Responding to concerns that a lake development project could damage the environment of Phnom Penh, a senior municipal official said Thursday a 10-year study had taken place before the plan was approved.

The company developing the lake, Shukaku, Inc., began filling Boeung Kak lake last week, angering residents who say a government buy-out effort is too low and raising environmental concerns.

But a 10-year study has shown the lake is no longer a reservoir and is not an important part of the city's infrastructure, said Pa Socheartavong, deputy governor of Phnom   Penh, as a guest on "Hello VOA."

The lake is not being used for agriculture and cannot produce clean water, he added.

"This lake is just like a polluted bomb in town," where residents drain their waste daily, he said. "It's a dead lake. That means no activity."

The city decided to privatize the lake, offering a 99-year lease to Shukaku, which will develop the area into a long-term recreational area and reservoir, as well as a site for residential and commercial property.

The development will force more than 4,000 families to move, and many of them have proven reluctant to do so. The city has offered $8,000 per household to help people move, but residents say they want to be paid current market prices.

Around 1,000 families are still protesting the move.

But not all residents there are legal, Pa Socheartavong said. Following the 1993 election, many people moved from border areas and settled around the lake on public land.

The city has offered three options to residents, he said. They can either take the buyout, be moved to housing in another area, or wait for housing in the same place they now occupy.

The lake issue became politicized ahead of July's general election, he added.