Naypyidaw: A Dusty Work in Progress
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Naypyidaw: A Dusty Work in Progress


By Clive Parker OCTOBER, 2006 - VOLUME 14 NO.10


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(Page 4 of 7)

The costs are not simply those of construction—which are always considerable and rarely under-budget,” he says, adding that relocating civil servants, citizens, foreign embassies and companies makes a capital move all the more expensive.

 

Although the lack of transparency over the building of Naypyidaw makes any realistic cost estimate impossible, a look at other recent capital city moves offers some idea of the financial scope of such an undertaking. When Kazakhstan shifted its administration northwest from Almaty to Astana in 1997, initial estimates put the price tag at $400 million. The actual cost was much higher.

 

Even if all 80,000 construction workers in Naypyidaw were paid the minimum 1,500 kyat a day (and they are not), the total annual labor cost for the project would come to 43.8 billion kyat ($32.32 million).

 

 

 

Over eight years, the wage bill, considered a much smaller outlay than material costs, would balloon into the hundreds of millions of dollars—money that economists say Burma simply does not have. “There is little likelihood that the junta has been able to finance the project without borrowing heavily from the Central Bank, and even then the junta may still not have raised sufficient funds,” says Danny Richards, a Bangkok-based researcher o­n Burma’s economy for the Economist Intelligence Unit.

 

EIU data shows that by the end of the 2005-2006 fiscal year last March, the Central Bank’s claims o­n the government had escalated to more than 2.3 trillion kyat ($1.7 billion), up from 1.3 trillion kyat ($960 million) at the end of 2003. Burma has nearly doubled its domestic borrowing since the construction of Naypyidaw began.

 

As early as 1998, Burma was looking for funding from overseas to develop the new capital site. It secured a loan of $160 million from the China Exim Bank to fund the Paung Laung hydropower project in Pyinmana, with repayments made at 2.75 percent interest over 10 years. The Yunnan Machinery and Equipment Import and Export Company built the hydro plant, which is thought to provide Naypyidaw’s reliable electricity supply.

 

In June 2004, shortly after construction began o­n Naypyidaw, the Export-Import bank of Thailand lent Burma 4 billion baht ($106.45 million).



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