White Building Company in the Red

Source: Khmer Times


Officials discuss room sizes and ownership with a White Building resident. KT/Chor Sokunthea

The government revealed yesterday that Japanese company Arakawa, which is in charge of developing the White Building, does not have enough funds to cover both the $70-$80 million construction price tag and the buyouts for residents who want to sell their apartments.

A working group from the Land Management Ministry met with more than 500 families living in the White Building yesterday in an effort to verify residents’ names, provide information for them and discuss whether they want to keep their apartments or take a payout.

Hy Chenda, the deputy chief of the housing department in the Ministry of Urban Planning and Construction, said that after collecting statistics on the building’s population and measuring the size of the apartments earlier this month, the ministry’s working group went to the building largely to confirm room layouts and determine how many people wanted to stay in the building after it is redeveloped.

“After we gave them the information and documents, we posted, in public, the plan layout and collected data to verify them and allow them to complain in case anything was wrong,” he said.

“If it is correct, we will continue to work in accordance with our mechanisms by discussing things between citizens and companies,” he said.

However, Mr. Chenda said Arakawa did not have enough money to cover the high cost of developing the area and the potential buyouts, leaving residents in an all-too-common housing limbo.

The Ministry of Land Management, Arakawa and local residents met twice in October to discuss the development of the White Building and residents were given the option of taking compensation for their apartments or keeping their title and being part of the future development of the building.

According to the Ministry of Land Management, there are 554 families in the White Building and it will cost up to $80 million to develop it, including the cost of temporary relocation for residents keeping ownership of their units.

The top 12 floors of the 21-story building will be sold privately, with three floors of parking and one floor for commercial space. White Building residents will get five floors of accommodation.

Land Management Minister Chea Sophara said 171 working groups with a total of 569 people were created to deal with the residents, guiding them through the development process for each apartment.

According to Mr. Chenda, most residents of the building have expressed a desire to take a payout and leave rather than live in new apartments. The ministry, he said, will negotiate with residents to find an “appropriate and transparent” solution.

He added that the government also did not have the funds to pay residents of the building seeking buyouts. He floated the idea of residents being forced to put their apartments on the market themselves and sell the units on their own to private buyers, adding an additional layer of confusion for residents already wary of potentially losing their homes for a small amount of money.

Chum Sokkoeurn, a 75-year-old living on the second floor of the building, said she was planning to take the payout for her apartment because she was worried the development, like many others in Phnom Penh, would face obstacles during construction and go bankrupt before it was finished.

A number of communities like hers, she said, had suffered and ultimately were swindled when developers left the land in disrepair and failed to abide by contractual agreements to provide new housing, land or money for former residents of the area.

A report released last week by NGO Sahmakum Teang Tnaut showed that among 77 sites since 2011 throughout Phnom Penh where residents were evicted so their building or neighborhood could be developed, only 35 percent had been completed and the benefits promised to both local communities and evicted residents had almost always been forgotten or ignored.

The 61-page report studied developments started between 2011 and 2016 and found that 35 percent of the 77 eviction sites were completely developed, with 40 percent partially developed and 25 percent in disarray.

White Building resident Bun Thun said some inhabitants of the iconic Phnom Penh structure wanted to take a buyout because the layouts for the new apartments – despite claims by the company that the new units would be 10 percent larger – were too small for their large families.

“I trust the government’s development and the company. But I chose the money in order to share it with my children and have a different future,” he said.


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