Of the 1,006 “high-rise building” projects seen mushrooming in coastal Preah Sihanouk province before the Covid-19 pandemic, 558 are now complete and 303 of those are in operation, according to governor Kuoch Chamroeun.

Speaking at a press conference on the province’s achievements of the past five years, held at the Council of Ministers on February 15, Chamroeun noted that 89 other projects are now back under construction while another 359 have been completely suspended.

Sihanoukville saw a flood of Chinese investments in the years just prior to the pandemic, which disrupted travel and daily life in China up until recently when the Chinese government eased its “zero-covid policy” restrictions.

“The construction activity in Preah Sihanouk province has dramatically decreased since the onset of Covid-19 in early 2020, when countries began to put in place lockdown measures to prevent the spread of the virus,” he said.

According to Chamroeun, there are currently more than 20,000 Chinese living and working in the province.

Responding to the question of what measures the authorities have taken to address the issue, Chamroeun said the Ministry of Economy and Finance have set up a working group to study the situation and look for measures to assist project investors.

“The finance ministry has held many meetings with technical officials. It’s now in the stage of requesting policy decisions from the the government. So, there will be some mechanisms which I can’t reveal yet until a final decision has been made,” he said, hinting only that it is now at the point of considering giving some unspecified favours to the building owners or investors to complete the projects.

At a January 25 public forum on macroeconomic management and the 2023 budget law, finance ministry permanent secretary of state Vongsey Vissoth said Cambodia would not abandon the real estate sector, which he said had contributed significantly to national economic growth, amounting to roughly one-tenth of the Kingdom’s gross domestic product (GDP) prior to the pandemic.

Vissoth said the entire real estate sector in Cambodia in 2022 was still slow and facing difficulties as it would likely be for the rest of this year.

He also mentioned the establishment of a working group to create supportive policies that would consist of officials from the National Bank of Cambodia (NBC), which handles credit, the finance ministry, which would be responsible for tax policy, and the construction association itself to jointly shoulder the responsibility.

“We already have space for addressing the problem by not letting the risk spread to other sectors to become a bigger danger. The main risk is credit crunch. So, as I had mentioned the other day, we need to address the issue together,” he said.

Vissoth said growth in the construction and real estate sector in Cambodia over the next 10 years will be fuelled not only by internal factors but also by foreign direct investment (FDI) inflows, especially from China, which he revealed accounted for more than $1.6 billion or 42 per cent of the 2022 total.

According to Vissoth, this indicates that China remains an important driver of Cambodia’s economic growth, not only investing in industry but also in agriculture, tourism and especially in construction and real estate.