Making sense of the high-rise review
AFTER three months of bitter argument and amid accusations of opacity and inaction, the government has backed down from attempts to enforce serious changes on a group of high-rise projects. The Myanmar Times looks at what happened to a bold but massively disruptive review of Yangon’s high-rise buildings by an administration promising a new era of transparency.
The fundamental case for the citywide review – now in its 101st day – has proved phenomenally divisive. Many developers were angry that the government would freeze projects that had received permission under the previous administration.
Other commentators defended the review as a positive move to ensure Yangon’s long-term development is wellplanned and sustainable. Some lauded what they perceived as an admirable effort to redress corruption in the construction industry.
But critics and supporters alike said the review should be conducted as transparently as possible, and here construction industry heads say the government failed badly.
The freeze on high-rise construction began with an announcement on May 14 (see timeline), which Yangon City Development Committee – an administrative body elected by municipal poll – issued at the request of the Yangon Region government.
That announcement stated that any building project with nine storeys or more that had received a permit in principle from YCDC would have to stop temporarily for a review. Projects that receive a permit in principle still lack formal permission to begin construction.
Among developers, investors and the public, however, the government’s decision two days later to review another group of 64 buildings that had received a full permit and legally begun construction drew far more attention.
The Yangon Region government did not publicly announce that decision. Instead, YCDC on May 23 sent private letters to 12 projects on this list of 64 instructing them to halt construction.
But there was confusion about how many letters were sent out and why. Region government spokesperson U Ye Min Oo said the only stop letters sent out as part of the review were to those 12 projects. But at least two other developers with projects on this list of 64 said they were sent private letters from YCDC in May telling them to stop work pending a review.
One of the letters seen by The Myanmar Times simply informs the firm that YCDC “needs to review the building’s permit”, which requires “temporarily suspending construction”. U Ye Min Oo said he was sure that the letters were not related to the review.
However, YCDC secretary Daw Hlaing Maw Oo said yesterday that in fact letters were sent out to other buildings on the list of 52, because the intention had been to subject them to on-site reviews.
She could not comment on how many letters were sent to projects on that list of 52 other than the 12, but at least two other developers – U Myo Myint of MKT construction and U Kyaw Kyaw Soe of System Engineering – received instructions to halt in late May.
The confusion over the stop letters appears to stem from indecision over how many buildings would be subject to on-site inspections. U Ye Min Oo confirmed the initial plan had been to visit all 64 buildings.
An inspection committee, chaired by Yangon Region Minister for Electricity, Industry and Transportation Daw Nilar Kyaw, began visiting the 12 buildings, which at that point had been frozen for almost one month, on June 21.
U Than Htay, head of the Department of Engineering (Building) at YCDC – but not a member of the inspection committee – said in the first week of July that the results from those 12 buildings were in. The Yangon Region government would review the findings and tell YCDC whether the 12 buildings would receive new permits, after which on-site reviews on the other 52 would begin, he said.
That same week on July 2, however, a Yangon Region government cabinet meeting decided privately that the other 52 would not be subjected to on-site inspections.
The results of the 12 on-site inspections that did happen were released on July 13 to general furore, as they instructed drastic changes. Affected developers were hugely critical of the decision, with one saying there had been no transparency in how the review was conducted, no standards made clear and no consultation with the developers.
U Ye Min Oo said the government had explained its reasoning to the developers in detail, but did not want to make the information public.
The publication of the results also marked a sharp change in the amount of information that YCDC and the Yangon Region government provided to the media. In the aftermath, YCDC officials said they were no longer authorised to provide information to the press. YCDC and region government officials directed all requests for information to spokesperson U Ye Min Oo.
By the time these initial results were published the construction freeze on many projects had lasted for around two months. Cash-flow issues on some sites had resulted in workers being paid in rice or oil, while other developers had told workers to seek employment elsewhere.
Businesspeople warned the government its review jeopardised international investment and local livelihoods. Financial industry figures said the review had prompted some banks to curb lending.
Meanwhile, developers involved in the 12 projects presented a united front, holding a press conference on July 21. They complained that the 12 buildings singled out for inspection were all private ventures on private land and suggested that projects with some government involvement – or on government or military-owned land – were purposefully left out.
U Ye Min Oo said no high-rise buildings were neglected during the review.
A day after the developers’ press conference YCDC published a press release stating that the review of all the 64 buildings had finished.
This should have freed developers like U Kyaw Kyaw Soe and U Myo Myint – who had received stop letters – from a state of suspension, but they would only be told they could proceed some eight weeks later.
As to what had prompted that decision, Daw Hlaing Maw Oo said the committee had reviewed the 64 buildings on paper as a first step, but many were either finished or almost complete. Therefore, the committee had decided to visit “the 12 worst” projects to assess the situation, she said.
These “worst” buildings were those with the biggest potential impact on residents and the city, she said, but did not elaborate further.
This lack of detail relates to a second charge against the government’s review – a lack of transparency on how the buildings were judged.
Daw Hlaing Maw Oo said the committee has had clear standards from the outset, which will be published after the review is over. But earlier government statements have caused confusion.
Yangon Region Chief Minister U Phyo Min Thein announced that although a Yangon zoning law was in draft format, its stipulations could be enforced on projects that had already
received approval under the previous government, according to Frontier magazine.
Supporting this idea, Daw Nilar Kyaw, leader of the inspection committee, told The Myanmar Times in early August that developers involved in the 12 projects instructed to make changes should explain why they violated draft zoning rules. But U Ye Min Oo said the proposed zoning rules were not used to inspect any of the projects as part of the review, because the law is still in draft format.
He said the 12 buildings were singled out for inspection because most of the other buildings were either finished or had received the building completion permit that allows people to move into a finished building.
But some – including the projects for which U Kyaw Kyaw Soe and U Myo Myint received stop letters – are unfinished and therefore have no completion certificate.
These projects did not receive onsite inspections because a YCDC review of the blueprints deemed inspections unnecessary, according to U Ye Min Oo.
This on-paper review used metrics such as floor area ratio, building coverage ratio, population density, street width ratio, and existing regulations on earthquake and fire safety standards. But the importance of each criteria differed from case to case, he said.
A member of the inspection committee, who is also a developer involved in some of the 64 buildings, provided The Myanmar Times with a full list of the 64 projects. He pointed to several uninspected sites that are being built on narrow streets or congested areas
that he argued were just as much in need of on-site inspections and changes as the 12 selected. The committee member, who provided the information on condition of anonymity, said he was unclear on how the government had decided which buildings to subject to on-site inspections.
Also unclear is why developers like U Kyaw Kyaw Soe and U Myo Myint were left in limbo. They said they were given no information about why their projects were stopped and were never contacted by the government. U Kyaw Kyaw Soe said his firm was left with an idle site and sent away its workers, but had to keep paying interest on loans.
The government announcement in July that the 52 projects were in accordance with regulations and could continue gave him hope. But when the firm contacted YCDC to ask for official approval to restart, YCDC responded that only the Yangon Region government could give the approval.
“They [YCDC] said if you want to proceed it’s at your own risk,” U Kyaw Kaw Soe said. He did not contact the region government directly, because developers are expected to take issues to YCDC, he added.
Resolution only arrived last week, when both firms received phone calls from YCDC’s Department of Engineering and were told they could continue.
Neither U Kyaw Kaw Soe nor U Myo Myint said they received any information on why their buildings were subjected to a three-month freeze.
Both have asked for official approval letters from the Yangon Region government, and expect them to be delivered soon.
A few days later YCDC publicly announced that the government had backtracked on its July judgement on the 12 projects subject to on-site inspections. These are now free to continue without having to make the severe changes instructed, but will have to abide by certain conditions – which are not being made public.
Developers involved in the group of 12 are similarly eager to have official confirmation. U Kyaw Kyaw Naing was told to cut six-and-a-half floors off his condo project in July, some of which were already built, but said he would only believe he was free to restart construction as planned “once we have the letter in our hands”.
Still waiting for resolution are developers with a permit in principle who had begun foundation work.
U Ye Min Oo said there are 78 such projects, and that as of yesterday the government had finished reviewing 50. He could not comment on when the entire review would finally be done.