Yangon high-rise review will cause bankruptcies, developers say

Twelve developers ordered by the government to reduce the scale of their high-rise residential projects in Yangon said yesterday that the review – which includes a total of 185 projects – could cause up to US$6 billion in losses and force many companies out of business.

The developers held a joint press conference in Yangon yesterday to outline the impact the ruling will have on their projects and warned of serious consequences if the government demands arbitrary changes to major long-term investments.

In May, authorities suspended all projects in Yangon with nine floors or more, pending an inspection to ensure they were all compatible with draft urban plans. In the first round of results published last week, 12 developers were told to cut the number of floors or change their designs.

A total of 185 projects were suspended – 64 of which were already under construction. Developers said yesterday that if more companies were also told to dramatically alter their blueprints, they stood to lose a combined $5 to $6 billion. The 12 companies alone would lose $340 million, they said.

“We have stopped work on our construction sites for around two months, and if we have to demolish floors that have already been built there will be consequences,” said U Myo Myint of MKT Construction. “We will have to break our commitments to buyers, subcontractors, foreign partners and banks. If we have to follow these orders, we will repay our debts as much as we can, but some of us will not be able to, and will go bankrupt.”

Many developers felt the government had broken its own commitment, by rescinding the original building permits. They also accused it of lacking transparency, because it did not make the review criteria public.

“The [high-rise inspection] committee said it wants to save Yangon and the character of Yangon,” said U Myo Myint. “These are very good words to use, but they should focus on checking whether high-rise projects are following policies set out by the former government or not. They shouldn’t inspect according to new policies,” said U Myo Myint.

U Ye Min Oo, a spokesperson for the high-rise inspection committee, told The Myanmar Times earlier this week that the review is simply to check that projects comply with draft urban plans, which are already in the public domain. However, he said the committee was also considering the impact of projects on the city, including on local residents, traffic congestion and the environment.

“We are inspecting the technical standards of buildings and their impact on the city,” he said. “If a project seems to present a danger to the city’s character or to residential areas, even if the construction is sound, we will tell the company to make changes.”

Developers yesterday said they want to continue building under their original permits and do not want to knock down floors. They said they will try to meet with MPs in the Yangon Region government in the hope of reaching a compromise.

They also noted that each construction site hires around 500 workers, meaning the suspension of more than 100 projects has put more than 50,000 labourers out of work.

“We are not privileged people and we are not saving our city, but we are people who want to develop the city as well as we can,” U Myo Myint said.

“When this country transitioned to a civilian government we believed that we, the developers, could help to move this country forward. We were enthusiastic about democracy, but it seems that our second civilian government only wants to return to the ways of the past.”


Source: The Myanmar Times

NB: The best way to find information on this website is to key in your search terms into the Search Box in the top right corner of this web page. E.g. of search terms would be “property research report”, ”condominium law”, "Puma Energy", “MOGE”, “yangon new town”,"MECTEL", "hydropower", etc.