Billion dollar Dreamland development doubtful
Billion dollar Dreamland development doubtful
After news of a colossal 133-storey twin tower development worth more than $1 billion went viral across local media when it was first announced last July, reports have resurfaced after a spokesman from the Ministry of Land Management, Urban Planning and Construction (MLMUPC) said the ministry was eagerly waiting for the plan to be handed over from the Phnom Penh municipality for approval. However, despite the enthusiasm, doubts surround the development.
“I got news from the municipality that the proposed 133-storey construction project will soon be submitted to [the MLMUPC] through City Hall,” said Seng Lot, MLMUPC spokesman.
“This [would be] Cambodia’s tallest building – maybe the tallest in Asia. [It] shows the Kingdom’s prestige,” he said, adding that feasibility studies undertaken by experts place the cost of construction easily over a $1 billion threshold.
“The presence of [such] a skyscraper is good for the Kingdom’s economic development,” said City Hall spokesman Long Dimanche, who acknowledged that the project had indeed been submitted to the municipality.
The blueprint of the project – which is on display at the MLMUPC while specific details remain in the care of City Hall – shows the twin towers being built on five hectares of the Dream Land amusement park, opposite Nagaworld. The development is to be undertaken by local Thai Boon Roong Group, and Chinese property developer Sun Kian Ip Group – owned by the notorious Macau-based business tycoon Ng Lap Seng.
Lot said construction could begin this year and finish in three.
After the project was once again published in local newspapers on Tuesday, the Kingdom’s real estate experts lined up to applaud the plan.
“[The skyscraper] creates a positive picture for Cambodia’s real estate sector. It also raises the level of prestige of Phnom Penh, [bringing it onto] the international stage,” said Po Eavkong, managing director of Asia Real Estate.
However, Eavkong was quick to note Phnom Penh’s real estate market is not ready for such a development.
Sung Bonna, President and CEO of Bonna Realty Group, also expressed optimism in light of the announcement, but cautioned that such a dramatic announcement could overshadow developments currently underway.
While he said that current market oversupply has created “a worrisome situation”, he nonetheless explained that such announcements could drive more competition into the market.
However, he did voice a clear concern that if this project actually breaks ground, it needs to be completed or else it will fall into the same trap that has ensnared Korean-backed Gold Tower 42, which to this day sits silent despite annual promises by investors that construction will resume.
“Cambodia’s market is small; such a development needs to be carefully considered to see if it is possible for the long term,” he said, noting that the Kingdom has already felt the growing pains of rampant speculation.
Doubts surrounding the project only worsen when the supposed backer, Ng Lap Seng-owned Sun Kian Ip Group, is further examined.
According to a series of reports made by the South China Morning Post over the past year, Ng Lap Seng, who has retained top-level connections with both Beijing and Washington dating back to over a decade, was arrested on September 19, 2015 in the US over an apparent scheme to smuggle $4.5 million into the country under “false pretenses.” While a verdict is still pending, Ng was granted a $50 million bail provided he does not leave US soil. Ng’s current estimated worth sits at $1 billion.
The Hong Kong-based newspaper also revealed that Ng Lap Seng, although never charged, was caught up in a 1999 scandal that linked the real estate mogul to illicit campaign funds to former US president Bill Clinton’s 1996 presidential campaign.
From that point on, Ng had frequently been linked to organised crime.
Post Property tried to reach both Thai Boon Roong Group and Sun Kian Ip Group for comment, with requests being rejected.
Meanwhile, Cambodian officials said they had no knowledge about the Macau-based firm or its disgraced owner.
“I don’t have any information. I have just learned [about] the news this morning. I do not know whether the company has registered with the Ministry of Commerce,” said Ken Ratha, spokesman for the Ministry of Commerce. He said that for such a large supposed investment, questions should be addressed to the Council for the Development of Cambodia (CDC).
“I do not know. Simply, such a mega construction project must seek approval from the CDC. If the proposed project has not been submitted to CDC, any announcement is not official,” said Chea Vuthy, Director of Cambodia Investment Board of Council for the Development of Cambodia.
Asked what role CDC plays in due diligence, Chea Vuthy said the organisation’s duties are not to investigate speculative investments or publicised announcements.
“My role and duties are not to investigate them. CDC is responsible for development, but not to investigate who investors are,” he said.
Bonna suggested that to prevent any possible risks associated with rampant speculation, due diligence needs to remain paramount.
“To avoid any bad image on our country, a company and their previous activities need to be looked at to ensure they have proper experience in the property sector,” he said, adding: “The government knows what to do.”
