The train route that is set to connect Poipet to Thailand, and the government’s plan to make Poipet a commercial and industrial area, are readying this Thai-bordered city to exercise its potential.
In accordance with Thailand’s Thai +1 Policy, more Japanese investors will start to pour into the area in the future, while experts from the Japan International Cooperation Agency (JICA) continue conducting studies on the master plan for the infrastructure of the area.
Ngo Meng Chroun, governor of Poipet city in Banteay Meanchey province, said via phone on Monday that the train route from Stung Bot to Poipet, bordering Thailand, is under construction and will be finished by the end of the year.
This is the first step in anticipation of other rail connections from Thailand to different parts of Cambodia set to happen in the near future.
“After the train route connection with Thailand, businesspeople will find it easier to transport their products because trains are an easier and cheaper means of product transportation,” Chroun said, adding, “These infrastructure [developments] will attract more investors to come here. There will be more employment for the people as a result.”
In addition to currently having two industrial zones, Poipet also has 97,000 permanent residents and more than 30,000 mobile job-seekers around the area, who come from all over the Kingdom.
In the Industrial Sector Development Policy (ISDP) of 2015-2025, created by the Cambodian government at the end of last year, the cities of Poipet and Bavet are the designated zones for industrial and commercial development.
Va Simsorya, spokesman for Ministry of Public Works and Transport, said the 6.5 kilometre-long railway from Stung Bot to the border of Poipet and Thailand, along with the 10 kilometre-long railway from there to Mongkol Borey district – both of which are funded by the Asian Development Bank – are set to be finished at the end of this year.
He said it is expected for the train route from Thailand to these areas to begin in 2017 once all discussions between Cambodia and Thailand come to a consensus.
Simsorya added, “The two countries have held a discussion once, but have not come to an agreement because this train should connect Thailand [directly] to Mongkol Borey district.” He added, “This train connection with Thailand is very important because it will help reduce the cost of transportation as trains are cheaper than transportation through road vehicles.”
He also said the 60-kilometre railway connection from Mongkol Borey to Battambang province, which will cost the national budget some $30 million, is set to commence construction soon. Another railway connection from Battambang province to Phnom Penh is planned to cost another $150 million.
In the ISDP, the government details a plan to construct and expand National Road 5 from Phnom Penh to Poipet with funds from the Japanese government. This road will expand two lanes on each side and a garden along the middle of the road. The first stage of construction is set to start in September or October of this year.
Heng Sok Kong, secretary of the Ministry of Industry and Handicraft, said JICA’s research on the master plan to build industrial zones in Poipet will be finished in the beginning of 2017 at the latest. The plan to finish National Road 5’s expansion has been slated for the end of 2018.
According to him, as Poipet is in proximity to Thailand, it falls under the Thai +1 Policy allowing Thai factories to connect with its neighbouring countries.
He continued, “The construction of National Road 5, Nak Leung Bridge, the increase of Japanese restaurants and Japanese vocational training schools, along with a major hospital investment in Phnom Penh, and direct flight route from Japan to Cambodia in the coming September are long-term investment strategies of the Japanese investors in Cambodia.”
Mey Kalyan, senior advisor to the Supreme Economic Council, said ASEAN countries like Thailand, Malaysia, and Singapore already have connected train routes. Poorer countries like Cambodia have been excluded due to limited funds and slower development progress.
He added, “This train connection with Thailand is an economic breadth which can facilitate commerce by attracting investors from Thailand to build factories in Cambodia, and export to Thailand.”
Kalyan elaborated that “the Thai +1 Policy is important, and benefits Cambodia a lot because of our lower labour costs compared to Thailand. Therefore, we can attract more Thai investors.”
Nevertheless, the real estate price and development in Poipet have not shown any signs of improvement.
Poipet governor Chroun said, “The price of real estate property is normal concerning the country’s changing economy and politics. In reality, the land price in this city has not increased that much.”
For instance, the owner of Sok Sreng Borey, who had sold affordably priced flats in the city, has abandoned her project.
“There’s not much interest concerning house selling and buying in Poipet, and that’s why I stopped my flat construction project because I wasn’t able to sell even one flat within three to four months.”
Economists have a more long-term vision for Poipet, and the northwestern parts of Cambodia.
Kalyan has no doubts, saying, “I believe Poipet will grow very fast in the future. Serey Sophorn city, Battambang, and Pursat will benefit more in the future from the Thai +1 Policy and Cambodia’s ISDP.”