The government has created a working group to study the development of Koh Kaong

Karng, an island about an hour's boat ride from Sihanoukville. The move followed

an expression of interest from a French development company, said Kong Vibol, secretary

of state in the Ministry of Economy and Finance.

Vibol, who was appointed deputy chairman of the working group, said the government

had not yet seen a full proposal for the resort development. It had also not signed

a Memorandum of Understanding (MoU) with the developer, which is trading in Cambodia

as the Kaong Karng Island Development Group Company.

"We must be very careful to select the areas which are appropriate for development

and those that we must preserve," he said of the upcoming study.

He said the working group would study the economic and environmental impacts of what

is likely to be a small bungalow-style resort. The island is a popular spot for day-trippers

from Sihanoukville looking to snorkel and scuba dive.

The study follows the establishment of a similar working group to examine a much

larger development on Koh Rung and Koh Rung Sonleum by a Las Vegas consortium.

The US-based Island Development Group (IDG) completed a feasibility study in May

and plans to develop an airport, resorts, electricity generation and water treatment

plants on the two islands in the Gulf of Thailand.

In February IDG signed an MoU with local firm Ratanak Stone Cambodia Development

Company. IDG's website identified Ratanak's owner as the wife of General Pol Saroeun,

Deputy Commander-in-Chief of the Royal Cambodian Armed Forces. IDG signed a 70-year

lease agreement with the government in July, and paid a $500,000 deposit.