THE government has established an inter-ministerial committee to privatize the potentially

lucrative state rubber industry, as well as a state-owned fishing company and a fertilizer

manufacturer.

The committee, which is headed by Senior Minister Sok An, was created in a May 8

sub-decree. The reward for privatizing the three outfits is a $35 million loan from

the Asian Development Bank (ADB).

Ly Phalla, the head of the General Directorate of Rubber Plantations at the Ministry

of Agriculture, Forestry and Fisheries (MAFF), said the procedures surrounding the

audit and sale of the enterprises would be decided soon.

"We will meet with a team from the ADB to determine the process in the next

few weeks," he said.

However it is not clear who will undertake the audit of the three firms. In theory

the divestment committee itself can perform the audit, which is meant to be completed

by October.

The ADB's deputy country head, Anthony Jude, said the audit was necessary to determine

the value of each business. He would not be drawn on concerns surrounding the transparency

of the audit, but said it was a necessary first step.

"Once we know how much the enterprises are worth, then we will see who is interested,"

he said.

But he raised the possibility that the coming election, which is scheduled for July

27, could delay the audit. Jude said the government had so far followed all the ADB's

recommendations, but stressed that the audit would be key.

"If [the government] doesn't do the audit, then there will be a problem,"

he said.

Although the revenue flow to the government from the three businesses has been modest

at best, the most valuable is likely to be the rubber firms. The latest International

Monetary Fund country report noted that the seven state rubber companies, which cover

45,000 hectares of land, produce 45,000 tons of rubber annually.

At the current market price of around $570 a ton, that would be worth almost $26

million. However, MAFF's Ly Phalla said the plantations generated just $1 million

in tax revenues last year.

The situation with the state-owned fishing company KAMFIMEX is less clear. The head

of the Fisheries Department, Nao Thouk, said the firm was now barely operating, as

it had no boats and had been reduced to collecting revenue from private fishermen.

He said it generated around $250,000 last year for the Treasury.

The value of the Agricultural Materials Company is even less clear. MAFF personnel

were unable to give any figures on the company's contribution to the national budget.

The seven-member committee overseeing this potentially important fund-raising exercise

for the government is headed by Sok An. The deputy heads of the National Divestment

Committee of State on Rubber Plantation Enterprises, Agricultural Materials Company

and Fishery Company are finance minister Keat Chhon and Chan Sarun, who heads MAFF.