Shukaku, the private company owned by CPP Senator Lao Meng Khin and behind the mass eviction of Phnom Penh’s Boeng Kak neighborhood, says it is back in negotiations with a number of foreign firms interested in investing hundreds of millions of dollars in the controversial project.
Shukaku spokeswoman Amu Pillay said Wednesday that the company was in talks with firms from Hong Kong and Singapore that were considering investing some $300 million in its Phnom Penh City Center project, which aims to transform the one-time slum into a complex of high-end offices, shops and condominiums.
Ms. Pillay declined to name the foreign firms because the talks were ongoing.
“Nothing has been on paper yet; nothing has been inked,” she said. “These figures are ballpark, but they could change because we are still in negotiations.”
The proposed investments from Singapore include a school and a $100 million condominium, she said.
Shukaku says it is using its own money to build a park on part of the project area, which is roughly 120 hectares. It has already built a few roads and started on a drainage system and a five-story office block.
The company appears to lack the capital to fulfill its billion-dollar plans for the site, however, and has had a hard time holding on to foreign investors to date.
In 2010, Shukaku formed a joint company with China’s Erdos Hongjun Investment Corporation, with net assets of $2.17 billion, to develop the area. But work never began, and in 2014, Erdos and Chinese Embassy officials confirmed that the firms had parted ways.
In June last year, Singapore’s HLH Group announced plans to set up a new subsidiary in Cambodia for the express purpose of buying a 1.35-hectare plot from Shukaku for $14.9 million and filling it with office space, condominiums, shops and restaurants.
HLH went so far as to sign a sale and purchase agreement with Shukaku, and announced the pending deal on the Singapore bourse. But by December, it, too, had pulled out. Shukaku said HLH was facing unspecified financial difficulties, though HLH denied it.
The entire project area sits on troubled ground.
In 2008, Shukaku started filling the small, natural lake at the center of the Boeng Kak neighborhood with sand in order to lay the land on which it would start building. To do that, however, it had to force some 3,000 families living over and around the lake out of their homes.
Families and housing rights groups said the evictions were illegal, and in 2011, the World Bank put a freeze on all new lending to Cambodia in protest.