Thirteen companies have pledged to pay several hundred thousands of dollars of back rent owed on property leased by the Ministry of Industry, officials said this week.
However, the written promises do not mention the deadline for the payment of the outstanding debt, nor penalties should the companies not abide by their agreement, officials said.
Keo Sovath, director of the ministry’s industry department, said Tuesday that the written promises were signed after senior officials met representatives of the 13 delinquent renters last month.
And even though the pledge doesn’t mention deadlines or penalties, Keo Sovath maintained that the government would be tough on those that don’t keep their promise.
“If the promise is not kept, the ministries of Finance and Industry will take strict measures, including imposing penalty fees and canceling the lease contracts,” Keo Sovath said. “I believe the payment situation is getting better because of the meeting.” Officials of the Finance Ministry could not be reached for comment on Tuesday.
But Kaing Leang Khan, acting director of the state property department for the Finance Ministry, previously called the Industry Ministry the worst of the 11 ministries in collecting rent on the buildings it leases.
He said in late December that 16 private companies owed $724,000 in back rent. Another government official pointed out then that three companies owing about half that amount already had skipped town. That means at best the government will be able to collect only about $360,000 of the back rent.
Also in late December, Finance Minister Keat Chhon told Industry Minister Suy Sem in writing to solve the problem. Officials said then that threatening to cancel the leases might be the only solution.
According to Industry Ministry officials, the property leases should generate about $2 million per year, but the full amount has never been collected. Overall, the Cambodian government leases more than 100 properties to the private sector, generating about $6 million annually on paper, Kaing Leang Khan said.