The Stung Trang-Kroch Chhmar Cambodia-China Friendship Bridge seen in November 2021. Public Works Ministry
In an effort to transform Cambodia into a regional investment hub, the government has launched an initiative to modernise and upgrade infrastructure and logistics systems, presenting an important opportunity for private sector investment.
The government recently launched a roadmap for the Comprehensive Master Plan on the Cambodian Transit and Logistics System 2023-33.
The plan prioritises 174 projects, with an estimated investment value of $36.68 billion. It includes 94 road, eight railway, 23 waterway, 20 sea and 10 air transport projects, as well as 15 logistics and four other infrastructure development ventures.
The initiatives aim to interconnect all modes of transportation and link them with logistics centres.
“Although the development of transport and logistics systems in Cambodia has not fully met the needs or been a driving force for socio-economic development, especially in the transition to an upper-middle- and high-income country, the [master plan] sets a vision,” stated the Ministry of Public Works and Transport.
“This vision includes continuing to improve and develop the logistics system, focusing on the construction of physical infrastructure to develop a highly interconnected transit system. The system will not only connect within the country but also with the region, contributing to national economic growth and sustainable socio-economic needs,” it added.
Government efforts
Former public works minister Sun Chanthol – currently deputy prime minister and first vice-chair of the Council for the Development of Cambodia (CDC) – noted that the country is on the right track to strengthen and expand its road network, particularly with international border checkpoints with adjoining nations.
He said the development is essential for increasing the country’s competitiveness and attracting foreign investment.
“The government laid out a … plan for road renovations, including widening and upgrading from two- to four-lane roads, to enhance connectivity on all fronts, and facilitate faster travel and transportation of goods,” Chanthol explained.
“The logistics … plan includes building physical infrastructure through international border checkpoints with neighbouring countries. This will aid transportation and transit traffic, aiming to enhance Cambodia’s competitive advantage, reduce logistics and transport costs and attract investment,” he added.
According to Chanthol, the public works ministry is making significant progress in its responsibilities, including major projects such as the construction of a new container port and the first phase of the Sihanoukville Autonomous Port (PAS), which has a water depth of 14.5m and is scheduled for completion in 2025.
Other initiatives include the study for the construction of Phase 2 and Phase 3 of the new container port, and the implementation of an electronic data exchange system there (Port EDI) to expedite cargo vessel entry-exit procedures.
Chanthol said there are plans to expand and improve the quality of national roads (NR) 5 and 7, alongside the construction of a bridge across the Mekong River in Kratie province.
He noted initiatives also include a road connecting Battambang and Kampong Thom provinces, modernisation of the railway system, improvement of waterway transport and a feasibility study for a direct waterway route from the Tonle Bassac River in Phnom Penh to the Kep coastal port.
Infrastructure development crucial
Chea Chandara, president of the Logistics and Supply Chain Business Association in Cambodia (LOSCBA), told The Post previously that the substantial investment capital strategy is essential for enhancing the sector by shortening delivery times and reducing shipping costs.
He mentioned that the country currently faces numerous challenges in logistics, including a lack of modern equipment and the absence of a deep-sea port for large international ships.
“The transport sector is like a guide for the flow of economic activity. If transportation works well, the domestic economic flow will be good, and the number of foreign investors will increase accordingly,” he stated.
Chandara also noted that he was aware of the ministry’s previous plans to build a large logistics centre in the capital, which would serve as a hub for transport companies and warehouses, equipped with modern systems.
Anthony Galliano, founder and group CEO of the Cambodian Investment Management – which offers a range of vertically integrated financial services – commended the government’s precision and meticulousness in spending on infrastructure.
He said the focus has been on scale and necessity, rather than indiscriminately accommodating special interests. He noted that critical infrastructure upgrades have been appropriately made in airports, ports, bridges and roads.
“Foreign investors in the manufacturing and logistics sectors are particularly focused on strategic areas, which will considerably boost foreign direct investment [FDI]. Infrastructure is sometimes taken for granted,” he said.
“One only needs to look back at the time when a ferry was required to cross the Mekong on the way to Vietnam, which is now obsolete due to the Neak Loeung Bridge. The fact that the Kingdom will soon have two new airports with drastically increased capacity and capabilities prepares the nation for a return to a tourism boom and for evolving into a regional hub,” he emphasised.
Galliano explained that as the capital expands, bridge links such as Koh Pich and Koh Norea spur economic growth and development.
“This step-by-step approach will need to address traffic congestion in Phnom Penh, eventually with public transport, and also extend to allow other provinces to benefit from infrastructure upgrades,” he stated.
