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Logo of Phnom Penh Post newspaper Phnom Penh Post - Railway revenues drop 25 percent on cargo slump

Railway revenues drop 25 percent on cargo slump

Railway revenues drop 25 percent on cargo slump


The railway says that a slower economy and the border dispute with Thailand contributed to a fall in revenues, but a better 2009 is expected


A bird’s eye view of Phnom Penh’s train station. The national railway reported a drop in revenues for 2008.

CAMBODIA'S railway revenues dropped by one-quarter in 2008 as freight deliveries plummeted and trade with Thailand declined.

"Last year's revenues from railway transport services was US$1.5 million - 25 percent down from 2007," said Sokhom Pheakavanmony, director-general of the Royal Railway of Cambodia, on Tuesday.

He said that Cambodia's limited railway, which currently only runs from Phnom Penh to Sihanoukville, as well as to Battambang and Sisophon in Banteay Meanchey province, are heavily dependent on trade with Thailand.  

"The drop was because the border dispute with Thailand led to a decrease in freight for goods such as cement that are brought in through the Poipet checkpoint," he said.

"The border was also closed entirely to train transport in October," he added.

He added that national elections in July and the real estate downturn had also added to the decline.

"Cambodian businesses stocked up on goods prior to the election and reduced their orders afterwards," he said.

According to the report, trains transported 233,000 tonnes of goods, compared with 310,000 tones in 2007.

Even with the sharp drop in revenue, he predicts a recovery in 2009.

"For this year, I project that railway revenue will climb 25 percent to 30 percent, based on railroad upgrades, an easing of border tensions and rising yields for agricultural goods such as rice and beans," Sokhom Pheakavanmony said.

For this year, I project that the railway revenue will climb ... to 30 percent.

"For this year, the trains will rely less on the cement trade from Thailand. We are targeting local agricultural products for exports such as rice, corn and beans," he added.

Opposition lawmaker Yim Sovann said Tuesday that a deteriorating railway system was also to blame for the low 2008 figures.

"The railroads are extremely old and deteriorating. There are a lot of derailments, which cost in terms of property and life almost every month," he said.

"The government should immediately renovate the railroads. In other countries, this railroad would be shut down because it is very dangerous."

He said that a systemwide upgrade would allow the railroad to earn in a few days what it currently makes in a year.

Chan Sophal, president of  the Cambodia Economic Association, agreed Tuesday that the loss of revenue is understandable due to poor track conditions, competition with other means of transport and higher local cement production. But he was sceptical that agricultural products would make up for the losses in other areas.

"Agricultural products are now mostly transported by trucks to Vietnam or Thailand, rather than by train," Chan Sophal said.

Sokhom Pheakavanmony said that the government has been negotiating to privatise railway management with Australia's  Toll Holding for a 30-year period.

He added that the deal will increase its revenue to $40 million a year.