Phnom Penh is finalizing the final wording in a contract with a Canadian company whose behavior in other countries has led to controversy and recrimination.
“We are not yet finished,” said Sok Leakhena, deputy chief of Cabinet to Phnom Penh Governor Chea Sophara and the municipality’s chief negotiator with the Canadian company Cintec Environment Inc. “There are still problems to discuss, clauses not agreed to by our side.”
Cintec Vice President Franco Pacetti, the company’s negotiator in Phnom Penh, said he expected the contract to be signed by the end of the month.
“Both parties want to arrive at an agreement, and I’m confident that we will,” he said.
Chea Sophara’s office has been in negotiations with Cintec for several months, documents acquired by The Cambodia Daily show. These documents include two drafts of a contract between the city and Cintec. Sok Leakhena said Cintec approached the city to open the negotiations.
While negotiations with Cintec have been arduous, the governor said he believes Cintec could improve city conditions if an agreement is reached.
“This company is a very good company that has done a good job in many countries. I think maybe they have the experience to do the job well for the people of Phnom Penh,” Chea Sophara said.
But Cintec Environment Inc has faced controversy in other countries. In the company’s home province of Quebec, an award-winning investigation by the Montreal Gazette newspaper found the company was dumping contaminated soil near a residential area without alerting residents to the possible dangers.
The Gazette articles also accused Cintec of having criminal connections. The company denied these allegations.
In El Salvador in 2000, three municipalities included in the metropolitan area of the capital of San Salvador accused Cintec of not complying with the terms of its contract to operate a sanitary landfill.
The municipalities claimed Cintec never completed several of the components of the integrated waste management system it was contractually obligated to build.
Phnom Penh’s trash collection is currently handled by a local company called PSBK, which has a 50-year contract with the city. The proposed agreement with Cintec would allow the Canadian company to take over PSBK’s duties.
Nhem Saran, director of public works and transport for the municipality, said he believed the reason PSBK wanted to transfer its duties to Cintec was because PSBK no longer has enough money to carry out the city’s trash collection itself.
PSBK officials could not be reached for comment, but Chea Sophara said PSBK is not broke—it simply lacks the funds to make substantial investments in new facilities.
The second draft of the proposed agreement between the city and Cintec, written last month, does not specify exactly what Cintec would be expected to do—only “street cleaning activities, solid waste collection for residents of [Phnom Penh] and transportation to and operation of a sanitary landfill.”
The contract draft lists nine circumstances that would put the municipality in default, enabling Cintec to stop collecting trash and collect damages. But there are no clauses guaranteeing Cintec’s performance or allowing the municipality to claim damages.
Nowhere does the contract give the municipality a reason to cancel the contract or collect damages from Cintec—not even if the company fails to collect trash.
The contract allows Cintec to pass any and all costs on to the consumer. The municipality is responsible for raising collection rates and enforcing them if Cintec demands it. The municipality has no control over these costs—so if Cintec’s costs increase, Phnom Penh consumers, not the company, would bear those costs.
City and Cintec officials would not discuss the specifics of the proposed agreement. Sok Leakhena, deputy chief of Chea Sophara’s cabinet, said there are just three sticking points still to be worked out before the municipality signs the contract with Cintec.
First, the city wants Cintec to keep its workers employed. There are about 500 workers currently on PSBK’s payroll.
Second, under the draft contract, the price Cintec charged for garbage collection would automatically go up every year. The municipality wants such increases to be contingent on the improvement of the Cambodian economy.
Third, the city currently participates in a pilot trash-collection project involving about half of Chamkar Mon district, which is funded by the government of Norway. The city wants to keep this pilot project going, and has a contract with the Norwegian aid agency to do so. But Cintec wants to eliminate it.
Sok Leakhena said these are minor disagreements and a compromise can probably be reached without much trouble.
Before the contract is signed, it must be approved by the Municipal Council and the Council of Ministers. (Additional reporting by Phann Ana)
