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More Vietnam, Thailand trucks trigger local fears of competition

Tourists disembark from a bus in the border town of Poipet
Tourists disembark from a bus in the border town of Poipet, after travelling from Thailand in 2012. BLOOMBERG

More Vietnam, Thailand trucks trigger local fears of competition

Cambodia's borders are set to receive more Thai and Vietnamese trucks and tourist buses as the government considers upping bilateral transit agreements with both nations.

An official from the Ministry of Public Works and Transport (MPWT) who wished not to be named told the Post last week that Vietnam could soon increase its current 500-vehicle quota to 600 per day, and Thailand could up its quota from a mere 40 to 500 per day.

“We are still in discussions over whether to approve Vietnam’s request as there is the concern that local operators will not be able to compete with the increasing number vehicles transporting goods and people from Vietnam,” he said.

Cambodia ratified the Greater Mekong Subregion Cross-Border Trade Agreements (CBTA) with Vietnam, Thailand and Laos in 2001, with a quota of 40 vehicle crossings each. Vietnam has since increased its quota from 40 vehicles to 500.

“For Thailand, the Cambodian government proposed the increase. The Thai government had not shown much interest in bilateral discussions on the issue until very recently,” the official said.

They added that any amendment to Thailand’s CBTA will take up to a year to install.

Sok Chanmony, president of the Cambodia Bus Association, said that such a large increase in Thai and Vietnamese transportation companies could hurt business for local providers.

“Thai and Vietnamese transport companies can undercut local bus and truck operators’ prices because those countries have cheaper fuel costs, they have better trucks and modern utilities, and they are more efficient,” he said.

Chan Sophal, spokesperson for the Cambodian Economic Association, said competition in the logistics market is inevitable as the region moves closer to integration.

“Operators will face tough competition while consumers will certainly benefit from the increase in transportation operators,” Sophal said.

“The players with effective and low-cost transport services will be the winners come Asean integration. This will speed up trade across borders and boost the wider economy.”

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