The National Commercial Arbitration Centre (NCAC) is seeking further support from the Commerce Ministry to continue operating, saying that fees collected from dispute claims are too small to cover the centre’s costs.

The NCAC, an independent body that works to resolve commercial disputes, was officially launched in 2013, but due to a lack of resources – including office space – it was relatively inactive until 2015 when it reached a deal with the commerce minister to receive assistance through 2017.

With that deal – which mostly involved free office space – having just ended, Ros Mornin, the NCAC’s president, said yesterday that he was sending a proposal to the ministry to extend the deal.

The centre needed the assistance to make ends meet, he said.

“The revenue we get from administration fees from dispute claims is very little, and it is not able to cover the cost of rent,” he said, adding that he was hopeful the ministry would support the NCAC’s operation. “When the centre is more active in the future, we hope that we’ll able to cover all costs on our own.”

The NCAC has now received five cases in total, Mornin said, with the first two now settled. For each case, parties are required to pay administration costs based on the size of the disputed claim and a $250 registration fee.

Lim Heng, vice president of Cambodia Chamber of Commerce, said the NCAC offered crucial dispute-resolution options for businesses.

Businesses had now begun to put clauses in contracts stipulating that if a dispute arose, they would agree to bring the case to the NCAC rather than the courts, Heng said.

“Many business owners think that the legal system is time consuming and expensive,” he said. “I hope and believe that the ministry will provide further support to keep the centre operating.”

Seang Thai, a Commerce Ministry spokesman, said the ministry had not yet received the NCAC’s proposal, but noted that the ministry recognised the advantages of having the centre.

“Having the NCAC operate sustainably is our goal as it is important to build trust for investors,” Thai said. read more →

The central bank has threatened legal action after a Japanese tech firm announced the development of a Cambodia-based cryptocurrency with the claim that the National Bank of Cambodia (NBC) was backing the new digital tender.

The NBC, which has previously warned of fraud related to the peddling of cryptocurrencies, said in a statement that it had never allowed the purchase, sale or circulation of any form of cryptocurrency in the country.

“We condemn to the highest exten[t] any person who used [the] NBC’s name to disseminate such false information, and we are taking legal actions against this,” the bank’s statement said.

The warning came on Friday as Japan-based Chaintope and Hong Kong-linked Digital Agriculture Exchange held a “cooperation signing ceremony” the day after a Khmer-language press release from Chaintope was disseminated to local reporters.

An English version of the press release, dated December 19, announces the development of K-coin “together with Cambodian corporations and the Cambodian Central Bank”. It names Digital Agriculture Exchange as the local partner.

The press statement says that K-coin is being developed for use in the import, export and processing of farm produce in Cambodia, with an ambitious initial goal of being adopted by 200,000 companies and later expanding to have a total issuable value of $200 billion.

The NBC’s involvement in the digital currency would purportedly have been foundational: “Digital Agriculture Exchange will be able to conduct the issuing and management of K-coin with authorization from a central bank, and with the central bank providing a constant guarantee of trust,” the release says.

It claims that the NBC’s backing would allow K-coin to overcome the fundamental flaws inherent in incumbent cryptocurrencies, such as bitcoin, which have exploded in value in recent years but have become all but useless for actually performing transactions.

Asked by reporters at Friday’s ceremony how the company could claim collaboration with the NBC, Hideki Shoda, Chaintope’s CEO, suggested that reporters should raise the issue with its partner as Digital Agriculture Exchange was in charge of working with the NBC.

Responding to reporters on the same issue, Bridget Lau, Digital Agriculture Exchange’s director, would not directly say whether she had received official recognition from the central bank, only stating that she had met with NBC officials three times to discuss the situation.

Yesterday, a woman who answered a Digital Agriculture Exchange phone number listed with the Commerce Ministry hesitantly gave her name as Ly Leng, but said she did not know how to spell it. She identified herself as the company’s director of administration.

Leng said Chaintope’s announcement was negatively affecting her company’s reputation and the management team was considering taking legal action against its partner.

Leng acknowledged that her company had signed an agreement with Chaintope on Friday, but said it was only related to an agricultural development project and the construction of a golf club in Phnom Penh, and had nothing to do with K-coin.

She said her company had a plan to study the market for cryptocurrencies in Cambodia and had only met with NBC officials to seek information.

“It is just a plan to study the market, but it does not mean we have done the research,” Leng said. “We did not receive any approval from NBC.”

Chaintope’s office phone went unanswered yesterday, while emailed queries to several addresses at the firm, including CEO Shoda’s, received no response.

However, during the afternoon, the company’s press release on K-coin was removed from its website.

Among Chaintope’s previously reported projects have been plans for the adoption of a cryptocurrency in a tiny southwestern Japanese town.

Digital Agriculture Exchange, meanwhile, has had extensive dealings with the Agriculture Ministry. Even as the NBC was chastising the K-coin scheme, the Agriculture Ministry over the weekend publicised a visit by Minister Veng Sakhon to the company’s $10 million Phnom Penh facility involved in food processing and exports.

Digital Agriculture Exchange’s CEO is Hong Kong-based Long Yunhai, who also heads Weihai Dragon Union Agriculture, with which the Agriculture Ministry last week announced an imminent $50 million deal involving mango processing for export to China and Japan.

Chea Serey, the NBC’s director general, last month warned at an economic conference that cryptocurrencies remained “very risky”.

“You should all be cautious if you are lobbied to accept the coins as a form of payment instead of regulated cash currency. This is a new form of fraud,” she said at the time.

Nevertheless, the NBC has explored using blockchains – the mechanism that prevents cryptocurrency users from being able to forge transactions – internally to facilitate and monitor interbank lending.

There has been a proliferation of cryptocurrency-based enterprises worldwide in recent years, and “initial coin offerings” have attracted billions of dollars in investment even as the underlying technology – particularly in the case of bitcoin – has come under criticism for its massive environmental footprint and lack of immediate practicality except as speculative investment. read more →

As Cambodia enters peak tourist season, industry insiders say they expect foreign visitor numbers to continue to rise after a record-setting 2017, but exhort a need to keep up with infrastructure improvements and adapt to the needs of a now significantly Asia-centric visitor base.

Cambodia welcomed a landmark 1 million Chinese tourists over the course of 2017, with the numbers of Chinese visitors climbing by over 45 percent in a single year. In the first 10 months, the Kingdom welcomed nearly 5 million tourists, a 10 percent increase in foreign visitors from the same period in 2016, according to a report from the Ministry of Tourism.

According to Men Phearom, director of planning at the Ministry of Tourism, Cambodia’s tourism industry is projected to continue to grow in 2018, welcoming at least 6 million international visitors and reaching an anticipated $4 billion in revenue, while also catering to 15 million domestic tourists.

“We keep increasing direct flights to Cambodia, so tourist arrivals are increasing year by year,” he said. “However, we worry that global issues – like airplane failure, ISIS attack or problems with North Korea – will impact our tourist industry.”

He added that Cambodia needed to continue strengthening security to encourage safety across the sector.

Ho Vandy, adviser to the Cambodia Chamber of Commerce and president of World Express Tour and Travel, said that even though tourist numbers had increased, the sector had difficulty marketing itself to international visitors.

“It was a bit tough to promote tourism in Cambodia in 2017 because of the political situation,” he said, referring to the tumultuous political climate that saw Cambodia’s main opposition party dissolved in November, months before the national elections. “But it should be better in 2018,” he added.

Nevertheless, he urged that the tourism sector needed to improve infrastructure for domestic tourism, enforce traffic laws, and create more domestic airports for ease of travel around the Kingdom.

Harry Greig, marketing manager at the Sofitel Phnom Penh Phokeethra Hotel, said a rise in corporate travellers had driven an increase in visitors to the high-end hotel in 2017.

“China in particular played a significant role in this growth, with an overall 51 percent increase in Chinese clientele and a 300 percent increase in business groups originating from mainland China,” he said. He added that Asia accounted for 75 percent of visitors to the hotel, with Europeans accounting for only 11 percent as the property’s second-strongest market.

Chim Sophal, owner of Happy Herb Pizza restaurant along Phnom Penh’s riverside, said he was struggling to adapt to the changes in tourist demographics since the establishment of his restaurant in 1995.

“I lost money every month this past year,” he said. “Without the Westerners coming to Cambodia, it’s hard to continuing operating. Now it’s mostly Chinese, and they don’t come here.”

While the Kingdom’s top five markets for foreign tourism were once dominated by Western countries, with the US, France and the UK ranking near the top throughout the early 2000s, visitors now overwhelmingly come from Asian countries. The US, France and the UK have been supplanted instead by China, Vietnam, Laos, South Korea and Thailand. read more →

The Transport Ministry and Phnom Penh Autonomous Port (PPAP) are looking to launch a ferry service by the Khmer New Year in mid-April, connecting Prek Pnov in the north of Phnom Penh to Kandal province’s Takhmao City via six initial terminals, the ministry said yesterday.

Va Sim Sorya, a ministry spokesman, said six floating terminals were now being built and would later be transported to the docking points.

The six terminals would be in or near Prek Pnov, Russey Keo, the Night Market, Areiy Ksatr, Phrea Monivong and Takmao, but exact sites had not yet been selected, Sorya said.

“We expect that civil servants and workers at some factories [near the river] will use the service, and we hope it will help to reduce traffic congestion,” he said.

There are no details yet on transportation schedules, price, or the number of passengers each ferry will be able to carry, Sorya said, though he added that PPAP had confirmed that it would have two ferries available for the initial operation.

Though a public transportation system taking advantage of Phnom Penh’s waterways could potentially reduce the load on land transport, Cambodian people have typically favoured personal transport, which could pose a challenge for new schemes, Sorya said.

According to a post on the ministry’s Facebook page on Monday, the project includes plans to eventually expand the number of terminals to 15.

Last year, Phnom Penh City Hall and CPP Senator Ly Yong Phat’s LYP Group announced a similar water taxi project, to also run from Prek Pnov to Takhmao City and scheduled to launch early this year.

Representatives for City Hall could not be reached for yesterday. read more →

Fishermen on the Tonle Sap river are smelling success: The season’s first harvest of the fish now being crushed into the famously pungent prahok has hauled in a bounty set to almost double last year’s catch.

As the fishermen temporarily packed their nets ahead of last night’s full moon, marking a pause in the frenzied fishing of prahok season, fisheries officials and others in the business said that this year’s high water levels had brought a welcome turnaround in fortunes compared to the poor harvest a year ago.

“It will satisfy the demand for fish to process into prahok,” said Nao Thouk, secretary of state at the Ministry of Agriculture, Forestry and Fisheries.

Water levels were 1.5 metres higher than last year, he said. The Tonle Sap has been teeming with fish being carried in its flow as it once again drains towards the Mekong.

Last season’s yield was roughly 10,000 tonnes, Thouk said. This season, fishermen are looking at a total haul of 15,000 to 20,000 tonnes. The average catch in recent years has been around 12,500 tonnes, he added.

Finger-sized fish for making prahok – typically mudfish – are collected in giant nets called dai over two periods of peak activity, each lasting about two weeks ahead of a full moon. They are then gutted, crushed, dried, salted and fermented until they become the much-loved – though for many foreigners highly divisive – fish paste.

The first peak this season was from December 22 to 27, with fishing continuing until early yesterday morning. The second peak period is expected from January 21 to 26.

Chhin Chansa, the owner of one of 60 allotted dai operating on the river, said he had collected about 80 tonnes of fish during the first period.

He had sold the fish to a broker for about 1,400 riel per kilogram – which would amount to total revenue of $28,000 – but after the costs of equipment, labour and rents, his estimated profit for the season would be $2,000 to $3,000, Chansa said.

“The result is that we got a lot more fish than last year,” Chansa said.

Another dai owner, Phe Van, said he thought he could do even better during the second fishing period.

“During the first period I collected around 60 tonnes – it was a smaller amount because of rains and storms,” Van explained. “I hope the next period will give me 100 tonnes.”

Luy Maly, a prahok seller, has made her first order of about 50 kilograms of fish, and noted that the prahok supply lines were smooth flowing.

“This season is good for me,” she said. “I get a fair price and all the amount that I want.” read more →

As international giants Grab and Uber battle it out in Phnom Penh’s crowded ride-hailing industry, local apps have begun to expand their platforms by finally incorporating traditional Khmer tuk-tuks as options for rides. Some drivers, however, are seeing more liabilities than opportunities, with many fearing the apps will encroach on their livelihoods with lower rates and longer hours, while also feeling the pinch as their industry shifts beneath them.

The Post spoke to eight traditional tuk-tuk drivers in Phnom Penh, most of whom said their incomes had suffered since the rise of ride-hailing apps. They were sceptical about how much money they would be able to keep for themselves, though several expressed interest in using the apps in the future if their fears about profitability were allayed.

A common theme was confusion around how the services work, including misconceptions about having to be available at all hours and concerns about how to secure smartphones on motorbikes as they pulled their carriages.

Locally owned ride-hailing apps have built sizeable traction in recent months with cheap rides on three-wheeler autorickshaws, a smaller, metal-framed version of traditional Khmer tuk-tuks. Phnom Penh has seen a surge of the yellow autorickshaws take to the streets as leading apps PassApp and ExNet have risen in popularity.

There have been some obvious benefits to the apps. Rather than flagging down tuk-tuk drivers and motodops on street corners and haggling over fares, customers have their rides come to them with predetermined fares based on distance. And apart from consumer convenience, the system has also introduced flexibility for new drivers like Soriya Sor, a police officer who signed on to PassApp to supplement his income.

“I can start driving any time of day, and I have constant business,” he said. “It’s a very good job.”

He could not have worked as a tuk-tuk driver – unable to balance his police work with the full-time service of a tuk-tuk – but with PassApp he has made enough money to buy his own autorickshaw after initially renting one, he said.

However, the opportunity for flexible work has had little attraction for tuk-tuk drivers already working full-time.

Sarun Sok, waiting for business in his tuk-tuk on Sothearos Boulevard, said that even as PassApp and ExNet opened up their platforms for drivers like him, he had no interest in joining up.

Autorickshaw drivers would tell him that the long hours were difficult to manage, and that he – as a privileged member of the organised tuk-tuk crews working along bustling Sothearos Boulevard and at the Sorya Shopping Centre – had enough business to keep him profitable even while taking far fewer daily rides.

“I have regular customers, and I can make about $25 a day off of only five rides,” he said. “My friend who drives the autorickshaw, he’s tired. And every ride is so cheap.”

Autorickshaw fares on PassApp and ExNet are typically under $2. PassApp takes a cut of 13 percent, or about 500 riel per dollar, while ExNet takes $0.25 plus 10 percent.

Chay Khem, another tuk-tuk driver, said he also relied on his regulars, a routine he preferred over the idea of being called out to frequent and unfamiliar runs.

“I’m better off keeping my own customers,” he said.

Yaem Yary agreed that he couldn’t understand what was in it for him.

“I have no idea how this app works,” he said. “What’s the benefit?”

He acknowledged, nevertheless, that the business was changing and squeezing tuk-tuk drivers’ livelihoods.

“Profits for me and most tuk-tuk drivers have dropped by about 50 percent in the past three or four months,” he said.

Keo Poeurn, spokesman for the Independent Democracy of Informal Economy Association (IDEA), a union for informal workers including thousands of tuk-tuk drivers, said tuk-tuk drivers had been struggling since the rise of the apps, with the lower-paying rides cutting into their work.

“Still, many drivers are interested in joining these apps, because it will be easy for them to get customers,” he said.

The union was preparing to organise talks with the operators of local apps to encourage higher pay for their drivers, Poeurn said.

Ride-hailing operators have also encountered reluctance among tuk-tuk drivers to change their habits.

Hor Daluch, founder of ExNet, said he was the first of the local apps to begin recruiting traditional tuk-tuks, opening his platform to registration two months ago. However, he has run into unexpected obstacles, thus far signing up only 10 tuk-tuk drivers.

“I don’t understand why [tuk-tuk drivers] don’t like to get passengers,” he said, adding that he has held events and offered promotions to encourage drivers to sign up, with limited success. “Most drivers seem to prefer the traditional way of giving rides.”

The rate for customers ordering tuk-tuks on ExNet is 10 percent more expensive than for an autorickshaw, he said, because tuk-tuks can carry more people and often use more fuel. While offering even cheaper motorbike-hailing services is a possibility in the future, he said he would like to focus on recruiting more tuk-tuks first.

Top Nimol, founder of the highly popular PassApp, said he started with autorickshaws instead of tuk-tuks because the smaller carriages were both safer and faster than traditional tuk-tuks. But the price of autorickshaws has begun to creep higher, he said – originally priced around $2,000, they are now sold for nearly $3,000 and rented at $140 per month. Opening up the platform to tuk-tuks, which are generally cheaper to buy, was a way to let prospective drivers avoid the rising prices, he said.

After completing a one-week pilot in Phnom Penh last week, Nimol currently has 20 tuk-tuk drivers on the streets. His company inspects each bike and carriage and ensures all drivers have valid identification, he said.

As far as Nimol is concerned, tuk-tuk drivers need to join the new wave or disappear.

“I want my customers to have options, and I also want more options for traditional tuk-tuk drivers, because if we do not include them, they will soon be gone,” he said.

“I’ve actually been trying to launch tuk-tuk services for a while now, but drivers don’t always understand the meter, and sometimes prefer to negotiate with their customers to get higher prices,” Nimol added.

He defended his pricing as appropriate, particularly considering the competition.

He has been able to compete against Grab and Uber because their prices are much higher, he said. If they were to lower their prices he would not be able to keep undercutting them, he said.

“The current price is already low, but PassApp drivers are happy with it, and they make good profits,” he said. “If we lower the price to try to compete, the impact will be on the Cambodian drivers.”

What seems clear, regardless, is that the sector is only expanding.

PassApp anticipates taking its service to Siem Reap later this month, becoming the first local ride-hailing app to grow beyond Phnom Penh, mostly by recruiting tuk-tuk drivers. Nimol already has 50 registered to begin operations. He has plans to expand to Sihanoukville in the first quarter of the year as well.

The app has also been incorporating mobile banking service Wing into its operations, initially for drivers’ payments and soon for customers’ fares, Nimol added. Grab has also launched online payment options through Wing.

Tomas Pokorny, CEO of popular cashless payment app Pi Pay, said his company had also reached agreements with multiple local ride-hailing services, and intends to introduce payment options with them in the next few weeks.

“Pi Pay is very keen to partner with international ride-hailing applications [Uber and Grab] as well, and has been reaching out to them for the past several months,” he said, adding that negotiations with the two giants were still underway.

According to representatives from both Grab and Uber, there are no current plans to expand services beyond Phnom Penh, to partner directly with any popular local ride-hailing platforms or to include autorickshaw-, tuk-tuk- or motorbike-hailing services in the near future.

Sok, the tuk-tuk driver, mimed gestures of trying to navigate online maps with his thumb as he lamented the changes taking place in his industry.

“You have to have a smartphone,” he said, and pointed to his old-school Nokia. His income was still safe, but others weren’t doing so well, he said.

“I would never join these apps. I hate them.”

Additional reporting by Cheng Sokhorng read more →

Angkor Archaeological Park saw a rise in visitor numbers and a 72 percent jump in ticket sales revenue to over $100 million last year, allaying fears that increased prices would discourage tourists from visiting the site.

According to an Angkor Enterprise statement released yesterday, the number of visitors to Angkor Wat reached nearly 2.5 million over the course of 2017, exceeding those figures from 2016 by 12 percent.

Total revenue from Angkor Wat ticket sales increased to $108 million over the course of 2017 as well, thanks to the increase in ticket prices, which went into effect on the second month of the year.

Prices of admission for foreign visitors to Angkor Wat are now set at $37 for a single day pass, $62 for a three-day pass and $72 for a weeklong pass. They used to be $20, $40 and $60, respectively.

Ho Vandy, secretary-general of Cambodia National Tourism Alliance, said he had initially been fearful that the increase in ticket prices would result in fewer tourist visits to Cambodia, which would have negatively impacted the tourism sector as a whole.

He attributed the fact that tourist visits to the site had continued to increase despite higher prices to an overall strengthening of the tourism industry, and said he was optimistic that ticket sales would continue to increase this year.

“The government has been working hard with the private sector to pursue PPPs [private public partnerships] and opening a dialogue that has helped to strengthen the whole sector,” he said.

Chhay Sivlin, president of the Cambodia Association of Travel Agents, said such partnerships included the promotion of Cambodia at travel fairs around the world.

“Also, there has been major steps taken in ensuring the quality of our country’s hospitality system in terms of cleanliness, friendliness, and security,” she said.

Sivlin added that even with the increased prices, tickets to Angkor Wat were not expensive compared to similar sites around the world.

“With that said, it seems that foreign tourists deem the newly increased price acceptable, hence the steady increase in tourists to Angkor Wat,” she said. read more →

Cambodian rice exports in 2017 increased 17 percent by volume compared to the year before, with exporters pushing to fill orders under China’s expanded import quota while shipments to European markets remained steady, according to Agriculture Ministry figures.

A total of 635,600 tonnes of rice was exported to international markets in 2017, up from 542,144 tonnes the previous year, according to a Facebook post by Hean Vanhan, director general of the general directorate of agriculture at the ministry.

China, which agreed to accept 200,000 tonnes of rice from Cambodia in 2017 – doubling the previous limit – and will expand the quota to 300,000 tonnes this year, was the top destination for rice shipments.

Over five years, total rice exports have grown 67.78 percent from 378,800 tonnes in 2013, the figures show.

Chray Son, deputy director of Capital Food Cambodia, a Battambang province rice exporter, said the increase in exports to China was welcome, but Europe remained the market with high potential for future growth.

“Cambodian rice is becoming more popular and the quality is being recognised in the international market,” he said.

But rice exports were still small compared to neighbouring countries, and the industry would need to focus on quality seeds and building more storage, drying and irrigation facilities in order to reach its goal of exporting 1 million tonnes a year, Son added.

Som Song, director of Agricultural Development Chamroeurn Phal, an agricultural cooperative in Raing Kesei commune in Battambang province’s Raing Kesei district, said that even though 2017 was a profitable year, farmers in his area were still hampered by a lack of storage and drying facilities.

“We do not have a place to dry our paddy rice, so we have to sell at a low price,” Song said.

The state-run Rural Development Bank (RDB) provided about $15 million in low-interest loans last year to two companies to build and operate rice storage warehouses and rice-drying facilities. Amru Rice is building one facility in Kampong Thom, while Khmer Food Group is constructing two in Prey Veng and Takeo provinces.

The facilities, which are each set to have the capacity to store 50,000 tonnes of paddy rice and dry approximately 1,500 tonnes of rice daily, are scheduled to be completed this month.

Meanwhile, another RDB project, based on a $15 million loan to Thaneakea Srov (Kampuchea) Plc in 2016, is also set to start operating in Battambang province this year with a massive 200,000-tonne capacity silo and warehouse facility and the ability to dry 3,000 tonnes of paddy rice a day. read more →