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Cambodia: Logistics centre under discussion
The Kingdom’s draft framework agreement for the development of a logistics centre is being discussed, according to the Ministry of Public Works and Transport (MPWT).
Sun Chanthol, the minister of MPWT, said the Phnom Penh Logistics Complex (PPLC) is a potential centre to promote Cambodia’s transportation sector to be more efficient and competitive with countries in the region and the wider world.
“Both in terms of costs and services it will promote Cambodia’s economic growth that will achieve the government’s vision to develop the country into a high-middle-income country by 2030 and a high-income country by 2050,” he said.
Chanthol said this during a meeting to review and discuss the draft framework agreement for the PPLC as well as to collect additional input from all relevant institutions to ensure that this agreement has a comprehensive legal content acceptable to all parties, especially to serve the interests of the nation as a whole in line with the long-term vision of the government.
“[We] would like to instruct the working group to work closely with stakeholders and investment companies to ensure that the project runs smoothly in accordance with the planned schedule,” he said.
Chhieng Pich, director of the MPWT’s General Directorate of Logistics, said that the government has offered a Singapore-based company to develop the PPLC and the ministry is drafting a framework agreement which it expects to submit to the company soon.
“The agreement is talking about things that both sides need to do such as the company needs us to do a full feasibility study within six or nine months. It will start soon because we need to clear the draft before submitting it to the company,” he said, without revealing more detail.
During a video conference meeting between Singapore and Cambodia earlier this month, a Singapore-based YCH Group expressed an interest in the project.
The PPLC is to be located on 98 hectares of land in the capital’s Samraong Krom commune just northwest of Phnom Penh International Airport. This is strategically significant because it lies between Sihanoukville Autonomous Port (PAS) and the northern railway line to Thailand via Poipet. It is also located near National Roads 3 and 4, as well as the Phnom Penh Special Economic Zone (PPSP).
Cambodia’s underdeveloped logistics infrastructure has long been considered to be an impediment to trade. A previous World Bank report showed that the country’s exports cost 30 percent more than in neighbouring Thailand and Vietnam.
In 2016, the Japan International Cooperation Agency (JICA) said Cambodia charged exporters $540 per 20-foot equivalent unit (TEU) of cargo, more than double the $200 and $250 per TEU in Thailand and Vietnam respectively.
Sin Chanthy, president of the Cambodia Logistics Association (CLA), said the challenges for Cambodia’s transportation sector are a lack of road connections, high costs, taking more time and unofficial fees.
He said, referring to the World Bank and JICA report, currently the cost of transportation in Cambodia is still more than 30 percent higher compared with Vietnam and Thailand. “The rate today is still the same as mentioned by JICA four years ago and even could be higher because the price of goods also increased,” he said.
Chanthy said the development of a railway system is the best choice that can ensure the transportation is low cost, efficient and more profitable.
He said the PPLC project, as a central hub, will provide great benefit for trade and investment.
“It will link to the deep-sea port via the expressway between Phnom Penh and Sihanoukville, connecting Cambodia with countries in the region, linking the railway from Phnom Penh to the Poipet border with Thailand and connecting to the Bavet border gate with Vietnam,” he said.
“As far as I know, the ministry is pushing the project. It will appear soon,” he said. However, the centre must be modernised…[to be competitive].”
Source: https://www.khmertimeskh.com/50765766/logistics-centre-under-discussion/