Logo of Phnom Penh Post newspaper Phnom Penh Post - Sihanoukville Port upgrade to start soon

Sihanoukville Port upgrade to start soon

Sihanoukville Port upgrade to start soon

The government has shortlisted five of the 25 companies which were in the running

to undertake the ambitious Sihanoukville Port expansion project. A final decision

on the winning bid is expected in a few weeks.

The technical proposals submitted by two Japanese, two Korean and an Italian-Thai

joint venture followed intense bidding. They were scrutinized November 4 by the local

port authority and forwarded to the Ministry of Economy and Finance the following

day.

Lou Kim Chhun, general director of Sihanoukville Port, told the Post that the ministry

was likely to give its opinion on the bids within a week, following which they would

be sent to the funding organization, the Japanese Bank for International Cooperation.

"We will then open the financial bids of those which meet our technical guidelines

and the work would then be awarded to the lowest bidders," Kim Chhun said, adding

that work at the port was likely to commence by January next year.

The project, funded by the Japanese government, is part of the larger plan to enhance

the Kingdom's key economic infrastructure including roads, bridges, railways and

airports. Though a soft loan of 4.14 billion yen ($34.5 million) was sanctioned in

1998 to upgrade and expand Cambodia's only major port facility, the project was postponed

due to several procedural formalities.

This latest spurt of activity should ensure that Sihanoukville Port finally graduates

from being an elemental facility.

The capacity of the port is extremely limited when compared with other countries

in the region. The width of the berth is 350 meters, while the depth - which accommodates

the ship's draft - is only around 8 meters. Shipping companies said that limited

width and depth has considerably restricted the number of ships that can enter the

port.

"For shipping companies, this means they can not bring in ships weighing over

10,000 tons. Besides requiring additional time for transportation of bulk goods,

this could eventually increase the shipping costs for importers and exporters once

the cargo traffic increases," a shipping company representative said.

According to an impact evaluation report prepared by Tokyo-based Pacific Consultants

International (PCI), a subsequent increase in volume of container cargo handled by

the port would require ships to wait in a queue until the completion of loading/unloading

of one ship.

"This waiting [for the berth] would require the demurrage cost and as a result,

the cargo freight would become rather high and not competitive when compared with

freight cost via other ports," Nobuo Ide, project manager of PCI's port and

harbor department, wrote in his assessment.

To avoid this wait, shipping companies typically increase the size of their ships

to increase cargo efficiency. But with a limited berth size and wharf depth, larger

ships cannot enter Sihanoukville. Though other options like diverting the additional

cargo to Phnom Penh Port or Ho Chi Minh City Port were initially considered, the

port in Phnom Penh is not equipped to handle large consignments. In the case of Ho

Chi Minh City Port, the transportation costs would spiral further, the report said.

The port currently has two berths: old jetty and new quay. While the new quay is

already stretched to capacity, the old one has become extremely unstable due to deterioration

and can no longer be used. Besides the rehabilitation of this portion, Ide said the

port needed to prepare for a projected long-term growth in cargo traffic. Lou Kim

Chhun added he wanted the port to serve as a regional facility serving cargo requirements

of other countries as well.

"To ensure that, we need to upgrade the facilities to acceptable standards,"

he said.

After the improvement, which will take around 30 months, the width of the quay will

increase to 590 meters, while dredging will enable ships with a draft of up to 9

meters access to the port. The container capacity will also increase from the existing

200,000 TEU (Twenty feet Equivalent Unit, used to measure cargo volume) to over 300,000

TEU if the berth is equipped with large cranes to load and unload containers.

According to the master plan, the existing berth would be used for miscellaneous

cargo and the add-on facility would be equipped with cranes and turned into an exclusive

facility for containers.

However, not everyone felt the port needed the expense of an upgrade. The resident

representative of a Singapore-based transport company said the existing capacity

was more than enough for the volume of cargo currently being handled by the port.

"The total imports and exports in the Kingdom is to the tune of around 140,000

TEU, still a long way from the existing capacity," he said.

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