With eight years of experience in Phnom Penh’s taxi business, Chinese-owned Global (Cambodia) Trade Development turned its hand to public transport in March when the company took over the operation of Phnom Penh’s bus service. But barely a month later the duty was handed over to City Hall. The Post’s May Kunmakara sat down with CEO Lim Andre this week to talk about the company withdrawing from the contract, allegations of an unfair acquisition process and the future of public transport in the capital.
With the support from the Japan International Cooperation Agency (JICA), City Hall launched a public bus service for the second time in February, after a failed attempt in 2002. How
do you think it is performing this time around?
Well, our city really needs to have a public bus service. It benefits the government and a lot of people. It can reduce expenses, it can reduce traffic accidents, traffic jams and pollution.
If you look at other cities around the world, most of them provide a public bus service. And although presently we provide one line of service with old buses, I do hope that they [the municipality] can run it smoothly with brand new buses with many lines in order to broaden service to city dwellers – don’t take it as a joke.
You are the only private company to get a licence from the municipality to take over the bus service after the one-month trail period with the JICA. Why did you stop?
Of course, after the JICA, we got authorisation to run the business, but my requests [to City Hall] were not met; therefore, we think that we cannot continue the business because nobody wants to run it when it cannot make profit.
Of course, we expected that we will lose with the business but we also believe that one day it will change from losses to the break-even point, and then we could make profit in next five to 10 years – that’s why we wanted to know what the Phnom Penh Municipality would offer us as encouragements for our company.
It is like, for example, when there is a party and someone brings a chicken and the other person offers soy sauce to enjoy together. But, if we just let one side pay for all of the chicken and soy sauce, it is not possible. We could not agree on the negotiations, so we decided to drop the business and we don’t want to continue anymore.
So, the reason that you stopped is that the municipality would not subsidise your business?
No, we didn’t ask the municipality to subsidise us, we just asked them to support us on some points. Not for the long term, just the short term.
As I said, I have a chicken, and you have soy sauce so this is like the incentive. If you do it without incentives, we can’t do it.
So without this support you couldn’t make it work?
Well, I had prepared the plan three years ago and up until now I have not changed anything. As we mentioned in our business plan, within 10 months after signing with Phnom Penh Municipality, we would have eight lines operating in Phnom Penh. If we cannot achieve that, the municipality can take back our licence.
If I cannot do it, I don’t think any other companies can. I am confident and I know the industry and the situation here in Phnom Penh – that’s why I dare to put it like that.
I can run the business. But without any incentives for me I wont.
By my plan, I would import brand new standard buses. My plan was to have 320 buses to operate on these eight lines.
You have been criticised for a lack of transparency in obtaining the contract. Do you think the process was fair?
I don’t think it is an issue. There were seven companies and the municipality dropped them one by one which left only two. Then at last, they selected us. The door has been open for other companies to operate this business for years, but no one wants it as they know it is not attractive – it is not a gold mine. But, if anyone says that it is not transparent, that is wrong.
Any companies, either local or abroad who want to operate the business should use brand new buses. And not charge people over 70 or disabled people. The should give discounts for students and garment factory workers. Would business dare to take that on?
City Hall is running it by themselves now. Will it be a success?
I cannot comment with that. But, I wish the municipality would offer more lines in order to help people who want to use the service.
It is not like what people were saying: that we just operated it for only one month and got lost and then ran away.
Do you have a plan to renegotiate or reapply for the licence? Or if the municipality agreed to help, would you take it up again?
Of course, I would rethink it. But, at the moment, I have already closed it down.
This interview has been edited for length and clarity
Contact PhnomPenh Post for full articlePost Media Co Ltd
The Elements Condominium, Level 7
Hun Sen Boulevard
Phum Tuol Roka III
Sangkat Chak Angre Krom, Khan Meanchey
12353 Phnom Penh
Tel: +855(0) 23 888 161 / 162
Fax: +855(0) 23 214 318