India is financing the construction of a US$70 million transmission line to bring electricity from hydroelectric projects in Laos to Cambodia, according to Indian Chamber of Commerce President Debasish Pattnaik.
Speaking yesterday after the official launch of the Indian Chamber of Commerce in Cambodia (ICC), Pattnaik said Laos has signed an agreement with the Asian Development Bank (ADB) to finance the transmission lines from Laos to Stueng Trang and the $70 million soft loan from the Indian government would finance the line from Stueng Trang to Kratie.
He said the transmission lines from Kratie to Phnom Penh were already in place.
Tenders for the construction of the project by local contractors would be called by the Indian government in October, Pattnaik said.
The Indian business community in Cambodia assembled yesterday at the Intercontinental Hotel for the signing of documents and networking in an effort to boost business connectivity between India and Cambodia.
“We are here to help and to improve the economy,” said Pattnaik.
“We can bring products from Cambodia to India, and Cambodians can take their products to India too. We want to be a bridge. India is the world’s second biggest population after China, and the second biggest economy in Asia and well,” Pattnaik said.
A letter of support between the ICC and the Federation of Indian chambers of Commerce and Industry (FICCI) was signed.
“This signing, along with the Cambodian Ministry of Commerce today, gives us a national platform and we mean to do serious business now,” Pattnaik said.
Of the Indian businessmen, some of whom have been present in Cambodia for 15 years, about 60 per cent are doing pharmaceutical business, according to Pattniak.
“The rest of them are in Fast Moving Consumer Products (FMCG) as well as food and beverage. Today most of the Indian companies coming in are agricultural and we are trying to bring in more mining companies and oil and gas, electric power and transmission,” Pattnaik said.
Pattnaik said investors shouldn’t look at Cambodia in isolation.
“You have to look at Cambodia as part of an increasingly integrated regional market including Vietnam, Laos and Thailand which together have a population of 120 million people. Cambodia has a lot of advantages, along with being a US dollar economy. You can manufacture things and send them out to other regions. People say Cambodia is a very small market; actually it is not.”
Pattnaik said with the coming 2015 ASEAN agreement, people could send anything they manufacture in Cambodia, anywhere in the ASEAN region, which gives Cambodia an advantage.
He said an additional advantage would be the improvement of electric power during the next two years with hydro power projects coming online.
“In two years down the line, two of the biggest hydropower projects will be online. The price of electricity will come down. You’ll have that advantage. Cambodia has power agreements with Vietnam.
Cambodia also has power agreements with Laos, and Pattniak said that Myanmar, which was geographically closer to India, was also receiving a lot of attention from investors.
“I see investors going to the 81 million people in Myanmar, due to nearness to India, and its existing relationship with Myanmar. I see more investment going to Myanmar than to Cambodia.”
That’s why it was important to have the ICC focusing on Cambodia and bringing in Indian investment, he said.
“India is a democratic country. We can repatriate funds; we can bring in funds. The laws are good. The maximum number of millionaires on the Forbes list are from India. Yes, there are rich and poor and there is disparity between rich and poor, but we don’t depend on international aid. For China, if the US or Europe stops buying, they are in trouble. India is more into the service industry. India brings in stability and a lot of stability within the region as well. India is hosting the INDIA ASEAN Summit.
Pattniak said Cambodians had begun choosing India as a destination of higher education. He said the Indian Ambassador to Cambodia, Dinesh Patnaik, was actively lobbying to bring in regular flight services from India to Cambodia, connecting Calcutta to Siem Reap and Phnom Penh.
Because the majority of Cambodians are Buddhists, Pattniak said there was considerable interest by Cambodians to make visits to the place where Buddha received enlightenment, a place called Bodhgaya.
“We want to make the bridge that so we can bring Cambodian people and products to India. Today Indian companies have got about 900 employees in Cambodia and 80 to 90 per cent are Cambodians.”
Pattnaik said that ICC hoped to attract about 100 member companies by the end of this year.
The ICC charges $175 for corporate members.
Nguon Meng Tech, Director General of the Cambodian Chamber of Commerce, who joined the launch, said the Indian Embassy in Phnom Penh had contacted him to set up ICC to facilitate business for a long time because they thought some countries, including China and Vietnam, already created their chambers in Cambodia.
“India should have this chamber as well in order to have good relationship,” he said, adding that business relationship with India would be good as Indian economic growth is high almost like China.
“We hope that there are good results from India to Cambodia. But, Cambodia investment to India, I think, we need more time.”
Pan Sorasak, Secretary of State for Ministry of Commerce, said trade between Cambodia and India was starting to grow stronger. “I hope we start to do more direct work because now we are working to process many works together to promote direct investment.”
Indian Ambassador Dinesh Patnaik said India wanted to invest more into Cambodia.
“We want to do more direct investment from Cambodia. That’s why we pushed to create ICC,” he said.