MALAYSIAN firm YTL and the Cambodian government tourism agency Apsara have began

arm-wrestling negotiations to try to resolve a long-standing differences over a Siem

Reap development plan.

The Prime Ministers have instructed Apsara to negotiate with YTL and try to move

toward a settlement before Oct 8, when the PMs are due to visit Malaysia.

However, it remains unclear whether a deal can be done by then. In a Sept 27 fax

to the government, YTL rejected some conditions placed upon the talks by Vann Molyvann,

Apsara's deputy chairman, according to an official at the Council of Ministers.

The dispute began with two lucrative projects slated for the same area of Siem Reap

by rival government agencies.

Last October, Apsara - the umbrella agency supposed to be responsible for Siem Reap

tourism development - was given control of 560 hectares of land to manage.

Within four weeks, the Ministry of Tourism had signed a deal with YTL to develop

some 1,000 hectares - including the 560 hectares given to Apsara.

Earlier this year, Apsara invited bids for tender to build infrastructure on 60 hectares

of the land, angering Ministry of Tourism officials who said the move endangered

the YTL deal.

On Sept 18 a meeting of Apsara's council of administration, co-chaired by the Prime

Ministers, was called to try to resolve the impasse.

At the meeting, the PMs asked for negotiations between Apsara and YTL, while keeping

open the option of involving other foreign partners in the development.

But it was stressed that Apsara would remain the owner of the land and in charge

of its development, according to an Apsara official.

"The two Prime Ministers were very clear on that point that Apsara still control

the land," said Kerya Eng Sun, in charge of tourism development for Apsara.

"The Royal Government is not giving a concession. We will not negotiate on that

point."

After the Sept 18 meeting of Apsara's council of administration, another meeting

was called at the Council for the Development of Cambodia (CDC) - the first time

Apsara and YTL had come face-to-face, albeit unintentionally, since May.

YTL attended the meeting at the invitation of the Ministry of Tourism. Apsara officials

including Molyvann turned up, not knowing that YTL representatives would be present.

At the meeting, Molyvann outlined two conditions for any deal with YTL. He asked

that Apsara's tender process remain open for other bidders to seek to take part in

the development, according to Seung Kong, director of Molyvann's cabinet.

Molyvann also sought a 15-20 percent share on the profit from leasing the land to

private companies for hotels or other developments.

In the original YTL deal with the Ministry of Tourism, it was envisaged that YTL

would get 95 percent of the proceeds of selling long-term leases; the Royal government

would get 5 percent.

In a Sept 27 fax to the government, YTL disagreed with Molyvann's two conditions,

and objected to other firms being able to bid for a share of the project.

But two other conditions - joint control of the zone by Apsara and YTL and a request

that an Apsara masterplan for the Siem Reap area be followed by YTL - have been agreed

upon.

Intan Cornell, YTL's coordinator of Cambodian projects, said she hoped Apsara would

agree to drop the other two conditions of Molyvann's.

"The sooner will be the better. We have been working [on this] for a long time.

We will be happy to resolve this at the end," she said.

The present negotiations do not concern the controversial sound-and-light show planned

for Angkor Wat, which YTL is due to construct as part of its deal with the Ministry

of Tourism - that will be the subject of later negotiations and Apsara officials

say the show will have to meet their approval before work can being on it.