Questions Raised About $300 Million Downtown Development Project

YANGON — Land clearing and demolition for a project worth more than US$300 million on the former site of a Defense Services Museum, near Shwedagon Pagoda, has prompted a lawmaker to inquire about the initiative in the upcoming parliamentary session.

U Kyaw Zay Ya, a Yangon regional lawmaker representing Dagon Township—where the site is located—told The Irrawaddy that the scale of the project on a nine-acre plot of land attracted his attention.

The lawmaker said that in the upcoming legislative session on Aug. 31, he would ask the government about the project details, which have not yet been made public. The project is the first such undertaking granted permission for investment under the new Myanmar Investment Law.

He also pointed out that some of his constituents were unhappy with the new project, which includes the construction of a hotel on the site where Jubilee Hall, once a landmark in country’s struggle for independence from British colonial rule, was located.

In the 1970s, the historic building was demolished to make way for the Defense Services Museum, which has since moved to Naypyitaw.

In 2011, the government announced plans to privatize land in Yangon, including state-owned colonial heritage buildings and military-owned land. Most of the areas were handed over to well-connected companies, while critics pointed to a lack of transparency in the selection and leasing processes.

The Irrawaddy has learned that the development project at the former Defense Services Museum was first approved under previous U Thein Sein-led government. The local Ayeyar Hinthar Holdings Co. Ltd. initially won the tender announced in December 2011, for developing and operating a hotel, offices and service apartment, and a shopping mall.

Ko Ne Ne Hlwam Moe, vice chairman of Ayeyar Hinthar, told The Irrawaddy on Tuesday that the company signed a leasing contract in 2013 with the government for 50-year terms with two 10-year extensions.

“Since 2013 we have been paying annual land use fees of US$2 million to the government,” he added.

But according to written correspondence seen by The Irrawaddy from the Yangon Region government to the company in January this year, the owner of the land in question is mentioned as the Ministry of Defense.

Later, the company partnered with the Japanese companies Fujita Corporation, Tokyo Tatemono Co. Ltd, and Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development (JOIN). The Myanmar Investment Commission granted investment permission for the joint venture in May 2017.

Under the joint venture, they will develop a nine-floor five star hotel operated by Japan’s Hotel Okura Co. Ltd., as well as offices and commercial facilities.

The total cost of the project is expected to reach $332.5 million, with construction to start at the end of 2017 and be completed by 2020, according to the vice chairman of Ayeyar Hinthar.

“It is a more than a $300 million investment in Myanmar. A nice project will be developed in this place. Many job opportunities will come and the government will get around $170 million in profits from leasing,” Ko Ne Ne Hlwam Moe said.

He said they are now doing a traffic impact assessment, as the Yangon City Development Committee is curious about how the project will impact the gridlock of the city.

Source: The Irrawaddy