A

n agreement to set up a joint venture oil storage and distribution company

between the French oil company TOTAL and the state-owned Companie Kampuchea des

Carburants (CKC) may be on track again after the intervention of First Prime

Minister HRH Prince Norodom Ranariddh.

Doubts about the future of the

agreement arose when the Ministry of Commerce issued an unsigned declaration on

Feb. 11 stating that "the agreement signed by HE Mr. Sam Rainsy and TOTAL

company on 19 January 1994 is not legal and is considered cancelled."

The ministry's declaration went on to say that "TOTAL was banned from

contacting CKC and that CKC officials had been informed not to work with

TOTAL."

The issue entered the public domain when a copy of the Protocol

Agreement between TOTAL and the Ministry of Economics and Finance was leaked to

the press and reprinted in full in the Khmer Independent on Jan. 29.

Sources contacted by the Post who requested anonymity speculated that

individuals within the CKC and the Ministry of Commerce, as well as others

involved in lucrative oil distribution contracts, may have been trying to

sabotage the agreement over fears that the new joint venture company would

disrupt a flow of financial benefits outside of official government

channels.

Concern was also raised about a potential personnel shake-up at

the CKC which might result in the loss of jobs.

When contacted by the

Post on Feb. 21, the CKC refused comment and said the Ministry of Commerce was

the appropriate agency to deal with. Commerce officials were unavailable at

press time.

The Ministry of Commerce has been the oversight agency for

the CKC, although Ranariddh in a Feb. 16 letter to Second Prime Minister Hun Sen

suggested that responsibility be shifted to the Ministry of Industry, Mines and

Energy, and that the agreement be resubmitted for ratification.

The issue

came to the attention of His Majesty King Norodom Sihanouk who in a Feb. 11

letter to TOTAL's Managing Director Andre Camp said "I am of the opinion that HE

Mr. Sam Rainsy is very competent and serious and I have confidence in him in

this matter."

His Majesty the King added that "TOTAL was known and

respected throughout the entire world for its seriousness."

Assuming the

agreement moves forward, the new joint venture company will be responsible for

the rehabilitation of petroleum products storage facilities in Phnom Penh and

for their systematic control and distribution.

Once an audit has been

completed of CKC's existing fixed assets a shareholder agreement will be

produced defining the percentage of shares owned by each partner.

TOTAL,

for its part, would provide the cash to upgrade the storage facilities to

international standards, contribute firefighting equipment to insure safety

standards, oversee the quality of imported petroleum products, and insure

payment of import duties and relevant taxes to the Royal Government.

TOTAL is also committed to overseeing technical training for Khmer staff

and to give its full support to the transfer of technology where appropriate.

Minister of Economics and Finance Sam Rainsy, commenting on the TOTAL

agreement and the need to regularize the flow of revenues from state enterprises

through proper, accountable channels said: "Only a company like TOTAL can put

things right in this sector."