Chinese Name: 仰光新城
Location: Kyeemyindaing Township, Seikgyikanaungto Township, and Twantay Township in the Yangon Region, Myanmar (Phase One); Dala Township, part of Kawhmu Township, and part of Kungyangon Township in the Yangon Region, Myanmar (Phase Two)
Type of Project: Real Estate
Project Developer(s): The sole developer is the New Yangon Development Company, wholly owned by the Yangon Regional Government (no Chinese developer is involved)
Main Contractor(s): China Communications Construction Company, Ltd. (CCCC)
Known Financiers: n/a
Cost: 1.5 billion USD
Project Status: Planned
According to a Master Plan Report released by the developer in May 2019, the New Yangon City project will urbanise an area with a population of around 50,000 that was mostly farmland, so meeting the burgeoning demand for industrial, commercial, and residential space in the Greater Yangon region. According to the developer’s draft New Yangon City Development Guidelines from August 2019, around 25% of the Phase One site will be dedicated to the industrial sector, 35% to residential use, 14% to the existing villages and their buffers, and 14% to flood resilience and drainage facilities. Phase One of the project lies in Twantay, Kyeemyindaing, and Seikgyikanaungto townships on the western bank of Yangon River. The site is separated from western downtown Yangon only by a strip of water, but no existing bridge or ferry connects the two sides. Phase One of the project covers an area of 88.30 square kilometres (around 20,000 acres), with the Pan Hlaing River bordering the site to the north, Yangon River (Hlaing River) to the east, and Twantay Canal to the south. Phase Two is envisaged to sprawl south from the Twantay Canal to the coast of the Andaman Sea, covering 600 square kilometres (around 148,000 acres) in Dala, Kawhmu, and Kungyangon townships.
The NYDC, a firm wholly owned by the Yangon Regional Government, has been tasked with developing the megacity. While Yangon Regional Chief Minister Phyo Min Thein, a confidant of State Counsellor Aung San Suu Kyi, has been championing the project, the most visible public face of the NYDC is CEO and Vice-Chairman of the Board of Directors Serge Pun (also known as Theim Wai), a mogul who also chairs Myanmar-based conglomerate Serge Pun & Associates and Singapore-listed Yoma Strategic Holdings.
Under an agreement signed in May 2018 with the NYDC, Chinese state-owned China Communications Construction Company, Ltd. (CCCC) was to prepare at its own cost a set of pre-project documents (PPDs) to define the scope of nine projects within the planned city. Among other things, these included two bridges, infrastructure for a ten-square-kilometre industrial zone, water and power facilities. Following a model that has been called the ‘Swiss Challenge’ or ‘NYDC Challenge’, upon the approval of the PPDs, the NYDC will negotiate a tentative contract with CCCC, publish the draft agreement, and allow other qualified firms to challenge the deal by offering better terms. If the NYDC finds a challenger’s bid preferable, CCCC can choose to either countermatch the competing offer or withdraw. In the latter case, the successful challenger will have to reimburse the costs CCCC spent on preparing the PPDs. The Chinese firm’s participation is controversial because the NYDC did not openly call for tenders before awarding the contract to CCCC.
Facing persistent criticism from regional lawmakers and the media, the Myanmar authorities have made it a point to diversify the foreign countries involved in the project. AECOM Singapore Pte Ltd was slated to carry out master planning in September 2018, and it completed the work in May 2019. Dutch engineering consultancy Royal HaskoningDHV conducted a flood risk assessment for Phase One of the project. The NYDC selected through tendering Thai state-owned PTT Group to prepare PPDs for power supply and distribution and an Indian consortium of Indraprastha Gas Limited and Gail for natural gas supply and distribution. Finally, the Ministry of Investment and Foreign Economic Relations announced in September 2020 that it had hired German consulting firm Roland Berger to oversee the ‘Swiss Challenge’ procedures.
The proposed project features in the China–Myanmar Economic Corridor (CMEC), an economic cooperation initiative proposed by China and agreed on by the two governments through an MoU in September 2018 (for more details see Myanmar’s country profile). During Aung San Suu Kyi’s Beijing visit in April 2019 and Chinese President Xi Jinping’s Myanmar visit in January 2020, the New Yangon City was among the projects both governments vowed to advance.
On 15 October 2020, the Myanmar government called for expressions of interest to compete against CCCC in the Swiss Challenge Tender Process to develop the industrial park with essential ancillary infrastructure envisaged under the project. By the deadline, the government received 16 proposals submitted by companies from nine countries.
From the outset, the project has been tainted by murky deals, opacity, and environmental risk concerns. The new city project—which until early 2017 was known as ‘Yangon Expansion Plan’ and ‘Yangon Southwest New City’—first garnered attention in August 2014, when Chief Minister of Yangon Region Myint Swe submitted a plan out of the blue to build a 30,000-acre new city in the southwest of Yangon to the regional parliament and awarded the development rights to an obscure firm, Myanmar Saytanar Myothit Public Company. One month later, pressure from lawmakers and the media over the opacity of the plan forced the government to halt and downsize the project. The area of the proposed city was later reduced to 11,716 acres and the Yangon Regional Parliament approved the revised plan in June 2015.
In a tender call announced in July 2015, the government received three bids from Yangon South West Development Public Company, Business Capital City Development, and Shwe Popa International Construction. However, the tendering process took place against the backdrop of the General Election, and after the NLD won in a landslide victory, the outgoing USDP chief minister reportedly invited all the bidders to develop the project together. The government did not officially announce the tender result. According to The Irrawaddy reporter Kyaw Phyo Tha interviewed by the author of this profile, the firms submitted a plan of joint development, which was approved by the Regional and Union Governments. The companies then formed the Yangon South West Development Committee and proposed to build a bridge across the Yangon River first. As the NLD and the new Chief Minister of Yangon Regional Phyo Min Thein vowed to scrutinise mega-projects approved by the USDP government, including the new city project, it became uncertain whether the three companies would be allowed to go ahead with the plan.
The Yangon authorities once mulled over alternative sites, such as Hlegu in northeastern Yangon. However, in February 2017 the Yangon Regional Government decided to move ahead with the southwestern site. On 30 March 2017, the Yangon Regional Parliament approved the New City project, which was controversially packaged in the Yangon Regional Planning Bill and set to start on 1 April. In July 2017, the Yangon Regional Government scrapped the 2015 tender result.
Initially, little information regarding the business model that would be used to develop the project was made known to the public. On 31 March 2018, the Yangon Regional Government launched its wholly-owned subsidiary NYDC, tasked with developing the planned city. Serge Pun was appointed the firm’s CEO and Vice-Chair of the Board of Directors. Pun introduced the ‘Swiss Challenge’ or ‘NYDC challenge’ at the company launch, but the procurement model did not become widely discussed until CCCC’s controversial participation in the project emerged.
Without any public call for tenders beforehand, on 2 May NYDC slated Chinese state-owned CCCC to prepare PPDs to define the scope of nine projects within the planned new city. Even though the NYDC claims that the use of the ‘Swiss Challenge’ would foster competition, CCCC would still enjoy an implicit advantage, as the scale of the project, which includes nine composite infrastructure projects, as well as the requirement that the contractor has to bring finance for it, sets a very high entry barrier. Moreover, CCCC has a dubious reputation given its record of engaging in bribery and corruption in projects around the world. In response to the public concerns, Serge Pun said in a 2018 town hall meeting that the NYDC appointed CCCC to ‘avoid wasting time’. In a 2019 consultation meeting, while refusing to comment on CCCC’s track record, he stressed that CCCC was the only company that could meet NYDC’s basic condition of bankrolling all the infrastructure projects.
Pressured by the Yangon regional parliament members and members of civil society, the NLD government responded by dividing the project into different components for separate bidding, thus allowing more companies to participate. Aung San Suu Kyi also promised that the tender process would be ‘open, transparent, and competitive’.
The NLD-led Yangon Regional Government’s use of funds in relation to the New Yangon City project was also called into question. According to NLD regional parliamentarian Sandar Min, the lawmakers were not informed of the administration’s injection of 10 billion kyats (approximately 6.5 million USD) into the NYDC in the fiscal year 2016–17 until the auditor general’s report revealed this fact. Nor did the government consult the legislature before implementing the project.
Remaining concerns include the topographical flaw of the proposed city and its financial viability. The highest point of the site stands no higher than five metres above sea level. The strategic flood risk assessment commissioned by the NYDC also recognised that the proposed city would be vulnerable to floods elicited by tide and storm surges, river discharge, and precipitation. Building a resilient city on low-lying land will also be costly. The NYDC has stated that the burden of financing the project would fall entirely on private investors, with the public company providing only the land.
A number of media reports—for instance this and this—have shown that the local farmers in Twantay were hopeful that a new city project could help improve their economic situation. Unlike adjacent Hlaingthaya, which hosts a large industrial zone, and Dala, which is linked to Downtown Yangon by an hourly ferry, the area designated for Phase One of New Yangon City is sparsely populated, with the villages cut off from the nation’s commercial hub on the other side of Yangon River. According to current compensation plans, the villagers will receive parcels of developed urban lands instead of a defined amount of cash, a design believed to be fairer for the villagers to share the dividend of urbanisation. The resettlement process started in the first quarter of 2019.
20 April 2021: New source added.