With container ship traffic increasing rapidly, the capital’s port operator has moved forward its expansion plans to ensure it has the yard space and equipment to handle the growing volume of containers arriving daily at its flagship cargo port near Phnom Penh.
Hei Bavy, director general of Phnom Penh Autonomous Port (PPAP), said yesterday the state-run port operator had already commenced with the second phase of its container port expansion months ahead of schedule.
The $12-million development plan aims to double the annual throughput capacity of the company’s LM17 container port, located 30 kilometres south of Phnom Penh in Kandal province.
“The project already started in 2015 because we were afraid that we wouldn’t have enough capacity to receive more containers this year,” Bavy said.
He said the container port received 145,000 TEUs last year, and current models project more than 160,000 TEUs arriving in 2016 – exceeding the container port’s capacity of 150,000 TEUs per year.
“We worry that in 2016 we will reach 160,000 TEUs, exceeding capacity we have,” he added.
Bavy said PPAP will self-finance the second phase of the container port’s expansion, which is scheduled for completion in 2017.
The company successfully raised $5.2 million in an initial public offering on the Cambodian Securities Exchange (CSX) last December, and will funnel a portion of its estimated $15-million 2015 earnings into the project.
“We will use our revenue from 2015 and proceeds from the IPO to fund the project,” he said. “We don’t need any other funding sources, we already have enough.”
With container traffic growing at 10 to 20 per cent a year, the port operator is already looking ahead to a third phase of expansion, which is set to increase LM17’s annual throughput capacity to 500,000 TEUs by 2028.
The project envisions a new jetty and container yard on 10 hectares of PPAP-owned land west of the existing terminal.
Bavy said PPAP was weighing its options to finance the $30-million expansion project, and could combine soft loans and a follow-on offering.
“The first option is to list around 10 to 20 per cent of our shares [on the CSX] and seek more capital, but we will first see how the business grows and the demand for expansion,” he said.
He added that the proposed follow-on offering was still several years off, perhaps in 2020 “when we see that the demand is growing.”
PPAP, the country’s second-largest port operator, was the third company to list on the CSX, floating a 20 per cent stake.
The company’s shares were trading at 5,460 riel yesterday, with a market capitalisation of approximately $28 million.
