To boost investments in operations for piped water supply, the government is looking into changing the way private water suppliers here receive approval to operate.
Currently, suppliers must apply for a new operating license every three years from the Ministry of Industry, Mines and Energy. If the proposed changes kicked in – possibly by the end of June – the licence would last between three to 25 years, with bigger companies getting a longer period, said Meng Saktheara, director general of industry of the Ministry of Industry, Mines and Energy.
However, to ensure suppliers with long-term licences are “compliant to regulations”, a new permit will also kick in that will be automatically renewed every three years, as long as the supplier has been rule-abiding, Saktheara said.
These proposed changes come after feedback from a newly formed alliance of water suppliers.
The Cambodian Water Supply Association, formed in August last year, told the government at a forum in January that the current short-term license makes accessing funds difficult, said a source who asked not to be named.
“The problem is the bank will not accept our facility as collateral because a three-year licence is too short. So it is hard to receive loans to expand our services,” said Dalis Chhorn, a board member of the association, which consists of 32 operators supplying water to more than 10 provinces.
If the changes are implemented, more investors will enter the market, as it will be “easier to access finance”, she said.
Her plant, which serves 2,500 customers in Mukkompoul in Kandal, was started in 2007 and costs her $650,000, with an extra $100,000 grant from the US Agency for International Development.
By 2015, the government aims to have clean water supplied to 80 per cent of the country’s urban areas, which would be a significant boost from the current 50 per cent, Saktheara said. To achieve this goal, investments of $200 million more are needed.
“Frankly, I don’t think we’ll meet the goal, but we will try our best to make everyone work towards it,” he said.
To contact the reporter on this story: Low Wei Xiang at [email protected]