The Cambodian government is pushing ahead with an ambitious plan to build an international

port on the Mekong River although many shippers believe the country would be better

served by expanding the coastal port at Sihanoukville.

The plan, originally conceived in the 1960s, has been revived in the wake of the

signing of the Paris Peace accords and envisions a facility to serve the capital

city Phnom Penh which sits near the intersection of the Mekong and Tonle Bassac Rivers.

"The port would handle small to medium sized vessels and allow for door-to-door

movement of cargo," said Phnom Penh Port Director Mom Sibon. He said the new

docks would share Cambodia's port duties in a 50-50 split with Sihanoukville, which

would cater to larger cargoes and agricultural shipments.

But shipping agents and traders argue that building a port on the Mekong, which winds

through Vietnam before it reaches the sea, would leave Cambodia dependent on the

inconsistent and bureaucracy-bound government of its communist neighbor.

"Vietnam has been totally unreliable on rates and transit permits. They have

changed the procedures four times in the last year," said Kevin Whitcraft of

trading company RM Asia.

The shallow draft of the Mekong also poses problems for shippers. Vietnamese pilots

have run freighters on to the river's shifting sandbars six times since December.

Sibon said he was confident the Vietnamese would simplify their procedures to enable

them to share the benefits of increased river trade up the Mekong.

At present, the plan is still only in its nascent stages and the government is looking

for $60,000 to fund a feasibility and environmental impact study which is to be undertaken

by the Mekong Committee.

In the meantime, the dilapidated Phnom Penh port on the Tonle Bassac river will be

upgraded over the next two years to allow it to handle up to a million tons of cargo

a year by the turn of the century.

The old wharves are structurally weak and cannot handle individual cargoes of more

than 20 tons. The piers are also small and allow little room for maneuvering. Shippers

also complain that the Russian equipment is old and regularly breaks down.

A $17.1 million rehabilitation project, which is being financed by the Japanese development

agency JICA, will add two more births to the current four and extend the wharves

by 100 meters to make room for a container terminal. Planned dredging will increase

the port's draft from the current four-meters and allow it to handle vessels of 4,000

DWT, up from the existing capacity of 1,200 DWT.

Phnom Penh is further handicapped by a shortage of public warehouse space. A number

of American, Greek and Japanese firms have expressed interest in building refrigeration,

transportation and fishing facilities and a container yard although most investors

have adopted a wait and see approach while the political situation remains uncertain.

"Business is not going to go anywhere as long as UNTAC is here and they have

a big question mark over the country," said an executive of one trading company

who asked not to be named.

As part of the redevelopment plan, the loading site known as Port No. 3, which is

used for domestic cargo traffic will be closed down. The port, which is little more

than a stretch of bank near Wat Phnom, has long been a home of sorts to the families

of the stevedores and other port workers. Each rainy season, the port's inhabitants

are forced to evacuate the area ahead of the rising tide but this year they have

been notified by the port authorities that they will not be allowed to return when

the tide retreats.

"This port has been very problematic. It has been an area of crime and gambling,

and extortion rackets. The principle problem is that a lot of people live here and

it has been impossible to control," said Lt. Raul Peluffo of the UNTAC port

office.

A Mekong Committee report, released in June, on the Phnom Penh Port said its location

in a primarily residential area would restrict future expansion and plans for a new

facility would have to made soon as it will reach its capacity early in the next

decade.

Sihanoukville port has gained in popularity among traders, especially following the

morass of red tape created by the Vietnamese last year.

The port, which was built in the early 60s, can accommodate ships up to 10,000 tons

and has a draft of 8-meters although this has been declining steadily.

"10,000 tons is sufficient for now but when they start doing large rice exports

it would be more efficient to ship in bigger lots," said Whitcraft.

The port lacks proper equipment for handling traditional break bulk cargo and containers,

which are rapidly emerging as the way of the future for shipping. Forklifts and slings

are currently being used to move containers although the Asian Development Bank has

provided a $3 million budget to purchase proper stackers.

Shippers say the bigger problem lies with the port workers.

"Administration works well but there are problems on the operations side. Here

you pay triple the rates of Thailand but they are only one fifth as efficient plus

they steal your cargo," Whitcraft said.

Cambodian stevedore teams are notoriously unproductive. The teams, which are responsible

for discharging and loading cargo, average only about 200 tons per day whereas their

Thai and Vietnamese counterparts move between 800 and 1,000 tons of cargo for the

same period. Shippers say they would be willing to pay premium rates if the stevedores

would work 24 hours a day. The teams currently only work daylight hours. If it rains,

a time when dry cargoes such as rice sugar and cement can't be moved, they go home

rather than waiting the storm out.

Since late last year, authorities at Phnom Penh and Sihanoukville ports have boosted

stevedore wages and introduced productivity-tied bonuses in a bid to increase their

work rate. Some shippers are pushing for privatizing the teams.

The low productivity rate of the stevedores is being cited as the main cause of the

current congestion at port. Large shipments of timber presently leaving the country

coupled with the withdrawal of the U.N. peace mission has resulted in ships having

to wait more than a week to enter the port

Whatever its shortcomings most traders believe the future of Cambodia shipping industry

lies in Sihanoukville, which lies about 230 km away from Phnom Penh and is also connected

by a rail link.

"People talk about resurrecting the infrastructure the roads and electricity

but the rail should be the number one priority. The current rail system is a piece

of junk," said one trader.

Rail is far cheaper than trucking, the costs of which have tripled since the arrival

of UNTAC, but the bureaucracy and slow service--the existing train service makes

23 stops between Phnom Penh and Sihanoukville-have made the utility a nightmare.

Rail lines also link Phnom Penh with Battambang, the main growing area for rice,

formerly Cambodia's number one export.