Why is Cambodia Pushing Out Multiple Infrastructure Projects Despite an Ongoing Global Crisis?

• Sommana Yan
• 17 April 2023
• Local News
• 3721 Views

Amidst a global crisis, Cambodia remains committed to infrastructure development, with over US$30 billion in projects currently underway or on the table. The country’s railway system is a focal point, with plans to modernize the 382-kilometre Phnom Penh-Poipet railway system to become the kingdom’s first standard high-speed rail line. The project, estimated at over US$4 billion, is being studied by China Roads and Bridges Corporation (CRBC), and will feature a maximum speed of 160 km/hr and 33 stations. (Read more)

Chinese President Xi Jinping recently provided a grant of 300 million yuan (about US$44 million) to support railway development projects in Cambodia, further underscoring the country’s commitment to infrastructure improvement. (Read more)

Cambodia is also requesting China Metro Group Limited to study the feasibility of high-speed and light-rail high-speed rail projects for Phnom Penh and Siem Reap to reduce traffic congestion. (Read more)

Besides the aid from China, Cambodia is also now encouraging France to invest in the construction of the Phnom Penh-Ho Chi Minh high-speed rail line.

Prime Minister Samdech Hun Sen informed the French investment delegation that Cambodia allows French investors to 100% investment in the new high-speed railway from Phnom Penh to Ho Chi Minh City. (Read more)

In addition to the railway system, Cambodia is set to construct more expressways, with the Phnom Penh-Bavet Expressway as the second expressway in the country. Construction is expected to commence in June 2023, and the project will connect Phnom Penh at the third ring road to the Bavet Cambodian-Vietnamese border, with a total length of approximately 135 km and a construction cost of approximately US$1.6 billion. The Phnom Penh-Siem Reap Expressway is also in the pipeline, with a framework agreement set to be signed in September. (Read more)

Cambodia’s infrastructure development projects extend to other areas, such as national roads, bridges, and international airports, among others. The scale of these projects, totaling up to US$30 billion, is larger than Cambodia’s annual GDP of US$27 billion. The government’s long-term policy to stimulate the country’s economy through BOT investment is aimed at reducing public debt while boosting the economy and investment.

The Cambodian government’s focus on infrastructure development is also a strategic move to boost the country’s competitiveness in the region once the crisis is averted. With the national elections just over the horizon in July, Prime Minister Samdech Hun Sen’s vision for the country’s infrastructure development projects could bolster his standing among citizens.

As Cambodia seeks to build trust among investors and increase BOT investment in infrastructure, a new investment law and other incentives have been enforced. The success of the Phnom Penh-Sihanoukville Expressway project, a BOT project, could also instill confidence in new investors. Cambodia’s commitment to infrastructure development in the face of a global crisis is a testament to the government’s long-term vision for the country’s economic growth and development.

• Projects Development
• Policy and Strategy
• Road and Infrastructure