Transportation logistics centre plans submitted

Transportation logistics centre plans submitted

A study on the construction of a Phnom Penh transportation center is undergoing a pre-feasibility study conducted by the Asian Development Bank (ADB) has been submitted to the government.

Chhieng Pich, director of the Ministry of Public Works and Transport’s General Directorate of Logistics, told Khmer Times that the relevant ministries are working on the issue.

The PPLC is to be located on 98 hectares of land in the capital’s Samraong Kraom commune just northwest of the Phnom Penh International Airport.

“We have already completed pre-feasibility on the project, and the detail of feasibility study needs more things to do and it also depends on the decision of relevant parties,” he said.

According to Pich, the Ministry of Transportation and the Ministry of Economy and Finance in charge of this project, known as the Phnom Penh Logistics Complex (PPLC).

“If they decide today or this month, the ADB could start the full feasibility study and the process could be started very soon,” he said.

The PPLC is considered commercially viable. “It depends on how huge the infrastructure and services provided in the center are, so the more infrastructure and services there are, the more profit margin we could earn,” he said.

“Now our transportation is mostly made by land and we need to turn to railway because the cost is cheaper, traffic jams will be reduced, time and reliability will be increased,” he said.

The location 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).

Sin Chanthy, president of the Cambodia Freight Forwarders Association (CAMFFA) said that the logistic complex to provide great benefits for the Kingdom’s transportation sector in term of competitiveness.

“It is good because the complex center will reduce the time and cost of transportation because it will serve as a one-window service,” he said.

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% higher than in neighboring Thailand and Vietnam.

In 2016, the Japan International Cooperation Agency 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 said the Kingdom’s cost of transportation will remain higher compared with neighboring countries and that affects the country’s competitiveness and costs compared with its neighbors and that may not change much.

“We are now working on the report of the issue and will submit it to the Ministry of Public Works and Transport soon,” he said.