Myanma Railways has shortlisted 15 firms and joint ventures, including a number of well-known local companies, that responded to an EOI to redevelop Yangon Central Railway Station and the surrounding area in downtown Yangon.
This is the railway ministry’s second attempt to tender the project, after an initial tender called in 2014 was cancelled last year, reportedly due to a lack of suitable applications. The project will be developed under build-operate-transfer terms.
Following a second call for expressions of interest in mid-2015, Myanma Railways received a total of 18 EOIs from potential developers from 14 countries, according to an announcement published in state media yesterday.
“On the basis of the information provided, Myanma Railways has shortlisted 15 potential developers who prove themselves capable enough for the development,” it said.
The list (see below) includes well-known local companies such as Yoma Strategic Holdings and FMI Group, owned by U Serge Pun, Capital Diamond Star Group owned by U Ko Ko Gyi, and U Mya Han’s Fortune International Group.
Among the other applicants, High Tech Concrete (Technology) is chaired by U Aik Htun of Shwe Taung Group, and Shwe Gon Development Group is owned by the founders of Red Link Communications. M&A-Iconic is associated with Myint & Associates, owned by U Moe Myint, and Great Genesis Gems is owned by U Thiha Aung of Young Investment Group.
International candidates include China Railway International Group, South Korea’s Lotte Asset Development and Megawide from the Philippines.
Shortlisted developers will now be asked to prepare and submit request for proposal documents, which will be available from March 6 to May 31, according to the notice in state media. Applicants will have to pay a non-refundable fee of US$30,000, payable to international banks with an established correspondence with state-owned Myanma Foreign Trade Bank.
“Myanma Railways gave out the EOI forms freely, and more than 100 companies took the forms, but only 18 companies applied,” said Myanma Railways spokesperson Ko Nay Lin Aung.
He dismissed concerns that the non-refundable fee is relatively high, saying that for a company who believes they can win the tender, the amount “is not much”.
The tender winner will be expected to take responsibility for all aspects of the project including “designing, engineering, financing, procurement, construction, operation and maintenance”, according to the EOI notice published last August in state newspapers.
The EOI announcement included no details about the proposed size of the site. It stated that Myanma Railways is committed to developing the area as a “rail concerned business, high-rise building, comprehensive development and transport system also the essential part of Greater Yangon City development [sic]”.
A Myanma Railways spokesperson said yesterday that he could not comment on details of the project.
Unsuccessful tender
When the original EOI was called in May 2014, U Htun Aung Thin, general manager of Yangon Railways (Lower Myanmar), said Myanma Railways estimated the project would cost more than $2 billion and would include high-rise hotels, shopping centres, office towers and shops.
A total of 34 developers and joint venture companies from 12 countries responded to the initial EOI, and 28 companies were shortlisted, but in the end only three firms submitted proposals – one from Taiwan, one from Vietnam and another from Singapore, according to a source close to the tendering process. The tender was scrapped as none of the companies were deemed suitable, they said.
A number of companies including Ooredoo Myanmar, Hongkong Land and Shwe Taung Development said that they chose not to pursue the application further than the EOI stage.
Others shortlisted for the original tender included Korea’s Lotte Asset Development, local firms including Ayeyar Hinthar Construction, and joint ventures including a tie-up between Myanmar’s Shwe Than Lwin Group of Companies and Japan’s Azusa Sekkei Company.
Those who decided not to pursue the initial application said there were several issues with the tender. Some said the size of the site – almost 63 acres – was too big.
“The whole project was just too large for the likes of any major foreign corporate to get involved given the ‘risk’ of the country and the opportunity itself,” said the Myanmar representative of an international company.
Others added that the ministry did not provide enough guidance and that developers were required to take on too much responsibility, including re-housing government staff and resettling families living along the edge of the track.
Source: Myanmar Times
