THE Ministry of Public Works and Transport (MPWT) will allow a Chinese construction
company to continue building an Asian Development Bank (ADB) funded road in Kratie
province despite the fact the company has breached its contract.
The China-Jilin International Economic and Technical Corporation (JIC) signed a contract
with the MPWT September 2000 to build an 83-kilometer long section of road, number
7E, linking Snuol with Kratie town. The $11 million cost was loaned to the government
by the ADB.
Earlier this year, however, JIC sub-contracted the construction of 65 kilometers
of the road to a South Korean firm, East Toyo Construction (ETC) without the knowledge
of the ministry. That was a breach of contract, agreed the bank and the ministry.
"[JIC] should not subcontract the project without asking permission from the
Cambodian government," said Anthony Jude, deputy head for the ADB.
The problems emerged when lawyers for ETC contacted the media December informing
them ETC had ceased work after discovering differences between the agreed specifications
that the road was contracted to be built to.
The court prosecutor in Kratie, Penh Vibol, said he knew of three different sets
of specifications, but had no idea which was the correct one.
He has issued a warrant to withhold the passport of the president of JIC on suspicion
of document falsification and breach of contract. Vibol said JIC president Cao Min
Hong would face a jail term from five to 15 years if convicted.
However, the MPWT said its investigation found no evidence JIC had deliberately faked
the specifications. Chhin Kong Hean, director-general of the MPWT, said his ministry
had decided therefore that it would not stop JIC continuing with the project.
"My minister has found nothing wrong with the technical problems," said
Kong Hean after a two day visit to the site with Minister Khy Taing Lim December
16. "We know JIC very well, so we will not stop the company from working."
ETC's attorney said the company would sue JIC for $1 million in compensation for
labor costs, transport and rental of construction equipment.
While the dispute between the two companies continues in court, the ADB said it was
the ministry's problem. Jude said the dispute had nothing to do with the ADB. he
said the bank would conduct an internal investigation into the matter.
"[The government] is the employer," Jude said. "It borrowed the money,
and it is responsible to make sure the money is used properly."
Chea Vannath, president of the Center for Social Development, said all parties, including
the ADB, shared responsibility.
"This is irresponsible," said Vannath. "I think the responsibility
lies with everyone, because the project needs monitoring and evaluation. To ensure
transparency and accountability, the ADB should monitor the project appropriately,
and MPWT should take legal action [against JIC]."
Vannath said corruption was common in road construction and said that when problems
occurred the parties involved regularly blamed each other.
SRP MP Son Chhay, who was sacked September as chairman of the National Assembly's
public works commission, requested the ADB and World Bank introduce a strict policy
to monitor projects rather than allowing the government to do so alone.
Chhay said that in 1999 he wrote a complaint letter to the ADB and World Bank - they
fund most road construction in Cambodia - regarding the fact that all loans
are granted directly to the government, rather than going through National Assembly
debate as required by the Constitution. He got no response.