Logo of Phnom Penh Post newspaper Phnom Penh Post - Factories’ move to outskirts brings ‘benefits’

Factories’ move to outskirts brings ‘benefits’

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Motorcyclists ride past a factory in the capital’s Meanchey district in 2021. Heng Chivoan

Factories’ move to outskirts brings ‘benefits’

Back in 2019, the Phnom Penh Municipal Hall issued a notice to owners of factories, manufacturing enterprises, warehouses and large repairing garages, instructing that they plan to relocate to new premises around the third ring road of the capital.

Following the announcement, several had done so, especially along national roads 3 and 4.

Cambodian Footwear Association president Ly Khun Thai told The Post that over 30 per cent of factories and warehouses had relocated to suburban locations as they understood that moving would help with traffic congestion as they transported raw materials and their products back and forth between Phnom Penh and Sihanoukville Autonomous Port, and that it would not affect their production chain.

Besides that, he said it was easier to find workers in the new locations, as they tended to be nearer workers’ homes.

Another point is that workers don’t need to rent houses as most of them are from the province. Fewer city dwellers were likely to be looking for factory work, he added.

“The owners whose factories have moved to the suburbs have immediately seen the benefits. First, there is more available labour, so workers are easier to recruit. In addition, the workers don’t need to spend as much time or money on their commutes. It’s a win-win,” he said.

According to Khun Thai, in recent years, no new bag or shoe factories have been established in the city. Most of the most sought after locations are now along National Roads 2, 3 and 4, as they are major transport links to the port in Preah Sihanouk province.

A number of factories have relocated to the second and third ring roads, with most are currently under construction or already operational. Some of the relocations have faced problems, such as a lack of access to state water pipes. However, some areas have access to private companies’ water supplies.

He added that the cost of renting land is cheaper, so they can build larger factories. The municipal administration has not set a deadline for relocation, preferring to let the various businesses move voluntarily.

Phnom Penh municipal deputy governor Keut Che said the municipal administration required factories and enterprises to set up locations along the ring roads or in the suburbs to reduce traffic congestion. In the last two years, there has been no construction of new factories in the municipal area, due to a combination of rising land prices and the spread of Covid-19.

“Due to the Covid-19 issue, the municipal administration has not forced relocations. The important thing is that there are no new factories or enterprises emerging in Phnom Penh,” he said.

Kim Pagna, director of the Asia Injury Prevention (AIP) Foundation in Cambodia, told The Post that authorities had worked hard to construct the ring roads, but they were not yet completed, which is why not all factories had relocated out of Phnom Penh yet.

He expressed confidence that once the ring road was finished, the municipal administration would speed up coordination with business owners and other stakeholders through administrative measures and encouragement. He warned that if they were allowed to remain, serious traffic congestion would still occur.

“If we can move them to the suburbs or onto the roads designated by the authorities, we will reduce the number of vehicles, especially trucks, travelling through the capital,” he said.

According to a report by the Council for the Development of Cambodia, most factories are expected to be relocated to special economic zones and in the provinces adjacent to Phnom Penh, such as Kampong Speu and Kandal.

A February 26 announcement by the municipal hall said that thanks to the government’s pursuit of

peace, the Kingdom had achieved an era of independence, peace, democracy and development in all areas. This has led to the growth of the national economy. Consequently, Phnom Penh has also developed rapidly, especially in the areas of public transport, infrastructure, sewerage networks, electricity, clean water and the construction of small and large buildings.

Along with this progress, Phnom Penh faces a number of challenges that must be addressed, including the issue of traffic flow – one of the highest priority issues. This is partly due to the rapid growth in the number of vehicles on the roads and the large number of factories. Together, these factors have increased congestion and seen a rise in accidents.

The administration has taken measures to reduce these through public education, the installation of traffic management systems, the banning of heavy vehicles during the day time and the introduction of city buses. Strict guidelines were also issued in 2018 on the use of public sidewalks, but congestion continues to increase, it said.

In order to maintain public safety and order and to reduce congestion, the administration asked all factories to relocate their premises to the third ring road which the Ministry of Public Works and Transport has been constructing a road through the capital and Kandal province. The construction of the road will be finished in 2023.

Once the road is completed, the administration will ban all heavy trucks from entering Phnom Penh.


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