Gov’t Seeks $5M From RAC

The cash-strapped government is seeking to collect more than $5 million in back taxes and loans from Royal Air Cambodge, a Ma­laysian-Cambodian joint venture.

Finance Minister Keat Chhon appealed this month to the two prime ministers to assist in the matter, saying his ministry’s at­tempts to collect the money have been ignored.

The government advanced the airline $1.8 million in 1995 to help pay for insurance and repairs of two aircraft. RAC has not paid 1995-96 taxes of $3.5 million and owes an unspecified amount of 1997 taxes, he said.

“The Ministry of Finance and Economy has many times written to the company asking for payment, but on its part, RAC ig­nored it even though they know the government is facing financial difficulties,” Keat Chhon wrote June 17 to Second Prime Min­i­­ster Hun Sen and First Prime Min­­ister Ung Huot.

“Therefore, we would like… [you] to kindly take appropriate actions in order to commit RAC to pay all of the above dues,” Keat Chhon wrote.

An RAC official contacted Sun­day declined to comment on the letter, saying he had not been informed of it.

Formed in 1995 as the national carrier and given exclusive rights to domestic routes, RAC is part-own­ed by Malaysia Helicopter Ser­vices, one of the parent companies of Malay­sian Airlines.

RAC lost millions of dollars up to July 1997. Some government officials claimed the losses reach­ed $24 million.

Late last year, newly-appointed RAC Chairman Pan Chantra

vow­­ed to cut operational costs by $700,000 a month. However, it is unclear whether the airline has turned a profit yet.

Long criticized by international lending institutions for its poor tax-collection record, the government has been working to gather back taxes.

Shortly after July’s fighting, original RAC chairman Vichit Ith left the country and Hun Sen subsequently declared an “open skies” policy allowing other carriers to fly domestic routes.

He originally opposed giving RAC exclusive domestic rights.


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