Cambodia: Why islands snapped up by developers and speculators?

Cambodia: Why islands snapped up by developers and speculators?

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Came across below Phnom Penh Post article from 2012.

In Demand and Supply of Asia’s Tourism Coastline we commented that Cambodia “has a very limited coastline (next shortest coastline after Singapore), a high land-mass-to-coastline (3rd highest) plus high population-to-coastline ratio (3rd highest). Cambodia also has the second highest position in terms of international-arrivals-to-coastline. Question is: will we witness an explosive growth in coastal tourism development as Cambodia develops and ramps up its international tourism marketing?”

This combination of limited coastline, limited number of offshore islands, Angkor Wat, more ideal weather, growing internal economy, emerging Asia middle class, is a potent mix for Cambodia’s coastal tourism development.

It’s not surprising why investors snapped up Cambodia’s islands (while Indonesia goes looking for investors to develop its small islands).

The next question is, will Cambodia be executing its coastal development on a larger tourism strategy, thereby optimizing on scale and quality, or along a more conventional approach seen so far in the region?

 

Re-classification / Re-zoning of islands

More than 180,000 hectares on 28 of Cambodia’s 64 islands were reclassified as state private property for 31 companies seeking land concessions between 2008 and 2010, government sub-decrees reveal.

The reclassification sub-decrees, compiled by investigators at the rights group Adhoc, pave the way for firms to secure 99-year leases to develop hotels, resorts and casinos, mostly on islands dotted across the coasts of Preah Sihanouk, Kampot, Kep and Koh Kong province.

They include already popular destinations off Preah Sihanouk and Kep province such as:

  • Koh Tonsay (Rabbit Island)
  • Koh Russey (Bamboo Island)
  • Koh Rong
  • Koh Rong Somleom
  • Koh Takhieo as well as far more obscure enclaves.

 

Impact on public access

Experts in the investment and conservation communities have told the Post that on top of these land re-classifications, many of which have since gained final approval, plots have been earmarked for development by private firms on almost every single island in the Kingdom.

Adhoc senior investigator Chan Soveth said although this was good for a small number of individuals in the business community and rich foreign tourists, there were few island areas left for average Cambodians to enjoy their own country’s serene getaways.

“For example, can residents travel along Sokha beach?” he said, using the private, 1.5-kilometre shore at Sihanoukville reserved exclusively for hotel guests as an example of how the Kingdom’s islands could soon become off limits to most Cambodians.

EIA?

Soveth said there was a lack of vision and co-ordination from the government as it hastily divvied up Cambodia’s islands, reclassifying land for 99-year leases without assessing negative effects such as the depletion of forest resources that supported communities.

“We are concerned about development without transparency, and we don’t know what exists on those islands,” he said.

Connection

Seven of the sub-decrees reclassify land to firms that are not named, while two are simply referred to as “Chinese company”, a not uncommon practice in documents related to land concessions in Cambodia.

Some of the most audacious Cambodian island developments have been connected to shady individuals, including convicted pedophile Alexander Trofimov, who allegedly drove to his resort on Koh Pos from prison regularly before he was pardoned by the king last year.

Adhoc’s list of soon-to-be concessionaires includes a veritable who’s who of controversial development including LYP Group (Koh Kong Knong), TTY Corporation Co, Ltd (Koh Koan) and Try Pheap Company (Koh Tonsay), all firms that have been involved in major land disputes.

But Tourism Minister Thong Kong yesterday defended the aggressive island development plan, which was guided by the Cambodian Development Council, saying it would lead to jobs and prosperity for the local populations.

“If it affected villagers, for what would we be doing it? We have to make villagers get profit from those development projects,” he said.

Tobe Eastoe, protection adviser at Fauna and Flora International, said many companies had not even broken ground yet on their concessions, while some were developing on islands where 60 to 70 per cent of villagers depended on fishing for their primary income.

“Different types of development pose different threats to the marine environment. Some, such as those we have worked with, are interested in preserving natural beauty, as it is their primary tourist attraction,” Eastoe said. “Some are more interested in large-scale development.”

David George, Cambodia country manager at property investment firm CBRE, which has partnered with two of the biggest island development projects in Cambodia, said most firms developing Cambodia’s islands recognised it was in their own interest to do so responsibly.

“If you allow poor development on your island, it will affect the quality of your whole island,” George said.

Catching up with neighbors

He added that as Cambodia pushed to catch up with established markets in Thailand and Vietnam, it had the advantage of being able to learn from mistakes made in those countries.

“In a country where you have a relatively small number of people who have quite a lot of land, they have quite a lot of power [as to] how it’s developed,” George said.

With about 20 per cent year-on-year increases in tourist arrivals and the expected commencement of flights from Vietnam to Sihanoukville next year driving investment, Cambodia’s long-dormant island tourism industry had become nascent, he said.

As greater numbers of well-heeled tourists sojourned out to luxury island resorts, increasing trickle-down revenues would ensure that smaller-scale, locally owned onshore businesses benefited, George said.

Land speculation

But George and Thong agreed that a number of concessionaires who continued to idly sit on their leases – a strategy usually used to profit off land appreciation rather than follow agreed-upon development plans – remained a snag holding back tourist dollars from Cambodia’s beaches.

 

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