Yan­gon con­struc­tion projects claim heavy losses

De­vel­op­ers who were told by the Yan­gon City De­vel­op­ment Com­mit­tee to sus­pend con­struc­tion in May dur­ing a gov­ern­ment high­rise re­view claim the dis­rup­tion has lost them money and dam­aged their rep­u­ta­tion.

The Myanmar Times - - Front Page - ZAY YAR LIN za­yarlinn@mm­times.com

‘It’s not easy to bring back skilled work­ers who were laid off while the site was sus­pended.’

U Kyaw Kyaw Soe Sys­tem En­gi­neer­ing

HIGH-RISE build­ing de­vel­op­ers given the green light to re­sume con­struc­tion af­ter a ban im­posed by the Yan­gon Re­gion gov­ern­ment in May say the un­planned dis­rup­tion to their projects has led to sig­nif­i­cant fi­nan­cial and rep­u­ta­tional losses.

The freeze on high-rise con­struc­tion be­gan with an an­nounce­ment on May 14, 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 un­der the pre­vi­ous ad­min­is­tra­tion would have to stop tem­po­rar­ily for a re­view.

The gov­ern­ment as­sess­ment de­ter­mined there to be 185 projects that had re­ceived an in-prin­ci­ple per­mit from the pre­vi­ous gov­ern­ment, many of which had al­ready started lay­ing foun­da­tions. The Myan­mar Times re­ported on Septem­ber 13 that close to one third of these ten­ta­tively ap­proved projects have been told by YCDC they will need to make ret­ro­spec­tive de­sign mod­i­fi­ca­tions if they want to re­ceive a full build­ing per­mit.

Mean­while, some 64 ad­di­tional projects un­der con­struc­tion that did re­ceive a full per­mit from the prior ad­min­is­tra­tion were also told to halt for in­spec­tions. Af­ter a com­pli­cated and at times con­fus­ing re­view process, all of these build­ings were al­lowed to con­tinue. Many have since re­sumed con­struc­tion, but their de­vel­op­ers say they have ac­crued losses dur­ing the pe­riod of gov­ern­ment re­view.

Sites had to lay off work­ers, in­clud­ing hard-to-find spe­cial­ists, scram­ble to sat­isfy lenders who ex­pected steady re­turns, and pla­cate the own­ers of the fu­ture apart­ments, who had al­ready started pay­ing for them in ad­vance, de­vel­op­ers say.

U Kyaw Kyaw Soe, as­so­ci­ate gen­eral sec­re­tary of the Myan­mar Con­struc­tion En­trepreneurs’ As­so­ci­a­tion and the ad­min­is­tra­tive direc­tor of Sys­tem En­gi­neer­ing, said the stop­page had a huge im­pact on an al­ready sag­ging con­struc­tion mar­ket, and dam­aged cus­tomers’ con­fi­dence.

“My site has been al­lowed to re­sume work af­ter a three-month pause. But I have to start from the be­gin­ning. Aside from the fi­nan­cial prob­lems, it’s not easy to bring back skilled work­ers who were laid off while the site was sus­pended,” he said.

The most dif­fi­cult part of the build in­ter­rup­tion, he said, was restor­ing trust among his clients.

“Cus­tomers who had bought pre-sale rooms are now un­will­ing to make fur­ther de­posits. They’re wait­ing to see what hap­pens next,” he said.

De­vel­op­ers say the sus­pen­sion or­der was a blow to the in­dus­try that had hoped a new gov­ern­ment would re­vive the sec­tor af­ter a slow­down in the lead-up to the 2015 elec­tion. And the or­der had deep­ened in­dus­try un­cer­tainty, be­cause par­lia­ment has yet to is­sue by-laws for the lon­gawaited Con­do­minium Law passed by the pre­vi­ous gov­ern­ment.

U Kyaw Kyaw Naing, de­vel­oper of i-Green com­pany, said his high­rise project had been forced to take out un­planned bank loans in or­der to restart be­cause pre-pay­ing cus­tomers had stopped pay­ing, un­cer­tain the build­ing would be fin­ished.

“Even though we can re­sume work, we can’t start col­lect­ing the money we’re owed im­me­di­ately,” he said. “Peo­ple used to trust us, but now we’ve lost that trust, and buy­ers are say­ing they will pay us the 40 or 50 per­cent they owe, but only af­ter con­struc­tion is com­plete.”

Woo­ing back work­ers laid off as a re­sult of the stop­page was pre­sent­ing prob­lems in­dus­try-wide, said Asia Con­struc­tion gen­eral man­ager U Yan Aung.

“Every­body in­volved – en­trepreneurs, work­ers and cus­tomers – has been dam­aged by this. We can’t hand over com­pleted apart­ments to the buy­ers on the date agreed, and new con­tracts have to be drawn up,” he said. But the law is un­clear on how to deal with con­struc­tion-re­lated prob­lems.”

Yet the gov­ern­ment is stick­ing to its guns, say­ing that the re­view was needed to en­sure a sus­tain­able build­ing sec­tor in the cap­i­tal.

“If high-rise build­ings in other coun­tries do not meet stan­dards the gov­ern­ment will knock them down,” said Ye Min Oo, spokesper­son for the high-rise in­spec­tion team of the Yan­gon Re­gion Ggov­ern­ment.

He said the re­view was needed and in the case of the 64 projects un­der con­struc­tion they had not been asked to make ret­ro­spec­tive amend­ments. But the in­dus­try as a whole needed to lift, he added.

“We know the con­struc­tion mar­ket is cool­ing, but man­age­ment is also poor,” he said. – Trans­la­tion by Zar Zar Soe and

Khine Thazin Han


Photo: Aung Myin Ye Zaw

Con­struc­tion work­ers at a high-rise site at Yan­gon

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