Logo of Phnom Penh Post newspaper Phnom Penh Post - Plans for tourism light and glory turn grey



Plans for tourism light and glory turn grey

Plans for tourism light and glory turn grey

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.

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