N EGOTIATIONS are already being held between Cambodian officials and Thai businesses

for gem and timber rights in Khmer Rouge-held areas in and around Pailin.

The Royal Government - confident that this year's "new strategy" will hold

ground won by its military - has received mining proposals from Thai companies that

have reached Prime Ministerial level.

Those particular proposals, confirm government sources, have not yet been approved.

Battambang's First Deputy Governor Serey Kosal said that he spent five weeks in Thailand

in January meeting business leaders.

"I met the vice-president of the [Thailand] Association of Industries... and

offered members of the association [the chance] to invest in Battambang [province],

including Pailin," Kosal said.

"It is already time to negotiate and sign contracts on the economic resources

of the Pailin area," he said.

Kosal added however that it may already be too late if the Khmer Rouge had commercially

exhausted Pailin's natural resources.

Kosal said that he told investors that they had to first contact the Prime Ministers

and the Cambodian Development Council (CDC) to approve investments.

Sources in Battambang and Phnom Penh said that negotiations with Thai companies on

logging and gem mining had already been made "at a high level" for a couple

of months.

"I think negotiations have [already] started on gems," Kosal said. He added

that it was legitimate for the government to start such discussions.

Kosal said that since the beginning of February, ten Thai companies had come to Battambang

to talk business "but there is nothing officially signed yet."

The Post was told by a highly placed source in Battambang that there had been one

gem mining deal signed already. Kosal said he had not heard of the Thai company said

to have won the deal. If a contract had been signed at some provincial level - and

not through the CDC - then it would be illegal, he said.

Sources in Phnom Penh had not heard of the company either, but confirmed that at

least three proposals for gem and timber concessions around Pailin had been put forward

to the offices of the Prime Ministers.

The proposals had been referred to the Ministry of Industry, Mines and Energy, said

one source, but were unlikely to be forwarded to the CDC for further action.

The deals are considered premature until the territory is actually secured and the

bidding companies can be checked out.

The government was wary that some gem mining companies would prefer to make a quick

return from their investment by concentrating first on felling trees, before mining

gems, the source said.

Kosal said that the Thai companies now dealing with the Khmer Rouge must stop and

"modify" their contracts to deal with the government.

Second Deputy Governor Nam Tuong said: "We want to let all the companies that

used to work with the Khmer Rouge, work with us."

Kosal said the military situation was very good and the government "could go

to Pailin right now if it wants," he said.

Officials in Phnom Penh agreed with Kosal's assessment, though one said "certainly,

we can say that the government is very confident that the area will be secure soon,

but there is no timetable."