Businessmen study the plan for the New City project on August 4.
Pic: Sithu Lwin
A PRIVATE bank last week unveiled plans for an ambitious 20,000-acre, US$2 billion mixed use property development about 15 kilometres south of Mandalay but warned it will cancel the project if it cannot reach reasonable compensation agreements with landowners.
U Khin Maung Aye, president of Co-operative Bank (CB), said the proposed New City Project is near the ancient city of Inwa, about 16 kilometres (10 miles) south of Mandalay.
While the government is yet to approve the proposal for the project, CB Bank on August 4 formed a public company to oversee the development and invited investors to express interest in purchasing shares in the venture. More than 250 people submitted share application letters on the day but U Khin Maung Aye warned that progress is not certain because of high land prices.
“We are going to negotiate with the landowners about the price. The project aims to have a good outcome for all and we want to look after the farmers. Most of the area is not farmland but if the negotiations over land sales are not acceptable then we will cancel the project,” he said at the launch ceremony in Mandalay on August 4.
“This will create job opportunities, and migrant workers and those in border areas could potentially come back to work here.”
The launch came after U Khin Maung Aye met members of Mandalay’s business community in June to pitch the development, which the company expects could take 10 years to complete. If it gets permission from the government for the project, it will sell shares for at least K10,000 each. Individuals who buy K1 billion (US1.2 million) of shares will have the chance to get a seat on the board of directors, U Khin Maung Aye said last week. CB Bank will also be an investor in the project.
Another member of the public company said that the government must ensure the new land laws are properly enforced when the company tries to acquire the 20,000 acres needed for the project. The land is beside the Ayeyarwady River in Tada-Oo township and the site was selected because of its proximity to the Yangon-Mandalay Highway and Mandalay International Airport.
CB Bank envisages the project will feature waterfront housing, a hotel zone, riverside recreation areas, an industrial zone, retail and warehouse areas, a trading centre and education facilities.
Real estate industry sources said last week that farmland prices in Tada-Oo township near Inwa had risen tenfold since March – from about K1 million to K10 million an acre – when rumours began spreading about the project.
But real estate agent U Aung Soe said speculators were also concerned that owners of land in the project would receive minimal compensation if the project goes ahead.
“I have also bought 30 acres in Tada-Oo township for a mango plantation but it’s not in the project area and I don’t dare buy any land in the project area now because it’s not certain to make a profit,” he said last week. “We can’t know how the project will move forward, particularly if compensation will be paid for land acquired. I don’t think we can expect too much.”
“But the project sounds plausible and the hotel zone would be well located because it’s close to the airport … it is also a chance for both small and big entrepreneurs [to invest].”
U Thein Tun, president of the Brokers, Traders and Millers Association of Mandalay, said it was “an interesting project” but given the lack of the government approval there was not a lot of confidence yet that it would “become reality”.
“But it’s so big that residents can’t really believe yet that it’s going to eventuate. If it does become reality, I expect most entrepreneurs will participate or buy shares,” he said.
‘New City’ attracts K200b in investment, says CB president
By Zaw Win Than
Volume 33, No. 641
August 27 - September 2, 2012
A PUBLIC company formed to oversee a proposed US$2 billion “New City” development in Mandalay has received applications to purchase about K200 billion (US$230 million) in shares, a senior official said.
U Khin Maung Aye, president of Co-operative Bank (CB), which is a major investor in the New City project, said New City Development Public Company has received applications to buy shares from 3000 individuals.
While the Directorate of Investment and Company Administration has approved the formation of the public company, the project has yet to be officially approved, he said at Sayasan Plaza on August 21.
“The project has not started yet because the Mandalay Region government will first invite us to bid for the project. It will be like an auction and we’ll need to submit our detailed project plan, list of shareholders and financial status,” he said.
The proposed New City project is on a 22,000-acre site near the ancient city of Inwa. It is about 16 kilometres (10 miles) south of Mandalay and 10km (6 miles) from Mandalay International Airport, beside the Ayeyarwady River in Tada Oo township. The project will feature mostly residential and commercial zones.
U Khin Maung Aye said he was confident that New City would beat proposals from other companies.
“We will do our best by presenting our project and financial situation. The decision is up to the regional government. I don’t know whether they will approve our project or not but … I believe we have good potential. Even if we win the auction, we still need to get approval from the Myanmar Investment Commission before starting the project,” he said.
“Most of the proposed site is vacant land and there are a few villages. We will not do it if the local people are not willing but if they believe this project will create job opportunities and if they believe it will developed their region then we will push ahead. We will make sure we compensate them for the farmland at the market price,” he said.
The company will sell shares for K10,000 and U Khin Maung Aye said it would also invite foreign investors to participate if it’s bid was approved.
“We need to invite foreign investment because this project is not just to develop residential areas; we also need technological assistance to develop industrial sections of this project,” he said, adding that “many” international companies had expressed interest in investing.
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