More effort needed to tackle idle industrial land

A month after the first site visits to inspect idle industrial plots in Yangon, officials are warning there will be no progress in freeing up unused land without a special committee that has the power and resolve to revoke the leases of absentee owners.

Yangon Region government announced in late May that it was turning its attention once again to the issue of vacant industrial-zone plots. Data on the extent of the problem is hard to come by, but estimates classify roughly 40 percent of Yangon’s industrial park land as idle.

Much of that is held by speculators taking a bet on real estate prices, which for industrial land have reached levels that make purchasing plots for genuine economic activity very difficult.

A newly formed regional government inspection team conducted field studies in nine industrial zones between May 19 and May 24, but industrial zone officials said there had been limited success in tracking down owners of vacant plots.

Regional Minister for Industry, Electricity and Transportation, Daw Nilar Kyaw previously stated that the inspection teams would visit all 29 of Yangon’s industrial zones before submitting findings to the government.

Daw Nilar Kyaw could not be reached for comment, but industrial zone officials said many owners in the first nine zones had not been found.

“We have surveyed the list of vacant industrial zone plots and a few are under construction at a slow pace,” said U Myat Thin Aung, chair of Hlaing Tharyar Industrial Zone management committee. “But there are still many [vacant] plots where we have been unable to find the owners.”

The government has not given officials power to revoke ownership of idle land by a certain date, which meant that owners had no incentive to approach the zone management committee, U Myat Thin Aung added.

Hlaing Tharyar industrial zone has nine zones, of which U Myat Thin Aung oversees six. Those six zones house over 700 plots, of which more than 20 are vacant and held by difficult-to-reach owners.

Other industrial zones face similar problems.

“We’ve warned that land will be taken away, but owners [of vacant plots] don’t contact us,” said U Aye Thaung, chair of Shwe Lin Pan Industrial Zone management committee.

Attempts to tackle the issue would only be successful with the formation of a special Yangon Region committee tasked with examining industrial zone ownership, he said.

Chairs of several Yangon industrial zones have proposed such a committee, which would include Yangon Region government officials, chairs of industrial zone management committees and local businesspeople.

“Nothing will happen unless we do something,” said U Aye Thaung.

Industrial plots sold under the previous government came with regulations requiring a business to start operating no longer than six months after the lease was given and banning the construction of residential housing.

“But people have often bought land without understanding the rules, and some buy two of three plots or land and don’t do anything with them,” said U Aye Thaung.

Previous policies were also adjusted to allow the sale of plots before construction work had begun. When Hlaing Tharyar industrial zone was founded by the Ministry of Construction’s Rural and Housing Development Department in 1996, there was a policy that a 1 acre lease – which then cost K4.5 million – would be given only after a factory was built.

A series of policy changes meant that from 2010 leases were given before work had started, opening the door for people to buy plots in order to rent them out as landlords or simply speculate on land values.

The price for 1 acre of industrial land is now K400 million to K500 million, making it very difficult for people to purchase land for genuine industrial operations, said U Aye Thaung.

He wants to see a return to the old system where leaseholds “are given to people who can establish factories”, an approach that other countries also take.

 

Source: Myanmar Times

 

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