Logo of Phnom Penh Post newspaper Phnom Penh Post - Foreign-funded ferries face privatization

Foreign-funded ferries face privatization

Foreign-funded ferries face privatization

ferry.jpg
ferry.jpg

IN a move that may result in a 400% hike in ferry fees, the government is

considering leasing the Mekong River ferries in Neak Leung to a private company.

The proposed deal comes just six months after the completion of an $18 million

foreign-donor-funded renovation of the ferries, most of the money coming from

Denmark.

One of the Neak Leung ferries that the Ponloeu Angkor Import Export and Construction company wants to take over

Minister of the Interior and Deputy Prime Minister Sar Kheng has

already stated that he has no objections to a privatization of the ferry

operation, and officials at the Ministry of Finance and the Ministry of Public

Works and Transportation support the idea.

But other government

officials, donors and ferry workers fear that privatization will lead to higher

charges for users who can ill afford such an increase.

Critics say the

Neak Leung ferries are running well and that there is no need for further

improvements by a private investor.

But the company Ponloeu Angkor Import

Export and Construction, which wants to operate the service, seems to think

differently.

In mid August, the company sent a letter to the Ministry of

Interior, the Ministry of Finance and the Ministry of Public Works and

Transportation, requesting permission to take over the operation and

administration of the ferries during a 10-year period from 2000 to

2010.

In its letter, the company offers to pay an unspecified amount of

money to the government and to renovate the structures and ferry units in Neak

Leung.

In a copy of the letter, obtained by the Post, Sar Kheng notes

that he has no objections to the suggestion.

Two weeks ago, the Mekong

River Commission inquired at the Ministry of Public Works and Transportation to

know its stance on the matter. The MRC received the answer that the ministry had

decided to oppose the privatization.

However this week the Undersecretary

of State responsible for the ferries, Koy Kem Phan, who supports the

privatisation move, said no final decision had been made. He said other

ministries were backing the proposal.

"Officials in the Ministry of

Finance agree with me by saying that this is a very good plan for investment,"

Phan said.

He also explained that the final decision rests with Sar

Kheng, since the ferries are a matter of national interest.

The talk of

privatizing the Neak Leung ferries has created anxiety among the more than 150

people who work on the ferries, the jetties and the affiliated shipyard. Also,

some government officials are worried that it will upset the Danish government

if Cambodia were to lease the ferry project to a private company so soon after

completion.

More tangible is the fear that Ponloeu Angkor will exploit

the ferries without keeping them and the harbor structures properly

maintained.

"There is some very complex equipment involved in the ferry

operation, and we made every effort to ensure that the staff was well trained to

handle it; but if the equipment is not properly maintained, the whole thing will

collapse," warns an MRC official, who estimates that with proper handling, the

ferries can run for 10 to 15 years without major rehabilitation.

The

director of the ferry operation, Um Luonn, says the period of the lease is

therefore an important issue.

"They will not maintain the equipment

properly. Then, after 10 years when everything is run down, they will hand it

back to the government," he says.

Luonn's opposition to leasing the ferry

operation has put him in a perilous position.

"I have been told that if I

don't go along with the idea, I will be moved away from the ferry station," he

says.

Another matter of concern is the price of the ferry tickets, which

looks set to increase if Ponloeu Angkor takes over.

The Neak Leung

ferries make a daily profit of six million riel after all expenses and salaries

are paid. But according to Phan, Ponleou Angkor has offered to pay the

government eight to nine million riel a day and to double the wages of the

employees.

This can hardly be profitable without reducing the work force

or increasing the ticket price - today at an affordable level of 100 riel a

crossing. Most private operators along the Mekong River charge 500 riel per

crossing.

When contacted by the Post, Ponleou Angkor's president, Chan

Long, and deputy president, Mom Nyn, both refused to discuss their plans for the

Neak Leung ferry operation.

Denmark's Minister for Development, Jan

Troejborg, said his Government had not been told of the plans for the ferries

they helped finance. He said they were not opposed to privatisation in principle

but that the process must be "sustainable and transparent".

The move has,

however, caused concern at the MRC, where one official said : "Our most serious

concern is the social impact that it will have. The company will gain a monopoly

on the ferry crossing and will be free to raise the prices, which will affect

many poor people."

Meanwhile the 150 ferry staff, and regular

passengers, are worried what privatisation will mean for them.

Last month

captains, security guards, mechanics, ticket sellers and dock workers sent a

thumb-printed letter to the Ministry of Public Works and Transportation,

protesting the proposed lease. Now, they threaten to go on strike if the

privatization is carried out.

"We are afraid that if the private company

takes over the ferries, they will fire many of the old staff or maybe replace

them with their own family members," says Im Reach, one of the security guards

on the fully renovated Peace 2 ferry.

"The company says that they will

double our salaries, but I don't believe that."

The captain of the newly

renovated ferry Ta Prohm, Chin Sary, has considerable pride in his ship but

little enthusiasm for seeing it privatized.

"We know from other

enterprises that private companies don't respect workers' rights. I fear that

the company will pressure us to work too hard and reduce our working conditions.

That is why I don't like the idea," says Sary.

A passing security guard

throws in another few arguments:

"Why do they think there is a need to

invest in the Neak Leung ferry station? It is not very old and it works well.

I'm sure that the private company will raise the ticket price and that will hurt

the poor people who cross the river all the time," he said.

It is a

concern shared by regular users. Fruit seller Sok Ny travels on the ferry every

day; she is concerned that her family will suffer if ticket prices go

up.

"It is my business to go to the market and sell vegetables and

bananas, so I have to cross the river every day. But if the price goes up I will

make less money for my family," she says.

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