U Win Khaing, Minister of Construction, on industry standards and key drivers of demand: Viewpoint

U Win Khaing, Minister of Construction

Viewpoint: U Win Khaing

The construction sector is going through a reform process under the new government, with particular emphasis on quality control and the rules, regulations, codes and standards that govern the sector. The institutional framework required to drive this new approach puts the Ministry of Construction in the driver’s seat, and there are a number of institutions, both governmental bodies and private organisations, assisting with the main objectives.

To strengthen industry initiatives, the Myanmar National Building Code 2016 has been approved by the government as the benchmark for all types of new buildings and civil infrastructure, and building material standards, such as cement, steel and sand, are issued by the MoC. Zoning rules are now also in effect, and building coverage ratios and floor area ratios for urban development have been set. Together with the enforcement mechanisms for quality control, these new rules and regulations have more or less put the construction sector – which had been freewheeling – on hold. After a period of adjustment, the industry will most certainly bounce back, with many government-backed projects in the pipeline, such as low-cost housing, high-end apartments, airports and special economic zones.

The new Myanmar Investment Commission law will also attract more investment, due to its flexibility and the delegation of more responsibility to state and regional level authorities. The tendering and procurement process has also been streamlined for more transparency and accountability, with technical evaluation given a priority over price. Going forward, detailed planning and due diligence are needed to accommodate the timeframe and turnaround of the operational processes of the Yangon City Development Committee. Similarly, investors need to have a realistic idea of construction lead times in order to be prepared for any potential issues that might crop up. Furthermore, it is vital to take a long-term view when forming local partnerships and to have a solid understanding of the domestic business environment.

From an economic standpoint, a well-thought-out master plan will encourage better allocation of the budget. Gains can then be consolidated with less slippage, which translates into sustainable economic development over the long term. In addition, relaxing certain trade and industry regulations will help establish a business-friendly environment and bring in investment, which will in turn create employment opportunities and strengthen the industry.

The need for infrastructure development, such as road building and the provision of a stable supply of electricity and clean water, will continue to drive construction demand. Fulfilling these needs is a priority for social development. To this end, funding has been allocated from the state budget and international development partners and banks. Similarly, the recently launched Yangon Stock Exchange has the potential to be a key instrument in the future as a way of raising public funding.

Urban planning is a key ingredient to our sustainable development. The housing market currently requires more than 30,000 new homes per year to cope with urban migration, especially in the growth centres of Yangon, Mandalay, Naypyidaw, Bago, Pathein and Dawei. As a result, the government has plans to offer homeowners access to mortgages at reasonable interest rates over longer instalment periods. This will complement Myanmar’s Vision 2030 development plan, which has the goal of providing 1m new homes across the country by 2030. To support this urban development, vocational training institutes will be promoted and more centres opened to foster key skills in younger generations entering the job market. The MoC encourages both local and foreign investors to invest in housing, roads, industrial estates and infrastructure projects.

Anchor text: 
U Win Khaing

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The Report: Myanmar 2017

Construction & Real Estate chapter from The Report: Myanmar 2017

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