Long-standing plans to set up industrial and free-trade zones in Cambodia have failed to take off because of a lack of land title laws, according to Industry Minister Pou Sothirak.
Speaking at a press conference Monday, Pou Sothirak blamed Cambodia’s ongoing problem of land title disputes for the government’s inability to move ahead with the development zones, which would put special tax incentives and infrastructure in place to lure foreign investors.
“The government understands the need to promote these zones,” he said, “but the problem facing us is a lack of legal framework to govern zoning.”
Proposed industrial zones include a 1,000-hectare tract in Sihanoukville and 12,500 hectares set aside by the government in Kompong Chhnang.
But the proposals have yet to move ahead because of conflicting claims on the land.
Pou Sothirak said that in some cases people claim land titles that existed before the Pol Pot regime but do not have the paper work to support their claims.
In other cases, local authorities and the central government have recognized conflicting ownership.
To rectify the problem, he said, he has recommended the Ministry of Finance draft a law governing land acquisition and compensation so the government can purchase the land for the zones.
He added that he is not optimistic the problem will be solved before 1999.
Meanwhile, the private sector has set up some smaller industrial parks of 100 to 200 hectares each. Two dry ports on Route 4 have been designed to alleviate storage space problems and customs clearance delays at Sihanoukville port.
In February, Thakral Cambodia Industries Ltd opened an industrial complex where the Singaporean company hopes to rent space to companies wanting to set up operations.
The SungeiWay Group from Malaysia has also proposed a billion-dollar industrial and residential zone in Chroy Changvar, but the government still must sort out land-title problems before construction can begin.
One economic analyst emphasized that industrial zones are crucial to luring investors to Cambodia, and that the government should not leave it to the private sector.
“The private sector can do it in little bits, but the government needs to be involved for it to be comprehensive,” he said.
