PRESS RELEASE
On the Cabinet Meeting of the Royal Government of Cambodia
01 October, 2004

On 01 October, 2004 at 08:30 am, the Cabinet Meeting of the Royal Government of Cambodia was held at the Office of the Council of Ministers and presided over by Samdech HUN SEN, Prime Minister of the Royal Government of Cambodia to consider:

1. the draft Royal Decree on Fund Creation for Rural Electrical Development

2. Others: the Government proposal to the National Assembly to amend the basic Agreement on Industrial Cooperation Scheme (AICO)

The Draft of this Royal Decree on Fund creation for Rural Electricity Development which was prepared by the Ministry of Industry, Mines and Energy is aimed at firstly, ensuring the equal access to electricity services in order to help the rural people accessible to the energy with a price that they can afford to serve their socio-economic activities and households, thus contributing to reduce their poverty, and secondly, encouraging the private sector with incentives to take part in the provision of a sustainable electricity production service in the rural community, particularly, in the introduction of new technological energy with an appropriate technical and commercial standard., Furthermore, the writing of this draft Royal Decree is a condition for the offer of co-grant aid amounting to about 120 million dollars from the Asian Development Bank and the World Bank for the rural electrification developmental project and the 220 KW power transmission line from the Vietnamese border to Phnom Penh through Takeo province.

In the implementation of the Government political platform, the electricity sector has been remarkably progressing, particularly, the electricity provision in Phnom Penh and in other provinces. So far, the electricity provision in Phnom Penh has been good and stable while the capacity of power production keeps gradually increasing. As for the rural community, the provision of electricity has not yet well been developed and the Government is paying a great attention to this matter.

Pursuant to the rectangular strategy of the Royal Government such as the Government political platform in this third mandate, the Ministry views that it is necessary to create a rural electricity fund to assist the users in the rural areas. The fund provision can be done in two forms:

a) assisting through the provision of a partial capital to investors in order to reduce the electricity price,

b) helping to cover the costs of power transmission line and a transparent process must be implemented in this kind of transaction. Moreover, the implementation of this fund must be in line with the priorities of the project selected by the board of fund while the source of this fund can be derived from the provision as stipulated in article 5 of this Royal Decree: 1- donation and grant assistance, 2- other proceeds from the government on a regular basis.

The above-mentioned draft Royal Decree was adopted by the Cabinet Meeting.

In this session, the Government Cabinet Meeting also adopted its proposal to the National Assembly to amend the basic Agreement on Industrial Cooperation Scheme (AICO)

Apart from these two topics, Samdech HUN SEN, Prime Minister of the Royal Government of Cambodia also gave his recommendations to the Ministry of Public Works and Transport to take urgent measures not only to inspect and repair the roads No. 68, 69, the Osmach and Anlong Veng roads which were destroyed by the current rainy floods, but also to inspect and take preventive measures so as safeguard and maintain a number of roads which can be affected by flood. In addition to this, preventive measures be adopted to prohibit the passage of heavy loaded-trucks on those roads.

In order to strengthen the rule of law in Cambodia, Samdech Prime Minister stressed on one angle of the Government rectangular strategy which is to crack down the corruption through top to bottom cleaning approach.

The Government Cabinet Meeting closed its session at 10: 10 am

Phnom Penh, 01 0ctober, 2004