September 13, 2011

Satellite city deal worth $1.6bn inked in capital


The signing ceremony.
CONSTRUCTION of a US$1.6 billion satellite city on Phnom Penh's Chroy Changvar peninsula will begin this year after officials inked a contract yesterday with local firm Overseas Cambodia Investment Corporation.

Dubbed “City of the Future,” the project would include a national stadium, a 60-hectare park, shopp-ing malls, financial centres, hotels, schools and 40,000 residential units on a 387-hectare plot, Pung Kheav Se, president of Canadia Bank Plc and chairman of OCIC, said yesterday. The project is expected to take as long as 15 years to complete.

Phnom Penh governor Kep Chuk Tema, who signed the contract with OCIC, said the project was a symbol of the Kingdom's robust growth and a necessity in meeting the capital's growing population.

“Our city has about 10,000 new families moving here every year, so it’s a very good housing project investment,” Kep Chuktema said.

The project will join a host of satellite cities under construction in the Phnom Penh area, some of which have been mired in scandal, including the Camko City project in Russei Keo district and the development of Boeung Kak lake.
However, proper development strategy can guide the “City of the Future” away from a similar fate, Sonny Soo, country head of the UK-based property consulting firm Knight Frank, said yesterday.

Careful contracting throughout the stages of the project’s development, as well as insightful pricing, could attract lucrative investment.

“People tend to forget things really fast,” Soo said, referring to the Camko City backer Busan Savings Bank facing corruption allegations in South Korea this year.

“But as long as the pricing is good, as long as the contracting is good, I think the development could be profitable.”

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