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Call to end hefty transport costs

A truck leaves Sihanoukville Autonomous Port in 2014 after being loaded with cargo.
A truck leaves Sihanoukville Autonomous Port in 2014 after being loaded with cargo. Heng Chivoan

Call to end hefty transport costs

Newly-appointed transportation minister Sun Chanthol met with representatives of the nation’s logistics and transportation industries yesterday to discuss the problems and bottlenecks that are keeping basic transport costs high, reducing the Kingdom’s trade competitiveness and putting a burden on both citizens and infrastructure.

The minister discussed the sector’s challenges with representatives of the three biggest industry bodies – CAMTA, CamFFA and CAMBA – as well as private sector transportation companies.

“We are focussing on the two main issues, the cost of delivery and overloading, to seek solutions,” Chanthol said.

The minister urged passenger and freight transportation companies to decrease their fees to reflect lower fuel costs, calling for a second meeting on Thursday to hear their proposals and discuss the issue further.

He also requested that the companies submit in confidentiality a report detailing their cost of operations to help the minister and his team determine suitable measures to bring transport costs down.

In doing so, Chanthol appeared to be following the same route taken earlier this year as commerce minister to create a fuel-pricing mechanism aimed at ensuring that prices at petrol stations across Cambodia reflected changes in world oil prices. In that case, the minister’s team used the cost of operations to create a formula for a price ceiling on petrol.

Chanthol called for cooperation, but said if the transportation companies were not forthcoming, the government was ready to intervene to protect consumers and businesses from unfairly high prices and price spikes during holidays.

“We are now trying to work together to seek a solution,” he said. “If that doesn’t work, we might have to create a formula to determine the costs of transportation, as we did with the gasoline-pricing formula.”

Private-sector transportation companies raised the issue of “unofficial fees” paid to corrupt government officials, which they said had resulted in higher costs that were passed along to consumers.

“Unofficial payments is the main obstacle to reducing transportation fees, as even when the government reduces official fees there are unofficial ones to be paid,” said Sin Chanthy, president of the Cambodia Freight Forwarders Association (CamFFA), which represents about a quarter of the country’s 300 logistics firms.

“I think everyone knows about this issue, but it is a sensitive one and people are afraid to talk about it because it will impact their business,” he added.

Chanthol acknowledged their complaints, urging the companies to document the problem so that it could be addressed.

“I suggested that they list down in detail what kind of [unofficial] payments they were making so that we can solve this issue together,” he told reporters after the meeting. “If we can confirm that this issue exists, it is not only our ministry’s duty, but also the government’s, to coordinate and solve this negative issue.”

The minister also warned trucking companies to respect laws on road weight limits to reduce road damage caused by overloaded trucks. He said the problem was much bigger than it appeared, as the vast majority of violations go unreported.

“If we find one truck overloaded, we need to multiply that by ten to get the actual number,” he said.

Sok Chheang, president of the Cambodian Trucking Association (CAMTA), was quick to distance his organisation’s 30 member firms from the issue.

“The overloaded trucks are not from our members,” he said. “They belong to companies outside our membership and it is the duty of the government to control them.”

According to Chanthol, the government is working to help establish a private sector-led committee to oversee the country’s logistics development and promote the national Industrial Development Program (IDP).

Chanthy expressed support for the idea, which he said worked successfully in neighbouring countries to solve problems in the transport and logistics sectors.

“We support this policy,” he said. “When we can reduce our cost of delivery we will attract more investors and our business will benefit.”

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