MICA future in doubt as contract details revealed

By NYAN HLAING LYNN | FRONTIER

THE GOVERNMENT is considering suspending the activities of a shadowy state-owned agency linked to prominent former Union ministers U Soe Thane and U Ohn Myint that was set up to manage valuable land assets.

The revelation comes as documents provided to Frontier show that the ministry misled journalists on the number of contracts that it had signed.

Myanmar International Cooperation Agency was set up under the former Ministry of Livestock, Fisheries and Rural Development, now part of the Ministry of Agriculture, Livestock and Irrigation. It began operations in 2012, but was officially established at a cabinet meeting on August 28, 2014. 

Speaking to reporters outside parliament on December 7, agriculture minister U Aung Thu said the ministry was “considering suspending the work of MICA”.

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“MICA has found it difficult to continue its work. The upper part of the management hierarchy no longer exists. Only a secretary and lower level remain in place,” he said, adding that 11 of the 15 members had resigned.

“The board of directors sent their report to us with their decision. But the decision is not clear.”

He added that he had given instructions to renegotiate existing contracts according to current market prices, but did not elaborate.

The shutdown would represent a significant reversal of policy. In August, a government spokesperson told Frontier that the ministry would install a new board of directors and MICA “will continue its activities in accordance with the government’s economic policies to increase government income and promote private sector and rural development”.

Keeping a low profile

As Frontier reported in September, MICA was set up as a semi-independent agency to manage the leases of 66 plots of land – including factories, fish ponds and farms – owned by the Ministry of Livestock, Fisheries and Rural Development. While the value of these properties has not been stated, about a third are in Yangon. They include some very large sites that would be worth tens, if not hundreds, of millions of dollars.

Under the former government, most MICA board members were ministry staff. It was chaired by U Soe Thane, the former minister for the President’s Office who now represents Kayah State’s Bawlakhe in the Amyotha Hluttaw as an independent, and the ministry’s permanent secretary, U Khin Zaw, acted as secretary.

Although not a board member, the driving force behind the creation of the agency was former Minister for Livestock, Fisheries and Rural Development U Ohn Myint.  One ministry source who requested anonymity said Ohn Myint had decided early in his tenure to shift businesses to an independent agency that could “work more freely”. “You won’t see his name on the organisation chart, but he’s behind everything,” the source said, adding that Soe Thane was just a figurehead.

As its name suggests, the ministry tried to present MICA as a government agency run to international standards.

In an interview with the Myanmar Times in March, MICA secretary U Khin Zaw said the agency had been formed based on suggestions from “experts, consultants and partner organisations, such as the World Bank and Asian Development Bank”. A presentation given at the March 22 press conference also mentioned the World Bank and ADB. However, spokespersons for both institutions denied any involvement.

MICA fire sale

The agency’s stated aim is to cooperate with international and local companies to develop the ministry’s underused assets. However, little effort seems to have been made to engage with prospective foreign investors. Instead, deals were mostly done with local firms – a subsidiary of Thai company CP appears to be the only exception.

In interviews with Frontier, both Ohn Myint and Soe Thane denied any lack of transparency over the agencies activities. Ohn Myint said tenders had been announced openly and the ministry had issued regular updates on MICA’s activities.

But the secrecy surrounding MICA has continued under the new government. The Ministry of Agriculture, Livestock and Irrigation has refused to release details of the contracts it has signed, how much it has earned to date or even what its land holdings are. In August, a spokesperson told Frontier that the government planned to continue with MICA’s activities and contracts were proceeding as planned.

According to a presentation given to journalists on March 22, MICA had sought to lease 18 properties to private investors and at that point had signed five contracts.

However, Frontier can reveal that the ministry had signed seven contracts for eight parcels of land by March 22. On March 22, it signed four further deals and a final contract was signed on March 25, just five days before the new government was signed in.

With the exception of the CP contract for a farm in Pyinmabin, which was signed in June 2015, all of the agreements were inked between January 7 and March 25 – after the National League for Democracy had won the election, but before its government was sworn in and both Soe Thane and Ohn Myint left office.

Of these deals, only one was widely publicised – the signing of a contract in February with First Golden Dragon Construction, part of Excellent Fortune Development Group, to develop 64.54 acres of land in Insein Township.

The US$62 million (about K84 billion) project would see the creation of a “new modern meat wholesale market”, with more than 500 shops and two cold storage facilities, said a ministry press release. A tender was issued for the project in 2015, it added. The terms of the deal were not publicly released.

The documents provided to Frontier show that on March 18, MICA signed a contract with the same company to develop an adjoining 32.454-acre plot for a mixed-use development project, the details of which are not explained.

MICA also signed contracts with a company named Glory Heyday Services for two plots of land in Ywarthargyi, East Dagon Township, totaling more than 125 acres. The company plans to build a wholesale market, 64 shophouses and 838 low-cost apartments.

The other companies to be given contracts included Min Maha San, U Saw Kyaw Than Min, Aung Phyo Myat Rich Farm, Golden Green Gate and Win Lily Mining, and the projects cover fuel stations, animal-husbandry and fishery, a concrete-mixing plant and construction machinery factory. All are for long-term leases.

Top photo: Gyo Gone Jetty was developed by MICA on state-owned land in Insein Township. After opening in January, the jetty was leased to private company Aung Phyo Myat on March 22, 2016. (Teza Hlaing / Frontier)

By Nyan Hlaing Lynn

By Nyan Hlaing Lynn

Nyan Hlaing Lynn is a former editor at People's Age Journal and Mizzima. He writes about politics, the military, ethnic conflict and social issues and is based in Nay Pyi Taw.
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