Gov’t, Ariston Abort Agreement at Last Minute

An agreement to relieve the Aris­­ton company from $1.3 billion in de­­velopment obligations it in­cur­red when building Phnom Penh’s Na­ga Casino was called off at the last pos­sible minute last week, sour­ces said Wednesday.

Commerce Minister Cham Pra­sidh and Ariston Chairman Chen Lip Keong were gathering to sign the agreement at the Council for the Development of Cambodia when the government aborted the pro­­cess.

In 1995, Malaysian-owned Aris­ton agreed to build an airport and po­wer plants in Sihanoukville and a re­sort on Koh Pos island in ex­change for the exclusive right to de­velop a ca­sino in the capital.

On July 14, the government was pre­paring to free Ariston of the ob­ligation, when it decided doing so would render it powerless to collect back taxes it says the Naga Casino owes, the government sources said.

“The government waited 10 years for Ariston to implement the agree­ment signed in 1995,” Civil Avi­ation Director of Planning Sin Chan­sereyvutha said. “Develop­ment projects are to be withdrawn from Ariston except Naga Casino, the legal casino corporation.”

The government and the French-owned Societe Con­ces­sionaire de l’Aeroport, which runs the Siem Reap and Phnom Penh air­ports, are set to sign an agreement for an un­disclosed sum to de­velop the Siha­noukville airport. The government is keen to in­crease tourism in Si­ha­noukville, the aviation official said.

The agreement hinges on the Ariston deal. That deal fell through, Sin Chansereyvutha said, over millions of dollars in back taxes and a claim by Ariston to money SCA will likely pay the government to purchase land surrounding the airport for its enlargement.

“The government cannot agree with the demands of Ariston to claim the money,” he said.

“We will await a decision of Sam­dech Krom Preah [Prince Rana­riddh],” a CDC official who asked not to be named said. The official said that government officials are de­bating whether relieving Ariston of its obligations before collecting tax­es owed will hurt the government’s ability to force payment.

Contacted Wednesday, a Naga Corp representative identified as Ra­vy said that Naga cannot res­pond to any questions from the me­dia until Aug 2, when spokes­man Michael Tachene returns from attending football matches in Brunei.

A Finance Ministry official familiar with the Ariston negotiation said that Ariston was hobbled by the Asian financial crisis of 1997 and does not have capital to invest in the proposed projects.

SCA, he said, is in sound financial po­sition to develop the Siha­nouk­ville airport. SCA spokesman Khek Norinda could not be reached for comment.

(Ad­ditional reporting by Erik Wasson)

 

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