Over­seas in­vestors sought

For­eign firms will soon be in­vited through a pub­lic ten­der to build low­cost hous­ing in Yan­gon, open­ing up the sec­tor to over­seas in­vest­ment.

The Myanmar Times - - Front Page - za­yarlinn@mm­times.com ZAY YAR LIN – Translation by Emoon

FOR­EIGN com­pa­nies will soon be in­vited through a pub­lic ten­der to build low-cost hous­ing projects in Yan­gon Re­gion, ac­cord­ing to the Min­istry of Con­struc­tion.

This will mark the first time for­eign con­trac­tors are given ac­cess to the af­ford­able hous­ing sec­tor in Myan­mar. Min­istry of­fi­cials have said they will pri­ori­tise build­ing hous­ing for the poor, af­ter in­her­it­ing a chronic hous­ing short­age from the for­mer govern­ment.

Con­struc­tion min­is­ter U Win Khaing promised in May to build more than 8000 low-cost homes na­tion­wide over the next two years, with each unit priced at less than K10 mil­lion.

This sup­ply will meet just a frac­tion of de­mand – the min­istry es­ti­mates that in Yan­gon alone, up to 1.8 mil­lion of the city’s 5.21 mil­lion res­i­dents own no land and are in dire need of af­ford­able hous­ing.

The govern­ment will need in­ter­na­tional in­vest­ment and ex­per­tise to meet its hous­ing tar­gets, said U Min Aung Aye, deputy di­rec­tor at the Depart­ment of Ur­ban and Hous­ing De­vel­op­ment.

He said a ten­der would be called through state news­pa­pers. “We plan to of­fer con­struc­tion con­tracts to for­eign com­pa­nies, on con­di­tion they can com­plete con­struc­tion within two years,” he said.

Un­der the pre­vi­ous govern­ment, the av­er­age cost of build­ing 1 square foot of af­ford­able hous­ing was quoted at K18,000. U Min Aung Aye did not want to com­ment on how much for­eign con­trac­tors would be paid.

He said the cost of build­ing will de­pend on im­port costs for con­struc­tion equip­ment, prices in the in­ter­na­tional mar­ket at the time of the ten­der, the ex­change rate and the choice of build­ing sys­tem.

“Prices also vary de­pend­ing on whether the con­trac­tor is build­ing low-cost hous­ing or af­ford­able hous­ing. Once we have a mas­ter plan, we will call a ten­der,” he said.

The govern­ment is plan­ning four ma­jor low-cost de­vel­op­ments. The first three, in Min­galar­don, Than­lyin and Dagon Seikkan town­ships, are still at the plan­ning stage.

Work on the fourth project – a 293-acre res­i­den­tial es­tate in Hlaing Thar­yar town­ship called Kyan Sit Min – started in Fe­bru­ary. The first 30 apart­ment blocks are be­ing built this month by seven de­vel­op­ers who jointly won a ten­der is­sued by the DUHD.

In­ter­na­tional in­vestor ap­petite will likely de­pend on the struc­ture and per­ceived trans­parency of the ten­der. In the past, in­vi­ta­tions to for­eign de­vel­op­ers

‘It is not easy for small firms, as most govern­ment projects re­quire the com­pany to pay.’

U Kyaw Kyaw Soe MCEA

have fallen flat, in­clud­ing a ten­der to build com­mer­cial de­vel­op­ments and a new rail­way sta­tion on 63 acres of prime land in cen­tral Yan­gon.

Smaller con­trac­tors also com­plain that past ten­ders have typ­i­cally favoured large com­pa­nies, as they have re­quired a large up­front pay­ment.

“Con­struc­tion com­pa­nies can only ap­ply for a ten­der if they can put up the money in ad­vance,” said U Kyaw Kyaw Soe, joint sec­re­tary gen­eral of Myan­mar Con­struc­tion En­trepreneurs As­so­ci­a­tion.

“It is not easy for small firms, as most govern­ment projects re­quire the com­pany to pay for the con­struc­tion, with pay­ment only set­tled in stages. More com­pa­nies might take part if the govern­ment makes sure the rules are trans­par­ent and fair.”

In this in­stance, ap­pli­cants will be judged on their com­pany history, fi­nan­cial strength and whether or not they are on a black­list, said U Min Aung Aye. He said the ten­der com­mit­tee will also check that com­pa­nies have enough skilled work­ers and ma­chin­ery to com­plete the project.

U Yan Aung, gen­eral man­ager of Asia Con­struc­tion, told The Myan­mar Times that he hoped the govern­ment would make its ten­ders trans­par­ent.

“In the past, many ten­der win­ners sold their con­struc­tion per­mits to other com­pa­nies at in­flated prices, and the qual­ity of build­ings suf­fered as a re­sult,” he said.

Photo: Aung Myin Ye Zaw

A res­i­dent walks into Yan­gon’s Min Ma Naing govern­ment hous­ing project.

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