On May 2, 2018, the New Yangon Development Company (NYDC), the company owned by the Yangon regional government to undertake the New Yangon City project, announced that China Communications Construction Company (CCCC) would develop the new city project. Interestingly, NYDC has emphasized that CCCC has not yet been granted the project. Under the Swiss Challenge model, other companies can submit counter-proposals during the bidding process and CCCC can decide to match the funding amount or forego the project if there is a proposal with a lower bid. NYDC insists that the arrangement will increase transparency and efficiency of the project.
The Swiss Challenge is not unique, but it is also not a prevailing practice. It has been adopted in the Philippines, Italy, Taiwan, Guam, as well as at the sub-national level in India and Australia. A study conducted by the World Bank on infrastructure projects in the Philippines in 2000 highlights some potential problems of the Swiss Challenge. The report states that other competitors perceive that they are disadvantaged in the bidding process because the original proposers have an established relationship with the authorities. They also have less time to prepare the counter-proposal in the bidding process. It also finds that the original proposers usually win the contracts.
NYDC may assure the public that CCCC will not be favored in the bidding process. A fundamental question is whether the regional Parliament had a chance to discuss the project design and the Swiss Challenge model before CCCC was entrusted with the project development. Article 190(b) of the 2008 Constitution stipulates that “bills relating to regional plans, annual budgets and taxation of the Region or State, which are to be submitted exclusively by the Region or State government, shall be submitted to the Region or State Hluttaw in accord with the prescribed procedures.”
As the National League for Democracy (NLD) has promised change in its governance, a detailed proposal and budget should be submitted to the regional Parliament for discussion to uphold transparency and accountability. It is exactly what NLD lawmaker Daw Sandar Min of Seikgyi Kanaungto 1 constituency points out – members of the Parliament have a duty to discuss projects that affect voters.
The success of the project is contingent upon people’s support. NYDC’s town hall meeting initiative is appreciated. However, people, including the regional government, still know very little about the project and the implementation plan of the project. For instance, how will the government resettle the affected communities? The investment of the Myanmar government will be substituted by land. How much land will be involved and for how many years? When will CCCC submit the development plan to the NYDC and how much time will other companies have to challenge the original proposal? Are there legal ramifications if the project needs to be reviewed or redesigned under the agreement signed between NYDC and CCCC. If CCCC finally gets the contract, how can the government ensure local employment in the construction of the project?
There is no doubt that Myanmar needs economic development, but lessons from previous projects must be learned. Projects that do not have the free, informed and prior consent from the public might trigger international disputes, as we have seen with the Myitsone Dam and the Letpadaung Copper Mine. The NLD is urged to conduct a participatory consultation in the New Yangon City project and review the Swiss Challenge model to avoid backlash in the course of project development.
About the author: Debby Chan Sze Wan is a Ph.D. graduate from the Department of Politics and Public Administration, The University of Hong Kong. Her research concerns business and human rights with a focus on Myanmar.
