The government is accepting bids for 99-year leases on three state-owned rubber plantations in Kompong Cham province as the first step toward privatizing several government agricultural institutions, officials said Tuesday.
The government’s 7,000-hectare Chamkar Andoung plantation, the 8,000-hectare Boeng Ket plantation and the 9,000-hectare Memot plantation are now available to private investors, said Chan Ponika, administration chief for the National Divestment Committee’s permanent secretariat office at the Council of Ministers.
The divestment committee placed adverts in local papers from Monday onwards to solicit bids, Chan Ponika said.
The bidding, which ends July 24, will be transparent and the Asian Development Bank is involved, Chan Ponika added.
Teng Lao, secretary of state at the Ministry of Agriculture, said the ADB has encouraged the government to privatize state-owned agricultural companies.
“[The ADB] raised the issue that the state should withdraw its hands from rubber, fisheries and agricultural product companies,” he said.
ADB Country Representative Arjun Goswami said the steps toward privatizing the plantations “show that [government officials] are trying to bring investors into the agricultural sector.”
The government has hired advisers to help manage the bidding process, which is being monitored by the ADB, Goswami said.
The government is still in the early stages of ceding control of its state assets, Goswami said, so this initial foray into privatization is needed to see how attractive such properties will be to investors.
But there could be obstacles to securing investor interest.
Teng Lao said the three plantations were chosen as the first to be privatized because the quality of the rubber resin is not as good as that found on the government’s four other plantations.
There could also be problems dealing with villagers and workers living on these plantations—some of whom have been there since 1979, he said. If plantation residents are forced to leave their homes, the government will compensate them “according to our policies,” Chan Ponika said.
SRP leader Sam Rainsy said the privatization of the rubber plantations was long due. Plantations have been so poorly managed by the state that they add almost nothing to the national budget, whereas 40 years ago rubber accounted for one-third of Cambodia’s annual state revenue, he said. Sam Rainsy said that any deal struck with investors should also include guarantees that plantation workers should not be fired or evicted.
“If they want to buy the plantation and fire the workers, then it is a sign that they just want land or to cut down the trees,” he said.