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Logo of Phnom Penh Post newspaper Phnom Penh Post - Construction projects approvals fall this year

Construction projects approvals fall this year

FEWER construction projects were approved in the first half of 2009 than a year earlier, but the value rose by a third on the back of a spate of requests to build business centres, shopping centres and upmarket hotels, a senior official told the Post.

Lao Tip Seiha, director of the construction department at the Ministry of Land Management, Urban Planning and Construction, said the ministry approved 1,142 projects worth US$1.14 billion in the first six months of the year. The number of projects approved was down 61 on the corresponding period for 2008, but the value was up 33 percent from $855 million, he said.

The increase in average value was due to an increase in "enormous construction projects" approved, he said, but declined to release a detailed list.

"We hope that capital investment for construction projects will keep going up, so people will stop fearing the ... world economic crisis and pay attention to their opportunity to construct buildings," Lao Tip Seiha said.

He added that approvals of locally funded projects had increased, while approvals of projects from offshore financers had decreased. He again declined to provide figures.

National Valuers Association of Cambodia President Sung Bonna warned that not all of the projects approved would see the light of day. Investors were still hesitant due to ongoing concerns over the impact of the global financial crisis, he said, and many who had sought approval were merely testing the waters and had not committed to developments.

"The government has not actually received any capital investment, and there have been no financial transactions," he said. "They have simply received registered construction projects."

A controversial financial edict from the Ministry of Finance requiring developers to deposit 2 percent of the cost of planned projects with the ministry is still to be enforced. It was due to come into effect last September but was delayed amid an outcry from developers over some aspects of the proposed prakas.

Ministry figures show 2,156 projects worth $3.191 billion were approved in 2008.

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