Representatives of foreign companies who registered to attend the 5th Business Roundtable

heard much about the new Cambodia - the one that's stable, business friendly, endowed

with natural riches and anxious to please.

Nearly 600 people, about half from abroad, attended the Nov 7-8 conference sponsored

by businesses and development organizations to promote trade and infrastructure investment.

With a slogan of "the right place, the right time, for the right investment"

all the top ministers in Cambodia dealing with money were on hand. Prime Minister

Hun Sen, while encouraging foreign investment, warned that the government is not

going to release control of many types of industries that often come up for privatization

elsewhere.

"You can do it in your country, not in Cambodia," he said, referring to

the customs service.

"We will not privatize the Customs House," said Hun Sen. "Why not

sell the rights to the prime minister? Then the army, then the police." He complained

that an American consultant was paid $15,000 a month to advise Cambodia on re-making

customs and it was recorded as American aid.

Briefly mentioning the new oil exploration off shore from Sihanoukville, Hun Sen

confirmed rumors in announcing that "a discussion between investment partners"

Investment for a 2.5 million ton capacity oil refinery in Sihanoukville by 2010 is

underway. He did not identify the investment partners.

An oil refinery - with or without state ownership - is a controversial topic. "There's

no doubt that the government wants an oil refinery but it's a very bad move,"

said Oxfam America's extractive industries program officer Warwick Browne. "Exporting

crude to Singapore is a better option."

Hun Sen also said he wants a national airline to succeed defunct Royal Air Cambodge,

but not a privatized carrier. It was unclear whether a joint venture investment with

private investors is on the table.

Senior government officials described other projects in need of funding, particularly

power generation plants, road building, railroad concessions and agro-industry.

According to Cambodia Minister of Commerce Cham Prasidh, Cambodia's major handicap

in getting foreign investment is the high price of electricity, which at 20 to 25

cents per kilowatt hour is two or three times as high as neighboring Vietnam and

Thailand.

He said the government is considering special economic zones on the border of Thailand

and Vietnam where companies could buy cheaper electricity and still do business on

Cambodian soil.

Mining of bauxite, gold , iron and gems was also touted as a good opportunity for

foreign investment.Meanwhile, deals were working on the sidelines.

New investment

An official of Raptor Energy said he is hoping to soon sign a deal for a 14-hectare

concession in Kampot for a palm oil plantation. "We're aiming over a period

of five years to build out up to 50,000 hectares of oil palm plantations," said

executive chairman Robert Brough.

He said Raptor Energy, founded as a bio-energy firm, will decide what to produce

when the first crop comes in after three years. "We'll be making the decision

then as to whether to use if in the food sector on [in] energy." He said they

bought an existing concession and will invest a total of $55 million in the venture.

Officials of Leopard Group, one of the conference sponsors, said they are raising

investment for a $100 million private equity fund called the Leopard Cambodia Fund

that would invest in select businesses in Cambodia. Peter Brimble, of Leopard Group,

said there were 30 to 40 investment bankers at the conference and "most are

really serious about investing in Cambodia."

"The stock market is going to play a very important role in the development

of Cambodia," said Brimble. He said once the electricity problem is solved,

the garment sector would resume its growth.

James Machin, an environmental scientist with Melbourne based Earth Systems, was

looking around for opportunities in environmental consulting possibilities related

to the new drilling and mining. "Which comes first the chicken or the egg? Should

we get a project first, or set up first and then get a project?" he said.

Scouting for business

Earth Systems already operates in Laos, where Australia mining company Oxiana is

exploring for copper and gold. Oxiana is also exploring in Mondulkiri. "With

all of these projects, we're assessing the demand for environmental services to international

standards," he said.

A representative of GE Security came to analyze the demand for advanced security

systems such as airport screening. "But I don't know if they are ready for this

yet," says Paul Sun, sales director for Asia based in Singapore.

Local entrepreneurs were scouting business. Kevin Britten, managing director of The

Secretary, an office services firm in Phnom Penh, said paid attendance at the conference

was impressive, and he had appointments with some of the visitors. "We work

with startups. It can be a tough town to come into," he explained.

Finance Minister Keat Chhon said new investment is anticipated in the banking and

insurance sectors. Four foreign insurance companies are doing a feasibility study

on whether to establish a life insurance company in Cambodia and the government is

looking to develop a "micro-health insurance" company for small buyers,

he said.

One potent message came from the chairman of the Garment Manufacturers Association,

Van Sou Ieng. "Cambodia is moving. Land, plenty of space, few licenses to apply

for. Come now or it will be too late," Ieng said.

Corruption question

But also on the sidelines, some of the business people wanted to know about that

old Cambodia? What's caused the big change? And what about the corruption issue.

Cambodia continues to rank among the highest in the world on the Transparency International's

list of the countries perceived to have the most corruption. Should foreign investors

care?

The question never reached open discussion.. "Business just buys into it,"

said one western banker, referring to the outlook for poverty reduction and better

transparency in government operations described by Deputy Prime Minister Sok An in

his speech.

Sok An said that the government plans to spend the revenues the government receives

from oil production - estimated at $174 million beginning in 2011 - on "clean

water and education".

The claim was hard to believe. "But there are 600 people here. What does that

tell you," the banker said. "Obviously it is a turning point."