Mak­ing sense of the high-rise re­view

The Myanmar Times - - Business - ZAY YAR LINN za­yarlinn@mm­ MYAT NYEIN AYE my­at­nyeinaye@mm­ STEVE GIL­MORE s.gil­more@mm­

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.

De­vel­op­ers floored

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.

Zoned out

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.

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