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Nippon Koei seen as right on track with local rail ambitions

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The country’s existing rails are earmarked for conversion to high-speed. Hong Menea

Nippon Koei seen as right on track with local rail ambitions

Tokyo-listed Nippon Koei Co Ltd’s interest in sprucing up Cambodia’s rails amid government plans for a switch to a high-speed system has been met with enthusiasm, as well as confidence that Japan’s extensive experience in the field could translate into a boon for freight and passenger transportation.

This comes after a Nippon Koei delegation led by Hirotoshi Suzuki – whose apparent LinkedIn page identifies as a “consulting engineer” with the company – met Ministry of Public Works and Transport permanent secretary of state Tauch Chankosal at the ministry on January 9.

The ministry said in a statement that the Tokyo-based firm expressed interest in upgrading the existing northern railway line in and around Battambang, Sisophon and Poipet towns to improve transportation.

Cambodia Logistics Association president Sin Chanthy explained that the main advantage of transportation by rail versus road or air is affordability.

“As far as I know when it comes to the development of the railway system, our government has prepared a master plan to make transportation more affordable and more competitive, which will contribute to lowering production costs – also an important factor as regards boosting exports and creating competitive advantages.

“Japanese companies showing interest in investing in Cambodia’s rail now marks a new step forward,” he said, reflecting on Japan’s history and experience in the area.

“I applaud any companies planning to invest in the development of the railways, it’s very important for our country and will contribute to economic growth,” Chanthy added.

According to Minister of Public Works and Transport Sun Chanthol, construction on high-speed rails in Cambodia could begin as soon as next year, with studies well underway on the conversion of existing railway and the creation of two new lines – one of which runs to the Vietnamese border – to optimally boost rail passenger and freight transport as well as cross-border trade and tourism.

The minister last month confirmed that studies on the existing Poipet-Phnom Penh-Sihanoukville railway are “nearing completion” while those on the new Poipet-Siem Reap-Kampong Thom-Kampong Chhnang-Phnom Penh and Phnom Penh-Bavet lines are underway, noting that the latter is planned to link with Ho Chi Minh City via Moc Bai.

He suggested that the Poipet-Phnom Penh-Sihanoukville high-speed rail could break ground as early as next year after the general elections – which are set for July 23.

An interconnected infrastructure system along with affordable and efficient transportation and logistics services are crucial to grow the economy as well as to encourage investors and businesspeople to choose Cambodia, he stressed.

And on December 23, Prime Minister Hun Sen mentioned that high-speed rail would better connect the Kingdom internally and with its neighbours, and confirmed that the existing railway is earmarked for a conversion.

“We’re studying high-speed rail links from Phnom Penh to Preah Sihanouk [province] and to [Poipet along] the Thai border,” he said.

At the January 9 meeting, Chankosal also asked Nippon Koei to look into possible rail projects in the capital. He suggested a tramway, arguing that it may be easier and less costly to set up than an automated guideway transit (AGT) system, such as the one studied by the Japan International Cooperation Agency.

On the Tokyo Stock Exchange, Nippon Koei’s share price rose 20 yen or 0.61 per cent to close at 3,290 yen ($24.95) on January 10 for a market capitalisation of 40.27 billion yen and 52-week range of 2,750-3,880 yen, with 22.6 thousand shares traded or 70 per cent of the 65-day average of 32.36 thousand, according to MarketWatch.

For the quarter ended September 30, the Japanese firm reported revenues of 26.78 billion yen, down 23.46 per cent quarter-on-quarter; net income of 585 million yen, compared to a 505 million yen net loss a quarter ago; and EBITDA (earnings before interest, taxes, depreciation and amortisation) of 338 million yen, down 59.71 per cent on a quarterly basis, the financial news website indicated.


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