CAMBODIA'S largest single investment project has ground almost to a halt with Ariston
director Dato Doctor Chen Lip Keong claiming the project has become a victim of bureaucratic
Ariston officials claim the company has faced government inefficiency, extortion
demands, kidnappings and tough living standards in their efforts to get the massive
project off the ground.
"We cannot control our fate if the problems are on the government side and they
have failed to honor their commitments," a clearly frustrated Chen told Phnom
Penh reporters recently.
Meanwhile, First Prime Minister Prince Norodom Ranariddh last week said he would
support canceling the Ariston contract if that was what the government and National
Ranariddh, whose Funcinpec party is widely considered to have played a leading role
in negotiating the Ariston deal, said that the contract had been signed by a "collective
Challenging political opponents not to use the contract as a weapon against him or
his party, he said the contract was a decision of the Royal government, including
both Funcinpec and CPP.
"Ariston is not mine - Ariston is the Royal Government of Cambodia's. If all
of us - the National Assembly, the Royal Government - bear responsibility for canceling
such a big contract without creating an atmosphere of insecurity to investment in
Cambodia, I [will] support it."
Ranariddh also said he would support the closure of the Naga floating casino, owned
by Ariston, if necessary. Ariston is supposed to have the sole casino rights in Cambodia
under its contract but - in the absence of a casino law which should have been passed
and a lack of police enforcement - many other casinos are operating in Phnom
"I have instructed the Ministry of Interior that it is not acceptable to have
26 illegal casinos at a time when there are no laws on casinos," said Ranariddh.
"If necessary, I am the first one to support the closing of the Naga casino...all
of the government has to bear common responsibility. If the National Assembly and
Royal Government do not, I'd like to tell you that I am the first one to support
the closing of the casino and all the illegal casinos, including the Holiday."
The Holiday International casino, operating under a license granted by Hun Sen's
former State of Cambodia government, is widely considered a "CPP" casino.
As well as casino rights, the $1.3 billion agreement signed by Ariston and the Cambodian
government in Kuala Lumpur in January 1995 involves the development of an island
resort, power, airport and infrastructure facilities for the southern port of Sihanoukville.
The controversial agreement has become mired in "bureaucratic red tape",
according to Ariston director Chen Lip Keong, with vital casino laws and sub-agreements
still not in place.
"There has been very little government compliance with substantive agreements
connected with the project, a key issue being the late implementation of the Casino
Control Law," Chen said.
The Ariston director said the government's failure to pass a law to legalize casinos,
which should have occurred by an agreed deadline of 31 January 1995, was damaging
Cambodia's reputation as a tourist destination.
"The absence of a Control Law creates the existence of illegal casinos, creates
a poor image of Cambodia and perpetuates the idea among tourists that the country
is lawless and unsafe," Chen said.
The government's failure, despite numerous reminders, to sign a Build Operate Transfer
(BOT) agreement submitted by Ariston in March is bringing the project to the point
of collapse, company officials have admitted.
"We can no longer be very civil and polite, in order for the Ariston project
to be a success the government must give equal commitment to the investor,"
"So far with Ariston this has not been the case," said Chen who says he
has invested close to $50 million in Cambodia so far, over $15 million of which has
been spent on the now floundering Sihanoukville-casino gambit.
Ariston plans to construct an international B737 capacity airport and a five megawatt
power plant at the southern port of Sihanoukville are also being blocked, Ariston
"The central government agreed in October to grant us immediate vacant possession
[for the airport and power plant] but the provincial government couldn't grant it,"
Company officials said over a hundred Cambodian villagers claiming compensation for
the loss of land surrounding the airport had destroyed Ariston property and harassed
company workers in a protest in late March.
"The authorities have now provided us with security but they have not solved
the issue of compensation so they cannot fulfill their commitment to provide unencumbered
vacant possession," Chen said.
"We must have full control of the site, we can't be stopped by local villagers,"
Ariston said the recent awarding of their earmarked Sihanoukville power plant site
to the Asia Development Bank for a parallel power project had upped costs and set
back project completion dates.
Company officials said millions of dollars of imported project equipment and supplies
had been "stuck at the Sihanoukville Port" breaching government commitments
to facilitate permits for the project.
Chen called "for the government to adopt a more efficient administrative machinery
to accommodate such a major project," but said Ariston's "will power"
for the time being meant the project would continue.
"We see Cambodia as an emerging market. There are pitfalls and problems it's
not like doing business back home, but despite the pitfalls we are not withdrawing,"
Chen said he viewed the recent establishment of the Sihanoukville Development Authority
as a positive sign for better inter-government coordination on the project.
Daunted but not defeated by Cambodia's intricate and complex inter-governmental arrangements
Chen said his company would like "to bring order into a seemingly disorganized
"It's no bed of roses," said Chen.