Overflight Fees Will Pay for Anti-Thai Riots

Cabinet Minister Sok An has authorized the diversion of government revenues from the national air traffic control service to a privately owned Thai company as reparations for last year’s anti-Thai riots, according to a notice from the Council of Ministers.

In a May 13 directive to the State Secretariat of Civil Aviation and the Ministry of Finance, Sok An wrote that the government’s share of revenues generated from Cambodian Air Traffic Services Ltd, which is jointly owned by the state and the Thai company Samart, will be paid to Modern Plastics and Packaging Co Ltd until the company’s $12 million compensation request has been met.

The decision was made by the council’s investigation assessment committee on Feb 4, the notice said.

“The compensation paid to MPP will use revenue-sharing from CATS, which was government revenue,” it read.

The Modern Plastics and Packaging factory on National Route 2 was destroyed by rioters on Jan 29, 2003, along with 32 other Thai-owned businesses.

The total bill from the night of unchecked rioting by mostly teenagers and students was about $56 million. The inability of police to prevent the destruction has never been fully explained.

In January, the Bangkok Post reported that MPP was seeking $12 million in compensation from the Cambodian government, a claim reportedly larger than nine other claims under discussion at that time combined.

Soy Sokha, an economic adviser to Sok An, said the decision to use CATS funds for MPP’s compensation was merely a “principle,” and the Finance Ministry and the SSCA would work out the details of how the money would be transferred.

“I believe the Ministry of Finance will know what to do,” Soy Sokha said.

Contacted Tuesday, Finance Minister Keat Chhon declined to comment on the plan, saying that he had not seen the notice from the Council of Ministers.

However, all government revenues and expenses must pass through the National Treasury, he said.

CATS coffers are fed by over flight fees and navigation fees paid by the airlines that enter Cambodian airspace. From 2000 to 2003, income from those two charges brought in 80 percent of the SSCA’s $43.3 million total revenue.

The MPP deal is not the first diversion of government revenue conceived for anti-Thai riot compensation.

Earlier this year, the government agreed to pay Cambodian Samart GSM $3 million through tax breaks.

Since December 2000, Cambodia’s air traffic control system has been jointly operated by the government and Thai-owned Samart. The government receives 50 percent of navigation fees and 40 percent of over flight fees. The rest goes to the Thai company. Now the government’s revenues will be diverted to MPP, the Council of Ministers notice stated.

Officials from MPP and CATS could not be reached for comment.

The civil aviation authority will keep 5 percent of CATS revenues to pay for salaries and administration costs, said Him Sarun, cabinet chief for civil aviation.

From 2000 to 2003, SSCA spent $6 million on salaries, administration, and maintenance expenses. It will continue to collect 100 percent of revenues from landing fees, passenger service charges and fees paid by foreign airlines for flying into the country.

The SSCA, which regulates international and domestic air service, reports directly to the Council of Ministers. The government decree which brought the agency into being did not specifically outline the agency’s responsibilities, according to the “Cambodian Civil Aviation Data Book,” a report about the national aviation system compiled in 2003 by JICA.

“Indeed, SSCA is often ignored even when decisions pertaining to Civil Aviation development in Cambodia are made,” the report said.

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