R AFFLES International, the Singapore-based company responsible for the famous hotel, is to restore Phnom Penh's equally historic Royal Hotel. A Memorandum of Understanding for the $25 million project was signed on Sept 20 by Tourism Under Secretary of State Sok Chenda and Richard Helfer, chief executive officer of Raffles International.

The Royal Government, the owners of the hotel, will be hoping for third time lucky with Raffles International after two previous agreements to renovate the Royal - with Thai company Eastern Dragon Group and French-owned Feal - fell through.

Helfer had reassuring words during the signing ceremony at the Cambodiana. "We don't enter into memorandums of agreement unless we intend to carry through the agreement," he said.

Once the lease agreement is signed in October, work will start on the 48-room hotel in the third quarter of next year and will take two and a half years to complete.

Restoration will preserve the nostalgic qualities of the Royal, while the construction of 34 additional, architecturally complementary rooms in the main building, together with an extension at the back of 127 rooms and a ballroom, will add to the old building's charm, Helfer said.

The fading yellow-painted Royal was built in the 1920s, and has played host to personalities such as Churchill, de Gaulle and Jackie Kennedy. During the civil war in the early 70s it became the playground for the international press corps and is featured in the film The Killing Fields.

Helfer said his company is not daunted by the long-term commitment in Cambodia. He sees it as a statement of faith in the tourism market and is not afraid that the Khmer Rouge and adverse media reports will frighten away potential customers.