THE financial brokers of Royal Air Cambodge have denied the speedy birth of
their new national carrier was in any way unconstitutional as has been
Secretary general of the Cambodian Development Council, Chantol
Sun, said the deal would likely make its way before the National Assembly - as
the constitution demands - "in due course".
"But if there are any MPs or
the National Assembly feel that this transaction needs to be approved all they
have to do is to ask [Finance Minister] Keat Chhon to explain to them," he
A draft copy of the $10 million deal struck between the government
and Malaysian Helicopter Services has been leaked to various media in the past
The million shows that MHS would pay $4 million and the government
$6 million in the form of an interest bearing loan from MHS.
Cambodian Constitution forbids any financial transactions being made on behalf
of the country without the approval from the National Assembly.
condition of the deal was that no regulatory action was being taken against
either party at the time of signing. Cambodian International Airlines [CIA]
sources - whose airline was closed on Dec 24 to make way for RAC - say they
would have taken legal action had they known the deal was about to be
First Prime Minister Prince Norodom Ranariddh has dismissed CIA
boss Udom Tantiprasongchai's $100 million law suit for lost earnings, saying the
government could not only defend itself against the suit but
RAC sources have been critical of CIA's safety and
suitability as a national carrier - charges that have angered the CIA camp as
Chantol Sun said that Tantiprasongchai's claim that CLA's
closure had repercussions under the international air travel liability Warsaw
Convention was bogus.
"He should check - Cambodia is not a signatory
under that convention," he said.
The government, which holds 60 percent
of the share capital, must pay one-half of its 60 percent dividend share in loan
MHS, in turn, is required to make royalty payments of $1
million a year to the government - less any interest accrued on the MHS
Chantol Sun said he did not understand what all the fuss about an
"unconstitutional" deal was.
"Keat Chhon signs deals of $28 million, $30
million with the World Bank [without National Assembly approval], how come
no-one questions that?"
He said the person who "stole" and leaked the RAC
draft deal to the press probably had a vested interest for doing so. "This
person is not ethical," he said.
"There is nothing fishy in this deal
nothing under the table, nothing whatsoever. It is a clean deal - I just don't
want to go into the terms and conditions of it. We have an obligation to keep
details of joint ventures confidential. It is not right to disclose such details
to the outside world, just like any joint venture."
understand the financial situation, we won't require $10 million in the first
year," he said.
Chantol Sun said that the $10 million "doesn't have to be
tomorrow", but it could be required as far as three years time or
He said that RAC's Malaysian partner would be asked to transfer
technology and equipment, and help with marketing and feeder
"Basically we asked them to help run our airline and we will
learn from you. RAC will be controlled by the government," he said.
deal specifically states that the new airline will be managed by the Malaysian
The government will nominate the chairman, chief executive
officer and the chief financial officer of RAC.
Malaysia will nominate
the chief operating officer, the commercial director, the deputy CFO and the
operations and maintenance directors.
The seven person board of directors
will be split between the government, which will have four [including the
chairman] and Malaysia which will nominate three. However, in the even of a tie,
the chairman will not have the casting vote.