A fierce row has broken out in Mandalay between the city’s development committee and developer City Man over the city’s seizure of the former Royal Rose hospital site.
The company has sought help from the Myanmar Investment Commission to recover the land and the building, in Chan Aye Thar San township, which was seized on October 13.
MCDC says the developer had breached the terms and conditions of its 30-year lease agreement with the city.
The investment commission has responded by encouraging City Man to negotiate with the municipal authorities.
MCDC says it took the action because the developer deviated from the terms of its agreement to build housing and a commercial plaza on the site, by seeking to extend the building and running a hospital.
MCDC warned the company three times to surrender the building, but the company failed to comply.
“MCDC approved the construction of the Chan Aye Mandalar Housing and Plaza. But the company added two more floors and opened a hospital, in violation of the agreement. So we seized the land and building,” said a city official.
Royal Rose hospital opened in 2013 but was closed by the Myanmar Medical Council earlier this year, after authorities discovered that an illegal clinic was allegedly being run from its third floor.
The 12-acre site in question is owned by Myanma Railways, which leased it to MCDC. In 1996, the local authority granted City Man permission to build a hotel, plaza, offices, a pharmacy and condominiums under a 30-year lease agreement.
City Man director U Tin Maung Ohn told The Myanmar Times on October 22 that the confrontation could deter investors. “The Myanmar Citizens Investment Law said that a business acting with the permission of the Myanmar Investment Commission will not be nationalised. Any offence should be met with a fine, not with confiscation,” he said. “Any more cases like this could deter investors from coming to Mandalay.”
A law enacted by the Mandalay Region parliament in January empowers MCDC to end the lease if a lessee is found in breach of the terms and conditions of the contract. However, in the Myanmar Citizens Investment Law of 2013 the Union government guarantees that it will not terminate an authorised investment without good reason. The constitution also prohibits the nationalisation of “economic enterprises”.
Source: Myanmar Times