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Logo of Phnom Penh Post newspaper Phnom Penh Post - PM secures US$2 billion steel project from Chinese

PM secures US$2 billion steel project from Chinese

PM secures US$2 billion steel project from Chinese

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Steel tubing used for scaffolding sits outside a construction site supporting a billboard showing the Beijing city skyline on September 2, 2012. Hun Sen secured a $2 billion industrial park project by Chinese company Delong Holding Group that was agreed upon by Cambodia’s premier yesterday. Photograph: AFP Photo/Mark Ralston

Steel tubing used for scaffolding sits outside a construction site supporting a billboard showing the Beijing city skyline on September 2, 2012. Hun Sen secured a $2 billion industrial park project by Chinese company Delong Holding Group that was agreed upon by Cambodia’s premier yesterday. Photograph: AFP Photo/Mark Ralston

Prime Minister Hun Sen has returned home from his trip to China a wealthier leader having secured upwards of US$2.5 billion in Chinese investment and loans over the next year alone, officials from the Ministry of Foreign Affairs said yesterday.

The package includes a $2 billion industrial park project by Chinese company Delong Holding Group that was agreed upon by Cambodia’s premier yesterday, minister attached to the Prime Minister and Secretary of State for Economy and Finance, Aun Porn Monirath, said at a press conference at Phnom Penh’s airport upon Hun Sen’s return yesterday afternoon.

“The industrial park consists of a logistics section, electricity plant, steel factory, sea port and human resources training centre,” Porn Monirath said, adding the steel factory would have the capacity of producing three million tons of steel per annum.

Porn Monirath said the Cambodian premier had flagged Preah Sihanouk province as a no-go zone for the development of the project, which includes a sea port of undefined magnitude.

The company would cooperate with Cambodian investment officials to facilitate the large-scale project and “the selection of a proper location excluding Preah Sihanouk province, which the government has designated as a domestic and international coastal area”, Porn Monirath said, repeating the premier’s words. Hun Sen had acknowledged the environmental sensitivities associated with such an “immense” project, slated to employ 10,000 Cambodians, and had accordingly sought to preserve the “beauty” of popular tourist destination Sihanoukville.

This would mean the $2 billion sea port and industrial steel manufacturing park would have to be built along the coast in any of Kep, Kampot or Koh Kong provinces. Chinese Prime Minister Wen Jiabao also granted Hun Sen’s request of annual concession loans of between “300 to 500 million US dollars” for the next five years, Porn Monirath said.

The request had received a “positive response” from China during the high-level bilateral talks between the two leaders while Hun Sen was in China for the China-Eurasia Expo being held in Urumqi of Xinjiang Uygur Autonomous Region.

Wen also agreed to additional 2012 financing of 150 million yuan [about $24 million] for Cambodia to work on seven infrastructure development projects.

So far this year, Cambodia has spent $420 million in Chinese loans on four infrastructure projects, according to Porn Monirath.

In respect of the South China Sea row that has consumed the ASEAN agenda, the Chinese president lauded Cambodia’s role as ASEAN chair in handling the “ASEAN-China framework”.

“China showed its firm stance to solve the sea problem with regional countries in a peaceful and diplomatic way based on legal procedure for the interests of peace, stability and regional development,” Porn Monirath said.

Highlighting the success of the Non-Aligned Movement summit, Porn Monirath said that Iran, China and North Korea had pledged their United Nations votes to Cambodia’s bid at a nonpermanent seat on the Security Council for 2013-2014.

China and Cambodia have mutual interest in strengthening their political ties, Institute of Southeast Asian Studies fellow Pavin Chachvalpongpun told the Post yesterday.

“China wants to expand its sphere of influence in Burma, Thailand, and through Indochina, China has done this successfully through its political leadership and soft power, and also through the work of the private sector,” Chachvalpongpun said.

“And Cambodia has a lot of interest in strengthening the relationship with China, Cambodia wants more foreign policy choices rather than relying on Thailand and Vietnam. Cambodia can use this power against other powers in its own interest.

“With the rise of China and ongoing competition in Asia, Cambodia is wise to play equal to key powers, and maybe Cambodia might move closer to China,” he added, highlighting the decline of US political power in the region since the mirror decline of the Cold War.

Next year marks the 55th anniversary of China-Cambodia diplomatic relations and the Year of China-Cambodia Friendship, Cambodian state news noted yesterday.

To contact the reporters on this story: Chhay Channyda at [email protected] and Rachel Will at [email protected]
With assistance from Bridget Di Certo

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