Yangon’s battle against unlicensed contractors

With more and more unlicensed contractors cooperating with landlords to build illegally in Yangon, local administrators say they are struggling to find ways to stop the unregulated boom in low-quality apartments.

Yangon City Development Committee has been fighting a losing battle against illegal construction for several years, while new contractors continue to open unlicensed businesses, said U Than Htay, head of the engineering department (building).

“Because they are still building and selling to this day, apartment buyers are losing out. YCDC finds it difficult to control the situation since these contractors have been unlicensed from the start,” he said.

“We encourage people to use licensed contractors, or they will have no protection if the company runs away. If a legal contractor does something wrong, we can confiscate their licence and their K5 million deposit.”

New five- or six-storey apartments sell well if they are cheap, even if they are low-quality, he said. When YCDC orders the illegal construction work to stop, the buyers lose out.

“Buyers should tell the landowner if they are about to buy a room, but now contractors are selling cheap rooms without informing the landlord how many apartments they are building. Later, when contractors run away, there are lawsuits,” said U Than Htay.

Many companies are building illegally to save on time and money, he said. To legally build a mid-rise project, a contractor must pay a licensed engineer, an architect, a lawyer, a ground tester, the Fire Services Department and YCDC, in addition to an insurance premium of K5 million. Skipping these costs enables contractors to build quickly and sell cheaply, he said. Unlicensed contractors are also able to offer some of the money they have saved to the landowner, making it difficult for licensed builders to compete.

Unscrupulous landowners are also known to contact unlicensed contractors and persuade them to build. YCDC has filed lawsuits against the companies responsible for 2072 illegal buildings and has forbidden further work on 76 of these, after deeming them unsafe.

“If construction is at the foundation stage, we sometimes tell companies to tear the work down, but we don’t usually ask them to demolish the entire building. We tell companies to take down fences and verandas and we stop them from putting up additional floors,” said U Than Htay.

Once YCDC has issued a letter ordering contractors to stop work, they summon them to court. It can take two months to prosecute a contractor, and construction can continue during this time. Meanwhile, a court can impose a daily fine from K10,000 to K50,000, but usually the fine is minimal. As a result, illegal construction is a growing problem.

Since 2012, the public has also been mobilised to inform YCDC about illegal building work. Most of the information has come from South Okkalapa, North Okkalapa, Thingangyun, Hlaing, Insein, Kamaryut and Dawbon townships.

For U Kyaw Kyaw Soe, joint secretary of the Myanmar Construction Entrepreneurs Association, it is almost impossible to keep track of all the new illegal buildings across the city.

“So many people are building without a licence, causing real trouble for buyers. It happens so often, it is becoming the norm. I think problems happen because unlicensed companies use unskilled workers,” he said.

“We need a better solution, because contractors sell the rooms and run away, leaving the landowner, township officials and buyers to deal with the faulty buildings.”


Source: Myanmar Times

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