No competition for FMI's new housing contract

 

 

According to the sources, close to the project, FMI promised to build 1,600 flats for middle-income families and around 1,100 for lower-income families. While it will reap 70 per cent of the profits, the remaining 30 per cent will go to the government. 

They added that the contract was awarded to FMI at the end of last year, with approval from relevant government agencies, as well as high-ranking officials in the government. 

FMI is registered as a local investment holding company, with interests in a wide range of businesses. It recently became a shareholder of Thilawa Special Economic Zone. With Sanny Swe, it also invested in Mizzima, a local newspaper.

Several business expansion plans have been plotted, including the expansion of existing operations in the tourism and automobile divisions, the building up of FMI Air following the grant of a temporary air operator’s certificate, as well as additional investments in Meeyahta International Hotel Ltd, a 10-acre mixed used property development in the heart of downtown Yangon comprising two hotels, two office towers, a retail shopping mall, a service apartment and a high-end condominium.

The Myanmar government has planned a number of housing projects to cope with the urbanisation, which drives up land and accommodation prices. 

There are growing complaints over the bidding process for government land as well as the prices of the projects, though.

Like Pyinmapin, Pearl Garden Housing, to include 27,000 units, was designed to satisfy the housing demand among low-income families. It is being criticised for quoting the prices above the affordability of many people. 

Criticism is also growing over the government’s method in of handling development contracts. 

Shwe Than Lwin Co was given the green light to start a project on a 10-acre plot located between Sedona Hotel and the Central Bank of Myanmar’s building. The company gave back this plot to the government on the grounds that it would not generate profits. It later changed its mind and requested for the return of the land when the project started to show profits.

Without competition by other potential bidders, there is no guarantee that the government will reap fair returns from the investment projects. 

There are two more low-cost housing projects in Dagon Seikkan Township, a suburban area of Yangon - Ayeyarwun and Yadana.

Than Myint, planning and commerce minister for Yangon Region, said last month that both would be 60 per cent completed in the 2014-2015 fiscal year. He made the comments while submitting the regional project bill to the Yangon legislature. The two projects will churn out a total of 20,000 housing units. 

The Ayeyarwun project comprises twenty six 18-storey buildings with 10,608 units while the Yadana project will have twenty two 18-storey buildings for 8,976 units.

The two are to be financed by the state budget and foreign loans. Meanwhile, related infrastructure construction will receive state and regional budgetary allocations. 

Than Myint said that authorities are now discussing with respective agencies to carry out rthe enovation of old public housing, especially Lintlan, Yankin and Kandawlay housing.

Ayeyarwun and Yadana housing projects have been designed with the initial intent of providing cheap apartments, but the price tag cannot be cut below Ks 20 million [US$ 20,000] per apartment due to rising construction cost, according to the Department of Human Settlement and Housing Development.