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Logo of Phnom Penh Post newspaper Phnom Penh Post - World Bank fund halt irks officials

World Bank fund halt irks officials

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A man uses a sledge hammer to tear down a house on the edge of Boeung Kak lake in June. Photo by: Sreng Meng Srun

THE government expressed disappointment yesterday with the World Bank’s announcement that it had halted new country loans due to the ongoing land dispute at Boeung Kak lake in Phnom Penh and vowed to raise the issue with the bank’s executive board.

“We are very dissatisfied with the World Bank’s decision because we are partners on several projects,” Phay Siphan, spokesman for the Council of Ministers, said yesterday,  referring to the 21 projects the bank now funds in the country.

“Each programme is an agreement the two parties have made with each other. No one has a right to breach these contracts.”

Annette Dixon, World Bank country director, said in a statement sent yesterday to The Post that the bank’s last loan to Cambodia was in December 2010.

“Until an agreement is reached with the residents of Boeung Kak lake we do not expect to provide any new lending to Cambodia,” she said.

Dixon said the World Bank would continue to work with the government to ensure that legal obligations concerning existing projects are met.

Three proposed projects, worth US$128 million, are still awaiting approval from the World Bank, according its website.

Phay Siphan said the government plans to address the bank’s suspension of funds with the World Bank central management and executive board, but said no timeline has been set for talks.

Rights groups and a spokeswoman for lakeside residents facing eviction lauded the World Bank’s announcement yesterday, saying the freeze may push more organisations to discontinue aid until land disputes and human rights abuses are addressed.

Land disputes at Boeung Kak lake drew national attention in 2008 when construction for an upscale housing development flooded surrounding villages. More than 20,000 people in total face relocation, according to rights groups.

Sia Phearum, secretariat of the Human Rights Task Force, called the World Bank decision a “good model” for other organisations that provide Cambodia with aid and cheap loans.

“The World Bank has found human rights violations here. So if others still support the county with aid, that means they are supporting human rights violations,” Sia Phearum said. “I think other aid agencies will do the same thing.”

Sia Phearum said the Cambodian government, as a member of the UN, will eventually need to mend relations with the World Bank, and expressed hope that the discontinuation of new loans would bring about an agreement at the lakeside.

“This could change the directions of the talks in the future,” he said.

Representatives from the Embassy of Japan reportedly met with Phnom Penh municipal government officials yesterday to discuss the Boeung Kak lake debacle, according to a government source who spoke on condition of anonymity. City Hall records show a representative from the Japanese embassy was scheduled to meet with Governor Kep Chuktema yesterday at 2:00pm, but Japanese Ambassador Masafumi Kuroki said the embassy did not meet, and had no scheduled meetings with local government officials.

Tep Vanny, a representative for lakeside residents, said villagers had heard about the meeting with the Japanese embassy and were pleased that Japan, a major aid contributor to the Kingdom, was engaging the government on the issue. Representatives from the community have petitioned – to no avail – for involvement from the Chinese embassy in the past.

Erdos Hong Jun Investment Company, a Chinese construction firm, holds a 51 percent stake in the Boeung Kak lake development, according to Chinese governmental documents obtained by The Post.

Shukaku Inc, a company tied to Senator Lao Meng Khin, reportedly made 49 percent of the investment.

In the first quarter of 2012, Erdos plans to break ground on some $2 billion in investments in the Kingdom.

The company plans to build a power plant in Sihanoukville and an alumina mine in Mondulkiri province, according to the documents.

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