CAMBODIA'S largest single investment project has ground almost to a halt with Ariston

director Dato Doctor Chen Lip Keong claiming the project has become a victim of bureaucratic

chaos.

Ariston officials claim the company has faced government inefficiency, extortion

demands, kidnappings and tough living standards in their efforts to get the massive

project off the ground.

"We cannot control our fate if the problems are on the government side and they

have failed to honor their commitments," a clearly frustrated Chen told Phnom

Penh reporters recently.

Meanwhile, First Prime Minister Prince Norodom Ranariddh last week said he would

support canceling the Ariston contract if that was what the government and National

Assembly wanted.

Ranariddh, whose Funcinpec party is widely considered to have played a leading role

in negotiating the Ariston deal, said that the contract had been signed by a "collective

decision."

Challenging political opponents not to use the contract as a weapon against him or

his party, he said the contract was a decision of the Royal government, including

both Funcinpec and CPP.

"Ariston is not mine - Ariston is the Royal Government of Cambodia's. If all

of us - the National Assembly, the Royal Government - bear responsibility for canceling

such a big contract without creating an atmosphere of insecurity to investment in

Cambodia, I [will] support it."

Ranariddh also said he would support the closure of the Naga floating casino, owned

by Ariston, if necessary. Ariston is supposed to have the sole casino rights in Cambodia

under its contract but - in the absence of a casino law which should have been passed

and a lack of police enforcement - many other casinos are operating in Phnom

Penh.

"I have instructed the Ministry of Interior that it is not acceptable to have

26 illegal casinos at a time when there are no laws on casinos," said Ranariddh.

"If necessary, I am the first one to support the closing of the Naga casino...all

of the government has to bear common responsibility. If the National Assembly and

Royal Government do not, I'd like to tell you that I am the first one to support

the closing of the casino and all the illegal casinos, including the Holiday."

The Holiday International casino, operating under a license granted by Hun Sen's

former State of Cambodia government, is widely considered a "CPP" casino.

As well as casino rights, the $1.3 billion agreement signed by Ariston and the Cambodian

government in Kuala Lumpur in January 1995 involves the development of an island

resort, power, airport and infrastructure facilities for the southern port of Sihanoukville.

The controversial agreement has become mired in "bureaucratic red tape",

according to Ariston director Chen Lip Keong, with vital casino laws and sub-agreements

still not in place.

"There has been very little government compliance with substantive agreements

connected with the project, a key issue being the late implementation of the Casino

Control Law," Chen said.

The Ariston director said the government's failure to pass a law to legalize casinos,

which should have occurred by an agreed deadline of 31 January 1995, was damaging

Cambodia's reputation as a tourist destination.

"The absence of a Control Law creates the existence of illegal casinos, creates

a poor image of Cambodia and perpetuates the idea among tourists that the country

is lawless and unsafe," Chen said.

The government's failure, despite numerous reminders, to sign a Build Operate Transfer

(BOT) agreement submitted by Ariston in March is bringing the project to the point

of collapse, company officials have admitted.

"We can no longer be very civil and polite, in order for the Ariston project

to be a success the government must give equal commitment to the investor,"

Chen said.

"So far with Ariston this has not been the case," said Chen who says he

has invested close to $50 million in Cambodia so far, over $15 million of which has

been spent on the now floundering Sihanoukville-casino gambit.

Ariston plans to construct an international B737 capacity airport and a five megawatt

power plant at the southern port of Sihanoukville are also being blocked, Ariston

officials said.

"The central government agreed in October to grant us immediate vacant possession

[for the airport and power plant] but the provincial government couldn't grant it,"

Chen said.

Company officials said over a hundred Cambodian villagers claiming compensation for

the loss of land surrounding the airport had destroyed Ariston property and harassed

company workers in a protest in late March.

"The authorities have now provided us with security but they have not solved

the issue of compensation so they cannot fulfill their commitment to provide unencumbered

vacant possession," Chen said.

"We must have full control of the site, we can't be stopped by local villagers,"

he added.

Ariston said the recent awarding of their earmarked Sihanoukville power plant site

to the Asia Development Bank for a parallel power project had upped costs and set

back project completion dates.

Company officials said millions of dollars of imported project equipment and supplies

had been "stuck at the Sihanoukville Port" breaching government commitments

to facilitate permits for the project.

Chen called "for the government to adopt a more efficient administrative machinery

to accommodate such a major project," but said Ariston's "will power"

for the time being meant the project would continue.

"We see Cambodia as an emerging market. There are pitfalls and problems it's

not like doing business back home, but despite the pitfalls we are not withdrawing,"

he said.

Chen said he viewed the recent establishment of the Sihanoukville Development Authority

as a positive sign for better inter-government coordination on the project.

Daunted but not defeated by Cambodia's intricate and complex inter-governmental arrangements

Chen said his company would like "to bring order into a seemingly disorganized

environment".

"It's no bed of roses," said Chen.