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Logo of Phnom Penh Post newspaper Phnom Penh Post - Public, private ports divided on regulation as exports rise

Public, private ports divided on regulation as exports rise

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Some claim need to curb chaos, others warn govt scrutiny would scuttle competition as cargo traffic soars at water ports throughout Kingdom

Heng Chivoan

A truck drives past containers stacked at the Phnom Penh Autonomous Port.

22 ports in Cambodia

With no law on the books, all you need is a stretch of waterfront land to set up a private port. The result, say critics, is a low-quality and chaotic port system

SOARING exports have led to what officials say is a chaotic and cutthroat system of private and public seaports that needs to be better regulated.

About 22 ports dot Cambodia's rivers and seashores, with few rules governing competition, quality, logistics or safety.

The state-owned Phnom Penh and Sihanoukville ports, meant to be key trade hubs, complain that they cannot compete against smaller private facilities that have few standards and frequently engage in what they say is price-dumping.

"Ports are no longer competing fairly and must upgrade their services and management," said Hei Bavy, director general of the Phnom Penh Autonomous Port.

"Some business people have created confusion by trying to adopt Cambodia's 'Open Skies' policy to the Kingdom's waterways," he told the Post.

Open Skies deregulated flights for international carriers to Phnom Penh and Siem Reap, greatly increasing business to these transport centres.

"But [Open Skies] didn't authorise the unrestricted building of new airports. Any move towards an 'open water' policy in Cambodia should follow the same pattern," Hei Bavy said.

Even with cutthroat port competition, businesses complain exporting from Cambodia is more expensive and slower than from neighbouring Vietnam and Thailand.

"All private ports should function under the same set of rules. Singapore has many port terminals, but all of them operate under the Port Authority of Singapore. The same is true of Hong Kong. In Cambodia, it's much different."

Officials say Cambodian law has failed to keep pace with changing trade patterns and rising exports, estimated at just over US$4 billion last year.

Debating a new law

Lawmakers are expected later this month to debate legislation that exporters and port operators hope will bring some order to the export sector.

The law is being made with help from Belgium and would include provisions to coordinate Cambodian and Vietnamese ports.

 

"We have to put all port operators on track and every port, both private and state-owned, needs to compete based on proper regulations," said Mom Sibon, secretary of state for the Ministry of Public Works and Transport.

"I think we need to control all ports to make sure they are operating fairly and according to the law," he said.

But some private operations say they are concerned about increased government control over Cambodia's ports. Greater port competition would improve services overall, they argue, while more scrutiny could eventually discourage trade.

"This is a free market. If there are no private ports to compete with state-owned ports, the price of services will not be competitive," said So Nguon, co-chairman of the Government-Private Working Group on Electricity and Transportation. "I would oppose any move to discourage the opening of new ports.... The more ports there are in operation, the better the competition and the more port users benefit."

Wing Hour, the managing director of City Power Group Cooperation, the firm developing the $16 million Kampot Sea Port in Kampot province, said the company supports the ministry's efforts towards comprehensive regulations, but this should not be an opportunity for tighter government control of private ports.

"The management and services must remain in the control of the private ports," he said.

Hei Bavy said that the Phnom Penh port, which was opened in 1996 with the expectation of handling 20,000 units, is operating far above capacity.

"In 2002, we handled 200 containers. In 2003 that rose to 6,000, in 2004 there were 15,000 containers," he said.

 "In 2005 there were 30,000, in 2007 there were 40,000 containers  and we expect  50,000 this year," he added.

But garment exporters have complained about the lack of capacity in Cambodia's ports, and the Garment Manufacturers Association of Cambodia  (GMAC) has formed a special committee to address the issue.

"There are serious backlogs in the ports. The worst problems happen on the weekends," said GMAC Treasurer Albert Tan.

"The ports still have to catch up to the country's trade," he said." It is still cheaper and faster exporting from Thailand and Vietnam."

Garments are Cambodia's largest manufacturing export, with more than $1 billion shipped in the first five months of 2008.

ADDITIONAL REPORTING BY GEORGE MCLEOD

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