New Yangon Development Company Chief Executive Serge Pun has used his weekly blog to highlight misconceptions featured in media reports about the company's challenge.

Mr Pun said while many of the subsequent articles following the final Master Plan presentation at the YCDC City Hall on February 15 had applauded the progress that had been made, there were also some "highly critical" pieces. 

"I appreciate the comments made and the spirit of openness on public affairs," he wrote.

"However, I deem it necessary to correct a few important misconceptions that have apparently led to the negative comments."

Amount of land awarded CCCC

Mr Pun said reports the entire land mass for the Phase I Development of New Yangon City had been awarded to China Communications Construction Company were untrue.

"The land that shall be injected into the joint-venture company accounts for only 28 square kilometres out of the total of nearly 90 square kilometres," he said.

"This land includes the industrial estate, residential and commercial land, as well as the land needed for the construction of public utilities such as a water treatment plant, wastewater treatment plant, and utility easements.

"Existing villages, green spaces, and other setbacks are 28.65 square kilometres and there is a residue of 33.35 square kilometres of land that shall still remain with NYDC.

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Price of farm land

Mr Pun described claims the NYDC was giving away land at a price which would cause a loss for the state were "highly erroneous."

"An editorial published by Eleven Media on February 17 cited that at $5 per square metre, the value that the State shall receive is only Kyats 300 Lakhs per acre, while land in Thilawa today is leased in excess of Kyats 3,000 Lakhs per acre," he said.

"The argument ignored the fact that at its present state as farm land, it is probably worth less than Kyats 300 Lakhs. In fact, the declared compensation price which the government has issued to those who wish to receive cash instead of buildable land in the Resettlement Village Towns is only Kyats 100 Lakhs per acre."

"It is true that these farm land will eventually be worth at least Kyats 3,000 lakhs per acre, but this is only after massive investments are made to build the infrastructure."

Internal rate of return

Mr Pun said one media outlet had made the assumption that the 13% internal rate of return represented the interest rate paid to the investor per annum for making the investment, when in fact it was a measure of return on an investment, after taking into consideration all streams of cash outflows and inflows.

"IRR is definitely not a flat interest rate calculated on the amount invested," he said.

"The result of this misunderstanding results in a significant difference in perspective of what the inherent commercial deal is between NYDC and the investor."

Source: New Yangon Development Corporation

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