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PM Warns Sub-National Administrations on Financed Projects: "Do Not Create a State Within a State”

KOH KONG: Prime Minister of Cambodia, Samdech Techo Hun Sen has stated on Monday morning, during the inauguration of the expansion project of National Road No.48 about the risks of decentralized administration.

The Prime Minister has directly warned sub-national administrations to cancel all projects that have not been implemented by Ly Chhuong Company, stressing for all provincial authorities and governors not to “create a state within a state”.

The Prime Minister stressed that Cambodia has a form of administration that includes decentralization of powers, but not to establish a state within the state, especially on financial management.

He has reminded sub-national officials they aren’t allowed to borrow money from any party, except the Ministry of Economy and Finance.

Prime Minister Hun Sen has specified that only the Ministry of Economy and Finance has the authority to loan money either inside or outside the country.

The Premier has warned that if any institution works with Ly Chhuong Company, they will have to take money from their institutional income and pay for 20 years.

If Ly Chhuong Company doesn’t immediately stop to loan money for sub-national officials, they will be blacklisted. Moreover, Prime Minister Hun Sen ordered all provincial governors to cancel all projects that have not yet been implemented, even after signing with Ly Chhuong or other companies, and to clear the list.

In addition, Prime Minister Hun Sen also warned to fire any provincial governor who borrows money to Ly Chhuong Company, “acting first and paying later” without requesting the national levels. "This could turn into a cancer disease because sub national level owes money, the national level is required to spend money. You act in a conspiracy without even requesting superior levels. This is corruption, I can honestly say that I have to deal with it”. Said Prime Minister Hun Sen.

Prime Minister’s order came after receiving a report from the Minister of Economy and Finance regarding the debts that the provinces owed to Ly Chhuong Company. Such debts were signed through a contract in which payments are set after the construction, without going through any requests from the Royal Government.

 Prime Minister Hun Sen has said:

“I was very surprised when the Minister of Economy and Finance made a report on the debts that provinces owed to Ly Chhuong Company. Moreover, the governor of that province must be responsible before the Royal Government, otherwise the Li Chhuong company will become an ill company and would make requests to me, when I haven’t approved anything. Then they go charge with province governments, but now the province owed a lot of money, even if I have issued an order. But it would be too late for me to cancel all the projects, even if it has already signed with Ly Chhuong or other companies, and has cleared the list of debts owed to Ly Chhong. Twenty-year installment payment is not available because you have to understand clearly that this is a public debt that the Royal Government cannot accept, not only cannot get any provincial governor to do so, otherwise it may lose his position because he was conspiring with his company to bid. He conspired with the government to pay. He asked the Royal Government to build this bridge, to build that road, to build this building. The National Assembly does this place, that place, but you cannot do this anymore, tell all companies to imitate Ly Chhuong.”

The Prime Minister has also quoted the example of neighboring countries, such as Laos and Vietnam, that are currently facing similar problems.

Both nations became burdened with debt caused by decisions and loans overtaken by provincial levels without the further knowledge of their Nation’s leaders.

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