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Rangoon MPs to review ‘outrageous’ city rent deals, citing major lost revenue

Rangoon’s Shwedagon Pagoda is seen in the distance as buildings dominate the foreground in this photograph taken on 23 September 2015. (Photo: Reuters)

Lawmakers in Rangoon’s divisional parliament are demanding a wide-ranging review of rental contracts that they suspect were awarded at knockdown prices under the previous military-backed administration of President Thein Sein.

The agreements, which cover amusement parks, land plots and nearly 1,000 shops on state-owned property, were so lopsided in favour of the companies that they have cost the divisional government upwards of $40 million in missed revenue a year, according to a report submitted to the legislature by the accountant general for Rangoon Division, Khin Than Hla.

The response to the report has been swift and blunt.

“These contracts are outrageous,” Tint Lwin, the chairman of the Public Accounting Committee, told Myanmar Now in a recent interview. “These businesspersons, as responsible citizens, should agree to rescind these contracts as the administration has changed.”

Khin Than Hla said contracts were awarded without transparency or a proper bidding process.

Among the firms singled out in her report for the 2015-16 fiscal year is Natural World Company Limited, which runs an amusement park inside the larger People’s Park. It won a 25-year lease at 6 kyats (less than 1 cent) per square-foot in 2011, and when factoring in market prices the loss to the state is about $10 million a year, the report said.

Eight companies renting land in Myakyunthar Park on Kabar Aye Pagoda Road have leases for 25 kyats per square foot, amounting to a loss of $16 million per year, the report said.

Natural World Company, according to details of the contract explained in the accountant general’s report, agreed to an annual rental increase of 10 percent. But even with the increase, the losses remain.

Tin Lin, a Natural World manager, defended the agreement in an interview with Myanmar Now, citing associated costs the company has to bear.

“People don’t take into account the growing expenses for the maintenance of the park. They are just talking about the low rental price for the park,” he said.

Kyi Pyar, an MP for Kyauktada Township, said in an interview with Myanmar Now that the accountant general’s office has called on the divisional parliament to review the deals.

“These contracts failed to focus on the public interest,” she said. “The incumbent administration and these business groups should review the contracts for renewal.”

Aung San Suu Kyi’s National League for Democracy dominates both the divisional and national legislatures after it won elections in 2015, edging out Thein Sein’s Union Solidarity and Development Party.

Htay Aung, a former member of the Yangon City Development Committee (YCDC) who worked there during the previous administration, said he didn’t always agree with the figures coming across his desk, but he faced pressure from superiors to not push back too much.

“YCDC was just there to sign lease agreements under the order of the regional government,” he said, pointing to the former chief minister of Rangoon under Thein Sein, Myint Swe, who preceded the current official in the post, the NLD’s Phyo Min Thein.

Myint Swe, who was a military commander in Rangoon under the junta before becoming chief minister, is now one of Burma’s two vice presidents, appointed by the army.

He did not immediately respond to a request for comment sent to his office this week.

This story was originally published by Myanmar Now here.