Cambodia and Singapore are jointly studying the draft framework agreement on the development of the Phnom Penh Logistics Centre (PPLC).
The centre will be located on 98ha in Dangkor district’s Samrong Krom commune, an area lying just west of Phnom Penh International Airport. It is part of the government’s logistics master plan and aims to trim production costs and increase exports.
Minister of Public Works and Transport Sun Chanthol held a video conference on Thursday morning to gather input from relevant institutions and ensure that the agreement provides a comprehensive legal framework that is acceptable to all parties concerned.
Present at the meeting were senior leaders of relevant ministries and institutions of both countries, as well as senior executives of Singapore’s YCH Group and IA Group.
Chanthol boasted that the PPLC will heighten transportation sector efficiency and competitiveness to levels that are comparable to countries regionally and globally in terms of prices and services.
This, he said, will create the impetus for the Kingdom’s economic growth and deliver a boost for the government’s vision of becoming an upper middle-income country by 2030 and a high-income country by 2050.
“To make the project run smoothly and move forward as planned, the ministry is looking for development partners and reports to submit to the leadership for further guidance and additional recommendations before the next meeting,” Chanthol said.
The ministry’s General Department of Logistics director Chhieng Pich told The Post in August that a then-recently-completed early-stage feasibility analysis of the PPLC had provided positive results.
He said the study showed that the project would be economically viable and commercialising it would benefit the private and public sectors.
He said the ministry forwarded the results of the analysis to the Ministry of Economy and Finance and is awaiting approval.
“If the Ministry of Economy and Finance gives us the green light, we will conduct a comprehensive feasibility study in collaboration with the Asian Development Bank,” he said.
The location is strategically significant as it sits between Sihanoukville Autonomous Port and the Poipet rail line on the border with Thailand. It is also located near National Roads 3 and 4, as well as the Phnom Penh Special Economic Zone.
Cambodia’s weak logistics infrastructure has long impeded its trade sector, with a 2014 World Bank report showing that the Kingdom’s export costs were 30 per cent higher than those of neighbouring countries.
In 2016, the Japan International Cooperation Agency estimated that Cambodia charges its exporters $540 per twenty-foot equivalent units (TEU), compared to $200 in Thailand and $250 in Vietnam.
TEU is an inexact unit of cargo capacity often used to describe the capacity of container ships.