Gridlock forces new car policies

New car import policies are being considered as the number of vehicles competing for space on Yangon’s archaic road network threatens to get out of hand.

The chief of the Yangon Region Government’s car parking analysis group, U Myint Cho, said that urgent action is needed and that the supervisory committee will reconsider existing rules.

The promise of modifications comes just over a year after the government pledged its car import policy would “never change” after a dizzying array of earlier changes left importers confused.

“While Yangon has too many vehicles, other regions and states still need more, so we can’t stop imports altogether. But we should change our car import policy for Yangon,” said U Myint Cho.

In 2011, the government allowed anyone with a national identity card to import a vehicle, and imports boomed. It is now impossible to control the number of cars entering the country, and traffic jams in Myanmar’s largest city are growing steadily worse, he said.

“In the Yangon region there are over 7 million people. Let’s assume that at least 3 million of these are over 18. The government can’t allow all of these people to import a vehicle,” he said.

Nearly half a million new cars have been imported since 2011, mostly for use in Yangon. The carrying capacity of Yangon’s roads has been estimated at about 450,000 vehicles.

Under existing rules, companies can import up to 50 vehicles, as long as they are necessary for operations and imported under the company name. However, some have exploited this system, importing cars and selling them on, without changing the names on the documents.

“Companies are selling cars they have imported under the pretence they are needed for business, so we are advising a change in policy. For example we may reduce the number of cars each business can import from 50 to 10,” said U Myint Cho.

Many blame growing congestion in Yangon on lax vehicle import policies. In response to mounting complaints, the government issued a rule late last year that anyone importing a car must prove they have space to park it, and obtain a recommendation letter from their township administrative officer. Some township officers have been more willing to hand out letters than others.

The scheme has not been a complete success, though imports have fallen from around 20,000 per month last year to several thousand a month this year, according to U Myint Cho.

“This week, we received over 1200 application letters, but only approved 300. We rejected the rest of the letters because they were suspicious, and we believed they contained false addresses,” he said. “Genuine applicants complain if their applications are rejected, then we interview them and re-consider their case. If it proves to be real, we give them a licence.”

As a result of the drawn-out process, dealers say that would-be buyers have been choosing cars from their showroom of choice and paying in advance, but have been unable to take the car until a letter has been secured and approved.

However, last month U Myint Cho told The Myanmar Times that almost all applications for new vehicles are fake. “When we started checking in May, we found that 95 percent of importers did not keep their vehicles at the address they gave the township authorities. They told us they had resold the cars, or that they were ‘out’,” he said.

He also found that letters of recommendation were being sold for up to K700,000 (US$544), and a secondary market was growing for people living on the outskirts of the city to “sell” their addresses to prospective car buyers without parking space. Dealers said the price of a recommendation letter continues to rise and is now around K1 million.

Since June, the parking supervisory body has been carrying out spot checks, reporting cars parked in different addresses to those stated on the documents to the police. Those found guilty can be fined between K10,000 and K500,000 and sentenced to up to three years in prison.

“If people follow the rules, corruption doesn’t happen, but the dealers are only interested in selling and the buyers don’t care if they have to pay K500,000 on top of the car price,” said U Myint Cho.

Companies must also follow the rules, he said.

“Companies can typically prove they have parking space as they own large compounds, so we allow them to import cars, but they are taking advantage of the opportunity to further their own interests,” said U Myint Cho.

“If they want to sell cars, they must apply for a licence to open a sales centre. If not, we must assume they are selling cars illegally and are not paying taxes. Worse, they often sell without changing the name on the documents, which is dangerous as it makes it very difficult to track those involved in traffic accidents.”

Beyond new car import policies, major investment is needed in Yangon’s roads, according to the Japan International Cooperation Agency (JICA), which is working with the government on an urban management master plan for the city.

Unless $10 billion is spent on the city’s roads over the next two decades, traffic could end up crawling along at less than 8 kilometres (5 miles) per hour. Assuming import policies remain the same, by 2035, vehicle use in Yangon is likely to rise 22-fold, JICA found.

Source: Myanmar Times

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