The government is refusing to compensate up to 1,000 families forced to wait for income restoration measures after being relocated from their homes for an Asian Development Bank-funded railway rehabilitation project, a previously unreleased action plan from the ADB reveals.

The ADB Management Action Plan, released on Friday and prepared in consultation with the government, also says that authorities have not agreed to help finance a debt workout scheme that would aid poor families who found themselves without adequate relocation funds and sources of new income after resettlement, becoming heavily indebted as a result.

The government will, however, pay additional compensation to families whose original homes were undervalued at the time of resettlement. Moreover, “transition allowances” – designed to ease the burden of moving – which were paid to families from 2009 onwards but calculated in 2006, will be adjusted and doled out so they finally account for significant inflation.

It has also agreed to improve poor facilities at relocation sites as part of the action plan, which is being spearheaded by the ADB but paid for by the government in order to bring the railway project back into compliance with the bank’s policies.

“Implementation of the action plan relies foremost on the Cambodian government. We have secured the Government’s agreement in several key areas and are actively engaging with the Government on outstanding matters to find solutions,” ADB country director Eric Sidgwick said in an email yesterday.

“The next phase is to conduct consultations with affected households, which are expected to start soon.”

Ly Borin, chief of the Ministry of Transportation’s railway department, and Sokhom Pheakavanmony, former director of the Royal Railways of Cambodia, could not be reached for comment.

Families began making way for the $143 million project in 2010. The ADB, which was to ensure that the government carried out resettlement appropriately, failed dismally to implement its own safeguards, a scathing January report from the bank’s internal watchdog concluded.

In response to the bank’s Compliance Review Panel’s (CRP) report, the ADB said it would prepare a “time-bound action plan” within 60 days in coordination with the government to address “compensation deficits and other deficiencies”.

Earlier this month, affected communities and local and international civil society groups urged the bank to disclose its action plan and consult with affected communities before a final plan was agreed upon. In a reply on April 25, the bank released a copy of the action plan for the first time and pledged to seek feedback from affected households.

A key recommendation from the internal ADB report was that the bank require the government to establish a compensation fund of $3 million to $4 million, likely funded by an ADB loan.

This was heavily criticised by rights groups, which accused the ADB of abdicating its responsibility for failing to handle the resettlement in line with its own policies.

The action plan does not specify how much the government might spend to further compensate families, but says it has agreed to review compensation for each affected household and pay compensation deficits for “(i) property losses due to mis-categorization and due to inflation . . . and (ii) transition allowances (living/income and transport allowances) due to inflation”.

“However, the Government does not agree to provide compensation for additional income losses from the date of relocations of [affected households] up to the commencement of income restoration activities,” it says.

This is despite the ADB compliance report finding that income restoration programs were seriously delayed in addition to being “inadequately designed and implemented”, causing many resettled households to suffer “substantial income losses” that drove many into debt.

“ADB policy says that you have to provide support for the loss of income and jobs and you have to design programs to ensure that people still maintain jobs and livelihoods and make sure that people aren’t worse off. Now the government has denied this and it’s really against the ADB policy,” Eang Vuthy, executive director of NGO Equitable Cambodia, said yesterday.

But families who were forced out of their homes and jobs in the name of development and left worse off because of it say they want the ADB, not the government, to compensate them.

“[This month], the ADB called me and told me that the [bank’s compliance review panel] had ordered the government to change the policies,” said Sim Vireak, a representative of Russey Keo’s Tuol Sang Kaeh community families, who were made to move to the Trapeang Anchang relocation site in Por Sen Chey district, far from their homes and where they say few jobs exist.

“I told the ADB that I don’t believe the government will pay our villagers, even though they did not follow the rules of the ADB. So I need the ADB to find this money themselves and pay it directly to our people,” he said.

ADDITIONAL REPORTING BY KHOUTH SOPHAK CHAKRYA AND CHEANG SOKHA