Construction on a new tourist ferry port located about 6 kilometres from the provincial capital in Kampot province has been delayed, although a Tourism Ministry spokesman promised that construction would begin before the end of this year.

The $10 million port, funded by a loan from the Asian Development Bank (ADB), is set to occupy 4 hectares in the province's Teuk Chhou district. Construction on the port will take about two-and-a-half years and, once completed, the new facility would be able to service cruise ships from neighbouring Vietnam and Thailand.

"It is delayed because we need to prepare and finish procedures and documents," Tith Chantha, spokesman for the Tourism Ministry, said on Monday. "The construction will start soon, absolutely in this year."

Soy Sinol, the director of the provincial Tourism Department in Kampot, said he had expected construction to begin earlier this year, but has not yet received details about the port's capacity or current status.

"I have no idea why the plan was delayed," he said. ADB officials did not respond to a request for comment.

About 162,000 foreign tourists visited Kampot province last year, according to the ministry. read more →

Updated: 6:41am, Tuesday March 27, 2018

Ride-hailing platform Grab announced on Monday that it had acquired the Southeast Asia operations of its US-based rival Uber, including the company's ride-hailing services in Cambodia, just three months after it officially launched in the Kingdom.

In exchange, Uber will take a 27.5 percent stake in Grab and its CEO, Dara Khosrowshahi, will join Grab's board of directors as part of the deal, according to a press release from Singapore-based Grab.

Wee Tang Yee, Grab's country head in Cambodia, said that Uber's services in the Kingdom will continue for a two-week transitional period as Grab seeks to transfer employees and drivers onto its own platform.

"Grab and Uber are working together to promptly migrate Uber drivers and riders, merchant partners and delivery partners to the Grab platform," he said in an email. "The Uber app will continue to operate for two weeks to ensure stability for Uber drivers, who can find out how to sign-up to drive with Grab online."

Founded in Malaysia in 2012, Grab now operates in eight Southeast Asian countries. It launched services in Phnom Penh in December, three months after Uber became the first international ride-hailing platform to begin operations in Cambodia.

Grab's acquisition of Uber had been rumoured for several months, and its entry into Cambodia was largely viewed as more successful than Uber's, despite the US firm's three-month head start.

Since its launch in December, Grab has added a motorbike taxi service and launched a preliminary tuk-tuk service in the capital, while also racking up several agreements with government and development agencies. Uber remained relatively static during the same period.

Multiple Uber regional representatives – including Krittiyawadee Pongpanich, Uber's Thailand-based head of communications, and Chris Brummitt, Uber's Asia-Pacific head of corporate and product communications – declined to comment on Monday.

Pascal Ly, who was hired as the general manager for Uber in Cambodia in January, said in an email on Monday that he was no longer able to speak on behalf of Uber or Grab, and would "prioritize my focus on the team to know what will be the next step for them".

That next step could be working for their one-time rival.

"All Uber employees, including ones in Cambodia, will receive offers to join Grab," Yee said on Monday. "As we onboard Uber passengers and drivers onto the Grab platform, there will be more passengers using Grab, which will mean more jobs, less waiting time, and ultimately more earnings for our driver-partners."

Yee predicted that the acquisition of Uber's operations would gradually lower fares for riders, which could mean increased competition with local ride-hailing platforms.

Homegrown ride-hailing startups, such as PassApp and ExNet, have so far been able to offer lower prices than Uber and Grab, but they could face increased pressure as Grab's prices fall.

Food delivery, another industry that's currently dominated by local businesses, could also feel the squeeze from Grab in the near future. Grab's Monday announcement said the company plans to expand its food delivery services to all Southeast Asian countries, including Cambodia, in the next few months.

"We will rapidly and efficiently expand GrabFood into all major SEA countries in the next quarter," Grab co-founder Tan Hooi Ling says in the release. "GrabFood will also be another great use case to drive the continued adoption of GrabPay mobile wallet and support our growing financial services platform." read more →

Grab has officially launched its motorbike taxi service and started beta testing a tuk-tuk and rickshaw service in Phnom Penh and Siem Reap, according to a press release issued by the company on Friday.

Grab Bike, which has been in beta testing for nearly two months in Phnom Penh's central districts, launched full services in the capital on Friday, making Grab the first major ride-hailing platform to offer motorbike taxi services in the Kingdom.

Grab Bike prices have also lowered since the initial beta test. Originally set at a higher-than-typical base rate of 2,500 riel, or $0.63, Grab Bike is now available for a base fare of 1,000 riel, or $0.25, with an additional $0.25 charge for each kilometre.

Grab also announced the launch of its beta test for "Grab Tuk Tuk" in Phnom Penh, a service that allows users to call auto-rickshaws, the ubiquitous three-wheeled Indian-style tuk-tuks commonly used by other ride-hailing applications.

The base fare for this service is now set at a rate of 2,000 riel, or $0.50, with each kilometre costing an additional 1,200 riel, or $0.30. Those prices are slightly higher than current prices offered for auto-rickshaw rides on local ride-hailing apps PassApp and ExNet.

Beta testing for a service entirely new for the international company, called "Grab Remorque", was announced as well, with those services available only in Siem Reap.

Top Nimol, the founder of PassApp, previously told The Post that he has been able to compete with international ride-hailing apps Uber and Grab because their prices are much higher than his own. With Grab now beginning to offer motorbikes and auto-rickshaws for lower prices, Nimol is taking a wait-and-see approach.

"I just don't know yet what this means for PassApp," he said. "Let's see in the future if [Grab] has a significant impact on us. All we can do is try our best."

On Sunday, US-based Bloomberg News reported that Grab would be buying the Southeast Asia assets from its rival Uber, which launched in Cambodia in September. Bloomberg reported an agreement between the two companies was expected to be reached this week. read more →

A pair of female Cambodian entrepreneurs placed second in a regional business competition on Saturday, beating out university teams from six countries with their startup idea – called Eco-Plastic – that could utilise Cambodia's plastic waste to pave cheaper, more durable roads.

The Mekong Business Challenge (MBC), an annual competition that launched in Phnom Penh 12 years ago, welcomed 11 entrepreneurial teams from six nations at their contest held in Bhutan last week. The grand prize for the first-place team was a spot in the International Business Model Challenge competition in the US in May.

Stephen Paterson, co-founder and organiser of the MBC, said the contest's judges – which included representatives from international companies including McKinsey & Company, Google and ManuLife – were impressed by the initiative taken by the Cambodian team in pursuing expansion options for their startup.

"Eco-Plastic came in second in the Cambodian competition [last month], but since [then] they have made so much progress," Paterson said. "We want to emphasise methodology in our judging, and our criteria takes a look at the failures these teams have had to overcome to make their business models more realistic."

Since taking home the silver medal, the Eco-Plastic team – female duo Bunhourng Tan and Sokanha Ly – have received funding from a US investor, travelled to China to tour plastic recycling facilities and met with the Ministry of Public Works and Transport to discuss implementing their idea.

"We had a great honour to meet the [Transport] Minister, His Excellency Sun Chanthol, who was very supportive of our idea," said Sokhana. "We got permission to use the ministry's laboratory to build and test our samples there, before we went to the MBC."

"Plastic waste is a curse to the environment, to health and to the economy . . . and people face a high risk driving on roads in Cambodia, which are often poorly constructed and damaged by high traffic," Sokhana said. "By establishing Eco-Plastic, we can use plastic waste to improve our roads, transforming landfill waste into a roadfill product."

Teammate Tan said that the pair had learned a lot since first coming up with their idea at the end of 2016, having entered several different local startup competitions and coming away with different lessons each time.

"During the last year, we've been to many startup competitions . . . and throughout the programs, our team gained more hands-on experience," she said. "It's been quite a journey, of going up and down, of failing and of learning from mistakes, of listening and then adjusting to incorporate the feedback."

Though a Bhutanese team took first place for their startup called Shogjur – which has already turned a profit from sales of recycled paper jewellery and souvenirs – the runner-up Cambodian team won a pair of laptops and has been encouraged to bring the Eco-Plastic business model to the US competition in May via another application process.

"The Eco-Plastic team will be applying for the open spot" in the US competition, Paterson said, adding he had "a very strong feeling they'll get it".

Cambodia's win in a regional competition was a sign of the growing entrepreneurial scene in the Kingdom, according to Paterson, and was likely due in-part to the many local programs and competitions that cater to university students. The next step for the Kingdom's startups would be to think bigger.

"There are businesses attracting small- to medium-size returns, but there's still a lack of investable ideas," he said. "There is still a lack of projects that can be scaled up to a larger level." read more →

The Phnom Penh Post is currently negotiating a tax bill with Cambodia's General Department of Taxation (GDT), the newspaper's CEO said on Tuesday, denying media reports that The Post was on the verge of shutting down, and characterising the negotiations as "routine".

Marcus Holmes, who has been CEO since late 2017, said on Tuesday that the negotiations with the GDT began in December.

"It's so routine," he said, referring to the negotiations. "We fully expect we are going to explain this, [the GDT] is going to accept that and everyone is going to be happy."

News articles published by online outlet AEC News and Catholic newswire UCAN had asserted that the negotiations were exceptional and threatened the newspaper with closure, claims that Holmes disputed. The pieces relied on anonymous sources claiming to be either "hackers" or close to Phnom Penh Post Publisher Bill Clough.

Holmes rejected various claims that The Post was threatened with closure in the next 60 days; that the company was being penalised for failing to disclose a $2.5 million transfer from Australia; or that a deadline to pay back a $200,000 loan from a local bank was "very soon".

He did acknowledge that the government had sent a letter alleging that the paper failed to follow proper reporting requirements regarding a $2.5 million money transfer from Australia, where Clough resides.

"There's some very complicated tax legislation to do with injecting capital into Cambodia from outside," Holmes said, explaining that it was a routine part of The Post's operation to receive funds from Australia.

He said that the issue was now subject to negotiations, and that the talks are confidential. The GDT's policy is to not comment on specific negotiations.

The issues of tax compliance and press freedom intersected last September when English-language newspaper the Cambodia Daily, often critical of the government, was shuttered over a disputed $6.3 million tax bill. Observers connected the paper's shutdown to a larger crackdown on independent media and the political opposition that was occurring at the time, though that claim was fiercely rejected by the GDT.

But throughout Tuesday's interview, Holmes characterised The Post's negotiations as routine for any business, and said that The Post's status as the last independent newspaper in Cambodia had not affected the negotiations with the GDT.

Holmes said on Tuesday that the negotiations were ongoing and had no specific deadline, adding the newspaper was likely to file its latest reply to the Tax Department this week or early next week.

Other matters raised in the articles included a loan owed to a local bank, which Holmes said was normal, adding that the company had plans to pay it off within the next year.

The articles also referred to a payment ordered by the courts in a wrongful dismissal suit brought by former CEO Chris Dawe, who was dismissed for cause in 2015. The Post will be appealing the ruling to the Supreme Court soon, Holmes said.

"None of this is new, or interesting, or surprising," he said.

"It's all painted in these apocalyptic terms because we're the last independent newspaper in Cambodia. If we weren't . . . it would be very boring, and no business editor would be vaguely interested in publishing anything about it." read more →

The Cambodian riel accounted for about 17 percent of total currency circulation last year, a number similar to previous years, but central bank officials said they remained optimistic that use of the local currency will grow in the future.

Speaking to reporters yesterday at an event in Phnom Penh celebrating the 38th anniversary of the re-introduction of riel as the national currency, National Bank of Cambodia (NBC) Director General Chea Serey said that despite the US dollar dominating Cambodia's currency market, the results of an internal consumer survey pointed to shifting attitudes toward the use of riel.

"I am optimistic that the circulation of Khmer riel will be better thanks to the change of consumer attitude," she said. "We have observed that our Cambodian people have increased their willingness to use the national currency."

Serey said that a study conducted by the Japanese International Cooperation Agency in 2014 found that Cambodian youths preferred to use Khmer riel rather than US dollars, and that preference strengthened in a more recently conducted study. Serey attributed that growing preference to the youths' "national pride".

"The priority now is that we need to transform the change of consumers' attitude to the real practice for better results," she said.

The central bank has also passed regulations to promote riel usage, including requiring all commercial banks and microfinance institutions to hold at least 10 percent of their loan portfolios in riel by the end of next year.

A previous version of this article misstated the author of a survey on the use of Khmer riel and US dollars in Cambodia. It was conducted by the Japan International Cooperation Agency. The article also misstated the results of the survey, which found the majority of Cambodian youths preferred to use Khmer riel rather than US dollars. The Post apologises for any confusion caused.

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In a country where most people are paid in cash and the majority of businesses are cash-only, cashless payment platforms can appear out of place.

But that hasn't stopped a number of digital payment companies from putting up impressive growth numbers in Cambodia, and the sector has continued to expand in the past few years.

One such company is Pi Pay, a smartphone application that allows you to either link your bank account to the service or top-up with cash at digital kiosks.

Following its launch in July last year, the company undertook a marketing blitz that offered steep discounts for people who paid with the app. It's now one of the most popular cashless payment services in the country, having processed 2.5 million transactions worth about $50 million and boasting a 30 percent user-growth rate each month.

Pi Pay CEO Thomas Pokorny said he thought it was just a matter of time before the country fully embraced the cashless economy.

"Once the mobile coffee vendor . . . sees the ease and convenience of moving the payment for a cup of coffee seamlessly from her customers' phone, through her phone and on in to her newly opened bank account, then . . . the likelihood grows that she will share this new world of convenience and security with friends and colleagues," he said.

Wing, another giant in the field of both cash and cashless banking and transactions in Cambodia, also reported significant growth in the mobile payments sector. The company's marketing director, Anita Harris, said she was upbeat about the potential for growth in the sector.

"Global forecasts suggest mobile payment transactions will grow by up to 40% by 2020," Harris wrote in an email. "I would not be surprised if Cambodia surpasses this."

But in a country where only 20 percent of citizens have a bank account, there are significant challenges to convincing people that an app can replace their banknotes.

Thy Vylin, owner of the Yes Coffee drink cart in Phnom Penh, is an example of the audience Pokorny would like to reach. And while Vylin did express interest in using a cashless payment system for his business – mostly to attract foreigners – he said he was not interested in using the service for personal transactions.

"Even if a bank account were set up for me, it's just too complicated," he said. "I prefer cash for myself . . . it is the normal thing."

What is considered "normal" could shift as cashless payment services continue to grow, according to Gordon Peters, a partner at investment firm Mekong Strategic Partners.

"Consumers using digital payment services and wallets will eventually get used to this versus cash," Peters said. "I predict it will encourage more bank accounts in the future."

Pokorny agreed, saying that he saw Pi Pay as a driver for broad financial inclusion.

But vendors outside of Cambodia's newly built malls and high-end shopping centres remain sceptical about the technology.

Ouk Saroeurn, a clothing vendor in Phsar Thmey, said she preferred cash and would only consider using a payment gateway to draw tourists or expatriates to her store. Her sentiments were echoed by every vendor interviewed by reporters, all of whom said they would prefer to stick with cash instead of a digital application.

That attitude can only be changed through education, according to Ngeth Chou, a senior consultant at Emerging Markets Consulting.

"When confidence in banks' IT operations is limited, people are still more likely to spend cash or keep money in their pocket," he said. "That will not help economic growth." read more →

Following reports that Uber plans to sell some of its Southeast Asia assets to Grab, the strategies and experiences of the two ride-hailing applications in Cambodia reveal differences in the pairs' approaches to new markets.

News of the sale has been rumoured for months, but Bloomberg and the Wall Street Journal have reported in recent weeks that the two companies have agreed in principle to a deal that would transfer most of Uber's regional operations to Grab.

Representatives of both firms in Cambodia declined to comment on any potential deal. Both companies have said they are seeking to localise services to adapt to the Cambodian market, which already features several ride-hailing platforms run by local entrepreneurs.

US-based Uber beat Grab to market in Cambodia, launching in September last year by signing a memorandum of understanding (MoU) with the Ministry of Public Works and Transport (MPWT).

It began offering its hallmark service, a sleek app that allows customers to call cars whose drivers take them to a predetermined location set on the app.

It was a fairly unique service in Cambodia, where taxis are a rarity and demand for drivers is often filled by motorbike drivers, tuk-tuks or auto-rickshaws.

So when Grab launched a few months later, it appeared they were behind the curve. But the Singapore-based company, which has focused on Southeast Asia and is known for adapting to local markets, has rapidly worked to establish itself in the Kingdom.

After signing an MoU with the MPWT in December, Grab went on to sign agreements with the Anti-Corruption Unit in January and the United Nations Development Programme last month. It has also launched a promotional code to donate $1 per ride to Kantha Bopha Children's Hospital and piloted GrabBike, a service allowing customers to hail motorbike drivers, which is a popular feature in other countries in the region.

Meanwhile, Uber did not hire a general manager in the country until January, and has not announced any partnerships with other agencies or government departments.

Grab also appears to have the favour of the government. During his remarks at Grab's launch event in December, Transport Minister Sun Chanthol said he hoped Grab "can sign an IPO [initial public offering] soon, before their main competitor", an apparent reference to Uber.

The race to IPO is likely what's driving Uber to sell its Southeast Asia business, which faces stiff competition, according to analysts. The firm has undertaken similar sales in China and Russia.

Grab may also have been helped by the political climate in the Kingdom. Prime Minister Hun Sen has lashed out at the United States in recent months, accusing it of colluding with the now-dissolved opposition party to enact a "colour revolution" in the country.

He has specifically targeted US Ambassador William Heidt, most recently calling him a "liar ambassador" earlier this month. Ambassador Heidt spoke at Uber's launch in Cambodia in September, hailing the company as "one of America's most exciting and innovative technology companies".

Whether politics played a role or not, Grab has appeared to more succesfully garner the support of the government.

But if a firm's success hinges on its ability to adapt to local markets, home-grown apps such as ExNet and PassApp may have the natural advantage, according to Gordon Peters, partner at investment firm Mekong Strategic Partners.

"Being able to ‘win' in this market requires offering a good customer experience and good driver relationships," Peters said yesterday. "Local ride-hailing apps seem to understand Cambodian drivers better at the moment," he said, adding that he expected companies like Uber and Grab to be able to adapt eventually, buoyed by their significant advantages in money and technology.

But until that time, the founders of local ride-hailing apps don't appear worried.

"Our customers still keep increasing, even though Grab and Uber are here," said Top Nimol, founder of PassApp which employs over 1,000 drivers. "All of our services are increasing every day."

Hor Daluch, the founder of ExNet, said he thought Grab was doing a better job than Uber of expanding into the Cambodian market, but noted he didn't view the company as a rival.

"Grab is not too much competition for me, even with its new GrabBike," Daluch said. "It is too expensive in comparison, and not as good as a rickshaw." read more →

The Asian Development Bank's recent announcement of $40 million in funding for Cambodia marks the first funds from the Green Climate Fund that were earmarked for the Kingdom, according to ADB officials.

The money – a $30 million grant and a $10 million concessional loan – will go towards the "climate-friendly agribusiness value chains sector project", according to Srinivasan Ancha, principal climate change specialist at the organisation.

"The amount will be used to enhance climate resilience of agricultural value chains in selected provinces of Cambodia," Srinivasan said, adding that the government of Cambodia would be the recipient of the money.

The six-year project will involve the Agriculture Ministry, Water Resources and Meteorology Ministry and Rural Development Ministry, according to Srinivasan, who said the project aims to boost the competitiveness of Cambodia's agricultural sector by increasing productivity and boosting efficiency.

Cambodia is regularly ranked as among the most susceptible countries to climate change, with the Kingdom's economy and population both sensitive to climate-related disasters and shocks that are expected in the future due to global climate change.

The ADB and the Green Climate Fund, both international funding organisations, signed an agreement in August last year allowing the bank to use the fund's resources in order to reduce greenhouse gas emissions and mitigate expected risks resulting from climate change in developing nations. read more →

Annual reports from two ministries released on Monday appear to show significantly different numbers of factories, enterprises and garment factory workers in Cambodia last year, and officials at the two ministries contacted yesterday did not explain the contradictory data.

The annual report from the Ministry of Labour (MoL) released on Monday reported a total of 1,147 garment "enterprises and institutes" operating in the country last year.

That appears to clash with data from the Ministry of Industry and Handicrafts (MIH), which released a report on the same day claiming a total of 1,031 garment "factories".

MoL spokesman Heng Sour did not respond to a message asking what the difference between a "factory" and an "enterprise and institute" was, or how the MoL was defining "enterprise and institute".

The MoL report also says the total number of "enterprises and institutes" operating in the country last year was 11,397. That stands in contrast to the MIH's report regarding both the total number of "factories", which was reported as 1,522, as well as the total number of "small- and medium-sized enterprises", which was 155,640.

The number of garment factory workers was also different in the two reports. The Labour Ministry's report said there were 763,820 workers at garment "enterprises and institutes" last year, while MIH reported there were 847,419 workers at garment "factories" – a difference of more than 80,000 workers.

Hort Pheng, the director of the Industry Affairs Department at MIH, said he did not know why the data or terminology was different and insisted his ministry's report was the accurate one.

"Our data is the key number, and the only data that is submitted to the Council of Ministers," Pheng said. "I have no idea where the Ministry of Labour's records are from." read more →

Singapore-based ride hailing app Grab has added motorbike taxis to its inventory in Phnom Penh, becoming the first app of its kind to offer the popular motodop service.

"We've seen a lot of people in Phnom Penh using motodops, and we thought we could help the drivers by letting them use the app to find customers," said Wee Tang Yee, Grab's country head for Cambodia and Thailand. "With traffic here, too, motorbikes seem a lot more useful [than tuk-tuks or cars] if you want to get somewhere quickly."

For now, GrabBike is only in beta and the service was launched exclusively in some central parts of the capital. Yee said the company had signed up about 100 motorbike drivers, all of whom had attended a safety and training session in addition to providing ownership documents and a valid driver's licence.

Hailed yesterday, Yoeun Ratana, one of Grab's new drivers, showed up on his personal motorbike, sporting a Captain America shield emblazoned across the front. Ratana has a full-time job as a technical assistant, but he signed up with Grab about a week ago to make extra cash.

"It's really easy to use the [Grab] app, and it only took me a day to train to be a driver," he said. But while the second source of income was nice, Ratana said the money from driving was nowhere near enough to let him quit his day job.

The base rate for GrabBike drivers in Phnom Penh is currently set at 2,500 riel, or $0.63, for the first kilometre, with customers charged an additional 1,000 riel, or $0.25, per kilometre after that. That rate was subject to change after the beta test, according to Yee, who also said he wasn't sure when the beta would end or when the full service would launch.

Grab's motorbike rates are slightly lower than the rates for auto-rickshaws from local ride-hailing apps such as PassaApp and Exnet, though those services' vehicles are capable of seating at least two people. read more →

Businesses expect the establishment of Cambodia's first marine national park covering seven coastal islands to boost tourism in the area, while government officials said yesterday it would not affect private development scheduled for the islands.

A sub-decree signed by Prime Minister Hun Sen on Thursday designated 52,448 hectares of national park off Cambodia's southern coast, but only 5,311 hectares of that area was land. The two most popular and developed islands on the list, Koh Rong and Koh Rong Samloem, have land masses of about 7,800 hectares and 2,450 hectares, respectively, and thus are not entirely covered by the designation.

Local conglomerate Royal Group, owned by Kith Meng, was granted a concession to develop Koh Rong and Koh Rong Samloem in 2008, and planned to spend $2 billion to turn large swaths of the island into a "luxury resort destination", according to Bloomberg's news service.

Those plans are unlikely to be affected by the recent announcement, according to Preah Sihanouk province's Deputy Governor Kong Vitanak.

"The national park will not impact to small business holders, investors, developers or villagers," he said yesterday.

Vitanak said that the exact areas that would belong to the national park had not yet been finalised, as officials from the Ministry of Environment were still measuring the area. A spokesman for the ministry could not be reached yesterday.

"This is the first national park in the coastal province, and it is a key to attract both international and national tourists" Vitanak said.

Taing Socheat Kroesna, director of the province's Department of Tourism, welcomed the news of the national park and said it would promote tourism as well as protect the country's coast.

"It opens the opportunity for investors who are looking for developing, in terms of protecting the natural resources," he said.

Ty Sochea, an operations manager at Koh Rong's Long Set Resort, said that if the national park was truly enforced, it would provide benefits to the island's tourism industry.

"If we have a national park on the island, I am sure our business would be better than it is now," he said yesterday. "It will give more options to tourists who will not only enjoy the beach and coral."

Royal Group's massive development plans on the two islands, which at one point included an airport, hotels, polo and golf fields and a marina, have been slow to get off the ground. The company's first completed development, the luxury resort Royal Sands Koh Rong, opened in December, more than eight years after the firm received the development concession.

The company's plans have occasionally put it at loggerheads with local authorities and villagers. In 2015, island residents held a sit-in to protest the construction of a road by the company, and the next year a Preah Sihanouk coastal working group halted Royal Group's construction of a port on the island, claiming that proper permission had not been granted.

Later in 2016, Prime Minister Hun Sen warned on his Facebook page that, "Island development projects that are not active shall be examined and taken back."

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Cambodia's economic freedom score dropped seven ranks in the annual Economic Freedom Index released by the Heritage Foundation, a US-based, conservative-leaning think tank.

The 0.8 point dip in the score from last year put Cambodia's economy in the "Mostly Unfree" category, ranking 101 out of a total of 180 countries – down from the 94 spot in 2017.

The Kingdom's 58.7 score put it squarely in the middle of the Asia-Pacific region, ranking behind Malaysia (22) and neighbouring Thailand (53), but ahead of Vietnam (141) and Laos (138).

Cambodia's score was hurt by a drop in the already-low "property rights" category, as well as decreases in its "fiscal health" and "labour freedom" scores. In general, the country performed well on overall indications of economic health, but poorly on regulatory efficiency and rule of law categories.

The government did see a rise in its "judicial effectiveness" and "government integrity" scores over last year, but they still remained well below the global and regional averages.

"Pervasive corruption remains a serious obstacle to economic development and social stability" in Cambodia, the report notes in its country summary.

Mey Kalyan, a senior adviser to the government's Supreme National Economic Council, said yesterday that the ranking was not bad for Cambodia, and that it was a reasonable reflection of the strengths and weaknesses of Cambodia's economy.

"The issue on institutionalisation needs some time for development, as it needs both human resources and some policies," he said, urging patience for further reforms to take place.

Using the example of education reform, Kaylan noted that while "building a school is easy to do . . . strengthening the institutional quality of schools needs a long time. So I think that whatever point that they said we are not good yet, we can reconsider and improve it."

Preap Kol, executive director of anti-corruption NGO Transparency International Cambodia, said yesterday that the study's findings showed that creating a truly independent judiciary was sorely needed in the country.

"Corruption is still a constraint for the judicial system, affecting the fair business playing field," he said. "Though our country is an open economy, individual businesses are always backed up by a powerful person as a shareholder."

To get a better ranking, Kol suggested the government establish a truly independent judiciary for businesses in the country.

"We need to improve the judicial system, and ensure fair business competition by creating a commercial court that is independent and transparent," he said. read more →

Rosewood Hotel Group, a rapidly expanding luxury hotel chain, is celebrating the opening of its first hotel in the Kingdom today as it embraces an aggressive expansion strategy in Southeast Asia. Its Phnom Penh hotel is located in the country's tallest skyscraper, occupying the top 14 floors of Vattanac Tower. The Post's Robin Spiess sat down with Managing Director Daniel Grau last week to discuss his hotel's impact on the Cambodian luxury hotel market.

Why has the Rosewood chosen to enter the Cambodian market?
The Rosewood has been around since 1974, but it was acquired by New World Development, a Hong Kong-based company, in 2011. Being now a Hong Kong-owned company, the focus has really been to bring the Rosewood into the Asian market. We opened our first Rosewood in the east in Beijing about four years ago, and that hotel did tremendously well.

When this location in Vattanac Tower became available, we decided it was a perfect opportunity to expand our footprint in Southeast Asia. We think it's the right time to be entering the Cambodian market; the market is developing rapidly here, and we think we have something new and exciting to bring to it. The approach we take isn't so traditional – we have a more relaxed service style, while still remaining professional and courteous.

The Rosewood first announced its intention to open this branch in 2015. What took so long?
In any project, there are challenges which inevitably delay the opening. It almost doesn't matter where you are. There are many moving parts which cause delays, but I think this is the right time for us to be opening.

How do you view the market for luxury hotels in Cambodia?
Right now, there aren't many luxury five-star hotels here in Cambodia. There are many people interested in coming to visit Cambodia, and we think it is important not only to promote the Rosewood, but to promote Phnom Penh and Cambodia as a whole. We have a long list of people who follow the Rosewood who would be interested in visiting here.

I know there are other luxury hotels interested in entering the market, as well. Siem Reap I think is more developed in terms of luxury hotels, and Phnom Penh has more room to grow. I think competition is a positive thing that keeps us on our toes and allows us to improve where we need to improve.

We notice the number of tourists coming into the country on a yearly basis is increasing, and the new airport is going to make it even easier for people to come visit this country. I think the future is bright: levels of service and appreciation for luxury brands among locals are going up.

Does the Rosewood intend to expand its presence in Cambodia in the near future? 
We have already signed with Vattanac Capital to open another Rosewood in Siem Reap. This was signed two years ago, and we are about to move forward on that project.

We have been expanding elsewhere in the region as well: we just opened a branch in Phuket [Thailand], and plan to open another few locations in Bangkok, Laos and Hong Kong later this year. There are a lot of hotels in the pipeline, and many more that have already been signed and will begin being constructed soon. It's been an aggressive expansion for what we believe is a great brand.

How is the Rosewood going to stand out among other luxury hotels?
Ninety-five percent of our team here is local. Our focus has not been to hire people with experience, but rather to hire based on personality and attitude, and then focus on training. Our focus here, first and foremost, is on the team. If our team feels good and is happy, then ultimately the hotel will be more successful.

Our aim right now is to get the service right. The profit will come on its own.

This interview has been edited for length and clarity. read more →

Chip Mong Insee Cement Corporation (CMIC) launched a new factory in Kampot province yesterday, with a total production capacity of 5,000 tonnes of cement per day.

The official opening of the $262-million factory was presided over by Prime Minister Hun Sen in the Banteay Meas district of Kampot, where the factory will occupy about 110 hectares of land. The plant is a joint venture between local construction conglomerate Chip Mong Group, which owns 60 percent of the shares, and Thailand's Siam City Cement Corporation (SCCC).

Aidan Lynam, CEO of CMIC, said yesterday that cement products from the new plant would help fulfill the rising demand for cement in Cambodia, which was estimated at more than 6 million tonnes last year. According to Lyman, CMIC products would be able to meet 25 percent of the market's total demand.

"We understand that the demand for cement in Cambodia will continue to grow strongly thanks to the rapid growth of the economy and population, that leads to the increase of the construction sector," he said.

CMIC's new factory is among five licensed cement factories in the country, which include plants operated by Kampot Cement, Cambodia Cement Chakrey Ting, Thai Boon Rong Cement and Battambang Conch Cement. read more →

Le Bokor Palace, located between the tropical forest and the “Opal Coast” in Preah Monivong Bokor National Park near Kampot, was inaugurated on 14 February 1925 to host royalty and elites. The hotel was revived in 1962 by Preah Karuna Preah Bat Samdech Preah Norodom Sihanouk and served high-ranking officials and wealthy business people, and used to be Preah Karuna Preah Bat Samdech Preah Norodom Sihanouk's favourite vacation retreat.

Perched on a cliff at the top of Bokor Mountain, this historical hotel commands breathtaking views of what the French once called the Opal Coast.

The weather on top of Bokor Mountain ranges between 17°C–24°C (62.6°F -75.2°F) for the whole year round.

Bokor Mountain is not just a tourist destination, but also a health resort with natural health treatments that have positive effects on the lungs, breathe, nutrition and nervous system, and enable blood regeneration and restore strength. Le Bokor Palace is a four-storey building, toughly and neatly designed, and has a powerful presence, embellished with decks and Italian-style pergolas.

Today, Le Bokor Palace has been restored by Sokha Hotels & Resorts. "Le Bokor Palace is a historic hotel that is a national treasure, our company has fully refurbished the building, preserving the original features and recreating its colonial interior design, with bathroom fixtures imported from Italy and ornate floor tiles from Spain. After extensive renovation of this grand colonial building for opening, Le Bokor Palace includes 36 tastefully appointed luxurious rooms and suites.

Its two restaurants capture the elegance of the hotel's historic past, with Swiss and Cambodian chefs preparing both its original menu and Royal Khmer cuisine using the freshest ingredients, including organic vegetables grown on a nearby organic farm. Le Bokor Palace has been restored to preserve the legacy of its French colonial past and Preah Karuna Preah Bat Samdech Preah Norodom Sihanouk," commented Mr. Philippe F. Frugere, General Manager of Le Bokor Palace.

The remains of the colonial settlement – which included a Japanese house, Catholic Church, Wat Sampov Pram, Domnak Sla Kmao, Damnak Sdech, City Hall and other colonial buildings – can still be seen today, spread out across a plateau and often shrouded in mist.

Visitors staying at Le Bokor Palace, which is renowned as a natural health resort, can also visit the spectacular Mountain Lake, beautiful Popokvil Waterfall, rock formations in various shapes at the 100 Rice Fields, and a uniquely shaped rock that symbolises a gate between heaven and earth. Meditation is recommended on Bokor Mountain, especially at the 500 Rice Fields. Bokor Mountain is the only place in Cambodia that has Nepenthes flowers; the locals use these flowers for medicine.

For media enquiries, please contact:
Ms. Samrith Bunnich
Marketing Manager
Email: nickie.samrith@sokhahotels.com
Tel:+855 33 683 9999
Facebook:https://www.facebook.com/LeBokorPalaceKP/
Website: www.lebokorpalace.com read more →

Phnom Penh's NagaWorld casino posted a massive increase in profits and revenue driven by strong growth in high-value guests last year, with the amount of money gambled by VIPs at the capital's only casino exceeding Cambodia's gross domestic product for 2016.

NagaWorld's parent company, NagaCorp, is listed on the Hong Kong stock exchange and released its annual financial report for last year, showing an 85 percent increase in gross gaming revenue (GGR) to $926 million, as well as a 39 percent increase in net profit to $255.2 million.

The casino saw the largest growth in its VIP operations, where "rollings" – a term referring to the amount bet by gamblers – increased by 142 percent to $21.1 billion.

That is more than the value Cambodia's 2016 GDP, which was $20.02 billion, according to the World Bank.

NagaCorp reported paying $8.12 million in income tax last year, an effective tax rate of 0.87 percent based on the company's GGR.

Cambodia has one of the lowest effective tax rates in the world for casinos. A 2015 report from accounting firm PricewaterhouseCoopers noted that Macau had a 35 percent tax on GGR, while Australia had a rate of between 10 and 45 percent, and Singapore had a rate of between 5 and 15 percent.

Ros Phirun, deputy director-general of the Finance Industry Department at the Ministry of Economy and Finance (MEF), said yesterday it would be difficult to explain how the ministry taxes NagaWorld.

"There are a lot of criteria in the agreement," he said. "The agreement is written in a very thick book, so it is not easy to explain just [over the phone]."

In 2016, NagaCorp had to pay the ministry more than $15 million in additional tax payments after a government audit of its 2015 finances found "discrepancies".

Last year's $8.12 million in income tax consisted of monthly payments totalling $676,700 made to the MEF. The paid income tax was smaller than the $11.7 million performance bonus that NagaCorp CEO Chen Lip Keong was entitled to, according to the report, though it added that the company's head deferred his 2017 bonus.

NagaCorp's performance was boosted by Cambodia's uptick in arrivals from China, which jumped more than 40 percent last year to 1.2 million visitors. VIP gaming revenue led the GGR growth, and totalled $625.3 million, more than double the revenue brought in from mass market gambling, which came out to $300.6 million.

But gross profits from the VIP sector were only $153.9 million, about half of the $294.3 million in profits that came from mass market gambling. Costs associated with VIP customers and a lower win rate for the casino resulted in a profit margin of about 25 percent for VIP gaming, compared to a 98 percent profit margin for mass market gaming.

That meant that while NagaCorp's profits rose, its overall gross profit margin decreased from 69 percent in 2016 to 49 percent last year.

The company's report also touted the November soft launch of Naga2, a second complex featuring gaming and other amenities that would allow the company to expand its operation in Cambodia and handle additional visitors.

Additional reporting by Hor Kimsay read more →

A Cambodian company is teaming up with a Thai investment partner to spend $100 million improving the quality of Cambodia's agarwood trees, according to a memorandum of understanding signed by the two companies yesterday.

Thoub Chankrassna Khmer Co (TCK), which owns agarwood plantations and an incense factory in Preah Sihanouk province, has partnered with Thai-based First Capital Group (FCG) in the hopes of improving the growth, processing and manufacturing of Cambodia's 1 million agarwood trees.

Agarwood, a fragrant wood harvested for its aromatic, religious and medical applications, is a nontimber forest product that can fetch prices upwards of $4,000 per kilogram in Cambodia. But despite high prices, Cambodian farmers have struggled to profit from their plantations, according to TCK's director Keo Sokunthea.

"Cambodian farmers have not had sufficient resources to process and extract agarwood oil," she said at the announcement of the MoU yesterday. "Most importantly, they have not been able to access the regional or international market to commercialise their agarwood trees and agarwood-related products, [which] has caused discouragement to a majority of agarwood growers, forcing them to abandon their agarwood plantations."

She added that FCG was an ideal candidate for this joint business venture, as it has been involved in agarwood business activities across the region and has access to modern technologies for producing agarwood oil and related products.

Sean Goh, CEO of FCG, said that the company planned to spend $100 million solely on improving the quality of Cambodia's agarwood trees. If Cambodia could produce top-grade agarwood resin, the country's 1 million trees could be a potential goldmine, he said.

"We use the best technology, and of course we have to take good care of the tree," Goh said. "We need to invest this capital in the improvement of quality of the trees, because of course we will get a better return when we are producing top quality [agarwood] oil."

Agarwood resin grows inside the trunks of wild Aquilaria trees. Through inoculation technology, it is possible to stimulate the growth of higher-quality agarwood resin inside the trunk of the tree, which in turn can be processed to create oil called "oud". Oud oil can fetch between $30,000 and $100,000 per kilogram, depending on the quality of the resin and the market, according to oud oil monitoring firm Sustainable Asset Management.

According to Goh, the company plans to inoculate agarwood trees in several locations in Preah Sihanouk and monitor their progress six months after inoculation. The company also plans to establish a processing factory in Sihanoukville following that process. read more →

In Shaun Rein's The War for China's Wallet, the author offers a roadmap for navigating relationships with China, both for foreign countries and international companies. He recently spoke with The Post's Hor Kimsay to discuss the potential benefits and pitfalls of Cambodia's increasingly friendly relationship with the regional giant.

What is the main message in The War for China's Wallet?
As China supplants America as the world's economic growth engine, countries and companies can benefit if they understand how to navigate China's political system and understand the wants of Chinese consumers. Companies that get it right can make billions of dollars – China, for example, has already eclipsed America as the largest market for fried chicken chain KFC. It has become the largest market outside of the US for Starbucks and Nike and is the main driver for those companies' growth.

However, the ability to generate profits has some downside. Countries and companies alike cannot cross China politically and must do the Communist Party's bidding or else run into trouble. For example, the Chinese government punished the hotel chain Marriott by blocking its Chinese-language website and apps in China for a week, costing them millions of dollars, because Marriott had promulgated a survey that listed Taiwan as a separate country, enraging Chinese consumers and government mandarins alike.

In the book, you define three categories for a country's relationship with China: Hot Partner, Warm Partner and Cold Partner. What is the difference between these groupings?
Many American foreign policy analysts criticise China for not having true allies in the American-Canadian sense. One day China is taking photo-ops with leaders from neighbouring countries, the next day lashing out at them for crossing them politically and thus say that China is failing in its foreign policy aims.

I view it differently – I don't think China is trying to forge alliances; instead, it is looking to use economic carrots and sticks to convince countries to either do its political bidding (a Hot Partner country like Hungary, Ethiopia or Cambodia) or to punish countries that cross it politically (a Cold Partner country like India or the Philippines and the Aquino administration). It knows it can never be truly close with any country in the long-term, so instead it tries to dole out low-interest loans and infrastructure investments to countries to make them open to China's political aims in the short term. Meanwhile, countries that cross China politically, as South Korea did by installing Thaad missiles, get punished. China blocked Chinese tour groups from visiting South Korea last April, causing a 40 percent drop in annual tourist visits and crippling the South Korean economy.

If Cambodia is a ‘hot partner' with China, what does this mean for Cambodia's economy and development? And what does China gain from the relationship? 
Cambodia's [Prime Minister] Hun Sen has been quite savvy in his dealings with China over the past decade. He has supported China's views on the South China Sea during summits of Asean. Having a supportive country in Asean like Cambodia is to counter criticism of China's policies by countries like Vietnam or the Philippines, and causes China to look to invest more in infrastructure development in Cambodia and to give it low-interest loans.

Moreover, the Chinese government uses its control of the state-owned media to tout the historical landmarks in Cambodia like Angkor Wat. Right now, Cambodia is one of the top destinations Chinese tourists want to visit. I am very bullish on Cambodia's ability to attract Chinese tourists to its landmarks and high rollers to its casinos. This is all gained by being a friend of China in the "hot partner" category.

One of the problems of becoming a "hot partner" country is that these countries often become too dependent on China economically and start to lose political independence. China's economy is so large that if a country gets punished for crossing China politically, then it will have a real impact, as in the South Korean case.

On the one hand, it is good to get close to China politically, as nations will reap economic benefits, but it comes at a cost of losing political independence so countries should try to be close to China but also distance itself at times, as the United Kingdom or France has done, so that they are not viewed as lackeys of the Chinese government.

This interview has been edited for length and clarity. read more →

Construction began yesterday on a $10 million factory in Kampong Speu province to process fresh fruit for international export, a first for Cambodia, though Agriculture Ministry officials could not confirm it would meet international standards yesterday.

South Korea's Hyundai Corporation Group broke ground on the 3-hectare factory in Phnom Srouch district yesterday, in the hopes that it would enable Cambodian fruits to be shipped abroad without first being sent to Vietnam or Thailand, as is currently common practice.

The factory is set to open in September and will process 1,700 tonnes of fruit in its first year of operation, according to Hyundai representative Lee Changhoon.

"First of all, we will start from mangoes," Changhoon said, adding that the company hoped to eventually process 50,000 tonnes of fruit annually, including coconut, durian, and mangosteen.

"Our market is not only Korea. Hyundai has 44 branches in worldwide, that is the strong network for export our high quality food of Cambodia," he wrote in an email yesterday.

Hyundai Corporation inked a deal with local mango producer Mao Legacy Co Ltd in November 2016, and the two companies combined have about 2,400 hectares of mango farms in Kampong Speu, but there has never been a sanitary and phytosanitary processing plant to enable international exports.

"It is not easy work, however we are getting support from Korean government and Cambodia government, [and] we are sure that we can comply to Sanitary and Phytosanitary [standards]" Changhoon said.

Hean Vahan, director general of the general directorate of agriculture at the Ministry of Agriculture, was less sure yesterday. He attended the factory's groundbreaking ceremony, but said that he could not comment on the SPS certifications because the company had not sent the ministry its master plan.

"I was just invited to join for the opening of construction, but I haven't seen any details of the construction or its capacity," he said yesterday. "I have no idea whether it will comply with the SPS procedure or not."

In Chayvan, president of the Kampong Speu Mango Association, was optimistic that the plant would be a boon for the province's fruit farmers.

"We have been waiting for this for years," he said yesterday. "Our mangoes will have more value when we can reach the market directly." read more →