Hun Sen OKs Ream eco-resort

The Phnom Penh Post
Wednesday, 02 September 2009
May Kunmakara

HUN SEN has given the green light to China's United International to begin building an ecotourism project worth more than US$700 million on the coast in Ream, Preah Sihanouk province, after a meeting Tuesday with company officials at the prime minister's home in Takhmao, government officials said.

Following the meeting, Hun Sen's spokesman Eang Sophalleth said the company - which is known in Cambodia as Yeejia Tourism Development Co Ltd - "plans to start ... construction later this year, in November".

The 5-million-square-metre project would be built in four phases, he added, over four years each. Infrastructure including roads, electricity lines and water access would be built from scratch, said Eang Sophalleth, along with facilities including a business centre, school and hospital.

Youn Heng, deputy director of the Evaluation and Incentives Department at the Cambodian Investment Board (CIB), told the Post Tuesday that Yeejia Tourism Development Co had been seeking government approval for the project since 2005 and had finally been accepted this year.

Rice millers invest in packaging factory

The Phnom Penh Post
Wednesday, 02 September 2009
Chun Sophal

THE Federation of Cambodian Rice Millers Associations announced Tuesday that it had invested US$7.8 million to construct a packaging plant for milled rice in Battambang province, a move it said would help boost Cambodia's prospects for exporting rice.

Federation President Phou Puy said construction of the factory was already 90 percent complete, and that the plant would go online in December.

"We hope that when the plant is finished, it will play an important role in supporting Cambodia's plan to export in a more competitive manner," Phou Puy said.

Investment in the technology - which was imported from Japan - came from a number of members of the federation, Phou Puy said, adding that it would be able to pack 720 tonnes of rice per day.

Packaged milled rice has more potential markets and a higher market value than unmilled rice due to countries looking for value-added, higher-quality products.

Mao Thora, secretary of state at the Ministry of Commerce, said that Cambodia would be ready to export international-standard rice next year following a series of investments in infrastructure, including the packaging machine.

"We will start two projects in 2010 to discover any obstacles which have hindered previous efforts to export," he said.

A French delegation will head to Cambodia this month to discuss with officials methods to help strengthen the Kingdom's rice- and rubber-export industries, Mao Thora said.

Last month, Phou Puy said that the federation planned to export 200,000 tonnes of milled rice next year.

Beeline accused of reneging

Photo by: SOVAN PHILONG
A mobile phone shop employee in Phnom Penh displays application forms for Beeline’s Boom tariff. The mobile provider said it stopped adding new customers on the scheme Tuesday.

The Phnom Penh Post
Wednesday, 02 September 2009
Steve Finch and Ith Sothoeuth

Mobile operator drops its controversial pricing plan but only for new customers; Mobitel says this violates recent agreement to settle telecoms dispute

MOBITEL on Tuesday accused Beeline of not doing enough to end a months-long dispute even after the mobile operator halted new applications for its "Boom" tariff, which competitors have said is priced below the cost of connecting across networks.

Beeline Cambodia General Director Gael Campan confirmed that it stopped adding new users on the tariff Tuesday, and that all advertising - including billboards - had been withdrawn.

"We have instructed all our outlets to stop selling Boom," Campan said Tuesday.

Deal breaker
However, referring to a meeting last month after which the Ministry of Posts and Telecommunications (MPTC) and Mobitel said Beeline had agreed to raise its tariffs from US$0.05 per minute to $0.06, the Royal Group - an investor in Mobitel - said Tuesday that Beeline had not fulfilled its part of the deal.

"The compromise that was reached between all the telcos and Beeline was that Beeline would cease selling below cost by September 1st,"said Mark Hanna, Royal Group's chief financial officer.

"If this is not the case, then they are going back on their commitments, and the situation will not have changed as far as we - and probably the other telcos - are concerned."

He added that in maintaining the Boom tariff for existing customers, Mobitel considered Beeline to have violated the agreement: "Beeline made commitments to the MPTC, and it is now up to them to deliver on them."

Beeline told the Post Monday that customers already signed up on the Boom tariff would still benefit from the $0.05-per-minute rate on all domestic networks, a point it reinforced Friday when it sent text messages to all users that the rate would remain "forever".

It said a new tariff - which Campan said Beeline had planned for some time as part of its expansion strategy - would be announced Monday at a press conference in Phnom Penh.

Campan has argued that it is not selling below cost, and that its pricing policy is little different from a supermarket promotion in which products are sold for a profit with a number of promotions added to entice customers and build loyalty.

Disconnect
With Beeline in turn accusing Mobitel of blocking its network in what it says is retaliation for its perceived price-dumping - a point backed up by Telecom Cambodia tests, Beeline says, and other industry insiders - it appeared Tuesday that Mobitel had not stopped its efforts to hinder Beeline's interconnectivity.

"The quality [of the line between the two networks] is bad," Campan said Tuesday.

Beeline conducts interconnectivity tests every 30 minutes by making 10 calls to each of Cambodia's eight other networks, which it said showed Mobitel was interfering with interconnectivity.

Despite the continuing disagreement, Campan said Monday that it had neither threatened legal action nor received word of Mobitel planning a lawsuit.

Still, both sides have made claims of legal infringement.

Beeline has accused Mobitel of violating an interconnection contract, interconnection standards and therefore Cambodian regulations by blocking its network.

Aside from allegations of price dumping - which Mobitel says other operators have also made to the ministry - the market leader says Beeline has illegally used Mobitel prefixes to get around interconnectivity issues.

Hanna said Beeline had also "violated national security and the ITU [International Telecommunications Union] guidelines on the use of mobile prefixes - an offence punishable by ITU on Vimpelcom Group [the Moscow-based owner of Beeline]".

Sanjay Acharya, the ITU's chief of media and public relations, told the Post by email late Monday from Geneva that the Mobitel-Beeline dispute "would be an issue to be dealt with by local authorities. It does not fall within ITU's purview".

Mediate, not regulate
Touch Heng, undersecretary of state at MPTC, told the Post Monday that the government would only mediate in the case, as it had done thus far.

Part of the problem, as acknowledged by international agencies including the UN Development Programme, is that Cambodia still does not have a telecoms law or regulator to deal with longstanding problems such as deliberate blocking of mobile interconnectivity. The long-awaited legislation remains stalled in the Council of Ministers.

Article 9, Chapter 3 of the Khmer-language draft law urges "fair competition in the telecommunications industry", but most of the detail relates to capping high prices rather than cases in which price dumping is alleged.

In Chapter 9 the draft states: "[The] licensee can decrease prices of services beneath the level set by the Telecommunications Regulator of Cambodia."

This regulatory body is expected to be set up once the draft passes through parliament.

In regards to the blocking of other users, the draft is much clearer, although no punitive measures are outlined: "No one licensee shall be allowed to ban or to, by whatever means, prevent any other services provided by another licensee," it states.

ADDITIONAL REPORTING BY NATHAN GREEN

Oz Embassy a lesson in top design

The new Australian Embassy in Phnom Penh combines materials from Australia and Cambodia. PHOTO SUPPLIED

The Phnom Penh Post
Wednesday, 02 September 2009
Nathan Green

Government’s new home minimises carbon footprint and maximises access for the disabled

Developers should look to Australia's new embassy in Phnom Penh as a lesson in architecture and design, according to a real estate specialist advising the Australian Embassy on the sale of its previous home.

Vanessa Gevers, a commercial-property expert who has been in Cambodia for around six months, said Monday that it was "very rare" to find a property of such a high standard in terms of construction quality, fit-out of interiors and spatial organisation.

"The materials are also of a quality you don't tend to find in other developments in the city," she said. "It's an example of the type of construction that should be more common."

The building combines granite from Kratie with stone from Siem Reap and Kampong Thom provinces, and plantation wood from Australia.

Deputy Head of Mission Fiona Cochaud said the materials and the design reflect the contributions that the two countries have made to their mutual relationship.

The building was also designed to minimise its energy footprint, with insulation, double glazing and energy-efficient air-conditioning.

Rainwater can be harvested from the roof for reuse in fire systems, and on-site water treatment allowed recycled water to be used for toilet-flushing.

It is also fully accessible to mobility-impaired people, allowing the embassy to meet on-site with people who could not easily access the meeting rooms on the third floor of the previous building. "This is a real first for Cambodia," Couchaud said.

Cochaud was speaking Tuesday at the first media viewing of the Australian Embassy's new chancery, into which it moved on June 1.

Cochaud said the move was needed as growing trade relationship between the two countries was in turn expanding staffing levels.

Two-way merchandise trade between the two countries was worth A$58 million (US$48.47 million) in 2008, up from a little over A$20 million in 2003, embassy figures show. "We had a huge need for more space, which was one of our main motivations for building our new embassy," Cochaud said.

Because the embassy had grown so large, the new building was designed around a central atrium with a wooden staircase to encourage people from different sections of the ministry to "bump into each other" to facilitate communication, she said.

Construction began on the 2,730-square-metre embassy in October 2007 and was completed in May this year. It was designed by Australian architecture firm BVN Architects, who faced a unique design brief.

Cultural challenge
After purchasing the land, which lies in the shadow of the new National Assembly building in the capital's Tonle Bassac area, the embassy discovered there was a Bodhi tree on the site. Out of respect for cultural values, the architects were briefed to design the building around the sacred tree rather than cutting it down.

Singaporean company Confluence managed the project, and Leighton Contractors (Asia) took care of the rest. Although Leighton is an Australian firm, Couchard said, the work was carried out by a predominately local workforce.

At the peak of activity, 430 workers were on-site, clocking up 1.4 million man-hours with not a single accident. "It's a very good record and compares favourably to any other construction project in Phnom Penh," Cochaud said.

The embassy's prominent position reflected the Australian government's strong commitment to Cambodia and the region, Cochaud said. "We have been here for a long time, and we will be here for a long time."

However, the architects were careful to remain in the shadow of the National Assembly building next door, which Cochaud described as a beautiful example of Cambodian architecture. "We've tried not to compete with the National Assembly."

But she also said the building was intended to impress people. "We want people that come here to think that this is the embassy of a country that is very proud to be here," she said.

The former embassy is now on the market, though Cochaud would not give an asking price. Gevers, who is advising on the sale, said the target price and timing of the sale had not been finalised. It would be ideal for foreign governments or Cambodian government ministries, she said.

Incense revenues set to light up

The Phnom Penh Post
Wednesday, 02 September 2009
Soeun Say

Kampong Cham

THE buildup to Pchum Ben festival of the dead is set to be a busy time for Leap Ly.

The 45-year-old maker of incense sticks says the Cambodian Buddhist holiday, in which people pay respects to deceased relatives by cooking meals for monks and making offerings to the ghosts of deceased relatives, is a peak sales time.

"We don't have any time to relax ... as we are producing as many incense sticks as we can to meet demand over Pchum Ben," he said. "The festival is the best time for incense makers to make money,."

To ensure the company maximises revenues over the period, Leap Ly is looking to hire two new workers to add to the three already employed at the factory in Sdav commune, in Kampong Cham province's Kang Meas district.

Employees earn from 150,000 to 200,000 riels (US$37.50 to $50) per month.

Leap Ly said the highest-quality incense sticks produced at the factory sell for 4,000 riels a bunch, with each bunch consisting of 40 sticks.

The factory can make between 40 and 50 bunches each day, but he is aiming to increase production to between 100 and 150 bunches daily from next year, if he can secure demand.

He sells locally as well as in Phnom Penh, Kampong Speu and Kampot provinces.

With raw materials - bamboo, leaf, and saw ash - costing around $150 a month, Leap Ly estimated he makes a profit of $300 to $400 per month.

Profits are higher in the rainy season, as supply tends to drop as manufacturers struggled to find enough sunshine hours to dry the sticks, he said.

The father of two learned the trade when he found a job at a Cambodian-Chinese-owned incense factory in Phnom Penh while he was in his 20s. In 1991, after working there for two years, Leap Ly married and returned to his hometown to set up his own three-employee business, which he named Ly Incense Stick Making.

"At that time I thought that I had enough experience in making incense sticks because I had worked in the job for more than two years," he said. "But it turned out to be very hard because although I knew how to make incense it was my first time running a business.

"My wife and I had to work hard every day to find ways to make higher-quality incense sticks and find new markets to sell our product. Our business eventually became successful, and we now have a lot of regular customers."

But the business is not without challenges. In a globalised world, even higher quality incense sticks from China, Vietnam and Thailand are eating into his market share. Leap Ly said he needed to expand to develop the economy of scale needed to compete.

"We had success in the first stage of our business, but now we need to move up a level to find new markets and increase the quality of our products further," he said. "If we cannot do this, our business will not be able to compete with our competitors from outside Cambodia."

New carrier buys Airbus jet

Photo by: Sovan Philong
A Cambodia Angkor Air ATR 72-500 turboprop plane sits on the tarmac in July at Phnom Penh International Airport. The new carrier will begin flights with its new Airbus A321 on Saturday, officials said.

The Phnom Penh Post
Wednesday, 02 September 2009
Nguon Sovan

National carrier Cambodia Angkor Air is to receive a new Airbus A321 today as the new airline increases flights to domestic destinations and Ho Chi Minh City

NEW national carrier Cambodia Angkor Air (CAA) will receive today delivery of a new Airbus A321 at Phnom Penh International Airport, an official said Tuesday.

Soy Sokhan, undersecretary of state at the secretariat of civil aviation, who is in charge of all matters related to CAA within the government, said the new passenger jet would go into service from Saturday.

"In operating the new aircraft, we will triple return flights between Siem Reap and Ho Chi Minh City - so now 21 flights a week - and double return flights between Phnom Penh and Ho Chi Minh, so that will be 14 flights [per week] from Saturday," he said Tuesday.

The airline - which launched July 27 - had seen a steady increase in passenger numbers, with an average passenger load of between 30 and 40 percent during the first month of operations, he said, without supplying official data, which he said was not yet available.

As the national carrier, CAA ticket prices had been kept between 5 and 10 percent lower than other private carriers following an opening promotional period. "This is our policy to attract tourists," he said.

Ho Vandy, managing director of World Express Tours and Travel, noted, however, that since the end of the promotional period - in which flights between Phnom Penh and Siem Reap were sold for as little as US$6 one way, not including tax - CAA's prices had been similar to Bangkok Airways.

"At the start, Cambodia Angkor Air's tickets sold well due to the discount promotion, but now the ticket prices are high," he said, without giving ticket sales figures for August.

He declined to say which tickets had sold better - CAA or Bangkok Airways, which also flies between the capital and Siem Reap.

Since its original promotion, CAA has sold tickets between Phnom Penh and Siem Reap starting at $30, not including taxes and other charges.

Chhuon Sambath, vice president of the Cambodian Association of Travel Agents and president of Angkor Media Travel, said Tuesday that CAA's promotions had coincided with slashed fare prices on other airlines.

"But the sales seemed good," he said. "It is too early to compare [CAA] ... to other airlines in terms of airfares and services because it just started a month ago."

Soy Sokhan said there were no immediate expectations regarding the airline's financial performance.

"For the first few years, we do not expect any profits. We will just promote our carrier and attract customers," he said Tuesday. Further expansion is planned, he added.

CAA would aim to begin flights between Siem Reap and Sihanoukville and the capital and Sihanoukville before the end of the year, he said, or early next year. The opening of the new airport at Cambodia's most popular seaside resort has been delayed, according to previous reports.

CAA has been collecting data on cruise ship passenger numbers to Sihanoukville from travel agents to plan ahead for flights, "but at the start it won't be regular flights on this route, but chartered flights", Soy Sokhan said.

Further aircraft purchases would be made next year, he said, as the airline looks to expand within ASEAN as well as to China and South Korea.

CAA is a joint venture between the government - which owns 51 percent - and Vietnam Airlines as part of a 30-year agreement with an initial investment of $100 million.

Renewable energy suppliers find their place under the sun

Photo by: PHILONG SOVAN
Only about 2 percent of Cambodia’s solar sales are in Phnom Penh.

SHEDDING SOME LIGHT ON SOLAR energy

A Swiss scientist, Horace de Saussure, invented the world’s first solar energy collector, or “hot box”, in 1767. In the 1830s, British astronomer John Herschel used a solar energy collector box to cook food during an expedition to Africa. Albert Einstein won the Nobel Prize in 1921 for experiments with solar energy and photovoltaics. It takes 8 minutes, 17 seconds for light to travel from the sun’s surface to earth. Enough sunlight falls on the earth every minute to meet the world’s energy demands for an entire year. If we covered a small fraction of the Sahara Desert with photovoltaic cells, we could have enough power to meet all the world’s electricity requirements. All TV and communications satellites are powered by solar energy using photovoltaic cells. The sun will run out of fuel in 5 billion years.

The Phnome Penh Post
Wednesday, 02 September 2009
Jet Odrerir

As the world scrambles to harness alternative energy sources, the importance of solar power has risen concurrently, but is Cambodia contributing to the demand?

Tropical regions should be the ideal place to generate solar electricity.

Developing countries along the equator get fairly consistent sunlight year-round and could use this to harness the free energy the sun provides.

However, high initial investment costs have made the option prohibitive for most.

Solar power is not a new idea in Cambodia. In fact, one company brought solar here more than 10 years ago.

Khmer Solar was the brainchild of Peter Banwell and Ford Thai, who started the business in 1997 with the idealistic view that renewable energy should be an option for Cambodians.

Their client base in the first five years was approximately 80 percent NGOs, with the remainder being private homeowners.

NGOs had the capital to invest in the equipment, and many of their projects were far from functioning power lines. Also, the foreign staff were aware of the benefits of using renewable energy.

Kunthap Hing, an adviser for Khmer Solar, was working with the World Bank in the early 2000s, studying the viability of renewables, energy efficiency and conservation.

"The World Bank was a big supporter of solar and still is," he said. "They helped fund studies showing that, if the initial costs could be brought down, rural Cambodia would benefit from solar power."

Ten years ago, the initial investment cost for solar panels, batteries and a charge converter averaged $10 per kilowatt.

To power a small TV for two to three hours, you would need a 130-watt system.

Therefore, the cost of buying and installing that system would have been $1,300.

For an oil-run generator, the investment cost is 50 cents per kilowatt and would have cost $75 for the same capacity.

However, the prices for solar have dropped considerably in recent years. It now costs $5-$8 per kilowatt, depending on the size and complexity of the system.

The lower costs have brought more interest, and there are now more than a dozen companies selling solar power systems in Cambodia.

European countries have invested heavily in solar, with Germany one of the leaders in the field.

Better technology has led to more efficient power converters and new sealed-gel batteries, which last longer and are easier to handle than the wet-cell batteries found in most cars.

Though wet-cell batteries only last two to three years in Cambodia's heat, Chanrith Khuth of KC Solar stated: "We have a warranty of three years for our gel batteries, but we believe they will last for 10."

These cutting-edge power sources are designed to work in a 30-degree environment, which is important because the system is centred on the battery, which is also the weakest part.

Although the battery will need replacing every so often, the converters and solar panels have warranties anywhere from 25-40 years and a probable lifespan of much longer.

All of these advances, combined with lower front-end costs, have made the systems more competitive with other electrical options.

According to The World Bank Web site: "Electricity tariffs in Cambodia are among the highest in the world.

"The average tariff charged by Electricite du Cambodge is 16 US cents/kWh, ranging from 9 to 23 cents/kWh, with even higher tariffs outside Phnom Penh.

"The tariffs of the Rural Electricity Enterprises (REE) range from 30 to 90 cents/kWh."

KC Solar recently installed a 4,000-kilowatt system in a house in Oudong.

The owner had been paying 50 cents/kWh for electricity, but is now off of the grid.

Battambang has become the area with the most sales of late, because many of the farmers are wealthy but only the city centre has power.

Sales trends have reversed recently, with 80 percent of solar systems being sold to private households and the rest to NGOs and government buildings.

Phnom Penh only accounts for about 2 percent of sales, most of which are solar water heaters.