S IEM REAP - If all had gone according to plan, this northern tourist town would by
now be home to a giant development zone, a half dozen nearly finished luxury hotels
and a glitzy temple light show.
But almost nothing has gone as expected.
While tourism officials have signed numerous big deals in recent years, only one
hotel will open on schedule this year. Most of the other proposed developments are
still empty lots.
Fed-up Cambodian officials are threatening to review all investments here and say
companies that have no broken ground on promised projects may soon find their agreements
canceled.
But frustrated investors argue a tangle of red tape, government infighting and a
sagging tourism market are also to blame for the unfulfilled plan.
"The companies that have signed contracts and not moved forward are keeping
my country and tourism development hostage," said So Mara, the Ministry of Tourism's
director general. "The government wants to open the door and look to other investors."
The biggest of the delayed projects are a 1,000-hectare (2,470-acre) tourism development
zone in Siem Reap and a sound and light show at the Angkor Wat temple, both to have
been developed by Malaysia's YTL Corporation Berhad. Work was due to begin in 1996.
"Nothing has happened in the zone. Nothing has happened with sound and light.
So the Ministry of Tourism will review the contract," said So Mara.
Most agreements with foreign investors include a clause allowing the government to
cancel a contract if companies fail to develop their projects within a certain timeframe,
he said.
Five hotel projects, which should provide nearly 1,000 new rooms, are also behind
schedule, according to So Mara. The five hotels are being built by firms from Thailand,
Malaysia and Hong Kong. Work has started on just one of them, being developed by
Thai Nakorn Patana Co Ltd.
A notable exception to the tale of delay is the $25m renovation of the historic Grand
Hotel d'Angkor. Raffles Holdings Pte Ltd of Singapore is due to open the 131-room
hotel later this month, as scheduled.
But the YTL story shows there is more to delays than simply foot-dragging on the
part of investors.
YTL signed a memorandum of understanding in 1995 for both the temple show and the
tourism zone, which was to include several hotels, business, cultural and sports
centers, homes, a hospital and a museum.
But soon after, culture officials opposed the sound and light show and Apsara, a
government body that oversees development around Angkor, said it wanted both the
show and zone reviewed.
In July 1996, Apsara put its own development zone up for bid - a 560-hectare (1,380-acre)
site that lay within the YTL zone. Tourism Ministry officials called Apsara's actions
illegal and a still-unresolved turf war erupted between the two parties.
A senior YTL official, speaking from Kuala Lumpur on condition of anonymity, said
the problems have been significant.
"We have done a lot of up-front investigations and studies and the end result
is they call a tender. What would you expect us to do?" the official said.
"We started off responding to a call to help a fellow country in the region.
We are disappointed it ended up this way."
The official said another reason for the delay was the withered tourism market since
Second Prime Minister Hun Sen deposed First Prime Minister Prince Norodom Ranariddh
in July.
In the months following Hun Sen's coup, tourism in Siem Reap dropped by 90%, although
the number of visitors recovered slightly in November.
Local tourism officials said 1,806 people visited the Angkor temples in November
1997, compared with 7,153 in November 1996 - a 75% decrease.
"It's slowly getting better. November brought some big tour groups back,"
said Siem Reap tourism official Suong Lan.
But Ros Borath, director general of Apsara, said the delays reflected regional, not
just Cambodian, economic malaise. "First, companies are delaying because of
the atmosphere here, but second, they have financial problems in their own countries,"
he said.
