Building contractors have their say
A new industry group for contractors has come together with a long list of grievances for Yangon City Development Committee.
OVER 500 of Yangon’s licensed building contractors met last week to debate forming an industry association, which will have a long list of policy complaints to take to Yangon City Development Committee.
The city’s contractors are banding together partly in anticipation of new YCDC regulations, and believe an industry association will make it easier for them to liaise with the government.
YCDC finished amending buildingpermit regulations last month, and the association can “stand up for contractors” if there are problems as a result of these new rules being enforced, said U Lar Sal, spokesperson for the association.
But at a meeting of over 500 potential association members on August 31 it became clear that contractors already have a number of concerns with existing YCDC policies.
The biggest grievance was against a K50 million deposit that licensed contractors must make with YCDC in order to operate. Some contractors remember a time – a little over 10 years ago – when the deposit was just K2 million and it was placed in a bank account that earned interest, said U Zaw Win, acting chair of the association.
The size of the deposit has crept up over the years, and YCDC now simply holds the deposit without paying interest, contractors said. This is particularly problematic for firms because inflation in Myanmar is in the double digits, according to recently published data from the Central Statistical Organisation.
The CSO monthly inflation figure for July was 10.59pc.
“We’re not sure where they put the deposit money,” said U Kyaw Htay Thein of Kyaw Construction Company at the meeting. “The old Yangon government kept the deposits in banks and we got interest now we don’t.”
Nay Win, deputy head of YCDC’s Department of Engineering (Building), said that the rules on paying interest on the deposit had changed 13 years ago, and YCDC now holds the deposit in a government fund.
Contractor U Chit Swe of Nay Zaw La Construction Company added that in addition the deposit, firms also had to pay an annual fee of K500,000 to YCDC and a K5 million permit deposit for each project.
That deposit is returned once a completed project receives a building completion certificate, but firms sometimes encounter difficulties getting the money back quickly, he said.
U Chit Swe had to wait around 2 months for his K5 million deposit after finishing a project earlier this year, he said.
“We need to pay a lot of money for a building [project], our deposit money is tied up and there’s no interest,” he said. “So for us these are big problems to discuss with YCDC after we found the association.”
Another issue that came up at the meeting is a new requirement stating contractors must secure agreement from 10 neighbouring houses or apartments – up from only two previously – before starting a construction site, said U Kyaw Htay Thein.
This also raises costs, because households demand payment in order to give their consent.
“Contractors shouldn’t have to pay, but if we don’t then people don’t sign the agreement letter, and without the agreement letter YCDC doesn’t given the permit,” he said.
U Nay Win said that residents living near construction sites often complain about disturbance, which had prompted YCDC to require that contractors get residents’ agreement. When contractors face issues securing this consent, including being asked for cash payment, YCDC can be flexible, he added.
“It doesn’t always have to be agreement from 10 apartments,” he said. “Sometimes we’ll reduce the number.”
But many attendees were upset, not only at the substance of the new YCDC rules and regulations but also because they are changed so frequently.
“They [YCDC] should hold discussions with contractors before amending rules for building permits because they sometimes make rules that are hard to follow,” said U Chit Swe.
A recent addition to YCDC’s building permit rules is that the bottom floor of buildings eight storeys or higher must be set aside for parking. But the lowest floor is also the most lucrative for developers, and the new parking regulation will reduce profits for the construction industry, he said.
YCDC revoked several contractor licences last year – the first time it had ever done so in response to firms breaking YCDC rules.
Spokesperson U Lar Sal said the licensed contractor association will be called the YCDC LC Association, but it has yet to apply for registration as an official industry body with the Yangon Region government.
Workers clean up at a construction site in Yangon.