fbpx

Pattko Alleges Foul Play in Economic Zone Tender; Calls for Re-examination



Pattko Global Development Company, which was one of the bidders for the tender of the second central economic zone project in Yangon, has alleged opaqueness in the tender awarding process and called for re-examination.

The company said that the country has lost billions because of offering low rental rates to the winner. U Tin Hlaing, managing director of the firm, said the tender should be re-examined.

The new business district was to be implemented on a 36.551 acres site at the corner of Mindhamma road and Tawwin road in Mayangone township.

The Yangon City Development Committee (YCDC) invited tenders for a foreign joint venture for the second central economic zone project in 2013. Five companies submitted applications and three companies – First Myanmar Construction Company, Pattko and Boston Construction Company were short-listed. Yangon region government examined the presentations of each company in June and First Myanmar Construction was selected as the bid winner in August.

“The tender was called for foreign companies and joint venture companies. However, First Myanmar Construction is neither foreign company nor a joint venture. That’s why this company should not have been accepted,” U Tin Hlaing said.

“First Myanmar Construction never submitted a $1 million deposit and professional technicians were not included in the tender examination team,” he alleged.

Pattko formed a joint venture with Singapore-based property developer Oxley Holding Ltd for this project and said it aimed to invest $700 million on a 50:50 basis.

Pattko said it will give a premium of $109 million for the land, for construction period of the first seven years it will give $34.77 million in rent and when the constructions are done it will give about $420 million in rent in 70-year lease period at a rate of $18 per square metres.

“We have discussed with our partner Oxley Holding Ltd (Singapore) and decided that we can pay this rate. This rate is calculated in accordance with international standards. The normal rate will cost $21 to $25 per square metre in Southeast Asia. According to Oxley’s calculation, we will get profit in 20 to 25 years,” said U Tin Hlaing.

Pattko said it will build one 18-storey hotel, two 18-storey office buildings, one convention centre and a four-storey retail building in zone (1). The firm said it will also build four 18-storey residences, one four-storey retail building, three 18-storey retail and medical suites and two 18-storey retail, medical and serviced apartments in zone (2) and zone (3). In total, 15 buildings with an investment of $690 million.

First Myanmar Construction said will build five buildings, will give premium of $76.67 million and pay $84 million for 70 years’ rent at a rate of $1.2 million per acre per year.

However, according to local media reports, local authorities and the winning company have denied any wrongdoing.

“I know that the complaints have been submitted to both regional government and union government. We will resolve the complaints and I promise I will lead to resolve this issue,” said U Khin Hlaing, representative of No.(7) division of Yangon City Development Committee.

“Tenders will be examined again and if it is found out that country is losing money on the project, the tender will be called again. However, new bidders will not be accepted,” he said.

Source: Myanmar Business Today

NB: The best way to find information on this website is to key in your search terms into the Search Box in the top right corner of this web page. E.g. of search terms would be “property research report”, ”condominium law”, “Puma Energy”, “MOGE”, “yangon new town”,”MECTEL”, “hydropower”, etc.

.

Looking for foreign investors to invest in your business in Myanmar