Construction business are calling for an easing of regulations and tax reductions over financial assistance to help them keep afloat in the wake of COVID-19.
During a recent meeting between the construction sector and State Counsellor Daw Aung San Suu Kyi, U Shein Win, president of the Myanmar Construction Entrepreneurs Association (MCEA), said there are other ways besides cash that the government can use help to ease the burden on local contractors and developers.
He pointed out that in other countries, the government helps by setting policies such as lowering stamp duties for foreigners and working with banks to arrange cheaper and more flexible mortgages.
“In Yangon Region, there are about 15,000 condominium units now under construction, 40 percent of which are available for purchase to foreigners. “If these 6000 units are fully sold, it would be an additional US$1.1 billion in the economy,” he said.
U Shein Win added that the condominium market could potentially draw a lot of interest from foreign investors if the conditions permitting them to buy and sell property are made more favorable.
For example, the government should permit foreign buyers to pay a deposit of up to 30pc on the value of the desired unit via foreign bank branches operating locally and arrange for mortgage options at lower rates.
He added that the cash flows from upfront deposits can help developers complete ongoing projects without running out of cash.
Due to the outbreak of COVID-19, many construction projects had come to standstill as a result of cash shortages, declining demand and delays in the import of construction materials. Other essential items like elevators, aluminium products and titles have also been delayed, and this has held back work in the construction sector. Meanwhile, many contractors and engineers have either left the company or are unable to return due to COVID-19 restrictions.
That’s not all. While some construction has resumed in parts of the country, insiders warned that activity over the next few months is likely to be tepid due to the rainy season, which typically falls between June and October.
In response, the government said it would ensure the construction sector remains open and supported. “Construction work cannot be suspended as this involves the country’s infrastructure development. We’ve permitted them to resume work as long as they abide by health guidelines,”said Daw Aung San Suu Kyi.
U Kyaw Lin, Deputy Minister of Construction, said the government will continue to roll out new infrastructure projects using state funds and international loans and approve property developments in cooperation with the private sector.
He added that Myanmar is seeking assistance from the international community to facilitate the imports of building machinery and construction materials.
U Shein Win said investors who have won tenders to implement projects in Myanmar should be given cash flow support and access to loans for working capital. He added that the level of financial assistance had declined this year due to COVID-19. – Translated
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