Logo of Phnom Penh Post newspaper Phnom Penh Post - Ex-KR airport to be regional cargo hub

Ex-KR airport to be regional cargo hub

Ex-KR airport to be regional cargo hub

A multi-billion dollar plan to make Kampong Chhnang a high-tech regional air cargo

hub has been revived after representatives of Malaysian construction firm DragonGold

met Cambodian authorities in late August.

The Cambodian government and DragonGold originally signed a joint venture agreement

in December 1996 after gaining the backing of then first Prime Minister Norodom Ranariddh

and second Prime Minister Hun Sen.

Under the agreement Cambodia took a 30 percent stake in TransGlobal Ltd, the Cambodian

joint venture company. But the ambitious project slowed to a crawl after the events

of 1997.

An air traffic control tower and some buildings had been completed when political

turmoil engulfed Cambodia during that year's coup, but the project's representatives

deny that the unrest was a major factor.

"I wouldn't say political problems [caused the delay], but the difficulty in

obtaining finance was the main reason the project has been slow," said DragonGold's

director Dr Iain Gray.

"We continued to work and maintained a presence [at the site] during that time,"

he said. He added he was within weeks of finalizing "the technical details"

with the government.

The project is slated to have a budget of between $3.4 and $3.5 billion, making it

the largest foreign investment project Cambodia has ever seen. Dr. Gray said that

within five to seven years the so-called 'Global City' would become home to between

20-30,000 people working in aviation, as well as a center for IT industries, tourism,

agriculture and an export processing zone.

According to the company's website, the scheme would also see extensive improvements

to the infrastructure of the area, including an extension of the runway to 4.2 kilometers,

the building of access roads and rail links, a new jetty on the Tonle Sap, a nature

reserve, a meditation center, restaurants, a golf course and hotels.

Dr Gray declined to identify the financial backers, who would fund the ambitious

building program, ahead of the deal's finalization.

"We have entered into a contract with private bankers with strong financial

capabilities coupled with genuine social aspirations to help Cambodians," he

told the Post.

"We expect to continue the project with the new injection of equity capital

before Christmas 2002. The airport should then be operational by June 2003,"

he said.

The 20,000-hectare site is 87 kilometers from Phnom Penh and is just off National

Route 5 with the Tonle Sap several kilometers away. Under the plan the site will

become a duty-free airport and the first dedicated air cargo hub in the world.

The project's backers are looking to take advantage of overcrowding at other regional

airports like Hong Kong and Singapore, and Cambodia's location near some of the world's

busiest flight paths. The website also stated that an air bridge would link the airport

to "strategic points within China".

Asia's air cargo volume has surged this year with large airlines reporting a 10 percent

growth in the first half. Aerospace giant Boeing has forecast a 6.4 percent annual

increase in global cargo volumes over the next 20 years.

"Cambodia's location is ideally suited to a venture of this nature," Dr

Gray said. "Combine a motivated and low-cost workforce, with infrastructure

that's within 4,000 kilometers of half the world's population and an airport facility

that can handle anything that flies, and you have a winner."

Transferring cargoes between long-haul aircraft to smaller aircraft plying regional

routes as well as consolidating cargoes before shipping them internationally are

at the core of the venture.

Cambodia's 'open-skies' policy allows pilots from any country to land at the site

without special certification to fly in Cambodia. This would let aircraft from other

countries in the region land and reload their cargoes onto Europe-bound long-haul

planes.

The long abandoned 2.5 km landing strip and ancillary roads linking rail, road and

waterway gateways were built by Chinese engineers using Khmer Rouge forced labor

in the late 1970s. The project used the labors of 50,000 people and took three years

to complete. An unknown number died during the building of the massive project.

However Vietnamese troops overran Phnom Penh before the airport was ever fully utilized.

When UN troops entered the country in the early 1990s the site was used as a logistics

base for their peacekeeping mission.

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