Government Signs $900M in Deals With Vietnam

The Cambodian government yesterday signed deals with the Vietnamese government and in­vestors for projects in hydropower, agribusiness and iron ore exploration that totaled more than $900 million in value.

The series of memoranda of un­derstanding was the latest symbolic high point for Vietnam’s in­creasing commercial presence and power here, with ballooning investments across much of the private sector.

Appearing at Prime Minister Hun Sen’s office as part of a working visit this weekend, Vietnamese Prime Minister Nguyen Tan Dung yesterday hailed growing trade and cooperation, calling on Mr Hun Sen to “give priority” to Vietnamese investors.

“I would like to suggest that the Cam­bodian government, particularly Prime Minister Hun Sen and local officials, give priority and facilitate Vietnamese investors to do business in Cambodia effectively.”

At a conference, licenses for thousands of hectares of rubber, cassava and sugar plantations were awarded to Vietnamese companies, along with hundreds of square kilometers for iron ore exploration.

But the clear cornerstone of projects signed into approval yesterday was a hydropower dam worth $806 million. First reported by Vietnamese media in January, the planned Lower Sesan II dam in Stung Treng province has resulted in a firestorm of criticism from NGOs and villagers who say the 400-megawatt dam will result in mass forced evictions and cause irreversible damage to the Sesan river and surrounding Sesan district.

“More than 400 km squared of land will be flooded, a lot of agricultural land damaged…. Fish cannot migrate,” Meach Mean, coordinator of the 3S-River Network in Ratanakkiri province, said yesterday. He said some discussions had been held over where to relocate the 10,000 villagers expected to be displaced, but the land under consideration was rocky and not sufficiently arable.

Signed by Ith Praing, secretary of state at the Ministry of Industry, Mines and Energy, and by Vietnamese Minister of Planning and Investment Nguyen Thanch Bien, the project is the work of the Vietnamese electricity behemoth EVN International.

After receiving an investment license, EVN CEO Nguyen Duc Tuyen announced that his company was looking into two smaller hydropower projects in Ratanakkiri and Stung Treng, worth $182 million and $407 million, respectively.

Mr Tuyen then called on the Cambodian government to quicken the approvals of proposed investments.

“In late 2010, we had a drought which…brought down electricity power in Vietnam, making it difficult to supply electricity to Cambodia,” he said. “We would like to suggest that the Cambodian government make the time shorter and facilitate a quicker process for investment registration.”

Representatives of the Ministry of Industry, Mines and Energy could not be reached yesterday.

In addition to the hydropower dams, investors and officials from both countries signed $30 million of agreements in iron ore exploration in Ratanakkiri totaling 162 square km, a $200,000 agreement for cassava plantations in Ratanakkiri, and a sugar cane plantation and processing plant in Kompong Speu worth $75 million.

Commerce Minister Cham Prasidh said in a speech yesterday that in 2010, exports from Cambodia to Vietnam totaled $276 million, while those from Vietnam to Cambodia totaled $1.55 billion.

“Our trade deficit is growing due to the consumer goods at reasonable price and quality [increasingly available] from Vietnam,” he said. He added that the target of $2 billion in bilateral trade by 2012 set by Cambodian Prime Minister Hun Sen and Vietnamese Prime Minister Nguyen Tan Dung would likely be reached this year.

Mr Prasidh noted that Vietnamese investors have injected fixed assets investment worth $352 million in 2009 and $153 million in 2010, though those figures do not include data from the civil aviation sector, banking and financial services sector, or working capital of investment companies.

“According to Vietnamese data, from 2009 to April 2011, Vietnam has invested in 87 projects in Cambodia amounting more than $2 billion,” said Mr Prasidh.

“I do hope this figure will increase even more in 2011.”

  (Additional reporting by Abby Seiff)

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