Weekly Insights and Analysis

In Cambodia: The Good & Bad of New Investment

June 20, 2007

By Roderick Brazier

Bokor Mountain is just 23 miles from the sleepy Cambodian riverside town of Kampot, yet the journey to the 1,000m peak takes more than two and a half hours. The steep winding road was built by French engineers in the 1920s and not an inch of it has seen a road maintenance crew since. The journey to reach the broad, boggy plateau at Bokor’s summit is a bone-jangling, exhausting journey.

Once there, the visitor is greeted by one of the world’s strangest sights. A casino, Catholic church and a guesthouse, also built by the French, brood in the misty gloom. All are long-abandoned. Left to the dank elements, the buildings are coated in dense, rust-colored moss. Inside, they are strewn with debris: glass, broken floor tiles, lengths of electrical wire. A wall in the ballroom wears a sinister cluster of bullet holes at chest height: the Khmer Rouge was particularly active here. A tin sign resting on the floor admonishes tourists not to sleep in the casino.

A Cambodian business conglomerate called the Sokimex Group recently announced its intention to repair the neglected road and renovate the hilltop casino and hotel at Bokor. A group spokesman assured that the original French buildings would not be demolished, but instead renovated as part of the ambitious and costly project. In addition to the renovations, insiders in Phnom Penh talk of cable cars, golf courses, and helipads.

Sokimex’s plans for Bokor speak eloquently about what is good and bad in Cambodia in 2007.

After decades of misery and instability, observers are cheered by the prospect of bold, imaginative investments that will create many jobs for ordinary Cambodian people and spur progress. And although Western tourists get a kick from visiting Bokor, who can blame Cambodians for wanting to modernize this creepy vestige of war and colonialism?

But the Bokor property sits in the heart of the Preah Monivong National Park, meaning it belongs to the state, not Sokimex. The project can only start once the government awards Sokimex a time-bound allowance to re-develop and manage Bokor. In exchange for this privilege, Sokimex will likely pay the government an annual fee. The trouble is that these arrangements are being concluded without competition, and in secret. The fee will likely be revealed to the public only after the deal has been struck, if at all. In the absence of competition, the true value of the concession cannot be known, possibly leading to underestimation of the appropriate fee to levy Sokimex. The state could miss out on valuable revenue.

Sokimex already holds an uncompeted concession to manage the Angkor temples. The International Monetary Fund and other international organizations have repeatedly urged the government to tender the lucrative concession for Angkor, but it persists with opaque processes that likely work against the public interest. The story is being repeated in Bokor.

Roderick Brazier is The Asia Foundation’s Country Representative in Cambodia.

Related locations: Cambodia


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