Business News

Myanmar nixes subway plan for new capital

Sep 4, 2011, 7:30 GMT

Yangon - Myanmar's government has shelved plans for a subway in the country's new capital due to lack of demand, media reports said Sunday.

Minister for Railways Aung Min confirmed the project had been dropped for Naypyitaw, 350 kilometres north of the old capital of Yangon, last week, the Myanmar Times reported.

In August, Russian news media reported that a Russian firm had won a contract to construct a 50-kilometre subway in Naypyitaw, a sprawling capital covering 7,054.37 square kilometres with less than 1 million inhabitants, primarily civil servants, military men and politicians.

'Nobody would use the metro in Naypyitaw, due to its population density,' Aung Min said. 'No foreign company would agree to build it under a build, operate and transfer system because there's no way they could make a profit.'

Aung Min is a member of the cabinet that took office on April 1, following the country's first general election in two decades on November 7.

Myanmar was ruled by a junta between 1988-2010. Former junta chief Senior General Than Shwe decided to move the capital from the port city of Yangon to central Naypyitaw in November 2005.

Thousands of civil servants were forced to leave relatively cosmopolitan Yangon for the newly constructed capital within weeks.

Many bureaucrats have lived in the new capital without their families, forcing them to commute to Yangon every weekend, sources said.

Aung Min said the government was considering building an express rail from Yangon to Mandalay through Naypyitaw in the future.

The existing railway line between Yangon and Naypyitaw is 375 kilometres long. A one-way trip takes nine hours.

Read more about Russia