The National Assembly has asked Prime Minister Hun Sen to cancel a 35-year contract with a local company over the National Route 4 maintenance project, saying the company was appointed without proper procedures.
A letter sent last week by National Assembly Acting President Heng Samrin and Son Chhay, head of its Telecommunications, Industry and Public Works committee, said the deal is not valid because AZ Distribution Co was appointed by Tram Iv Teok, the CPP’s secretary of state for the Ministry of Public Works and Transport, not by Funcinpec Minister Khy Taing Lim.
The letter was sent after the committee questioned ministry officials in late March. Minister Khy Taing Lim said the decision to grant the concession to AZ was made without his knowledge or open bidding.
“The decision is not official,” Khy Taing Lim told the committee. “I knew nothing about the deal. The decision didn’t follow the ministry’s procurement procedures.”
According to the parliamentarians, the deal, recommended by Tram Iv Teok and approved by Minister of Cabinet Sok An on Feb 16, requires that AZ maintain the road, which was rebuilt by the US.
The company will build two toll-road weigh stations in Phnom Penh and Sihanoukville. Cars will be charged a $1 toll at the booths; tolls for larger vehicles will range from $2.50 to $9. Fines will be levied for overweight vehicles. The contract requires that the money be used for maintenance.
Soy Sokha, economic adviser to the Council of Ministers, said AZ is going to invest $2.5 million to build the weigh stations and toll booths. AZ will conduct yearly routine maintenance and spend $10 million on major maintenance every eight years.
Ninety-five percent of the revenue from toll fees will go to the company, while the government will receive 5 percent, Tram Iv Teok said. All levied fines are supposed to go to the government.
“When the project starts, there will be no more illegal check points along the road,” he said.
Soy Sokha said he did not know about allegations of the contract being improperly awarded. “I will ask somebody at the council and the Ministry of Public Works to collect more information,” he said.
But Tram Iv Teok said there was no irregularity in the concession contract. “The deal is still on,” he said. “In my understanding, the minister knows about the project. We have told him.”
Tram Iv Teok said the government needs a private company to look after the road due to limited national budget for road maintenance. “We have to protect the road built by the US government,” he said. “We don’t want the US to look down [on us]. ”
Ing Bun Hoaw, owner of AZ, declined to comment, referring questions first to his lawyer and then Soy Sokha. Registered in 1994, AZ has conducted import and export businesses, construction and real estate operations.
Ing Bun Hoaw holds Oknha title, an honorary status given to business people who contributed to the country’s development, and is a member of a Phnom Penh Chamber of Commerce executive committee.
Heng Samrin and Son Chhay stated in their letter that only companies that develop roads or bridges in a build-operate-transfer scheme should be allowed to charge user fees. It is not appropriate to allow AZ to charge fines without building roads, they said.
“I think the deal should be canceled because it would affect users too much,” said Kim Sam, a Funcinpec parliamentarian and deputy chairman of the assembly committee.
AZ is also involved in a major telecommunications development deal: Telecommunications Minister So Khun appointed AZ to establish Cambodia Telecom, a public enterprise to take over all state-run land line and international gateway phone operations. The deal has been on hold since Finance Minister Keat Chhon questioned it in late 1999.
“If the government allows a private company to practice like this, other private companies will follow this and request to set up toll roads to collect fees from users on other national roads [built by donors].”
That’s why we decided to allow AZ to maintain it.