The Japanese government is reconsidering a $1 million grant to build hydroelectricity
plants in Mondulkiri province in light of the government's unwillingness to resolve
a land dispute between Japanese and Chinese companies, said officials familiar with
The two companies, Wuzhishan of China and Marubeni of Japan, have been allotted overlapping
plots of land by the government in O'Reang district, Mondolkiri. Wuzhishan is in
control of land upstream from the planned hydropower plants.
Two sources at the Japanese embassy said that with upstream land under Wuzhishan's
control, Marubeni could no longer be certain of sufficient water flows down the Prek
Dek Der river to power their hydroelectricity plants.
"The Japanese government is considering whether it will withdraw the grant or
continue with the grant," said one of the embassy sources on condition of anonymity.
While the source stressed that the problem was one of water management, not disputed
land, he acknowledged that the O'Reang controversy and control of Prek Dek Der were
Controversy over the overlapping land has simmered since last August, when the government
awarded land to Wuzhishan it had already given to Marubeni.
The threat to suspend the power projects appears aimed at motivating the government
to finally resolve the tussle.
Japanese ambassador Fumiaki Takahashi last month raised the matter with provincial
officials when he traveled to O'Reang district for Arbor Day celebrations.
The day's event was held on land covered by pine saplings, according to those who
attended, which suggested that the ceremony was conduced inside the Wuzhishan concession.
Kong Pisith, director of Mondolkiri's provincial Department of Industry, Mines and
Energy, said that Takahashi warned that the power plants might not be built.
"I heard that the hydropower projects would be suspended if the government is
not able to solve the conflict of land concession between the Chinese company Wuzhishan
LS Group and Japanese Marubeni Development Corp," Pisith said.
He said he hoped the dispute could be resolved so that the local community could
benefit from cheaper electricity provided by the hydropower plants.
While the hydroelectricity grant is a separate project to the rubber plantation,
the Japanese embassy has heightened the diplomatic bargaining by linking the two.
Marubeni began consulting with locals in July 2003 in preparation for developing
an 11,231 hectare rubber plantation. In August 2004, the government approved an overlapping
10,000 hectare concession for Wuzhishan.
Wuzhishan has since begun spraying pesticides on the land and planting pine trees,
despite not having completed the environmental impact assessments required by law.
The government has not released maps or any detailed information about the land concessions,
despite repeated requests from the international community and the United Nations.
Nouth Saan, secretary of state at the Ministry of Interior, has been assigned to
investigate the overlapping concessions.
"We are preparing the report and will send it to Samdech Prime Minister Hun
Sen within this week," Saan said.
He did not explain why the Ministry of Interior is heading the investigation into
concessions contracts usually signed by the Ministry of Agriculture, Forestry and
Fisheries or the Council of Ministers.
A second official at the Japanese embassy in Phnom Penh confirmed that a grant of
more than $1 million dollars had been set aside for the three hydropower plants and
planning had been underway for several years.
"Now we are preparing to have an agreement to implement the hydropower projects,
but recently we have considered the projects and we are not clear - it is dependant
on the situation," said the Japanese official on condition of anonymity.
The official said Japanese experts had completed preliminary studies for the electricity-generating
projects that when finished would supply 370 kilowatts of power.
Construction was to begin July 2006, and the power plants were expected to be completed
in early 2008.