Phnom Penh port expansion seeks funding solution
Phnom Penh port expansion seeks funding solution
With construction on the second phase of a new cargo terminal at the Phnom Penh Autonomous Port (PPAP) set to begin in 2016, officials are now looking for ways to finance the project.
Hei Bavy, director general for PPAP, said the $20 million expansion will see the existing cargo terminal, located in Kien Svay district of Kandal province, increase its handling capacity from 150,000 shipping containers to more than 300,000 by 2017.“We have seen increasing export and import activities in the last few years. The terminal's expansion will make it easy for exporters and importers from the nearby zone,” he said.
PPAP is allegedly looking at two sources to fund the expansion including a loan from the Chinese government, which funded the first $28 million phase of the port’s development, or potentially listing the state-owned asset on the Cambodian Stock Exchange as early as next year.
However the budget for the expansion is likely to decline to about $10 million if the Chinese government does not agree to finance the project, the PPAP official said.
In addition to the cargo terminal’s expansion, PPAP is currently seeking approval from the government to build a new Special Economic Zone on a thousand hectares of land surrounding the new port.
“For the special economic zone, we are waiting for government approval, especially from Council Development of Cambodia, if they approve it, we will start right away, maybe next year,” Bavy said.
But Kim Savuth, president of local rice exporter Khmer Food Co, called on the PPAP to focus also on reducing costs and transit changeovers at the capital’s main port entry.
“Goods that are exported through PPAP have to be transited to another vessel once arriving at Vietnam port before going onto Singapore or Malaysia whereas vessels from Sihanoukville Port can go directly to Singapore or Malaysia,” he said.
“Can PPAP work out a way to stop transiting in Vietnam and directly head to Singapore or Malaysia to reduce transit fees?” he asked.
A third phase of expansion for the PPAP is planned to start from 2018, bringing the port's total handling capacity up to 500,000 containers.
More than 61,000 containers of goods passed through PPAP during the first half of the year, up about 21 per cent from 50,000 containers during the same period last year.
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