After Abandoning Auctions, Government Sells Off Seized Timber

The government sold off more than 10,000 cubic meters of illegally logged wood in direct negotiations with private businessmen over the past two days, according to a Finance Ministry official, after abandoning efforts to auction it off due to a lack of interest.

The timber is part of roughly 70,000 cubic meters of wood seized by authorities earlier this year as part of a sweep of the eastern provinces for illicit stockpiles, mostly at sawmills and on rubber plantations.

Prime Minister Hun Sen initially announced plans to hand the timber over to the Education Ministry for construction purposes but later said it would be auctioned off instead because the ministry lacked the means to haul it away. But more than a month of announcements soliciting bidders for 11 lots, spread across the five provinces where the wood was found, has attracted little interest.

The Finance Ministry said four of the seven lots in Mondolkiri province attracted one applicant each, leading it to settle for direct negotiations.

Soung Mengkea, an undersecretary of state at the ministry, said the negotiations were conducted one at a time in Phnom Penh on Wednesday and Thursday, and that the combined 10,325 cubic meters were sold for a total of 9.76 billion riel, or about $2.4 million—roughly $615,000 above the combined asking price.

The official said DTC Group owner Ing Sithat Virak, who has a rubber plantation in Mondolkiri, purchased the two largest lots—totaling about 9,800 cubic meters—and that businessmen Ouk Rithy and Prum Bunthoeun bought one each.

Environment Minister Say Sam Al, who was put in charge of selling off the seized timber, still has to approve the sales, Mr. Mengkea said, after which the buyers will have to pay for the wood and haul it away from the plantations where it was found—and has been held since—within 45 days.

“The buyers are required to transport the wood within a limited time because we are worried that otherwise they will log more wood” in the area where it was found, he said. “The buyers are not allowed to build [sawmills] on the land of the [plantations] because we would be unable to see what they are doing.”

Mr. Sithat Virak said some of the timber he bought on Thursday—pending approval—was destined for his unfinished resort in Mondolkiri’s Sen Monorom City.

“Some of the timber will be made into furniture for the domestic market and the rest will be used for my 24-hectare resort. It will take a few years to finish my resort,” he said.

Asked why he paid more than the asking price—being the only applicant for the two lots he bought—he said: “I paid according to the bidding procedure.”

The government also sold off 265 cubic meters of timber on Monday, during the only auction for the seized wood to date.

Mr. Mengkea said there were still no applicants for the remainder of the 70,000 cubic meters but that the government would keep soliciting bidders.

The government’s timber auctions were shrouded in secrecy in past years, often favoring timber magnate Try Pheap, an adviser to the prime minister. Some environmental rights groups say auctioning off seized timber only fuels the illegal logging trade by feeding the timber market and that such wood should be destroyed.

(Additional reporting by Van Roeun)

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