UNASSEMBLED traffic lights and street lamps lay in haphazard piles in a conference
room at Phnom Penh municipality headquarters. Outside in the courtyard, more than
100 steel light posts lay waiting to be erected at the city's major intersections.
Across town, bulldozers and earth-movers continue to tear up the riverfront as the
dust settles around Psar Thmei's newly repaved round-about.
The capital is undeniably under construction, but where is the money coming from
to pay for it? Economists warn that Cambodia is slowly feeling the effects of a regional
economic downturn and a budget crisis is looming. They say the July coup scared off
some investors and donors, and many don't plan to return until the nation sorts itself
out after elections.
Phnom Penh First Deputy Governor Chea Sophara shrugged when asked about the unlikely
timing of a sweeping renovation of the capital. Both the municipality's public works
department and construction companies have a lot of time on their hands as Southeast
Asia slows into recession, so the two sides got together and found a way to keep
themselves busy, he said.
"Now investment doesn't come," Chea Sophara explained at his office. "[Contractors]
are free... so they ask me, 'Can I do this job for you, municipality?' And I say,
'If you can give it to me, yes, because I also have free time now'."
Formerly financially autonomous, the capital lost its taxing powers after the Royal
Government was formed in 1993 and the Finance Ministry took control over all tax
collection and revenue disbursements. Municipal sources said financial centralization
initially helped donors and the government keep better track of incoming revenue
and fight ingrained corruption, but an adverse side effect was that the City often
received only half of the funds it requested.
Keeping Phnom Penh running for the past four years has been hard enough, sources
said, but repairing the damage done by decades of neglect has proved impossible as
the government concentrates its spending on the Interior Ministry and the military
rather than urban development.
An additional roadblock had been partisan bickering between officials from Funcinpec,
which carried Phnom Penh in the 1993 election and won the governorship, and the CPP,
which has been effectively running the city since 1979.
"There were some difficulties before July," one municipal adviser said.
"There is a political problem, but they don't talk about it."
Funcinpec deputy governor Chap Nalyvudh, a relative of Prince Norodom Ranariddh,
was originally put in charge of public works but could not muster enough support
to get much done, sources agreed. But Nalyvudh and Phnom Penh Governor Chhim Seak
Leng fled the capital in July along with Nhek Bun Chhay's army, leaving Chea Sophara
After six months of stroking - and some say pressuring - his many contacts in business
circles, Chea Sophara has developed informal taxing schemes he calls "contributions"
from the private sector.
"This is idea money, not budget money," Chea Sophara said.
"Now the government has no money, no funds. The municipality is the same, so
we do it this way."
Among the many examples cited by the First Deputy Governor is the renovation of Psar
Thmei's moto lots and the repavement of the surrounding round-about. Advertising
billboards on the roof of the new moto lot will bring in $20,000 a year to help pay
for the work, Sophara said.
But the bulk of the payment for Psar Thmei's minor facelift will come from an excise
tax on stalls at all of Phnom Penh's markets that the deputy governor says brings
in $700,000 a year.
Municipal sources revealed that contractors, wanting assurances that they will be
paid on time, have been given collecting rights to a portion of the excise tax for
a fixed number of years, a fact Sophara does not dispute.
"The payment, I don't care now because I know the municipality and the government
have no money. If you can do, please do," he said of his negotiations with contractors.
"When I have the money, in perhaps two or three more years, I will bring it
to you. Now I work with your contributions to make Phnom Penh beautiful."
But one attempt to raise money for the city failed in a minor scandal when hotel
owners, hit hard by the July fighting, refused to pay a 2% sales tax. The Tourism
Ministry sided with the hotels and the tax became optional.
Sophara's aides said the city halted collection of the hotel tax after three months
and plans to give the revenue back to struggling hotels.
"There were some questions about legality," one municipal adviser said.
"[Sophara] stopped collecting the 'contributions', as he calls them."
Finance Minister Keat Chhon did not take issue with the First Deputy Governor's efforts
to collect his own taxes, also referring to them as "contributions from the
"I think Chea Sophara is doing his utmost to rehabilitate the splendor of Phnom
Penh," Keat Chhon said. "I approve of his efforts, but I do not know all
of his programs."
The construction that has engulfed the riverfront between Chatomuk Theater and Wat
Onalom is another example of creative income generation. Most of the riverbank will
simply be upgraded into a park with the addition of permanent stalls for street-side
vendors, but the key to the job is a 120-space public parking lot behind the Renakse
Parking along the street will soon be forbidden, and with the car park charging 500
riel a space to service the throngs of people that gather near the Royal Palace during
weekends, Sophara said the lot will pay for itself and the surrounding park in five
The city's main roads are also being repaved and lined with white and yellow paint.
"We do the roads, but not yet pay," Sophara said, hinting at yet another
develop-now, pay-later scheme.
Overhead traffic lights are another new addition on main streets, with a total of
144 lights planned at 36 major intersections. At $1,000 a pop, the city will pay
for the lights in two years by placing advertisements on both sides of the poles
at a charge of $250 a year.
A major incentive for jump-starting urban development now instead of after July's
elections is a $30 million Asian Development Bank (ADB) grant the city hopes to win
before 1999 to overhaul its water-supply and drainage systems. The city believes
the current work will convince the ADB it is serious about development.
Regardless of the ADB's assessment of urban development in the capital, Sophara's
work has already won him the praise of Second Prime Minister Hun Sen, who often referred
to the First Deputy Governor's authority in speeches made in the aftermath of July's
"We have worked with him since 1979, so he knows me and my name," he said
of Hun Sen.
The son of a farmer in Kompong Cham province, Chea Sophara first moved to Phnom Penh
in 1979 shortly after the Khmer Rouge were expelled from the capital. He became a
deputy district chief six months later and steadily rose through the municipality's
ranks until 1988 when he became a deputy governor.
Asked if he is eyeing a position in the national administration should the CPP maintain
control of the government after July, Chea Sophara stated he is still very happy
at the municipality.
After a slight pause he grinned and added: "But if the government appoints me
to any position I will go there."