Myanmar Government Invites Submissions of Competing Proposals for China-Initiated New Yangon City Project
The Myanmar government has invited investors to submit competing proposals against a Chinese company’s proposal to develop an industrial park and related infrastructure for the New Yangon City project, in a move that brings the backbone project under China’s ambitious Belt and Road Initiative (BRI) one step closer to implementation.
On Thursday, the government’s Swiss Challenge Tender Committee announced that expressions of interest by companies wishing to compete in the “Swiss challenge” tender process to implement the project would be overseen by the German consulting firm Roland Berger. In its announcement, the committee gave interested companies just seven days to submit their expression of interest (EOI), setting a final deadline for submissions of 3:00 p.m. on Oct. 22.
New Yangon City is one of the backbone projects in Myanmar for Chinese President Xi Jinping’s vast BRI, which is envisioned as a grand global infrastructure network. Xi has branded the New Yangon City project as a pillar of the China-Myanmar Economic Corridor (CMEC), a key component of the BRI.
Under the Swiss challenge process, the initial development proposal put forward by Beijing-based China Communications Construction Co. Ltd. (CCCC) will be made public to allow qualified firms a chance to offer better terms. If a company successfully challenges CCCC with a lower bid and better terms, it will be required to reimburse CCCC for the costs incurred.
As the original proponent, CCCC will have the right to match or improve on the proposal of the winning challenger for up to 45 working days from the announcement of the superior challenger bid.
According to the committee, the proposed project includes both public works and infrastructure concessions. Proposed public works include a Yangon River Bridge, municipal roads and municipal infrastructure for resettlement areas.
Proposed infrastructure concessions include an industrial park, water treatment plant, wastewater treatment plant, power plant and commercial and residential land areas, the committee said.
The committee said companies from any country can participate in the Swiss challenge tender process, which will be conducted in a transparent manner.
It said shortlisted applicants will be provided with information about the Request for Proposal (RFP) (including where to access the RFP) by the committee no later than seven working days after the deadline for EOI submissions. The RFP will provide further details on the industrial park, including the scope of work for essential ancillary infrastructure, documents to be submitted by applicants, and a timeframe for the Swiss Challenge tender process, according to the committee.
A qualified entity is defined as one that has experience in the development, construction or operation of at least one project related to industrial parks, commercial or residential property or infrastructure (such as roads, bridges, power plants, water supply systems or other relevant infrastructure), the committee said.
The Yangon regional government-owned New Yangon Development Company (NYDC) and CCCC signed an agreement in 2018 under which the Chinese firm was to draw up a proposal for the first phase of the project worth US$1.5 billion (1.95 trillion kyats). However, the project has been a source of controversy due to its flood-prone location, as well as corruption and bribery accusations against CCCC in relation to its development deals in at least 10 countries in Africa and Asia.
In July, Myanmar’s government decided to unbundle the project to reduce its size and cost, hoping to encourage other firms to join the challenge. The decision followed criticism that the huge initial investment required under the project’s original plan would deter other investors. According to the Yangon Region minister for planning and finance, the initial project would be worth $800 million.