New report provides detailed analysis of the Construction market
Published on April 29, 2010
by Press Office
(Companiesandmarkets.com and OfficialWire)
Cambodia Infrastructure Report Q2 2010: http://www.companiesandmarkets.com/r.ashx?id=7J5O563FJ284826&prk=8c8341ff720097293f09a1bc1545f598
LONDON, ENGLAND
Until 2008, Cambodia's construction industry saw some spectacular growth rates however the global recession has highlighted the country's susceptibility to external risks and the lack of support provided by its poor business environment. We estimate that the construction sector shrank 5.8% in 2009 and will contract a further 2.1% in 2010. Growth is expected to return from 2011 onward; however, rates will be significantly lower than the 19% year-on-year (y-o-y) growth seen in 2008. Average growth from 2010 to 2014 will be 6.7% y-o-y taking the industry value to just under US$1bn.
Project financing has started to trickle back into the country with a number of projects announced at the start of 2010. China has a strong interest in Cambodian ventures. One of the largest Chinese power companies, Huadian Corp., signed an agreement for the construction of a US$558mn hydropower plant in January 2010. This follows an engineering, procurement and construction (EPC) contract the company signed with Cambodia Energy in December 2009, for the construction of two coal-fired power plants in Cambodia.
In terms of its business environment Cambodia remains seriously disadvantaged compared with its regional peers. Widespread corruption and a lack of regulatory enforcement hamper project development at all stages and provide downside risk for investors. Overall Cambodia scores only 27 for its business environment placing it last in our ratings for the Asia Pacific region. Similarly in terms of project financing the country faces issues; however, strong growth rates resulting from Cambodia weak base position ensure that investment continues to appear higher in ratings.
The country's immediate development path is far from simple with many obstacles to overcome before the country becomes a secure investment environment. However, closer links to regional neighbours, in particular China, are likely to drive movement towards an improved regulatory system. Cambodia's aim of joining the Association of Southeast Asian Nations (ASEAN)-China free trade agreement in 2015, will drive further improvements.
Published on April 29, 2010
by Press Office
(Companiesandmarkets.com and OfficialWire)
Cambodia Infrastructure Report Q2 2010: http://www.companiesandmarkets.com/r.ashx?id=7J5O563FJ284826&prk=8c8341ff720097293f09a1bc1545f598
LONDON, ENGLAND
Until 2008, Cambodia's construction industry saw some spectacular growth rates however the global recession has highlighted the country's susceptibility to external risks and the lack of support provided by its poor business environment. We estimate that the construction sector shrank 5.8% in 2009 and will contract a further 2.1% in 2010. Growth is expected to return from 2011 onward; however, rates will be significantly lower than the 19% year-on-year (y-o-y) growth seen in 2008. Average growth from 2010 to 2014 will be 6.7% y-o-y taking the industry value to just under US$1bn.
Project financing has started to trickle back into the country with a number of projects announced at the start of 2010. China has a strong interest in Cambodian ventures. One of the largest Chinese power companies, Huadian Corp., signed an agreement for the construction of a US$558mn hydropower plant in January 2010. This follows an engineering, procurement and construction (EPC) contract the company signed with Cambodia Energy in December 2009, for the construction of two coal-fired power plants in Cambodia.
In terms of its business environment Cambodia remains seriously disadvantaged compared with its regional peers. Widespread corruption and a lack of regulatory enforcement hamper project development at all stages and provide downside risk for investors. Overall Cambodia scores only 27 for its business environment placing it last in our ratings for the Asia Pacific region. Similarly in terms of project financing the country faces issues; however, strong growth rates resulting from Cambodia weak base position ensure that investment continues to appear higher in ratings.
The country's immediate development path is far from simple with many obstacles to overcome before the country becomes a secure investment environment. However, closer links to regional neighbours, in particular China, are likely to drive movement towards an improved regulatory system. Cambodia's aim of joining the Association of Southeast Asian Nations (ASEAN)-China free trade agreement in 2015, will drive further improvements.
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