The government took a first step to privatize seven rubber plantations in Kompong Cham and Kratie provinces with a decision Friday by the Council of Ministers to take bids.
But Secretary of State for Agriculture May Sam-Oeun said Sunday he could not estimate when the government would begin taking the bids and declined to speculate on potential interested parties.
Although the government is planning to turn the plantations over to private companies, they will continue to generate revenue through export taxes, said Ly Phalla, general director of the Rubber Plantation Department of the Agriculture Ministry.
And Nady Tan, secretary-general of the Council of Ministers, noted that a private company is likely to generate more income from the plantations than the government has been able to as it would have greater financial resources and expertise.
The plantations to be privatized are Bung Ket, Chamcar Andong, Chup, Krek, Memot, Peam Cheang and Snuol. The government also considered privatization of three plantations in 1996.
The plantations, which historically have produced high-quality latex used for surgical gloves and condoms, have declined over the past 10 to 15 years because of a lack of funds for much-needed replanting, maintenance and infrastructure improvements, explained Craig Martin, executive director of International Management Investment Consultants Ltd in Phnom Penh.
“[Privatization] is the only way of getting money in,” Martin said Sunday.
The buyers of the plantations will have to make significant investments in terms of replacing the aged trees, building roads and general upkeep, he noted.
Moreover, the new owners will have to battle the practice of traders and plantation workers selling the rubber through unofficial channels and not paying the 10 percent export tax. A more efficient operation and the curtailment of untaxed rubber sales will be beneficial to both the plantation owner and Cambodia’s government, Martin underscored.
“It’s good news if it’s done properly and fairly,” he said.
According to official government numbers, Cambodia produces 45,000 tons of rubber annually on 61,000 hectares of land.
Ky Heang, former general director of the Rubber Plantation Department, estimated that the government makes an average of $2 million annually from the plantations, which primarily sell to Malaysia and Singapore, which then sell to international markets.
