US embassy cable - 05RANGOON1346

C O N F I D E N T I A L SECTION 01 OF 03 RANGOON 001346 
 
SIPDIS 
 
STATE FOR EAP/MLS; PACOM FOR FPA 
 
E.O. 12958: DECL: 12/01/2015 
TAGS: PGOV, PHUM, PREL, ECON, SNAR, MARR, BM, Pyinmana 
SUBJECT: BURMA'S NEW CAPITAL: NOT READY FOR PRIME TIME 
 
REF: RANGOON 1325 AND PREVIOUS 
 
Classified By: P/E Chief W. Patrick Murphy for Reasons 1.4 (b,d) 
 
1. (C) Summary:  Embassy officers, making an unannounced (and 
unwelcome) visit to the Burmese regime's new capital in 
Pyinmana, observed a massive, though largely unfinished, 
project to construct a new city from scratch.  A nearby 
military zone, inaccessible to Emboffs, is even more 
substantial and is reportedly already in full operation. 
Although the regime has described Pyinmana as a strategic 
crossroads of communications and transportation, neither 
modern communications nor decent highways currently exist at 
the remote site.  Officials there told Emboffs that the "GOB 
in Pyinmana is not open for business."  The scope and cost of 
the ongoing project is staggering, likely over one billion 
U.S. dollars.  Real motives for the sudden move, and its 
timing, remain unknown, but it is clear that any future 
government of Burma will be saddled with the costs and 
consequences of the GOB's absurd relocation.  End Summary. 
 
THE ROAD TO MANDALAY (AND PYINMANA) 
 
2. (C) Emboffs on November 29 made an unannounced visit to 
the Burmese regime's new administrative capital of Pyinmana. 
The 225-mile overland trip from Rangoon took roughly seven 
hours driving time (public transport takes 8-10 hours).  The 
route follows Highway 1, Burma's principal north-south 
corridor running from Rangoon to Mandalay, a potholed, narrow 
two-lane road crowded with commercial trucks, busses, 
bicycles, pedestrians, and ox carts.  In line with a 
country-wide practice, local farmers also use the paved 
portion of the road to dry their rice crops. 
 
3. (SBU) Highway 1 also now supports an endless stream of 
government and military convoys that are busy moving Burma's 
capital from Rangoon to remote Pyinmana.  Emboffs saw at 
least four convoys traveling north under military escort, 
transporting GOB payroll and office furniture for the 
Ministry of Labor and the Ministry of Social Welfare, Relief, 
and Resettlement.  Local shopkeepers along the route told 
Emboffs that the furniture-laden convoys, which take about 
thirteen hours to make the trip to the new capital, have been 
traveling north on alternating days since the official move 
began on November 6. 
 
4. (SBU) Emboffs saw a new airport about 17 miles south of 
Pyinmana, located at the village of Ela, that will serve the 
new capital.  Emboffs observed well constructed access roads, 
but entry to the airport site was prohibited.  According to 
Embassy military sources at the MOD's foreign liaison 
division, military aircraft are already using the new 
airport, but commercial flights are not yet scheduled. 
 
NOBODY'S CROSSROADS 
 
5. (SBU) The town of Pyinmana itself, located just off 
Highway 1, is more substantial than the small farming village 
described by some press reports.  According to GOB figures, 
the existing population of the district is about 90,000 
persons; the central town has at least 50,000 inhabitants. 
Emboffs observed a bustling market area and a small 
commercial district in the central part of town. 
 
6. (SBU) The foreign media has not been inaccurate, however, 
in describing Pyinmana as "located in the middle of nowhere." 
 The GOB said that it selected Pyinmana as a strategic 
location "at the crossroads of the country's communications 
and transportation networks."  The Pyinmana region, however, 
has neither transport nor communications links of any 
substance.  There is no cell phone or internet access in the 
entire area.  The so-called "highway" to Rangoon (south) or 
Mandalay (north) is a two-lane country road.  There are no 
direct routes to the east (Shan State).  Routes leading west 
must cross the Bago Yoma mountain range.  Emboffs returned to 
Rangoon along what maps identify as a principal east-west 
corridor, but in reality is little more than an ox cart path. 
 It took over five hours to travel the first 60 miles across 
the remote mountain terrain. 
 
MEN AT WORK 
 
7. (SBU) The Burmese regime has not constructed new 
government facilities within the town of Pyinmana itself, but 
rather at fairly distant locations to the east and west of 
the town.  To the east is a heavily guarded, massive military 
complex.  Emboffs were prohibited from reaching this area, 
but sources report that the construction of military command 
centers, offices, barracks, housing units, and golf courses 
is substantial and close to completion.  Many military sites 
within the complex are already functioning. 
 
8. (SBU) Seven miles west of Pyinmana lies a massive 
construction zone, perhaps as large as 20 square miles, that 
is the future site of the government bureaucracy.  The 
administrative and housing complex is known as "Kyatpyay" 
(roughly translated as "Running Chicken," although in a play 
on words in Burmese, locals refer to the area as "Running 
Devil").  Emboffs toured the Kyatpyay complex for about an 
hour, passing hundreds of apartment complexes, all in various 
stages of completion, that construction workers said will be 
future housing for civil servants and their families. 
 
9. (SBU) Emboffs also entered a ministerial sub-zone at 
Kyatpyay that appeared to be about five miles long.  There 
are over thirty sites within the sub-zone where workers are 
constructing individual complexes for each GOB ministry. 
Although none of the ministry buildings appeared complete, 
and no civil servants were seen on site, several structures 
were at an advanced stage of construction, including the 
future Ministries of Home Affairs, Foreign Affairs, Energy, 
Information, and Transportation.  Based on our rough 
estimates, each ministry, situated on 10 to 15 acre sites, 
appeared to cost between 10 and 20 million USD. 
 
10. (SBU) The remote ministerial zone does have not yet have 
significant infrastructure.  Roads and water and sewer lines 
are still under construction.  Construction sites are 
separated by rice and sugar cane fields, with no evidence of 
any commercial outlets or other services to support the GOB's 
large civil service.  Emboffs observed a single, crude phone 
line providing service to the entire administrative zone. 
The GOB has built a 300-bed hospital in the administrative 
zone and staffed it with nurses, but doctors and medical 
equipment have yet to arrive.  Hospital staff told Emboffs 
that the military complex east of Pyinmana already has a 
functioning 1,000 bed hospital. 
 
CRONY BUSINESS 
 
11. (SBU) All of the individual sites at Kyatpyay are 
identified by the construction company awarded each building 
sub-contract.  Our quick tour revealed a Who's Who of SPDC 
crony companies, many of which are associated with money 
laundering and/or with ethnic Kokang and Wa druglords.  Among 
the several dozen companies constructing new housing and 
government buildings are Htoo Trading, KAF (a Kanbawza Bank 
subsidiary), Asia World (run by U Aik Htun, former chairman 
of the now defunct Mayflower Bank), A-1 Construction, Dagon 
International, Tekkham (linked to the United Wa State Army), 
and Golden Flower. 
 
YOU'RE NOT WELCOME: UNWANTED VISITORS 
 
12. (C) Emboffs' self-guided tour through the ministerial 
complex was cut short by a half dozen security agents who 
stopped the Embassy vehicle, requested "authorization 
papers," and demanded to inspect our cameras.  Emboffs 
declined to meet the agents' demands, but agreed to accompany 
them to nearby Military Affairs Security and Burmese Police 
offices.  Emboffs explained to the senior military officer at 
the office, a Director of the Ministry of Border Affairs, 
that they had stopped off in Pyinmana to see the new capital 
and deliver some demarches to MFA counterparts.  When asked, 
another security officer said that the GOB had staked out 
land in the Kyatpyay area for future diplomatic missions, but 
that it had not yet identified specific plots for any 
individual countries. 
 
13. (C) The Lt Colonel in charge of the site consulted by 
phone with his superiors in Rangoon and told Emboffs that the 
"capital project is not completed," that the GOB in Pyinmana 
is not open for business, and that GOB officials relocated to 
the area "are not available" to meet with Emboffs.  He 
advised that access to the new capital area is prohibited and 
directed his subordinates to escort Emboffs back to Pyinmana 
and Highway 1.  On December 1, an MFA protocol officer 
approached P/E chief at a Japanese Embassy reception in 
Rangoon and said he had heard that Emboffs had visited 
Pyinmana.  "Next time, I suggest you submit an official 
request to make a visit," he said, adding, "Of course, the 
answer will be no, because our new capital is not yet ready." 
 
COMMENT: THE ABSURDITY OF IT ALL 
14. (C)  We are not aware of any other diplomats who have 
visited the Pyinmana area since the GOB's announcement in 
early November that it was moving to a new administrative 
capital.  Our November 29-30 visit to the region revealed 
several new dimensions to the absurdity of the relocation. 
The scope and cost of the new construction is staggering and 
underscores the regime's profitable control of natural 
resources such as natural gas, timber, and precious gems. 
Our rough estimate is that the GOB has expended over one 
billion USD for construction of the administrative zone 
alone.  This estimate does not include the more substantial 
and unseen military zone east of Pyinmana, the new airport, 
or other capital relocation costs.  Nor does our estimate 
include future costs for the necessary infrastructure 
upgrades to link Pyinmana with the rest of the country. 
 
15. (C) Our visit also revealed that the ongoing relocation, 
which involves thousands of civil servants, is well before 
its time.  We have seen no signs that GOB offices are 
actually functioning in Pyinmana, or that they even have the 
basic infrastructure that would allow them to operate.  While 
it possible that relocated GOB ministries are using "swing 
space" in the restricted military district, the 
administrative zone is, at best, less than fifty percent 
completed.  It will take at least another year or two for the 
new ministerial and housing complexes to be operable.  It 
seems most relocated GOB functionaries are on an extended 
holiday.  We have heard reports that the GOB has directed 
some civil servants, sitting idle in Pyinmana, to return to 
Rangoon until further notice or to rotate their time between 
the two locations. 
 
16. (C) The genuine motives for the relocation remain 
uncertain.  As we have reported (reftels), among the theories 
are the various whims, fears, and astrological peccadilloes 
of the SPDC Chairman Than Shwe.  We cannot rule out any of 
these possibilities, no matter how far-fetched, since much 
GOB decision-making seems more suited for Oz than for 
reality.  The obviously premature relocation, well in advance 
of completion of the new capital, was likely undertaken in 
order to meet Than Shwe's artificial deadline for the 
operation.  What is certain, however, is that any future 
government will be saddled with the largest infrastructure 
project in the country's history.  This will be a difficult 
and costly decision to reverse.  End Comment. 
STOLTZ