Skyscraper’s woes continue

Skyscraper’s woes continue

The saga of the stalled $240 million Gold Tower 42 was revived last week when it emerged that a supplier for the project had accused the owner and builder of failing to pay out nearly $500,000 in fees, according to an injunction request obtained by the Post.

 

In a complaint sent to the Phnom Penh Municipal Court on May 7, South Korea-owned subcontractor Do Best Khmer Ltd requested a seizure of assets in the amount it says it is owed from the tower’s builder, Hanil Engineering & Construction, and the tower’s owner, Yon Woo (Cambodia). Both companies also have operations in South Korea.

The complaint alleges that Do Best Khmer was not paid in full for three delivery agreements made since 2010, totalling $476,301.

According to the complaint, the orders were for tile and stone supplies.

When contacted at the end of last week, Leng Souhuoth, an attorney with the P&A Asia law firm representing Do Best Khmer, told the Post he had received a letter from the court requesting changes to the complaint.

“We will discuss with the client on whether or not they want to continue the lawsuit,” he said.

The law firm later said the complaint, which was dated May 22 by the Phnom Penh Municipal Court, was ultimately withdrawn. In an official statement sent yesterday, the firm declined to comment or answer questions on whether a settlement was now being sought out of court.

Representatives for both Hanil and Yon Woo both declined to comment.

Sitting on the corner of Sihanouk and Monivong boulevards, Gold Tower 42 got under way in 2008.

The project, however, came to a halt in 2010, due to lack of finances and a global financial crisis that crushed the real state industry. Developers once prophesied that Gold Tower 42 would be the tallest building in the city.

Now, the building’s shell, frozen in mid-development, looms over pedestrians and motorists like a cautionary tale of boom and bust.

The May 7 complaint isn’t the first disagreement over the project.

The targets of the injunction, Hanil and Yon Woo, went into arbitration with each other last year, and Hanil was ordered to pay $30 million in compensation to Yon Woo by the Korean Commercial Arbitration Board.

But Yoo Jeoung-hoon, a lawyer at the Jipyong & Jisung firm representing Yon Woo, said the payments had not yet been made, and that the dispute was being settled in Cambodia.

The progress of the tower has been shrouded in secrecy since work stopped a few years ago. In December, a crane was removed from the top of the building without any official explanation, and one of Do Best Khmer’s orders dates to earlier this year.

“Right now, we have suspended it provisionally. We are not sure when we will restart the process,”said Yon Woo (Cambodia)’s assistant manager, Kim Tae Yun, when asked about the status of the project, adding that an official announcement would be made whenever work begins again.

In 2012, the government estimatesdthat investment in construction from domestic and international investors exceeded $2 billion.

At the end of the first quarter of 2013, there were 100 Korean-owned companies registered with the Ministry of Land Management, Urban Planning and Contruction, of which 34 held valid licences.

South Korea was the largest investor in Cambodia last year, with about $287 million injected, 12.5 per cent of the total foreign direct investment, according to data from the Council for the Development of Cambodia.

Korea was followed by China, which invested $263.6 million, while Japan was third, with a total investment of about $212.3 million.

phnompenh post