The Myanmar government will split up the tender process of U Phyo Min Thein’s ambitious new city project, making it less difficult for companies to challenge its pre-ordained Chinese developer.
At an investment seminar organised by the Japan External Trade Organization today (July 29), Investment Minister U Thaung Tun said different components of the Yangon New City project will be separately tendered.
The new industrial park and ancillary infrastructure will be “unbundled” into smaller projects, which will then be put out to tender.
“We shall adhere to international best practice, ensuring that the process be carried out in a transparent manner through competitive tendering, supported by a leading international transaction advisory firm,” said U Thaung Tun, who did not name the company.
Though details have yet to be released, State Counsellor Daw Aung San Suu Kyi, also in the same seminar, affirmed that the bidding process will be “open, transparent,
and competitive”.
A pet project of Yangon Region Chief Minister U Phyo Min Thein, the “new city” scheme was launched in March 2018 and covers an area twice the size of Singapore
with a target of US$1.5 billion (K2.83 trillion) investment. The first phase involves 88.30 square kilometres which encompasses land on the western bank of the Yangon River, opposite Kyimyindaing township. U Phyo Min Thein has announced he is not seeking re-election for the 2020 polls.
New Yangon City Development (NYDC), the regional government-owned developer led by its CEO Serge Pun, signed an agreement with China Communications Construction Company (CCCC) to prepare “pre-project documents” for a raft of infrastructure proposals. It was widely criticised for doing so without calling a tender but said this was to “avoid wasting time” and a so-called “Swiss Challenge” would be carried out instead.
State-run CCCC has been embroiled in multiple scandals overseas, accused of corruption and bribery and was previously sanctioned by the World Bank for fraud.
The “Swiss Challenge” means other companies will be invited to beat the chosen companies but will need to reimburse their costs if the challenge succeeds.
U Thaung Tun’s announcement marks a shift for the megaproject because companies could now challenge CCCC for individual infrastructure proposals.
Breaking up the tender into smaller ones, however, does not address the fundamental flaw of the project location. The new city is located in an area which can withstand
only 90 centimetres of sea level rise. As Myanmar is one of the most vulnerable countries to climate change,