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Infrastructure spending rises

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Site break ground at Steung Meanchey flay-over bridge in late 2012. Photograph: Pha Lina/Phnom Penh Post

Between 2008 and 2012, Cambodia’s spending on public infrastructure amounted to about US$2.5 billion — a sum an opposition politician says is too low and is ineffectively put to use.

In his opening remarks at the seventh Cambodia Outlook Conference, Prime Minister Hun Sen said public investment on physical infrastructure totalled 9,852 billion riel ($2.5 billion) between 2008 and 2012.

Transport, irrigation and electricity spending accounted for 6,821 billion riel, 2,251 billion riel and 780 billion riel, respectively.

The premier said that during the four-year period, public investment on transport had risen from 850 billion to 1,851 billion riel, irrigation investment from 201 billion to 650 billion riel and electricity investment from 128 billion to 327 billion riel.

“Public investment financed by state revenue increased from 711 billion riel in 2008 to 1,327 billion riel in 2012, with much focus directed to physical infrastructure for underpinning growth and social development and protection of national sovereignty and integrity,” he said.

“Financing by external sources increased from 1,926 billion riel in 2008 to 2,860 billion riel in 2012.”

But Son Chhay, of the Sam Rainsy Party, said the figures the premier cited did not match the amount of actual work.

“Most of the money was used for the construction of roads, which are almost completely damaged — [there is] no quality at all,” he said.

“We have borrowed a lot of money abroad, especially from China, for the construction of roads, but most of the projects have been awarded to Chinese companies. And the government never follows the bidding process to the public, so the quality [of the roads] is bad.

“I think the government has enough capacity to expand [road construction], and [it] does not just receive loans and builds without quality.”

Chhay said the government should be able to collect more than $1 billion a year from taxes, customs and renting state properties.

Hiroshi Suzuki, of the Business Research Institute for Cambodia, said the increased infrastructure spending was indicative of the government’s efforts to stimulate economic growth.

“I appreciate the government’s great effort to invest in the infrastructure sector, even under the very limited fiscal space,” Suzuki said.

“The investment rate to GDP should be evaluated case by case, taking into consideration the situation of each country and the stage of development.

“The government has invested mainly in fundamental infrastructure such as national roads and the Sihanoukville port. I suppose these investments are very effective and efficient.”

Hun Sen acknowledged that the public expenditure policy gave priority to education, health, agriculture and rural development sectors in addition to infrastructure projects.

Public expenditure had increased by 17 per cent per annum, of which current expenditure and capital expenditure increased by 17.6 per cent and 16.8 per cent respectively, he said.

But Chhay pointed out that the government had also racked up foreign debts — most notably to China — of about $7 billion.

To contact the reporter on this story: May Kunmakara at kunmakara.may@phnompenhpost.com

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