New Yangon City to be Built on Land West of the Yangon River!

New Yangon City to be Built on Land West of the Yangon River 

- New Yangon City aims to generate two million jobs;

- New Yangon Development Company Ltd., is 100% owned by the Yangon Regional Government;

- Initial infrastructure works in the first phase of the development are expected to exceed US$1.5 billion;

- NYDC Challenge model to be used to ensure fair competition, efficiency and transparency.

. .

Laying the Foundation to Attract Businesses

Happy Myanmar New Year to all.

In my first blog, I had explained the vision of NYDC – which is to create 2 million new jobs. So what does it take to create 2 million new jobs? What are the requirements of turning this vision into a reality?

During the launch of NYDC in March, Yangon Chief Minister U Phyo Min Thein said that the improvement and promotion of the country’s manufacturing sector is one of the key focus of NYDC. The manufacturing sector is key to creating a large number of jobs within the shortest period of time as it is a sector that requires a large number of workers. It is therefore vital that the New Yangon City creates a foundation that is favourable to attract manufacturing businesses to the new City.

The key factors that would encourage and convince businesses to set up factories in the New Yangon City are i) an efficient and business friendly climate related to government policies and administrative systems: ii) reliable and sufficient supply of electricity and clean water; iii) good connectivity- roads, access to ports, telecommunications networks and other basic infrastructure support; and lastly, iv) skilled workers.

Having these key components lay the foundation for the creation of a strong manufacturing sector that creates new jobs. Without this foundation, we won’t be able to attract businesses and investors to the New Yangon City to set up factories. Without the factories, there won’t be jobs, and the NYDC’s vision of improving our people’s lives through access to new opportunities and employment will not come true. It would just be a dream. 

NYDC’s foremost focus at this inception stage is to concentrate on attracting investors who would fund the development of these basic infrastructure works so that we could turn the dream into reality. Negotiations with many potential investors are underway to undertake these investments and we look forward to reporting to the public shortly in this regard.

Regards, 

Serge Pun

 

New Yangon Development Company Limited has singed a Framework Agreement with China Communications Construction Company Ltd on 30 April 2018, for the preparation and submission of a detailed project proposal to provide infrastructures works related to the first phase of the development of the New Yangon City.

Kick-starting Stage 1 of the NYDC Challenge

This week is an exciting week for NYDC. We officially embarked on the first stage of the NYDC Challenge with the signing of a framework agreement with a leading global infrastructure company whereby they will prepare and submit a detailed project proposal related to the building of key infrastructure for the new Yangon city. The company is Hong Kong-listed China Communications Construction Company Ltd., (CCCC). 

To recap -- the NYDC Challenge is a model adopted and modified from the global model of Swiss Challenge; a model that lays the foundation for fair competition, efficiency and transparency. This framework agreement marks the first stage of the NYDC Challenge Model where a company that is qualified and competent to undertake the first phase of the development is selected to submit a set of Pre-Project Documents (PPD) which includes technical specifications, financial proposal and business model for NYDC’s review. 

But let me be clear. This does not mean that CCCC has been awarded the contract for all the infrastructure works in Phase 1. Once CCCC submits the PPD and it is approved by NYDC, the PPD will be made public to allow any party to challenge the proposal with better terms if they feel they are qualified. However, it has to strictly follow the terms and conditions of the agreement as this allows us to compare apples with apples.

If there is a company who is able to challenge with a lower bid, CCCC will be allowed to match the offer or forego. If CCCC chooses to forego, the second party will be awarded with the contract and will have the obligation to reimburse all costs incurred in connection with the preparation and submission of the PPD. Those costs will be agreed between NYDC and CCCC prior to the initiation of the tender process.

 

Why China Communication Construction Company

Since the launch of NYDC last month, questions have risen on social media and news media on why is NYDC working with a Chinese company, and some fear that China’s national interest may take precedence over Myanmar. 

Firstly, for a project of this scope and size, it is important to work with companies that have the expertise, experience and financial capabilities. We welcome CCCC's project proposal to lay the groundwork for the tender process as we believe the company has the required capability and sufficient experience of planning, designing, financing, constructing and developing regional developments similar to this project.

CCCC is the world’s largest highway and bridge design and construction company and is Asia’s largest international contractor. It has designed or constructed seven of the world’s 18 suspension bridges with a main span of more than 1,000 meters. It built the bridge that links Hong Kong and Macau which is considered among the longest fixed-links in the world, as well as the Beijing-Shanghai high speed railway which is the world’s longest high-speed constructed in a single phase. CCCC comes with depth of experience.

CCCC is a publicly traded company listed in Hong Kong, and is one of China’s largest state-owned enterprise. It’s shareholders include a multiple of international institutional investors. CCCC comes with financial clout.

Why would we not want to work with one of the largest and more experienced company in the global infrastructure industry space? We look forward to receiving their pre-project document and kick-start the next stage of the challenge. 

Regards,

Serge Pun

For more CEO Weekly Blog, Please visit : http://nydc.com.mm/en/ceo-weekly-blog/

 1MDB probe shines uncomfortable light on China's Belt and Road!

Scandal is only latest example of dangerous lack of transparency in showcase program.

China's reputation suffers as the 1MDB scandal shows.   © Getty Images

The story is still unfolding: Malaysian officials have announced a probe. Beijing has denied the report. Former Malaysian Prime Minister Najib Razak, who has been charged with corruption over 1MDB, denies the allegations against him.

What can no longer be denied is that the BRI is opaque by design. By limiting outside scrutiny, the initiative's lack of transparency gives Chinese companies an edge in risky markets, and it allows Beijing to use large projects to exercise political influence.

Of course, Chinese companies are not alone in being accused of peddling influence. But authorities in the U.S. and EU are more vigilant in policing their own companies abroad. China adopted a foreign bribery law in 2011 but has done little to enforce it. Chinese companies are also among the least transparent, according to a Transparency International study of 100 companies in 15 emerging markets.

As Chinese companies push deeper into emerging markets, inadequate enforcement and poor business practices are turning the BRI into a global trail of trouble. A long list of Chinese companies have been debarred from the World Bank and other multilateral development banks for fraud and corruption, which covers everything from inflating costs to giving bribes.

Consider the experience of China Communications Construction Co. (CCCC), among the BRI's most active companies. It was debarred by the World Bank in 2009 for eight years for alleged fraudulent bidding on a highway contract in the Philippines. CCCC denied the allegation at the time. Last year, its subsidiary, China Harbour Engineering, was publicly accused by Bangladeshi government ministers of offering a bribe to a Bangladeshi official in connection with a construction project. CCCC later told Bloomberg the allegations were "a mistake."

But after being blocked from the World Bank and other multilateral development banks, Chinese companies can still call home for support. Beijing's own policy banks have doubled in size since the turn of the century, and Chinese lending to developing countries now exceeds the major Western-backed multilateral development banks.

Corruption allegations multiply partly because China's largest lenders are opaque. Projects are publicized after contractors are picked, and loan terms are rarely released. As a former president of China Ex-Im Bank said in 2007, "We have a saying: If the water is too clear, you don't catch any fish."

In many of the 80-plus countries that China's Belt and Road aims to connect, corruption is in any case endemic. Among participating economies, the median credit rating is junk, so alternative lenders stay away. Chinese construction companies benefit because -- backed by state financing and often state ownership -- they are willing to take risks that others will not. They also know that, if the going gets tough, Beijing can intervene politically on their behalf.

China, like any major lender, exercises political influence well before funds are transferred. In recent years, for example, the prospect of Chinese infrastructure loans has helped persuade the Philippines and Cambodia to reevaluate military or diplomatic ties with the United States.

A willingness to handle huge financial deals opaquely provides even more opportunities for political leverage. By agreeing to inflate project costs, for example, Beijing can funnel money to its friends in high places. In Sri Lanka, Chinese construction funds were allegedly used for Mahinda Rajapaksa's failed reelection bid, according to an investigation by The New York Times. Rajapaksa has denied the allegations.

A backroom deal can itself become a source of leverage, since either side could make demands and threaten to expose the other. But Beijing holds the stronger hand: Chinese officials are not immune to reputational risk, but they do not face democratic elections, unlike many leaders in recipient states. Chinese officials also have more options. Given the immense demand for infrastructure, China has more countries courting its investments than its partners have alternative sources of investment.

Beijing's cynical approach might seem clever, but it is actually risky and shortsighted. When projects are poorly chosen -- because of political or corrupt considerations -- and do not generate sufficient returns, recipients struggle to pay back loans. Scandals reveal the true beneficiaries of these deals, and popular resentment grows. China's reputation also suffers, as the 1MDB scandal now shows.

Asian leaders facing reelection will take note that Najib grabbed China's Belt and Road as a lifeline, but it became a noose. Prime Minister Mahathir Mohamad, who defeated in Najib in national elections last year, made it a central campaign issue. After winning, he launched investigations and canceled several projects.

China is far from the first to fall into the trap of launching projects without adequate oversight and has much to learn from others. Multilateral lenders have developed more stringent lending practices precisely because their donors made many of the mistakes that Chinese companies are now repeating.

The experience of Japan, now a promoter of some of the world's highest infrastructure standards, is instructive. When the Philippine President Ferdinand Marcos fled office in 1986, his papers exposed a system of corruption implicating dozens of Japanese companies. The resulting embarrassment in Tokyo helped catalyze real reforms, leading to greater transparency, more open competition, and eventually Japan's first official aid charter.

Until Chinese officials improve transparency standards, the international community should provide better alternatives to Chinese loans and publicize the perils of opaque approaches to building infrastructure. Leaders in recipient countries must also demand greater transparency -- or risk drowning in the BRI's murky waters.

Ref:https://asia.nikkei.com/Opinion/1MDB-probe-shines-uncomfortable-light-on-China-s-Belt-and-Road

asnthanhan blog's