Cambodia’s transport, logistics master plan receives int’l attention

Cambodia’s transport, logistics master plan receives int’l attention

The ‘Comprehensive Intermodal Transport and Logistics System Master Plan 2023-2033’ (CITLS) is clearly Cambodia’s most goal-oriented and ball-on-fire master plan in recent years. It was the brainchild of the previous dispensation headed by former Prime Minister Hun Sen and years of hard work of Aun Pornmoniroth, the savvy Deputy Prime Minister and Minister of Economy and Finance, although the new government started implementing it last year. Khmer Times kept constant track of the happenings and reported from time to time the developments of the master plan. Given the propensity and eagerness of international investors, it’s most likely it will come to fruition

On February 20, the Royal Government of Cambodia (RGC) laid out a massive and the most ambitious transport and logistics master plan for the next 10 years seeking an investment capital of $36.67 billion for the construction of 174 projects aimed at overhauling the infrastructure across the nation.

The ‘Comprehensive Intermodal Transport and Logistics System Master Plan 2023-2033 (CITLS)’, as it is known, was announced by Sun Chanthol, Deputy Prime Minister and First Vice-Chairman of the Council for the Development of Cambodia (CDC) and Peng Ponea, Minister of Public Works and Transport (MPWT) during its fourth meeting held in Phnom Penh.

The CITLS consists of seven types of infrastructure development including the construction of 94 road infrastructures – nine expressways and 85 national road projects that connect to major provinces and other main roads – the railway development saw eight projects and the logistics has 15 projects, the river transport get 23 projects, the maritime transport has 20 projects and 10 projects of air transports and other four additional projects.

The infrastructure projects nationwide were broadly divided into two: the first phase was estimated to have 90 projects from 2023-2027 with a development budget of $19.92 billion; and second 91 projects will require $16.75 billion for the construction period from 2028-2033 with a total investment capital worth approximately $36.67 billion.

Source: Minister of Public Works and Transport

During the February 20 meeting, Chanthol recalled the efforts of former Prime Minister Hun Sen to develop this master plan making it possible to launch in August last year. He also appreciated Aun Pornmoniroth, Deputy Prime Minister and Minister of Economy and Finance (MEF), who led the working group in the past three meetings since the project was implemented.

Based on the Logistics Performance Index (LPI) issued by the World Bank, Cambodia ranked 98th in 2018 but was dropped to 115th, making the country stand on par with Laos – ranked 82 in 2018.

Compared to other neighbouring countries, Thailand has dropped from 32 to 34 rankings while Vietnam has moved out from 39 to 43.

Chanthol said that the shifting up of LPI ranking for most ASEAN countries doesn’t mean that the governments are not improving the transportation and logistics infrastructure but it is more on the competition in developing of road network over the last five years.

“We might have the Phnom Penh-Sihanoukville Expressway (PPSE) and many upcoming projects including PP-Bavet Expressway, Phnom-Penh-Siem Reap-Poipet Expressway and Funan Techo canal, but other countries in the region are doing even more than us, especially the Philippines as they signed tonnes of development projects, moving from 60 to 43,” he added.

Sun Chanthol (centre), Deputy Prime Minister and First Vice-Chairman of the Council for the Development of Cambodia (CDC) with the delegation of the US-ASEAN Business Council (US-ABC) in Phnom Penh. CDC

Responding to Khmer Times’ query, Chanthol said that the fourth meeting of the CITLS master plan was organised to review and update the progress of the development while explaining in detail to the public.

He continued that the meeting also focused on two other important projects such as the establishment of the Cambodia Phnom Penh Logistics Complex Project by Japanese investors thanks to the support from RGC since project inception and the Sihanoukville Logistics Complex PPP project – Public & Private Partners.

While talking to the media, Chanthol emphasised that these projects within the CITLS master plan require an investment budget worth nearly $40 billion from the private sectors and stakeholders to complete 174 infrastructure projects and logistic centres across the whole country by 2033.

The construction of all these projects and their locations has been examined for a duration of five years through collaboration with the Japan International Cooperation Agency (JICA), the World Bank and the Chinese Construction companies to ensure the efficiency of the logistic centres and transport infrastructures to facilitate investors for export purposes as well as reduce the time and cost for consumers good.

According to the exclusive information of the Sihanoukville logistics complex project issued by MPWT, the project has several objectives such as to improve the logistics sector’s competitiveness by reducing costs and time as well as improving its liability.

Chhieng Pich (third left), Director General of the General Department of Logistics Council of MPWT, one of the brains behind finalising the master plan. CDC

“An efficient logistics system will improve the nation’s supply chain and product competitiveness regionally and globally while sustaining trade development and economic growth.”

Following the masterplan study, MPWT has planned to develop major logistics complexes in key cities of the Kingdom, starting in Phnom Penh capital and Preah Sihanouk province, the statement added.

The objective of the project will also be to facilitate export and import goods processes through integrated, modern, value-added logistics services for goods and cargo as well as for domestic or international transit and sustain economic diversification in the future.

The project is envisioned to provide integrated, modern, and value-added logistics services for goods and cargo transiting through the Sihanoukville Autonomous Port while in the long term, the facility is expected to function as a hub that.

links with other complexes and satellite facilities to be developed under the government program.

Through a PPP, RGC wants to access the private sector’s expertise, innovation and capacity to minimise the project costs for the government while attaining a high level of service.

During the meeting to officially announce the master plan, Ponea briefed the background of the CITLS which has gone through three stages to achieve today’s success and the initiative of the project came from the collaboration between the Japan International Cooperation Agency (JICA), the World Bank and MPWT to create ‘Logistic Master Plan’ in 2018.

Two years later, MPWT received other support from the United Nations Development Programme (UNDP) and JICA to establish the ‘Interim Master Plan on Intermodal Transport Connectivity and Logistics System Master Plan’ which included five integrated plans such land transport, railway, waterway, ports, and logistics. The plan was approved by the National Logistics Council in January 2020, he added.

He said that in 2023, the cooperation between the Supreme National Economic Council, the China International Engineering Construction Corporation (CIECC) and MPWT, has led to the creation of the CITLS master plan.

The MPWT Minister said that on August 2 last year, the master plan was acknowledged by RGC and officially allowed to be implemented with two additional plans including the improvement of the airway and intermediate transport taking it to a total of 174 projects for both soft and hard infrastructures for the next decade.

Chhieng Pich, Director General of the General Department of Logistics Council of MPWT said the master plan was established with a vision to continue improving and developing the transportation and logistics system, focusing on the promotion of physical and non-physical infrastructure.

Our target is set towards the development of high-efficiency transit systems across the country and to member countries in the region as well which will strongly contribute to boosting the national economic growth as well as responding to the needs of a sustainable and socio-economic society, he added.

Development corridors
The CITLS master plan sets out a strategic framework for building transport infrastructures nationwide in the form of 3-3-4-2 (meaning three main transportation corridors, three sub-corridors, four growth poles and the two connect-growth poles) while setting up infrastructures of the logistic system is in the form of 2-2-N (meaning two logistic centres, two logistic parks, and ‘N’ stands for ‘logistic centres everywhere’).

The three main transportation corridors are the Southwest Transport Corridor – Phnom Penh & Preah Sihanouk, the Northwest Transport Corridor – Phnom Penh & Poipet town, and the Southeast Transport Corridor – Phnom Penh & Bavet, a town near the Vietnam border.

The three sub-corridors are the Marine Sub-Corridor – Koh Kong & Kep provinces, the Northeast Sub-Corridor – Phnom Penh & Stung Treng, and the Northern Sub-Corridor – Poipet & Ou Ya Dav, a district in Ratanakiri province.

The four growth poles are Phnom Penh, Preah Sihanouk, Siem Reap and Battambang while the two connect growth poles are Svay Rieng & Bavet town and Serei Saophoan & Poipet.

The two logistic centres are in Phnom Penh and Preah Sihanouk, while the two logistic parks refer to Poipet and Bavet towns, and the plan to create logistic centres everywhere focusing on server potential locations such as Siem Reap, Kampot, Kampong Cham, Battambang, Banteay Meanchey and Kampong Thom.

The master plan has four main objectives such as to expand the scope and capacity of transport infrastructure systems, improve the efficiency and effectiveness of transport services and infrastructure, strengthen service efficiency and logistics costs by continuing in-depth reform measures and promote transparency, competitiveness and human resources, and lastly is promote transport infrastructure to support national development policies, including the Belt and Road Initiative (BRI), ASEAN Highway Network, Mekong Subregional Economic Corridor and ASEAN Connectivity.

To achieve this success, the National Logistics Council (NLC) was created along with support from the ‘National Logistics Steering Committee’ and ‘Advisory Board for Transport & Logistics’ which included researchers, academia, the private sector and others.

The NLC is the top decision-maker that leads all projects and boosts the development of the logistic sector in the country. In addition to the core responsibility and other general roles related to the logistics system, NLC will be equipped with another role in promoting the effective implementation of the CITLS master plan.

US investors
Post-February 20 bold announcement, Chanthol engaged with representatives from India, Japan and a few other countries, but a major push came when he met a delegation of 17 mega-companies from the US-ASEAN Business Council (US-ABC) led by W. Patrick Murphy, US Ambassador to Cambodia in Phnom Penh.

The US-ABC delegation sought the Deputy Prime Minister’s assistance to facilitate the existing and upcoming investments, trades and business operations of US firms in the country to which Chanthol responded immediately to the readiness of the CDC through the QIP Online – a system created to facilitate investors fairly.

He informed the delegation on the direction of diversifying investment portfolios from other countries, as the Kingdom has investment laws that are open to all investors, whatever race or nation they came from such as the US, China, Thailand or Japan firms.

“We want to see more US investments coming into our country and developing human resource capacity and the logistic infrastructures thanks to the peace and economic stability in the country,” Chanthol said.

He emphasised that the current RGC under the leadership of Prime Minister Hun Manet is a pro-business government that focuses on facilitating investments and businesses in the country hence CDC has listed out several strategies such as the expansion of infrastructure and logistic master plan to reduce the transportation cost.

The Cambodia Investment Law does not discriminate against any foreign investments hence everyone will be treated equally under the law, Chanthol said.

Speaking to Khmer Times, Ky Sereyvath, a senior economist and Director of the Institute of China Studies at the Royal Academy of Cambodia, “Looking back in history, the Kingdom and the US were the trade and strategic partners for a long period however, the two nations find it hard to update into the comprehensive strategic partnership.”

The US mostly focuses more on geopolitical interests which caused the relations between the two countries unstable due to the election-winner party of the US holding different foreign policies and strategies hence it is hard to adapt to new changes every four years, he added.

Sereyvath emphasised that in terms of bilateral trade and business activities, our country and the US have reacted positively for a long time, leading to an increase in the Cambodian market share to 40 percent total.

He went on to add that the discussion between the two leaders could result in upgrading relations between ASEAN and the US to become comprehensive strategic partnerships which would lead to an opening international market gate, allowing all ASEAN countries – including the Kingdom – to absorb international investors and tourists.

Besides all the collaborations, the United States also intends to reduce the abuses of human rights and trafficking which goes the same to RGC hence this might be a great chance for the two leaders to team up to eliminate and prevent such cases in the country while also enhancing their relations. khmertimeskh

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