The Ministry of Information has swapped an 11-hectare plot of land in Phnom Penh’s Meanchey district, which was previously the site of National Radio AM 918, with a property development firm in exchange for the construction of a new radio tower and transmitter on a 20-hectare plot of land about 25 km outside the city.
Information Minister Khieu Kanharith said Thursday that there was no public bidding for the state land, but instead he personally called “all the land developers” and decided to grant the land to the Khun Sea Development Group, who in return is building a new radio facility in Kandal province’s Kandal Stung district.
Asked why his ministry had skirted public advertisement and competitive bidding regulations for state assets and contracts, Mr. Kanharith said, “This is an exception because nobody wanted to have this land.”
The 11-hectare, former National Radio site in Phnom Penh, just a few km from Stung Meanchey bridge on Street 217, is now the construction site for a gated community of luxury villas and condominiums being built by Borey Peng Huoth, a construction and development firm that Mr. Kanharith said has partnered with the Khun Sea Group since the state land swap was agreed in 2010.
Meanwhile, the government’s only short-wave radio station, AM 918, has been shut down since its Phnom Penh facilities were torn down in September 2012.
Employees of Borey Peng Huoth confirmed that the firm was in charge of the construction, but did not know details regarding the transaction with the Khun Sea Group. Calls to phone numbers listed for the Khun Sea Group went unanswered yesterday.
Borey Peng Huoth is owned by brothers Heak Bun Peng and Thay Chea Huoth. On its website, the company boasts having built 10 “boreys,” gated communities of high-end villas and condominiums, in Phnom Penh since 2005.
The Khun Sea Group, owned by local businessman Khun Sea, outbid other firms vying for the ministry’s land by promising to cover all costs for the new AM 918 infrastructure as well as compensation for the station’s 40 employees, a cost that Mr. Kanharith estimated at well over $9 million, more than other firms who were offering up to $8 million for the piece of real estate, he said.
“At that time, nobody wanted to bid [higher than Mr. Sea]. Nobody wanted that land at the time,” he said, insisting that no money changed hands in the arrangement, which was strictly barter and signed off on by the Council of Ministers in December 2010.
According to a copy of the agreement between the Khun Sea Group and the Council of Ministers, made at the request of the Ministry of Information, Mr. Sea’s firm is responsible for building a 600-kilowatt AM transmitter, a 180-meter high radio tower, a two-story broadcasting building to accommodate staff, a 1,000-kilowatt generator and an optical cable that links the site to the studio of National Radio FM 105.75 near Wat Phnom.
Once construction on the new site is finished, National Radio staff would receive compensation of a 125-cc motorbike, and Mr. Kanharith promised to push the Khun Sea Group for additional cash compensation for staff to cover the lengthy daily commute to their station in Kandal province.
Mr. Kanharith declined to estimate when the new AM 918 facility would be up and running, but said that the state AM radio station remained “very important” to spreading information to Cambodia’s rural areas, which often do not have access to TV or FM radio feeds.
The swap was also necessary, Mr. Kanharith said, because without the access to capital made possible by Khun Sea Group, the government would not have been able to upgrade its 20-year-old shortwave radio transmitter, which was broadcasting at only 80 kilowatts, well under its capacity of 200 kilowatts.
With the new equipment purchased by the Khun Sea Group, National Radio AM 918 will be broadcasting at 600 kilowatts, allowing it to reach the entire country as well as large Cambodian populations living in southern parts of Vietnam and eastern parts of Thailand, Mr. Kanharith said.
The Ministry of Information still owns about 3 hectares of land at the Meanchey district site, where National Radio Kampuchea FM 96 continues to operate. Mr. Kanharith said that the Wat Phnom location of National Radio FM 105.75 was safe from being swapped because it was important to staff that their workplace remain close to the city center.
Opaque land swaps have become common under the administration of Prime Minister Hun Sen and are often quite lucrative for the private companies who are awarded prime pieces of real estate in exchange for constructing new buildings on significantly cheaper plots of land in far-flung locations.
The most astonishing example of the trend was the move of the entire provincial government of Siem Reap in 2010, when staff were relocated from downtown office buildings in Siem Reap City to a desolate 42-hectare site in Ampil commune, some 16 km from the city center.
Little-known firm J&R Import, Export and Construction Company was awarded a contract to build 60 new office buildings for the Siem Reap provincial government in Ampil commune and, in return, J&R took control of centrally-located land belonging to the provincial government, including the provincial hall and 26 departments in prime areas of the city center.
Mr. Hun Sen has twice in the past five years publicly denounced public land swaps, and in February 2012 warned ministries, including the Ministry of Information, not to sell off prime government property.
Opposition lawmakers have repeatedly lambasted the government for the shady deals, claiming that they fail to meet legal requirements for transparency in the awarding of government contracts and, without competitive bidding, prevent the state from collecting millions in potential revenue.