Prime Minister Hun Sen has approved a joint-venture partnership to develop the controversial Boeung Kak lake project involving a Chinese firm and a local company linked to ruling party senator Lao Meng Khin, according to a document signed by the premier and Phnom Penh Municipal Governor Kep Chuktema.
In 2007, local developer Shukaku Inc, owned by Lao Meng Khin, was granted a 99-year lease to develop the lake. In a letter dated November 12 of last year and obtained yesterday, Kep Chuktema wrote to Hun Sen to inform him that Shukaku had established a partnership with China’s Inner Mongolia Erdos Hung Jun Investment Co.
“Shukaku’s owner has asked to register the land in the 99-year lease agreement ... under the new name of Shukaku Erdos Hung Jun Property Development Co, Ltd, for directly implementing the project in the Boeung Kak area,” Kep Chuktema wrote.
Hun Sen initialled the letter on November 27 along with a brief, handwritten notation reading: “agree to the offer”.
Rights groups say the emergence of the document, which confirms earlier reports of Chinese involvement in the lake development, underscores the lack of transparency surrounding the project and the willingness of the government to approve large-scale foreign investment deals without assessing the consequences for local residents.
The lakeside development, which rights groups say will ultimately displace more than 4,000 families, is the largest and most prominent example of the urban evictions that have displaced thousands of the capital’s poor in recent years. Protests by Boeung Kak residents have become a weekly occurrence in Phnom Penh, as homes are flooded or even submerged by the filling of the lake and villagers charge that they are being denied market value in compensation for their homes.
Kep Chuktema’s letter follows Chinese-language news reports from September stating that Hung Jun had set up a partnership in July with Shukaku and Cambodia International Investment Development Group.
CIIDG is also linked to Lao Meng Khin. According to an undated government investment publication available online, the firm runs a special economic zone in Sihanoukville, with Lao Meng Khin listed as the “zone developer”.
In a 2009 announcement to the Malaysian stock exchange, Malaysia’s Leader Universal Holdings announced a proposed joint venture agreement with CIIDG to develop a coal-fired power plant in Sihanoukville. The listed headquarters for CIIDG in the announcement is the same Daun Penh district address that houses Pheapimex, a local conglomerate owned by Lao Meng Khin’s wife, Choeung Sopheap.
In September, Hung Jun chairman Wang Linxiang traveled to Cambodia for a meeting with Hun Sen that was also attended by Choeung Sopheap. The lake development was part of a US$3 billion package of investment deals that also included a 750-megawatt power station in Sihanoukville and a bauxite exploration project in Mondulkiri province, according to Chinese news reports.
At the time, Eang Sophalleth, assistant to Hun Sen, told The Post that the meeting was to discuss the power station project and real estate developments, but did not mention Boeung Kak lake.
The prime minister, Eang Sophalleth said, “fully supported” Hung Jun’s proposals. Eang Sophalleth did not respond to a request for comment yesterday.
Shukaku representative Lao Vann declined to comment yesterday on the Hung Jun partnership.
“I don’t know about this, and now I am sorry, I’m busy finding a solution for people who have volunteered to receive compensation,” he said.
Chinese Embassy spokesman Qian Hai denied that any Chinese firm was involved with the project, declining to comment on Kep Chuktema’s letter or the Chinese news reports on Hung Jun’s involvement.
“There’s no Chinese company involved at this stage,” he said.
Some Boeung Kak residents said this week that they would boycott all Chinese products if Hung Jun does not send a representative to negotiate with them.
“We will starve to death if they do not find a solution for us and forcibly evict us from our homes,” 32-year-old lakeside resident Naon Sok Nen said yesterday.
City Hall claims around 2,000 families from the lack have already accepted compensation packages.
Those facing eviction have received varying compensation options, including cash payments of $8500, housing at a relocation site in Dangkor district, or on-site relocation, the plans for which have yet to materialise. In the meantime, many of those still in their homes have complained of rashes and health problems as the lake-filling inundates the community with floodwaters and sewage.
“The Chinese… should conduct the impact assessment and should do a public consultation with the residents,” said Sia Phearum, secretariat director of Housing Rights Task Force.
Kep Chuktema said in his letter to the premier that the relocation process was going smoothly, held up only by “powerful people and opportunists trying to make difficulty for the company”. But Nora Lindstrom, programme development manager at local housing NGO Sahmakum Teang Tnaut, called this claim unfounded.
“Faced with forced eviction, it is the residents right to demand adequate compensation that does not push them into poverty,” she said in an email.
Sia Phearum said Kep Chuktema and his subordinates likely felt pressure to emphasise “potential for development and benefit” rather than giving a proper account of the project.
“The residents really want to meet with the government, top leaders of the municipality, or the private companies, both local and Chinese,” Sia Phearum said. “They want to support the government, but so far, there’s no public consultation - they never consult with the people.” ADDITIONAL REPORTING BY SEBASTIAN STRANGIO