The multi-billion dollar development project in the coastal city of Sihanoukville has stirred discontent among locals and fuelled environmentalists’ worries.
The first phase of the Bay of Lights is underway in southern Cambodia. (Photo: Jack Board/CNA) China Solar System Ceiling Light Manufacturer
SIHANOUKVILLE, Cambodia: From the shady poolside cabanas of a newly opened beach club, only the buzzing of nearby passing sand-dredging ships disrupt the serenity of Cambodia’s largest ever coastal development.
This is stage one of the Bay of Lights - what is meant to be a US$16 billion 934-hectare “eco city”, nearly three times the size of Singapore’s Marina Bay.
Newly forged roads named Sunset Boulevard and Bay Esplanade lead to a menagerie of water sport offerings and a go-kart track. A golf course, shopping malls, luxury hotels and an international financial centre are planned for the future.
Visitors can currently pay US$95 for 40 minutes on a jet ski or US$180 for a ride on a jet pack. A reverse bungee can whisk holiday-goers high into the air, where they might fully see the extent of still-incomplete land reclamation stretching out into the Gulf of Thailand.
Sand has been poured at such a rapid pace that even Google Maps has yet to catch up with the reality that what has always been water, is now land.
The Bay of Lights is reshaping Cambodia’s southern coastline, a sparkling stretch of shallow water. By 2045, when the third phase is pegged for completion, the developers say 160,000 people might live in this new green city, which began in 2019.
The area is being developed by a company called Canopy Sands. Its parent company is Prince Holding Group, a powerful conglomerate led by Mr Chen Zhi, a business tycoon from China who became a naturalised Cambodian in 2014, a process that requires a significant investment or government donation. The city was master-planned by Singapore’s Surbana Jurong, a government-owned consultancy company specialising in infrastructure and urban development.
For now, aside from a few well-heeled thrill-seekers and the workers continuing to lay the city’s sandy foundations, it is mostly deserted and incomplete. But local people have already been left wallowing in its wake. There are growing fears among observers that the entire project could end up resembling a ghost city, undermined by shaky financial foundations, environmental concerns and growing scrutiny of the influential business group undertaking the ambitious construction.
Just five minutes’ drive along Ream Bay from the beach club, the artisanal fisherfolk who have called this bay home for generations are living a less glamorous existence.
Hidden directly underneath a bridge along the coastal road that services the project, the last remaining residents of this local area have made a new home.
Their stricken settlement consists of little but sleeping mats on concrete, with a tiny provisions store and the tools the residents need to survive - their fishing boats and nets lining the small canal that flows under the bridge.
For years, they have endured in the elements - unwilling to be forced away like most of their old community. Now, their shelter abuts awkwardly against the outer fenced perimeter of the city. On this shoreline where they used to fish to make a living, they are no longer welcome. Just a few hundred metres along the canal, in a mangrove forest, wooden stumps lying low in the water are the only signs that a fishing village used to exist.
Eventually, most agreed to be relocated to a site some 30km away, where they were offered plots of land 5m by 20m in size, and US$1,000 per household.
By the side of an artificially-emptied lake, life at this site is even more grim.
The families here live at the edges of utter neglect. The cash handed out to them was barely enough to construct a simple home on a tiny plot. There is no electricity or water or garbage disposal. There are few options nearby for jobs, schools or healthcare facilities.
Mr Soeur Sieb, 58, who had lived at the bay at Ream since 1990, said his family had to borrow money from the bank to afford a motorcycle so that his children could travel for work at a garment factory to support the family.
“Living here, it's hard. I don't know what job I can do. At the old place, it's close to the sea, which makes it easy for me to go fishing so I can earn money,” he said.
Instead, he now looks out to a barren, dry landscape, flies buzzing around the faces of young children and the ever-growing piles of trash.
“I'm not sure what I want. Even though I desire it, they will not give it to me. If I wish to return, they won't let me,” he said.
In an interview with Eco-Business in 2021, Canopy Sands’ managing director Khong Weng Fook - a former executive of Surbana Jurong - said that impacted locals would receive training, employment opportunities, education scholarships, healthcare and daily essentials as the project developed.
“As long as we approach our stakeholders with good intentions, and provide them with jobs and a decent living, I don’t see why they would be unreceptive to us,” Mr Khong said in the 2021 interview.
However, many among the impacted locals CNA spoke to said their living conditions remain dismal and they have yet to receive land titles for their new plots, raising fears they could be moved somewhere else at a whim.
CNA reached out to Canopy Sands for comment on the ways it communicates and deals with the community.
In response, Mr Adrian Chen, the company’s business development director, said: “Engagement with the community lies at the heart of our environmental strategy. Through comprehensive public consultations, we've fostered a dialogue with local stakeholders, including provincial government officials, local authorities, and villagers.
“These interactions have not only helped us understand and address community concerns but have also strengthened our relationships with the people whose lives our project touches.”
Canopy Sands did not respond to CNA’s specific questions on the problems faced by the community.
Sahmakum Teang Tnaut (STT), a Cambodian organisation focused on housing rights and living conditions for the country’s urban poor and vulnerable communities, has recently documented the “relentless displacement” of such groups around the Sihanoukville area. The organisation has monitored mounting pressures from real estate and land speculation, and found that the extensive privatisation of coastal areas has resulted in the systematic loss of land and rights for local people. “In a country where so many people live on land that still isn’t titled, people are vulnerable to land grabbing and forced evictions when powerful individuals or companies set their sights on a piece of land,” said Ms Naly Pilorge, outreach director for Phnom Penh-based human rights organisation, Licadho.
In recent years, a shadow has been cast over the entire economic landscape of Sihanoukville by an explosion of illegal casinos, organised crime, scam centres and money laundering.
The Global Organized Crime Index has identified Sihanoukville as a shipping port for drugs and a hub for cyber-enabled financial crimes. It reports that the mafia-styled groups linked to real estate, casinos, security and cryptocurrency businesses have become more powerful.
The index found Chinese nationals in the country have been linked with extortion, protection racketeering, human trafficking, drug trafficking and money laundering through casinos and construction projects.
Some Cambodians have increasingly come to view the city - the region’s largest and about 30 minutes’ drive from Ream Bay - as a nexus between mafia and rampant illicit activities.
"Since the Chinese gangs arrived, I've been concerned about my safety while visiting there. We've seen so many crimes committed there - shootings, road accidents, drugs and scams - so you don't feel safe in Sihanoukville," a Cambodian journalist who declined to be named told CNA.
“I think that people probably look at it as a bit lawless. Another example of the wild, wild east in some ways. Extremely wild, and in some ways, it’s scary,” said Mr Ou Virak, the president of Future Forum, an independent think tank focused on Cambodian policy and development.
The tarnished reputation of an important coastal city, and the gateway to the country’s tourist islands, has likely also damaged Cambodia’s international standing and contributed to a weak recovery from the COVID-19 pandemic, he explained, adding that attracting world-class investments to such an environment presents an ongoing challenge.
In 2019, as violent crime increasingly spilled out onto the streets, then-prime minister Hun Sen announced a crackdown in Sihanoukville, banning online gambling and forcing the closure of dozens of illegal casinos. Vast numbers of Chinese fled the city and the flow of funds within and beyond the city’s borders dried up. Thousands of captive workers trapped in shadow industries were rescued from Sihanoukville compounds, while the General Department of Immigration reported that 447,000 Chinese nationals left the country in the aftermath. Since then, Sihanoukville has been attempting to clean up its image - in the eyes of tourists, investors, Cambodians and the country’s strategic overseas partners, especially Beijing. Mr Long Dimanche, vice governor of Preah Sihanouk province, told CNA that the city has long been taken advantage of by criminal actors, something the government is now focused on tackling. “I think the reputation is one of our challenges that we are facing now. But we are also innocent,” he said.
“We have to solve it, we have to fix it, and now security has been established and the safety in place is even better than some other cities in the world. It’s just not 100 per cent yet,” he said.
The Bay of Lights has been framed as a way to change the trajectory of development in the region towards a more sustainable model. It was designed to be smart, green and liveable, using cutting-edge technology and services and renewable energy sources. The provincial government is keen to integrate the new city into its broader ambition of turning Sihanoukville into a multi-purpose special economic zone.
“The local government, as well as the (national) government, support the project to be successfully implemented. It is attracting a lot of interest and a lot of people are talking about it,” Mr Dimanche said.
Surbana Jurong declined to be interviewed about its commercial partnership with Canopy Sands, citing “sensitivity and confidentiality.”
But in a press statement about the project in 2021, its CEO for ASEAN Yeo Choon Chong spoke of the “immense potential” of such “iconic infrastructure projects”.
“Once fully developed, (it) will be an exciting destination for dining, retail, work, recreation and living,” he said. But Mr Virak said that the rapid development of mega-infrastructure without proper economic fundamentals - across the city and province - will not solve the problems that Sihanoukville has been facing.
In his view, that means ending the breathless rates of construction, weaning off gaming money, trying to attract “proper players and proper investors” and looking to kickstart light industry, such as manufacturing. Prior to the government ban, Macau-based consultancy IGamiX estimated that annual gaming revenue driven by Chinese investments was between US$3.5 billion and US$5 billion. Some 90 per cent of that was from online gaming, now outlawed. “You have to look at the economic foundations. What can sustain having all these buyers occupying these buildings? It's not the cost of building that’s difficult, it's those people who actually are going to be creating the economic activities that need to sustain the population and the whole economic ecosystem,” Mr Virak said.
Canopy Sands is aiming sky-high with the type of investors it is seeking to transform its empty land into a thriving metropolis. And the scale of its project might be beyond anything seen on Cambodia’s coastline before.
It will span across three phases - each expanding the scope from an initial 130 hectares up to more than 900 hectares and adding more services and infrastructure along the way.
Yet allegations about the source of Prince Holding Group’s wealth - and its involvement in illegal activity in Cambodia - have started to haunt the development.
Since Prince began operations in the country in 2015, the outfit has grown rapidly across various industries to become a multibillion dollar empire. It has been a significant player in the development of Sihanoukville over the past decade.
Mr Chen Zhi, originally from Fujian, is recognised as a ‘Neak Oknha’, roughly translating to ‘His Excellency’ in Khmer, a title that carries with it much influence and a direct channel to the upper echelons of Cambodia’s political leadership.
However, his public image has taken a hit in recent months.
A report by Radio Free Asia (RFA), an independent US government-funded news service, released earlier this year, alleged that Mr Chen’s operations, under Cambodian patronage, have netted billions of dollars and attracted the scrutiny of the Chinese judicial system as a result.
The report also contained allegations about extensive overseas money networks, shell companies and cash traffickers that Prince purportedly used to move money and distribute online gaming software, as well as purported links to scam centres operating in Cambodia. It is an assertion denied by Prince, which issued public statements and threatened legal action against RFA.
“The article alleges that Prince Holding Group’s revenue is derived from crime. This is speculative,” the company and its legal representative said in a joint statement.
“Prince Holding Group does not engage in money laundering or illegal activities, and has not transferred or received funds in the manner alleged, or through the entities named in the article.
“The central allegation in the article is that Prince Holding Group conducted, or was involved in, human trafficking, torture, and cyberscam operations at the “Golden Fortune Science and Technology Park”. This allegation is false,” the company said, in reference to those charges.
Low-ranking Prince members or associates have been convicted in provincial Chinese courts of money laundering or gambling, while Beijing police established a task force to investigate Prince in 2020, according to court documents cited by RFA and seen by CNA.
“This is false. This is a case of impersonation of Prince Holding Group by other unlawful individuals who have been brought to justice,” the company said in reference to those charges. Prince’s chief communications officer Gabriel Tan told CNA that the reporting done by RFA was “racist, reductionist and clearly motivated by resentment”. He said that the allegations were “rumours and tenuous links”.
Mr Tan maintained that the company "has carefully reviewed its human resource records and can confirm that none of the convicted persons were at any time employed by Prince Holding Group or any of its business units". "We reiterate that Prince Holding Group, its management and its employees, have not been convicted of the offences alleged by RFA," he said.
Canopy Sands confirmed that Radisson Hotel Group and Greg Norman Golf Course Design (GNGCD) are two international brands set to be involved in the project. For at least one of those named investors, the revelations about Prince Group will require closer examination.
“We have a robust process set in place to identify and mitigate potential risks,” a spokesperson for Radisson said in response to questions from CNA. “Nevertheless, we take this new information seriously, and our legal team will be collaborating closely with our risk advisory consultants to conduct further investigations,” she said.
A spokesman for GNGCD did not respond to specific enquiries about its dealings with Prince.
Finding financial backers and partners for the multi-billion dollar project comes at a time when China - historically a major backer of infrastructure projects in Cambodia - has tightened its purse strings overseas.
The potential troubles facing Prince - and the fluid but strong relationship between Beijing and the new government in Cambodia, led by Mr Hun Sen’s son, Mr Hun Manet - has onlookers concerned about where the vast sources of money needed to finance the Bay of Lights will come from.
“The spigot has stopped, and everyone who lived off of it is living on credit,” said Mr Sophal Ear, associate professor of the global political economy at Arizona State University and an expert on Cambodia-China relations.
“It also seems accurate to say that these investments are changing. This shift could be due to changes in China’s own economic policies, global economic conditions, and Cambodia’s regulatory landscape.
“The new Manet administration’s approach to managing relationships with powerful Chinese groups will be indicative of Cambodia’s future economic and diplomatic direction,” he added. Canopy Sands said it has “actively engaged with a diverse group of international investors” beyond China, from Singapore, Korea, Japan, the United Arab Emirates, Indonesia and Thailand, “showcasing the project's global appeal and its potential to redefine urban living”, according to Mr Chen.
In March, it put pen to paper with UAE-based investment platform, the Annual Investment Meeting (AIM) Congress, in an agreement to construct a convention centre within the Bay of Lights and host future investment conferences. It was a sign of a rare foray into Cambodia by a Middle Eastern outfit. “This kind of diversification in investment sources could be a positive step for southern Cambodia, potentially bringing in fresh perspectives, new technologies, and innovative approaches to development … provided it respects local needs and sensibilities,” Mr Sophal said. For average Cambodians, there is entrenched wariness about the influence of Chinese investments throughout the country, which have left many “out in the cold”, according to Mr Virak.
“Domestically, I think there's a lot of pushback against Chinese involvement in investment. If you're not in it, then you won't like what you’ve seen,” he said.
“I think that has not been helpful in the relationship between your biggest, most important neighbour in the region.”
Cambodians have been priced out of Sihanoukville, amid a construction boom he said, souring locals’ ties with those reaping the financial windfalls. In recent years, thousands of Cambodians have filed class action lawsuits against Ponzi schemes and prominent tycoons have been arrested for fraud in construction and land investment schemes.
The province’s former governor Yun Min spoke of land and property values doubling, or even quadrupling from 2017 to 2018. Rental market prices surged by up to 10 times compared to before the large-scale Chinese entry into the market, according to local media reports in 2018.
“That has created a skyrocketing bubble. Right now, construction is having a life of its own,” Mr Virak said.
“It’s become an industry driven by speculation, but also driven by money laundering. Construction is usually a response to a certain demand but then people start to use it as a way to clean their dirty money,” he said.
Vast lengths of the southern Cambodian coastline have been converted to private land in recent years in the name of infrastructure and economic development. Prime waterfront, mangrove forest and national park areas have been carved out for various powerful individuals, conglomerates or overseas investors.
Land deed documents that CNA has viewed shows that Ream Bay, and the areas for future coastal reclamation, were passed over to Prince by the national government in three parts, in 2019, 2020 and 2021. No cost to Prince Holding Group is mentioned for two parcels of land - a 427-hectare and a 407-hectare sized reclamation. The third - planned to be an elaborately-shaped group of reclaimed islands - was handed to Prince in exchange for the conglomerate building, a wastewater treatment facility on a nearby beach strip. CNA sought clarification from the relevant Cambodian ministry about whether any formal payment was made for the land transferred to Prince, but received no reply before publication.
Mr Tan told CNA that Prince "can confirm that a substantial sum was paid to the Government of Cambodia as consideration for use of the three parcels of land". However, it is "unable to disclose details about the payments made for the land acquisition, as this is confidential business information". He added that the land acquisition was "closely scrutinised and approved" by several Cambodia government ministers.
Mr Alex Gonzalez-Davidson, the co-founder of Mother Nature Cambodia, an environmental rights organisation, said that one must only look to the recent past - and other parts of southern Cambodia - to understand the dangers of unfulfilled ghost projects in the country.
He has seen this blueprint many times before, including around Bokor National Park where a Chinese real estate project to transform protected forested areas into a luxury housing precinct and gambling hub has been left to decay. Likewise, Chinese-financed plans for an international airport, deep-water seaport, industrial park and luxury resort facilities have been abandoned around Botum Sakor National Park, a project that was estimated to cost an initial US$3.8 billion. “You're throwing people out of their land but you don't end up with viable development projects,” he said. “People who have political connections make a lot of money out of it, because land which used to belong to all Cambodians now belongs to a few. But most of these projects have ended with nothing.
“There's obviously a precedent there, not just inside Cambodia, but in many other countries, especially in China.”
To build a city of such grand scale in the middle of the sea requires a whole lot of sand.
For the Bay of Lights, the amount could be in the hundreds of millions of cubic tonnes of earth needed to be shifted to create its foundations. Most of it will be mined from the local coastal area.
Cambodia has a chequered record when it comes to sand mining and dredging from along its southern coastline, which for many years has prompted concerns and protests from environmental groups. Canopy Sands says it follows an environmental management plan to ensure that “our activities not only comply with but aim to exceed environmental regulations”.
“We are not merely building a project; we are nurturing a sustainable and inclusive future for Sihanoukville, with every step taken reflecting a genuine effort towards environmental responsibility,” Mr Chen said. The company also said it previously commissioned a water impact study from the Tropical Marine Science Institute at the National University of Singapore.
However, Canopy Sands did not share either study with CNA, nor was it available from the Cambodian Ministry of Environment.
These assessments are required by law for all investment projects as well as state-run developments. However, increasingly they have been kept out of the hands of civil society or the public, Mr Gonzalez-Davidson said.
Local media in Cambodia reported in 2020 that land reclamation had begun in Ream Bay before an environmental impact assessment had been undertaken. By 2021, the country’s Mines and Energy Ministry opened up concessions for sand dredging along more than 2,000 hectares of the southern coastline, in order to “restore waterways” and correct marine areas that had become too shallow. The contract to reclaim an initial 408 hectares for the Bay of Lights was won by China Harbor Engineering Company, a subsidiary of the state-owned enterprise China Communications Construction Company, in a deal worth US$308 million.
The extent of sand dredging has experts concerned.
“In terms of environmental impacts (of land reclamation), there is so much to explore. We don't fully know the risks at the moment,” said Mr Dhriti Sengupta, a physical geographer and earth observation scientist at Plymouth Marine Observatory.
“The thing is now the intensity and the magnitude has increased and that poses a huge risk to the coastal and marine environment.
“Coastlines are connected pieces of string, so if you do one thing at one shoreline, the impact may be 100 kilometres along the shore,” he said.
For the locals who rely on fishing to survive in the area, the impacts have been sudden and dramatic. Already fisherfolk around Ream Bay say their catches have disappeared and Mr Gonzalez-Davidson believes it will cause communities to fracture even further. “People who used to make a decent living are now going out to other places to work as cheap labour or going to Thailand to work in very precarious conditions, because they've lost their livelihoods,” he said. At Ream, nothing right now is stopping the project. Only the flow of time, money and the sands will determine if lights ever get switched on across the bay.
Editor's note: The article has been amended after additional responses and clarifications from Prince Holding Group.
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