South Korea’s Samsung C&T Corp has expressed interest in investing an undisclosed sum in Cambodian transport infrastructure, to enhance the economic growth of the ASEAN country.
This was revealed on January 24, during a virtual meeting between Ministry of Public Works and Transport secretary of state Leng Thunyuthea and a delegation from Samsung Group’s construction and trading unit, led by a representative Han Jung-suk, with the participation of management and relevant professional teams, the ministry said in a statement on January 25.
Thunyuthea briefed the meeting on the achievements and other updates of ongoing and future projects concerning the development of roads, bridges, ports, railways and other tangible infrastructure in Cambodia.
“The Royal Government of Cambodia welcomes all types of investments, especially public-private partnerships [PPP] and investment under build-operate-transfer [BOT] schemes, and has requested Samsung C&T Corporation examine the possibility of investing in the development of expressways, mass transit and the ring roads of Phnom Penh as well as the port,” he said.
The BOT model is a form of project financing where the public sector grants concessions to a private entity to build and operate projects for a specified period a time, after which ownership is typically transferred back to the government.
Although the delegation did not make known the amount Samsung C&T intended to invest, observers have conjectured that the scope and extent may be substantial.
Cambodia Chamber of Commerce vice-president Lim Heng welcomed the South Korean giant’s interest in the local infrastructure and transportation sector, which he said could lower domestic freight costs of logistics and sharpen the Kingdom’s competitive edge over neighbouring countries.
Noting that the recently-signed Cambodia-Korea Free Trade Agreement (CKFTA) is due to enter into effect in the near future, Heng speculated that the company’s plans are likely directed to facilitate commercial shipments between the two countries.
“From where I stand, the company’s desire to invest in infrastructure and logistics is an exceptional move, as the two countries plan to implement the free trade agreement soon.
“Samsung’s investment is really in response to the growing economic ties between the two countries, both in terms of imports and exports.
“Now is the right time for Korean companies to invest more in infrastructure and transportation, it will help bring lower prices, which will allow us to compete with our neighbours, which benefit from transportation costs that are lower than ours,” he said in a separate statement.
Bilateral trade between Cambodia and South Korea reached $965.132 million last year, a 9.015 per cent surge from $885.322 million in 2020, according to data from the Korea International Trade Association (Kita).
In 2021, Cambodian exports to South Korea amounted to $341.503 million, up by 7.353 per cent year-on-year from $318.112 million, while imports clocked in at $623.628 million, rising by 9.947 per cent from $567.210 million in 2020.
Cambodia’s trade deficit with South Korea widened by 13.258 per cent from $249.099 million in 2020 to $282.125 million last year.
The Kingdom attracted a total of $39 billion of new inward foreign direct investment (FDI) in the first half of 2021, with South Korea ranking as the second largest source of registered FDI with $4.1 billion, behind only China ($17.3 billion), according to data from the Council for the Development of Cambodia.