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Logo of Phnom Penh Post newspaper Phnom Penh Post - Island dream on hold, for now

Koh Dek Koul, the former island residence of fugitive tycoon Sergei Polonsky
Koh Dek Koul, the former island residence of fugitive tycoon Sergei Polonsky, off the coast of Preah Sihanouk province in January. Griff Tapper

Island dream on hold, for now

Speaking during an interview in December, fugitive Russian tycoon Sergei Polonsky told the Post of his ambitious scheme to build a $1 billion eco-tourism network on the islands he claimed to own off the Cambodian coast.

He said the admittedly self-financed project, titled “Project Archipelago”, would be a place of respite for tourists looking for something more than a simple vacation.

“Here there wouldn’t be any nationalities, there wouldn’t be any religious dogmas, there would be no warlike aggression,” he said.

“It’s very important what we are doing here.”

But after the tycoon’s deportation for an overdue visa on Sunday morning to face charges of embezzlement in his homeland, the fate of his assets in the country remains unclear.

Polonsky claimed to own or co-own eight islands off the Cambodian coast, two of which saw significant development.

On Koh Dek Koul, his headquarters and the subject of a legal dispute with his former partner Nikolai Doroshenko, he built an extravagant lair, complete with a fully-equipped office for his legal and administrative staff and a rooftop swimming pool.

On Koh Damlong, some 60 kilometres from the Cambodian coast and the first step in Project Archipelago, Polonsky just finished setting up a resort earlier this year, where tourists could buy a night in one of the 25 bungalows for $40.

Both Koh Dek Koul and Koh Damlong have been evacuated of their staff and ceased all operations, with navy patrol boats guarding the waters around them.

“All the foreign [employees of Polonsky], all the staff, are all on the mainland or in the jails,” said Pierre Kann, who developed Koh Damlong for Polonsky.

Kann has been left in the lurch by the tycoon’s sudden departure. His construction company, which was planning to build a meditation area, lounge bar, and other developments on the island, will have to let go almost its entire workforce of around 100 builders, he said.

“There are still loads of things to be sorted.”

Polonsky’s islands were bought on 99-year leases from the Cambodian government, which includes a stipulation that the islands be developed, or they will be taken back by the government.

Ho Vandy, co-chair of the Government-Private Sector Working Group on Tourism, said that in Polonsky’s case the developments would likely be taken into possession by the government through the Cambodia Development Council, and then could fall into the hands of another private investor.

“We do not know the details from the CDC yet, but from our private sector we want to see development [and] progress”, he said.

Vandy warned that the Cambodian government should “know clearly about the history of the investors” who aim to develop Cambodian islands.

Polonsky was far from the first to eye Cambodia’s tropical islands.

Of the many previous schemes to develop them into integrated tourism resorts, including Russian-backed projects on Koh Puous and Koh Tang, none have been completed so far.

Nevertheless, James Padden, surveyor at real estate firm CBRE, said the Polonsky saga would likely not deter investors interested in building up the islands.

“There is interest in some of the island developments and getting them off the ground. I think it’ll start in the next 5 years or so.”

“I think [Polonsky] was just kind of a wild cowboy character.”

Neither the CDC or the governor of Preah Sihanouk could be reached for comment yesterday.

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