THE ghostly concrete husks on the southern fringe of Kandawgyi Lake are among Yangon’s most discussed buildings. And they are set to get tongues wagging again, with the developer dusting off plans to turn the mothballed towers into serviced apartments.

A grandiose but unfinished project of Malaysian billionaire Robert Kuok’s Shangri-la Yangon Company Limited, work on the towers was suspended in 1998. They have since been the subject of perpetual rumour, with Yangon residents espousing a variety of theories to explain why the project was never completed. A popular story was that the buildings failed a soil test, with proponents pointing out that one of the towers appears to lean to one side.

Yangon is a city that seems to runs on rumour but in this case there’s not a shred of truth, says Mr Craig Powell, general manager of Traders Hotel, which is also substantially owned and managed by the Shangri-la group.

“The ground is perfectly stable,” he told The Myanmar Times earlier this month.

“You might recall that in 2010 we had an earthquake in Yangon and following that not only did we get a structural engineer in to assess our hotel but we took a look at the [Kandawgyi] site as well.”

After almost 15 years on ice the buildings naturally look a little worse for wear but Mr Powell insisted they were 100 percent structurally sound.

“If the foundation or the land was unstable clearly we would have seen the effects or there would have been evident damage to the two towers. That has not been the case. … It’s not sinking either, nothing of the kind.

“Put it this way: After [Shangri-la] had done an assessment and feasibility study they wouldn’t be going ahead if the place wasn’t fit to continue,” he says.

Mr Powell quickly shot down another popular rumour – that the buildings are up for sale. Instead, they will be developed into Shangri-la Apartments, a 240-unit serviced apartment complex.

“The timing’s right I think [because] there is high demand for quality serviced apartments and a major shortage. Clearly we can see there’s an opportunity there and that’s why we want to start them up again, or rather finish what we started,” Mr Powell said. “That’s going to transpire very soon.”

Yangon’s current crop of serviced apartments already have long waiting lists and little in the way of new supply is expected over the next two years, Colliers International’s Yangon Property Market Report 1st Half 2011 stated.

“Due to limited supply and high demand, every serviced apartment in Yangon is recording high occupancy rates for long term contracts and some projects had a waiting list to stay of more than 50,” the report said.

“With no new supply expected in the next two years this is likely to continue,” it added.

In this regard Shangri-la has the upper hand on potential competitors because the basic structure and supporting infrastructure are already in place. Look closely enough and you can even make out what appears to be a tennis court in the undergrowth between the towers and the lake.

Shangri-la estimates the job can be completed within two-and-a-half years. Mr Powell said he was not privy to discussions concerning the budget for the project.

“The structure or shell of the building is fine. However, we’re going to have to do a lot of work on the inside. I think it’s going to take a bit of effort to complete it and the mechanical and electrical [systems] will have to be stripped and started over again,” he said.

“I think it’s going to take quite a bit to complete it … somewhere between two and two-and-a-half-years is the initial estimate.

“I can’t say that’s concrete because that’s dependent on what happens here in the country politically, as well as the availability of materials, being able to procure a quality contractor and skilled labour to get the work done.

“I know that this will be a challenge because we’re not the only ones looking to start a new project or continue a suspended site. Ours are not the only ghost towers in the town; there are at least six that I know of.”

Like many of the other dormant projects, which include one well-known hotel and office tower in the downtown area and prominent high-rises on Pyay Road, Shangri-la’s Kandawgyi project was the victim of the Asian Financial Crisis in 1997, which prompted a downturn in Myanmar.

“The reason that it stopped, like many of the projects that stopped, was the Asian Financial Crisis and also the situation in Myanmar at the time was not positive.

“People didn’t want to continue to invest money into a place that they had uncertainties about and that’s understandable. Those two towers have been sitting there since 1998 when we stopped work.”

The decision to restart the project follows a US$30-million-plus refurbishment of Traders Hotel launched in July 2011, Mr Powell said.

From Myanmar Times