Saturday, January 5, 2013

Growing Chinese influence in Cambodia:
A railway from Preah Vihear, a steel plant and a seaport in Koh Kong

Picture by Pigalle
Waiting for better times: Phnom Phenh Railway Station

Chinese investments in new railways in Southeast Asia are going on. Will the Chinese build a highspeed railway from Bangkok to Chiang Mai and to Nong Khai? That's what we asked here in December, when we also wrote about railway projects in Laos financed by Chinese loans. Now there is a new project in Cambodia for a railway from Preah Vihear province in the northeast to Koh Kong province in the southwest. The Cambodia Iron and Steel Mining Industry Group and the China Railway Major Bridge Engineering Group have signed a Memorandum of Understanding (MoU) in order to build this 404-kilometer railway - and also a seaport in Koh Kong. The railway will run through the provinces of Preah Vihear, Kampong Thom, Kampong Chhnang, Kampong Speu and Koh Kong, while the seaport will be capable to handle about 50 million tons of goods a year according to

The project shall begin on July 2013 and is expected to be completed within 4 years, said the companies. The reason: Cambodia Iron and Steel Mining Industry is set to build a steel plant in Preah Vihear, which has been found rich in iron ore. It is a Chinese firm based in Phnom Penh and established in 2006. The rail link and port would cost $9.6 billion and the steel plant $1.6 billion, notes

What is a contrast to these big sums: The correspondent of Reuters found in the companys headquartier in Phnom Penh "four Chinese labourers in flip-flops eating lunch" and a chairman, who was unable to say "where the billions of dollars for the Cambodian rail, steel and port projects would come from".

Phnom Penh Post adds, that there are plans to Export steel and iron to Thailand and Vietnam and that also passangers will be transported by the railway. But The Cambodia Daily notes, that Cambodias minister of transport Tram Iv Tek said: “I don’t know what the companies will do. Let’s wait and see all together (...) “If they can really do it, it will help Cambodia’s economy a lot.” The Cambodia Daily quotes also Environment Minister Mok Mareth Saying that an environmental impact assessment has not yet been submitted for the project. And according to the Preah Vihear provincial industry, mines and energy office, "the company currently holds a license to explore for iron ore, but not to dig a mine".

In May 2007 the Associated Press had reported from Shanghai that four giant state-owned Chinese steel firms — Wuhan Iron and Steel, Baosteel Group, Anshan Iron and Steel Group and Shougang Iron and Steel — had joined to explore for iron ore in Preah Vihear to address China’s lack of control over its steel supply. In the last days the plans in Cambodia were widely reported by Chinese media like the news agency Xinhua.

But doubts remain: "Chinese Plan to Invest in Cambodia Is Big, but Vague", write Andrew R. C. Marshall and Prak Chan Thul for Reuters.

And the revival of the railway from Phnom Penh to Sihanoukville

End of December 2012 a railway line from Phnom Penh to the port of Sihanoukville has started temporary operations. Tram Iv Tek, minister of Public Works and Transportation, said according to Phnom Phenh Post the Toll Royal Railway company received a 30-year contract from the Cambodian government to restore and maintain the line. "He said operation of the new railway was not yet official because some technical improvements were necessary, but the train was able to run at about 60 kilometres an hour." So on this day End of December a train loaded with empty cargo containers left Phnom Phenh station. David Kerr, chief executive of Toll Royal Railways, the line’s operator, said to The Cambodia Daily "that once permission from the customs department has been obtained, hopefully this week, trains could carry up to 128 containers, which are about 6 meters long". For the moment it is unclear, when a passenger train operation will start.
This project has received $141.6 million of funding, according to the Asian Development Bank (ADB), which has provided an $84 million loan for the plan. The project involves also a 337-km Northern line from Phnom Penh to Poipet City on the Thai border. But for the moment it's unclear, if there will be enough money to rivive this railway line.

Read also:
Will the Chinese build a highspeed railway from Bangkok to
Chiang Mai and to Nong Khai?

Briefing Paper: The Chinese North - South Railway Project by equitable cambodia.

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