Phnom Penh Municipality has reached a deal with PPDEC, a previously little known company, to privatise the capital’s public lighting system, a city official said yesterday.

Mean Chanyada, spokesman for Phnom Penh City Hall, said the agreement grants PPDEC the exclusive maintenance rights to the city’s traffic lights, street lights, security cameras and lighting systems for billboard advertising over a period of 20 years.

Under the terms of the agreement, which were finalised Monday, PPDEC will be responsible for replacing the fluorescent bulbs currently used in 10,000 street lights across Phnom Penh with energy-saving LEDs.

The deal will improve the efficiency of the lighting system management, he said.

“Our workforce does not have the skill to complete the task, so we hired a private company to undertake the project,” Chanyada said. “We will oversee the process to make sure that the terms of the deal are fulfilled.”

Chanyada did not provide details on the terms or value of the contract. However, local media reports claim PPDEC was given the right to collect the advertising revenue from all of the city’s billboards.

This could make it a very lucrative deal, according to one advertising industry expert, who estimated that the 30,000 advertisement billboards in Phnom Penh generate at least $10 million a year in revenue.

“I think the revenue from billboard advertising is much higher than what the company will spend on maintaining the lighting system,” said the industry expert, who spoke on condition that his name was not used. “It will be a very good source of profit for the company.”

Nevertheless, the result of the privatisation should be greater efficiency and a better public service for the residents of the city, he added.