Construction sector investment hits USD8.5bn

• Proeksa Meas
• 30 March 2017
• Uncategorized
• 4814 Views

Total investment in construction projects across Cambodia last year reached USD8.5 billion, more than double the 2015 figure, according to a report released by the Ministry of Land Management Urban Planning and Construction (MLMUPC).

The February MLMUPC report, released after its annual conference to wrap-up the previous year’s work and set future direction, shows that 2,636 projects were approved by the government last year, with total investments valued at USD8.5 billion. The figure represents a 155 percent increase over 2015 when 2,305 projects were approved totaling USD3.3 billion.

The report also shows that MLMUPC collected USD72 million from its various services last year. It also achieved 63.6 percent of systematic land titling equal to about 7 million titles. Through its serious commitment to fight against illegal land grabbing, only 10 percent of the country’s controversial land disputes, or about 700 cases, left so far. The construction industry absorbs a workforce of 200,000 people per day with a minimum wage no lower than USD5 per day, thanks to the huge inflow of foreign investment in the sector.

The MLMUPC, which also heads the national coastal management committee, has also cleared a number of land disputes around the coast and on the islands. They are now working on infrastructure developments and environmental protection planning for the country’s 440km coastal zone, which is ranked as one of the world’s most beautiful bay.

The ministry said it is committed to strengthening its services to people and investors, as well as offering social land concessions and low cost housing developments to low-income and marginalised people.

The construction industry has been one of the country’s four strongest economic sectors after agriculture, tourism, and textiles. The majority of construction projects have focused on residential developments (flats, villas, shop houses, and condominiums), resorts, satellite cities, commercial, office and retail buildings and industrial parks.

As construction has played a greater role in Cambodia’s economic development, various reports released over the past year by leading institutions have warned of the risks of such expansion. A report published by the Asian Development Bank (ADB) in 2016 warned that Cambodia’s growth could be at risk from private sector credit which has almost doubled in four years to more than 60 percent of GDP.

In October last year, the World Bank released an economic update on Cambodia which repeatedly warned of the risks associated with the construction boom, arguing that the construction and real estate sectors need to be closely monitored in order to maintain macroeconomic stability. 