Singapore out to play bigger role in Cambodia’s infrastructure growth
Singapore, the most advanced economy in the Asean region, is out to play a bigger role in filling Cambodia’s infrastructure gaps, and the city-state has positioned itself as a facilitator and partner for this in addition to providing an ideal ecosystem for private capital.
In an exclusive interview with Khmer Times recently in Phnom Penh, Lavan Thiru, Executive Director of Infrastructure Asia (InfraAsia), a facilitation office set up by Enterprise Singapore with full funding by the Singapore government to support Asia’s social and economic growth through infrastructure development, said that Cambodia is one of the six countries that it has focussed over the years.
He said that Asean is on the cusp of rapid growth and Cambodia, being one of the vibrant economies of the region has made steady progress over the years and the development of infrastructure remained crucial.
According to him, the infrastructure needs of Cambodia are varied and vivid and the role of InfraAsia, which functions like a company, is that of a facilitator that works with government officials and the private sector as well to move the projects forward. Among the many advantages of Singapore is its status as an international financial centre.
A number of projects, including the prestigious Phnom Penh Logistics Complex (PPLC), are in the pipeline with the support of InfraAsia. Launched by YCH Group, one of Asia’s largest logistics and supply chain providers, the PPLC is expected to have the best sustainable logistical practices in the Asean region. The $200 million project was unveiled in November last year following the signing of the Framework Agreement between Cambodia’s Ministry of Public Works and Transport (MPWT) and YCH Group, facilitated by Infrastructure Asia back in March 2021.
Lavan Thiru said PPLC is developed as a hub and spoke model and it will be connected to other logistics centres in the region. The project right now is undergoing a feasibility study, he said.
Singapore, he added, has certain capabilities as a trading hub, and this could be useful in making PPLC a successful project. “It is not a logistics complex of the traditional sense. It will be a modern complex using the latest technology. We will build the capability within Cambodia for it to actually operate complexes such as this one,” he said.
Elaborating on the role of InfraAsia in the region, he said, it helps to implement projects in a sustainable manner and it also helps the private sector to identify good projects. “Now many investors are looking at the region. But when we went around, we started to find that actually there was a mismatch in expectations, what the investors wanted, and what was available in the market. They couldn’t jump in there due to various reasons. They also have to spend a disproportionate amount of money to get comfortable with the market. Here, Infrastructure Asia can be a facilitator. We serve as an intermediary, bringing parties together to work on projects,” he said.
“For example, in Cambodia, when we started talking to the government a couple of years ago, we understood that in Phnom Penh, they were looking for better ways for waste management. So, we brought in some capability from Singapore from a public sector side first, and also from a private sector side to share our journey because we went through the same journey,” Lavan Thiru said.
In 2020-2021, for waste management in Phnom Penh, three licences were awarded, one of them being a Singaporean company. Previously, there was only one licensee. The Singapore company went through a competitive tender process for landing the project.
Infrastructure Asia also chips in with capacity building and this it does together with the World Bank Group. “We run a programme with the support of the Singapore Management University. And to date, more than 200 regional government officials have benefited from this programme,” he said.
The third thing that it does is project structuring. “We have some capabilities ourselves, but we also know the right people that we can bring to talk about how we can make a project better. To structure projects, the private sector can take a better role,” he noted.
Lavan Thiru said apart from Cambodia, Vietnam, the Philippines, Indonesia, India and Bangladesh are the markets that it focuses. “Right now, we think that these markets have very good opportunities for us. And from a sector perspective, infrastructure is very big. So, we are focussed on water, including wastewater and we also focus on waste management and also on the energy sector, both on the demand side and supply side,” he said.
Regarding energy, apart from the supply aspects such as increasing the share from renewable sources, one also needs to focus on the demand side where energy efficiency methods can do a lot to save energy such as by preventing transmission or distribution loss, Lavan Thiru said, adding that energy efficiency aggregation is equally important. “We have to aggregate buildings together for this. Because if you look at one building, it is not interesting, but when we aggregate buildings together then suddenly the cost dynamics change,” he pointed out.
On waste management, he said, landfills are turning out to be expensive options and also a very huge source of greenhouse gas emissions. “So, we need to have sustainable options. That is why we are starting conversations about how we can harvest waste to create resources, and there are many technologies for this, recycling being one. We can actually break down some of this waste into things like fertilisers that can then go back to the agriculture community,” he said.
“This is part of the bigger story of circularity, on how we create a circular economy. So, there are many opportunities here and we will work with officials and also with the private sector,” he said.
Cambodia, he added, also has to think about managing the construction debris it creates. “There are good solutions out there that InfraAsia can bring in. We want to find a way to bring in some of the Singapore-based solution providers who will be able to offer maybe a unique value here in the market,” he said.
He said Singapore is now one of the top investors in Cambodia. “Several countries are looking at the fast growth here and trying to find a way to play a role in it. So how Cambodia is going to work with the various parties? That’s actually something that’s quite interesting,” Lavan Thiru said.