The Council of Ministers has given the go-ahead for Industry Ministry officials to seek a new firm to take over a Sihanoukville power project from Ariston, the Malaysian firm touted as Cambodia’s largest single investor.
Government officials are also considering similar action with a different firm that has not begun work in Battambang province contract.
Industry Minister Pou Sothirak said last week the two prime ministers have approved a plan to seek bids for expanding Sihanoukville’s power supply to meet future growth.
Pou Sothirak said the decision meant modifying Ariston’s contract for a multi-million dollar project, which also includes a golf course, two luxury resorts and the upgrading of the Kang Keng airport. He said such a move was “not a cancellation” of the deal, noting that “Ariston got a package deal from the government.”
Ariston and government officials have regularly boasted that the Malaysian firm pledged several years ago to invest $1.2 billion in Cambodia.
Boeun Eu, an economic adviser to the Council of Ministers, said First Prime Minister Ung Huot and Second Prime Minister Hun Sen agreed three months ago to essentially remove the power project from the Ariston package and seek new bids. The Malaysian firm’s other projects in Sihanoukville are still game.
The company, which also owns the Naga Resorts Floating Casino in Phnom Penh, has been repeatedly warned by the Industry Ministry to start work on the power project. No progress has been made on any sector of the project, government officials said.
An Ariston representative in Sihanoukville could not be reached for comment Sunday. In the past, the company has complained the delays were the fault of the government, and that its selected sites for the 5-megawatt plant had been turned down.
The director of Electricite du Sihanoukville, Ros Oeurn, said Sunday he was glad the government had finally decided to re-open the project for new bids.
In the meantime, a French and Asian Development Bank-funded rehabilitation of Sihanoukville’s electrical system is scheduled to be completed this month. Eighteen km of new underground lines have been laid to replace overhead lines, plus 6 km of lines to extend service, and a 5-megawatt diesel turbine should go on-line later this month, Ros Oeurn said.
In Battambang, meanwhile, the Industry Ministry is putting pressure on the British firm Anglo-Cambodia Holding Ltd to obtain a new partner for its power project for the provincial capital.
Pou Sothirak said the company’s financial partner left Cambodia following the July 1997 factional fighting.
For several months, he said, the ministry has been threatening to cancel the contract if the company does not start work. Officials from a Canadian firm, Jupiter International, recently would neither confirm nor deny recent reports that they were interested in the contract.
The minister said the ministry should give Anglo-Cambodia an ultimatum to find a partner or cancel its contract within a month. Anglo-Cambodia has repeatedly declined to comment on the issue.