By Aun Pheap and Lauren Crothers , Cambodia Daily, Feb 21, 2014
Cambodia spent more than $414 million on imported construction materials to meet increasing demand in the local construction and property sectors last year – a rise of 7 per cent compared to 2012.
According to officials and industry insiders, the increased value of imports reflected steady growth of the construction and property sectors. They also suggested that the improving numbers were evidence that both local and foreign confidence continued to be high when it came to investing in the property sector, despite some domestic turmoil in the wake of national elections.
The Kingdom’s disputed election results in July of last year have continued to incite protests and some violence, but appear to have had little effect on business confidence or economic growth, which has remained steady.
Ken Ratha, spokesman for the Ministry of Commerce, said the increase in imported construction materials was a sign that the property sector was seeing renewed growth, while the overall construction sector was continuing to move in a positive direction, particularly in the areas of residential property developments in the boreys on the outskirts of Phnom Penh.
Ratha added that construction companies were making large-scale domestic investments due to increased demand for better housing in the Kingdom.
“Due to residential-sector growth, both local and overseas investors are injecting more capital into the construction sector,” Ratha said.
He added that a corresponding development was the establishment of increasing numbers of small- and medium-sized enterprises (SMEs), as well as large-scale enterprises, all of which were boosting the property sector.
“The important thing is that investment in the sector is now shared by both local and foreign companies,” the spokesman said.
Meanwhile, deputy general director of the Construction Department of the Ministry of Land Management, Urban Planning & Construction Lao Tip Seiha recently told the Post that Cambodia’s strong economy was the major contributing factor in terms of increased investment in the construction sector.
According to government data, the ministry approved 1,641 projects covering a total area of 7.5 million square metres, and a total value of $2.8 billion in 2013, or an increase of 31 per cent year-on-year.
In 2012 1,694 projects were approved, with a total area of 6.5 million square metres and total investment of $2.1 billion.
“Obviously, the construction sector has seen remarkable growth, particularly in Phnom Penh, which has seen a lot of construction of condominiums and apartments, and residential and office space,” Tip Seiha said.
Socheat Yutharo, marketing and sales manager of K Supply, a construction equipment and materials company, said K Supply’s imported products had risen between 25 and 30 per cent in 2013 compared to 2012 due to increased orders from existing customers.
Yutharo added that K Supply experienced a lull in orders during the period of the national elections, but they revived later in the year despite some unrest on the streets and concerns among the local business community.
“Customers put a hold on some of their projects after national elections, but by late 2013 they resumed operations, so K Supply’s products ended up doing well,” he said.
Construction of the luxury Diamond Island Riviera residential project on Koh Pich is under way after a groundbreaking ceremony last month.
The Western-themed, all-modern residential project – a $700 million joint-venture between the Overseas Chinese Investment Company (OCIC) and Chinese Jixiang Investment – is just one of many popping up in the Greater Phnom Penh area.
Chen Hok, Riviera project manager and engineer, said that the Chinese company had built accommodation for staff and construction workers, before initiating construction of two 28-storey skyscrapers, although he said they would be just two of five tall buildings when the project was completed.
According to Hok, construction of Building B was already under way, while construction of building A would start soon. The three remaining buildings would be even taller, with 38 storeys, and featuring 200-metre-long rooftop swimming pools.
Construction of these buildings would start in 2015, he said.
“The first two buildings will be finished in October, 2015.
Hok attributed the speed of construction to the fact that workers would be working night and day in shifts.
Meanwhile, as part of the overall project, 36 apartments have already been completed and another 68 apartments will be finished in the middle of this year, according to Hok.
He added that a shopping complex at the centre of the project will would be ready later this year. The seven-storey shopping complex will also feature a cinema.
Hok said the shopping complex would be divided into two joined buildings – one of them five storeys and the other seven storeys – and would have parking space for 1,400 cars.
Banh Suly, sales manager of the project, said that sales were progressing, with clients coming from a variety of nations, but she added that most were Chinese purchasing condominiums.
Suly declined to reveal actual percentage breakdowns of nationalities due to company confidentiality. The buildings comprise 600 units, which are priced at around $2,000 per square metre, she said.
Po Eav Kong, general manager of Asia Real Estate Company, said that, according to his information, the project has sold well, but he said no hard numbers were available.
Diamond Island’s location has proven a valuable asset in selling the project due to its desirable living environment, fresh air and the fact it was surrounded by the rivers, he said.
The $2,000-per-square-metre price tag might be affordable for some foreign clients, but he said it seemed high for Cambodians.
“There are challenges ahead in the residential market,” he said, adding that apartments were popular with foreigners, making it important to maintain economic progress and attract more foreign homebuyers to Cambodia.
Scores of families in Phnom Penh’s Borei Keila community tore down a corrugated metal fence and took up temporary residence in developer Phan Imex’s unfinished Building 9 as anger over smaller-than-promised relocation plots boiled over yesterday morning.
The occupation began after local and municipal authorities came to the site yesterday to measure plots of land for displaced families embroiled in the long-running land dispute. The plots became a point of contention, however, when it was discovered they were only three-by-four metres – half as big as the four-by-six-metre plots residents were promised, Borei Keila resident Chher Phan said.
“This is the reason behind our action, and we decided to live temporarily in Building 9 while we wait to live in the temporary settlement that Phnom Penh municipal authorities will build for us as we wait for resolution based on the 2003 and 2004 [resettlement] agreement” with developer Phan Imex, said Phan, who is occupying a room with her three children and another seven-person family.
At about 11am yesterday, the Borei Keila families could be seen making themselves at home in Building 9, sweeping out the building’s dusty one-room apartments and laying down floor mats for seating. Some gathered to chat in the open-air portions of their newly claimed flats.
Chhay Kimhorn, who also claimed a room in Building 9, said that even though the building was incomplete – many rooms sported uneven concrete and gravel floors rather than tiles – the occupiers would hold out until an agreement was reached, “even if there is a violent crackdown”.
Development at the site has been stalled for years after Phan Imex declared it had run out of money, and yesterday building occupier Chum Ngan said that if the development was bankrupt, the building should go to the community.
Phan Imex chief Suy Sophan could not be reached for comment yesterday.
There were no police in sight for the better part of yesterday’s occupation, but Prampi Makara district governor Sorm Sovann called the action a “serious offence”, brought on by a small group of rabble-trousers.
“We are sorry that they believed the incitement by a small group of people and broke the law by breaking into the building without permission,” he said. “We will take administrative measures when we get orders from our superiors.”
Municipal spokesman Long Dimanche said yesterday that authorities had called for a handful of community representatives to come to City Hall today for talks, but residents were adamant yesterday that the entire community accompany them in the interest of “transparency”.
And while Dimanche also said that yesterday’s action “is against the law, obviously, and interrupts the resolution-finding process”, he would not say how authorities planned to deal with the break-in.
However, after Veal Vong commune chief Keo Sakal visited the building around 4pm yesterday counting occupants and asking them not to stay the night, occupier Has Chenda said that she was “afraid of security” evicting them at night.
“Maybe they will come to take us away,” she said.
Defense attorneys will now turn to the Supreme Court after a Court of Appeals judge denied bail this morning for all 21 people still detained from clashes with authorities during garment strike demonstrations last month.
The presiding judge said he decided not to allow bail based on speculation that the detainees’ release would “disturb public order”, Sam Sokung, a defense attorney representing six of the defendants, said outside the courtroom minutes after the decision.
“We are shocked,” said Moeun Tola, head of the Community Legal Education Center, which also provided legal representation for some of the defendants. “There was not enough grounds to keep them in prison.”
Weeping in front of the courtroom after the decision was announced, were the wife, two sons and daughter of Vorn Pov, president of the Independent Democracy of Informal Economy Association (IDEA), who was arrested at a demonstration in front of the Yakjin (Cambodia) Inc. garment factory on January 2.
Guards at the court shut the gates to keep out about 200 people gathered outside from coming in, after land rights activist Yorm Bopha rushed into the courtroom complex after hearing the decision, falling to the ground and wailing next to Pov’s family.
Minutes before the decision came, rumors buzzed through the crowd of union activists, NGO workers and other supporters on site that a large majority of the detained men would be released today. Based on their attorneys’ take on the situation, Tola also believed this until the ruling.
“I hoped this morning that at least 18 people would be released today,” Tola said. “If the court is really independent, they should be released.”
Across the street from the courthouse, Ath Thorn, president of the Coalition of Cambodian Apparel Workers’ Democratic Union – the largest union behind the strike, which was suspended after deadly clashes on Veng Sreng Boulevard January 3 – said he was equally surprised.
Tomorrow, eight union groups will meet to discuss how to go about reigniting the strike, Thorn said.
“It’s not only about these 21 [detainees],” he said. “Wage negotiations are also important.”