Tracey shelton

Laborers leave after a hard day’s work on the $2-billiion Camko City

construction project in Russei Keo district.

Suburbia is coming to Phnom Penh by 2020, with at least five multibillion-dollar new urban centers or "satellite cities" planned for the fringes of the capital. Under the city's master development plan, the satellite cities will help manage population growth by shifting growth patterns away from the city center.

Phnom Penh officials said they see the sprawling, self-contained developments, which would include residential and commercial areas as well as industrial parks and full public services, as an answer to overcrowding and traffic congestion and a means to increase commercial development beyond downtown areas.

"I think if everything goes smoothly as planned, all of the satellite city projects will break ground by 2009," said Phnom Penh deputy governor Pa Socheat Vong. "To my knowledge, the satellite city projects are moving ahead on schedule, and I don't see any of them as likely to fail."

However, initial progress on the projects has been slow, causing both developers and city officials to make reassuring noises that the Kingdom's first urban mega-projects were on track for completion despite facing some obstacles and delays.

Chief among these are the escalating costs of construction materials that threaten to blow budgets, while land disputes have ground work to a halt on at least two of the projects as developers grapple with the task of moving hundreds of angry villagers facing eviction by the construction.

Critics of the satellite cities - which until a few years ago were unimaginable in this low-slung capital that traded on its quiet colonial charm - also say city planners are rushing prematurely into first-world development projects that threaten the very soul of Phnom Penh.

"The development plan set out by City Hall is designed by novice architects without input from [senior] architects or following the French style," said Ching Chhom Mony, dean of the Faculty of Architecture at the Royal University of Fine Arts.

"City Hall allows the development of satellite cities or skyscrapers - for instance Gold Tower 42 and the IFC building - close to or in the capital. This will cause serious traffic issues and a more polluted environment, as well as a more crowded city," he said.

"There is no thorough consideration; there is no broad participation from [other architects]," he told the Post on June 25.

Strong demand

But realtors say the need for new housing will likely outstrip concerns for aesthetics or function as increasingly wealthy Cambodians clamor for world-class housing.

"I sold 30 villas within two months," said Chuon Bunrith, construction manager for Sky View Apartments, which is building large tracts of housing in the capital's Russei Keo district, indicating that satellite cities are only meeting rising consumer demand.

Political stability has encouraged the latest building boom  and increased foreign investment will sustain demand for housing and commercial properties, said Sung Bonna, CEO of Bonna Realty Group.

While much of the buying that occurs today is speculative, Bonna said more than half of new owners intend to live at their satellite city properties.

"I am confident that with the political and economic environments being as good as they are today, the real estate market will continue to grow rapidly," Bonna said.

When completed, the planned satellite cities would cover a combined area of 1,100 hectares, or 2.4 percent of the city's 375 square kilometers, adding significantly to the capital's population of 1.5 million people.

Many of the projects were already in the land clearance and site preparation stages, said Socheat Vong. Developers will then begin work on infrastructure such as storm water drainage and sewage systems.

Among the first of the new urban centers to be completed will be the $2-billion Camko City project, approved in 2005 and being built by South Korea's World City Company on a 119-hectare site in the Boeung Pong Peay Development Zone in the Russei Keo district north of Phnom Penh.

"The first phase has been completed and townhouse and villa owners will be able to move in by the end of the year," said Kheng Ser, assistant to D.K. Kim, vice president of the Camko City project. "More than 80 percent of the 1,009 units in the first phase of construction have been offered."

The development was on privately-owned, not leased land, so all properties in the new urban area would be lawfully held by the owners, said Kheng Ser.

Tracey shelton

A model of Camko City displayed at the project headquarters adjacent to the construction site north of Phnom Penh.

Grand ambitions

Among other satellite cities in the pipeline is Grand Phnom Penh International City, a joint venture between the Cambodian YLP Group Co., Ltd and Indonesia's Ciputra Group. The $500-million project is being planned on a 260 hectare site in, Russei Keo district, northwest of Phnom Penh.

Including a 70-hectare golf course and driving range, Grand Phnom Penh International City would be the most extensive of the planned satellite cities, according to the project's marketing manager, Nhem Sothea. The development would be fully self-contained, with residential areas, schools, a hospital and business, shopping and recreational areas.

The project is to include up to 4,400 residential units, on lots of 140-600 square meters, with prices starting at $88,000.

"Customers will get legal title to own the properties when they buy here," said Nem Sothea. "Buyers will own the premises in freehold and in perpetuity, not by lease or land concession."

He said at least 40 villas in the first phase have already been sold to luxury-oriented buyers, and 35 shophouses have been reserved. Initially planned for completion by 2015, the city would be developed over a period of 8-12 years depending on market demand, Sothea said.

"The development of satellite cities is based on location, customer service and competitive prices," he said, adding that "these new urban developments have become possible based on Cambodia's political stability and steady economic growth."

Uncertainty remains

Still on the drawing boards is the Malaysian-invested Sunway City, approved in 2005 but suspended in development limbo as the project waits on site clearance and the resettlement of villagers.

The $2-billion project, situated on a 375-hectare site along National Road 6A in Chroy Changva commune, Russei Keo district, currently has no timeframe for completion, with compensation needed for "a very long list of families," said the project's general manager who gave his name as Chhin.

"So far, nothing's been developed," said Chhin. "We are waiting until the government deals with the problem of squatters first. We can't do anything if too many squatters are still on the land."

Other satellite cities in the pipeline include Koh Pich City, approved in 2006. Financed by Cambodia's Canadia Bank to the tune of $300 million, Koh Pich City would be located on 75 hectares along the Tonle Bassac River in Chamkarmon district.

But the project has been hampered by rising construction costs, said Rien Samrith, director of investment for the project.

"Now everything from labor costs to construction materials has increased so investment requirements will be more," he said.

The Boeung Snor Satellite City in Meanchey district is the brainchild of petroleum giant Sokimex Group. Local tycoon Sok Kong, the president of Sokimex, will personally shepherd the project to be built at a cost of over $300 million.

However, the Boeung Snor project is also confronting land ownership issues and could be abandoned if the disputes cannot be resolved.

"This problem is a real headache," said Khath Sarin, Sok Kong's assistant at Sokimex.

An additional land dispute between real estate developer Suy Sophan and Sok Kong has already caused the project to lose 27 hectares of its 235-hectare total site in Meanchey district, said Sarin.

Minister of Economy and Finance Keat Chhon told reporters at the Government Palace on May 28 that the government was keeping an eye on land issues that might hold up these projects.

However, Socheat Vong told the Post earlier this month that the rising prices of imported construction materials, including steel and cement, were also impeding the projects and making them less feasible, or requiring major recalculations of project budgets.

He urged patience. "Developing a satellite city it not going to take just one or two years," he said. "We need to have a lot of meetings to review each step of the development plan."

Approved projects

Koh Pich City

Developer: Canadia Bank

Projected cost: $300 million

Area: 75 hectares along the Tonle Bassac River in Chamkarmon district

Completion: 2016 at the earliest

Boeung Snor

Satellite City

Developer: Sokimex

Projected cost: $300 million

Area: 198 hectares in Chbar Ampov Commune, Meanchey district

Completion: Unknown

Sunway City

Developer: Sunway City Bhd.

Projected cost: $2 billion

Area: 375 hectares in Chroy Changva commune, Russei Keo district, east of Phnom Penh

Completion: Unkown

Grand Phnom Penh

International City

Developer: Cambodia’s YLP Group and Ciputra Group of Indonesia

Projected cost: $500 million

Area: 260 hectares in Kmounh commune, Russei Keo district, northwest of Phnom Penh

Completion: 2015 at the earliest

Camko City

Developer: World City Company, of South Korea

Projected cost: $2 billion

Area: 199 hectares in the Boeung Pong Peay Development Zone, Russei Keo district, north of Phnom Penh

Completion: 2015