be built on 20,000 acres of farmland across the Yangon River from downtown Yangon. At the launching ceremony in Yangon in March, Chief Minister U Phyo Min Thein said “it is expected that the new city will create two million jobs” while claiming that NYDC is fully owned by the government.

NYDC is headed by the Yangon government’s Electricity, Industry, and Roads and Communications Minister Daw Nilar Kyaw, along with property mogul Serge Pun of Yoma Strategic Holdings, a Singapore-listed outfit with real estate holdings in Myanmar. Former Singaporean Foreign Minister George Yoe is “Independent International Director” of the NYDC.

So far, the project remains in its planning phase.

It was revealed in the auditor general’s report on the Yangon government’s budget for the 2016-17 fiscal year that the government transferred 10 billion kyats to NYDC from Yangon Metropolitan Development Public Company Limited’s 64-billion-kyat ($41.6 million)fund without the parliament’s knowledge. The public company was founded by the Yangon government last year to promote development in the region. The Yangon government owns 51 percent of shares in the company and the 64-billion-kyats spent in shares was approved by the parliament. The company’s board of directors includes Daw Nilar Kyaw and Yangon’s Planning and Finance Minister U Myint Thaung.

During a discussion among lawmakers about the auditor general’s report at the Yangon parliament on Tuesday, an NLD lawmaker Daw Sandar Min pointed out that the parliament had no idea about the 10 billion kyats transfer to NYDC and it has never been discussed in the parliament.

Constitutionally, projects to be carried out by regional or state governments have to be approved by the relevant parliament.

She also highlighted that the company has already spent 93 million kyats out of  the 10 billion kyats fund: 50 million kyats has been spent on staff salaries, 32 million on city design planning, seven million on general expenses, three million on the company’s launch ceremony and one million on the signing of a framework agreement in April with Hong Kong-listed China Communications Construction Co. Ltd. (CCCC) to provide infrastructure for the first phase of the development.

“They have spent 93 million kyats. It is an act of spending state money as if it is their own and the regional government is acting beyond the authority it has been granted,” said the lawmaker.

Daw Sandar Min also warned during the discussion at the parliament that the Yangon government’s improper use of money from capital investment through the Yangon Metropolitan Development Public Co. Ltd. could be a waste of state money coming from public taxes.

“If there is a loss, the board of directors of Yangon Metropolitan Development has to take responsibility on behalf of the Yangon government,” she added.

NYDC plans to develop 20,000 acres of land in the first phase of the project. This will include five village townships, two bridges, power plants, water and wastewater treatment plants and a 10-square-kilometer industrial estate. The company says the cost of initial infrastructure work in the first phase is expected to exceed $1.5 billion.

The project’s location 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. The company said it has kick-started a flood-risk assessment (FRA) for the New Yangon City project area in coordination with Royal HaskoningDHV, a Dutch FRA consultant.

Last month, the company released a socio-economic master plan for New Yangon City. The master plan was drafted by US management firm McKinsey & Company. Serge Pun said during a technical roundtable discussion about the development last month that the NYDC didn’t need to pay for the drafting of the master plan as it was financed by the British government.

“Luckily, we didn’t have to pay for it. It would have cost us nearly seven or eight hundred thousand dollars,” he said.