Siem Reap’s Secret Multimillion Dollar Land Swap

SIEM REAP CITY – Inside the grounds of this city’s old provincial hall, past a green corrugated iron fence, municipal street cleaners and their families are squatting in what was once a bustling government office filled with civil servants.

Across the road, the former department of rural development is a deserted shell, its surroundings now a rudimentary eatery serving rice and pork to chain-smoking chess players.

The scenarios playing out on these plots of land are reminiscent of Cambodian village life. But this is some of the most expensive and advantageously located land in Siem Reap City, Cambodia’s most visited tourist destination where land does not come cheap. The plots are also part of the biggest land swap deal ever carried out by the Cambodian government.

The swap, in March 2010, took place after little-known firm J&R Import, Export and Construction Company was awarded a contract to build 60 new office buildings for the provincial government on 42 hectares of land in Siem Reap’s remote Ampil commune. In return, J&R took control of land belonging to the provincial government, including the provincial hall and 26 departments in prime areas of the city center, including a site located next to the city’s Royal Residence and near some of the city’s most luxurious five-star hotels.

Last week, however, Siem Reap’s provincial administration moved back to the city center after exchanging offices with the Apsara Authority—the body in charge of operating the Angkor Archaeological Park—in a move widely supported by provincial officials, who had grown tired of the lengthy commute to remote Ampil commune.

But questions over the original land swap deal remain.

Critics of such land deals say they are conducted without public tender and as a blatant boon for those lucky enough to obtain the state-owned land, as they get their hands on a prime piece of real estate in return for building replacement properties on land worth a fraction of the price.

Though it is unknown exactly who benefited from the deal in Siem Reap and how much was earned from the consequent sale of some of the government properties, interviews with provincial officials and real estate experts show just how lucrative the deals likely turned out to be and how the decision to carry out the land swap was made at the highest level of government.

For example, one plot of land measuring approximately 3,500 square meters that once housed the old provincial hall was valued at more than $3 million when the land swap deal was made in 2010, according to local real estate agents.

Part of that land was sold to the owners of the luxury Kep-based Knai Bang Chatt hotel resort in late 2010, the firm’s CEO Jeff Moons confirmed on Thursday, though he declined to say how much he paid.

Nearby, the site that used to belong to the provincial department of land manage­ment has been sold to the local concern Khek Leang Co. Ltd., which owns the Somadevi Angkor Hotel & Spa. Going by local real estate prices cited by Cambodia Property Limited, a realtor, that land, which measures about 1,200 square meters, would have been worth somewhere in the region of $1 million at $900 per square-meter back in 2010. The swap included many other plots of land—such as the former social affairs department and the rural development department—which now lie totally abandoned and have no obvious buyer.

How much J&R ended up earning from the swap deal is unknown. But the land in Ampil commune, used by J&R to build the new provincial administration, was worth probably no more than $5 per square meter when the deal was made, said Bong Somony, Cambodia Property’s branch manager in Siem Reap.

Going by estimates of prices at that time, that would mean the whole 42-hectare site at Ampil would have been worth about $2.1 million, a considerably smaller sum of money compared to the value of the land where the provincial hall and 26 departments once stood.

J&R director Lun Sothy de­clined to comment when contacted last week and asked about the land swap.

According to Chhun Chhorn, the former provincial governor of Kompong Thom, Mr. Sothy was a two-star general with the Royal Cambodian Armed Forces when the pair met to organize the construction of a canal his firm, J&R, constructed in 2010.

Military officials, however, have since denied that Mr. Sothy is an officer in the armed forces.

Siem Reap provincial officials at all levels in Siem Reap say that the land swap deal was orchestrated under a blanket of secrecy between then governor of Siem Reap, Sou Phirin, and an interministerial committee made up of senior government figures.

In interviews conducted last week, several provincial officials expressed anger over the original land swap and said Mr. Phirin had carried out the deal independent from any of his subordinates.

“We are too small to give you this information related to the land swap,” said Siem Reap’s provincial spokesman Chik Kimchun. “I have the documents but I cannot give you them since I am not au­thorized,” he added.

In fact, Mr. Kimchun’s reluctance to share information on the 2010 land swap is commonplace among government officials.

“A ministerial committee and the country’s leaders were working on it back in 2010. I don’t know. Please excuse me,” said deputy provincial governor Mao Vuthy, who was one of several deputies working in Siem Reap when the land swap took place.

By law, all the government’s provincial property is controlled by the Ministry of Interior, which must work hand-in-hand with the Ministry of Land Management when conducting land swaps.

Deputy provincial governor Bun Tharith said Interior Min­is­try Secretary of State Prum Sokha was chairman of the committee in charge of the Siem Reap land swap, though he declined to divulge any details about the deal.

Mr. Sokha declined to comment on the swap and referred questions to Mr. Phirin as well as the current provincial governor Khem Bunsong.

“This case was closed a long time ago. Ask the provincial governors,” Mr. Sokha said when questioned about his role as chairman of the committee in charge of the land swap.

Beng Hong Socheat Khemro, spokesman for the Ministry of Land Management, said he had no information regarding the huge swap of government land and buildings and he denied any knowledge of what had become of the former government buildings in the heart of Siem Reap.

“I don’t know. I have never been to those plots of land,” he said. “You better ask the provincial level. Ministry of Land Manage­ment doesn’t know this.”

Mr. Bunsong, the current provincial governor, declined to comment on the land swap. Mr. Phirin could not be reached for comment despite numerous attempts. His sprawling, bright yellow neo-colonial town house, which sits in a tidy compound surrounded by lush vegetation, stood deserted on Thursday and Friday.

Whoever one talks to about the land swap in Siem Reap, there is a general consensus that the decision to move the provincial government 16 km away to Ampil commune was a bad one due to the long commute and extra petrol costs for officials.

It also becomes immediately clear that people here are reluctant to speak about who was responsible for the deal and why J&R was chosen as the firm to build the provincial government’s replacement buildings.

When Mr. Bunsong, the province’s new governor, came into power earlier this year, one of his first acts was to move all local government offices back from the Ampil site to the city center, a demand Prime Minister Hun Sen signed off on August 9.

The site in Ampil sits down a purpose built road surrounded by rice paddies and cows. It’s the sort of place you expect to find stray dogs and ramshackle homes made from palm-tree leaves—but not the provincial governor in a suit and tie.

As dozens of provincial officials and removal workers were moving back into Siem Reap and the provincial administration’s new offices Thursday and Friday at bureaus belonging to the Apsara Authority, several members of the government expressed relief they no longer had to make the 16-km journey to work everyday in Ampil commune.

But ask them about J&R or the role of Mr. Phirin in the deal that brought about the failed land swap, they mostly go quiet and ask for their names not to be put in print.

“J&R controlled many other subcontractors and the land was divided between them. Some parts were sold and some parts were rented. Others lie dormant with a fence around them,” said an official working for the provincial department of finance, who asked that his name not be used due to the sensitive nature of the land swap.

“I could not tell what happened exactly as there was a committee in charge of this and various ministers. You have to go and ask the leaders,” he added as he sat on a leather chair that had been brought from Ampil to the province’s new offices inside the Apsara Authority.

There is a certain irony to the fact the provincial administration is now inside the Apsara Authority, as Mr. Phirin has since been made an adviser to the authority and he is now the one who will find himself having to make the 16 km journey outside of Siem Reap to the Apsara Authority’s replacement offices in Ampil.

The U.N. and Mr. Hun Sen have both expressed their opposition to land swap deals due to the proliferation of swaps of valuable, centrally located government lands and buildings, many of which have notable heritage value.

Christophe Pottier, director of the Ecole Francaise d’Extreme Orient in Bangkok, who spent 18 years as head of the institute’s center in Siem Reap until December 2009, said he did not know how much land was swapped during the deal with J&R. However, he noted efforts to move government buildings outside of the city was part of a long-term strategy to give central tracts of land to a booming private sector in the heart of the country’s tourist capital.

“It’s a phenomenon that dates back much further than 2010,” he said, pointing to both the provincial prison and the courthouse, which were moved to land way outside the city center prior to 2010. “These decisions have been ongoing and is part of a political decision regarding Siem Reap’s urban development.”

Still, who directly benefited from the land swap and what J&R has done with the centrally located plots remains unknown.

Mr. Moons, CEO of the Knai Bang Chatt resort, said his company had bought “a building” on the site belonging to the former provincial hall, though he declined to say how much he had bought it for or from whom.

“Of course I bought the property in 2010, 2011,” he said. I bought it “from the people who owned it. No further questions,” he added.

After three years of making weekly trips to the provincial headquarters in Ampil commune, Sar Chan Pollin, director of the municipal land management department, is relieved he no longer has to travel so far to work.

“We don’t know about this information,” he said, referring to the land swap. “We give the public a land title service, help solve land disputes… but we don’t have this information in our hands. You have to talk to the provincial hall officials.”

And asked about the latest move to the Apsara Authority building, Mr. Chan Pollin is candid.

“We all are happy that the provincial hall and the departments moved back,” he said. “It was a waste of time, petrol and money.”

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