Families forced to leave their homes to make way for a railway rehabilitation project funded by the Asian Development Bank and the Australian government have told the bank that a draft compensation plan it has drawn up to remedy their situation is inadequate.

On Monday, Inclusive Development International (IDI) and Equitable Cambodia submitted comments to the bank on behalf of affected communities and local NGOs.

According to these groups, the plan “fails to compensate people for their income losses” or “address the indebtedness that the most vulnerable households are burdened with as a result of inadequate compensation and income restoration”.

They argue that an income restoration program that started long after households were resettled needs to be strengthened and prolonged in order for families’ lost incomes to be sustainably restored.

“If these failures are left unresolved, the Project will continue to leave hundreds of vulnerable families impoverished and without redress,” the comments say.

Families began making way for the $143 million project to rebuild Cambodia’s railways in 2010. In 2012, IDI filed a complaint with the ADB’s internal watchdog on behalf of affected families, which triggered an internal investigation into the botched resettlement. The damning results, revealing the scope of the failure, were released earlier this year.

That report led to a compensation action plan being approved by the ADB board to finally bring the resettlement, which was carried out by the government but overseen by the ADB, into compliance with the bank’s own safeguards.

As the compensation details were disclosed last month, the ADB said feedback from affected households would be an “important part of the plan and remediation processes” and vowed to carry out more consultations with them.

But the plan’s release revealed that the Cambodian government – responsible for implementing the compensation, likely with an ADB loan – was intent on not paying families for income lost during the relocation period, and had refused to set up a debt workout scheme to help families manage their loans.

In a statement yesterday, the ADB said that talks with the government were progressing, and that the action plan would “be further informed by comments from all stakeholders”.