Tuesday, 21 August 2012
Gregory Pellechi and Don Weinland
Phnom Penh Post 
Workers manning a railway. Photograph: Sovan Philong/Phnom Penh Post
A company with ties to one of China’s top state-owned firms will look to push Toll Royal Railways
and its local partner Royal Group of Companies out of a 30-year
railroad concession with pledge to invest nearly US$850 million to
revamp existing lines and build an additional one.
The company,
Rail Services (Cambodia) Ltd, pitched its plan for what it calls
“Kampuchea Rail” to government officials on August 3, Chairman and Chief
Executive Daryl Dealehr said in a company statement obtained by the Post.
With backing from Sino-Pacific Construction Consultancy Co, Ltd, Rail Services, along with Hikmat Asia Sdn Bdh
of Malaysia, claimed that they were prepared to invest nearly $850
million in Cambodia’s existing rail lines that run between
Sihanoukville, Phnom Penh and the Thai border, and build a link from the
capital to Ho Chi Minh City, Vietnam.
The Cambodian government
watched as Toll Royal cargo trains on its southern line rolled to a halt
on May 1, weeks after the Post reported that the Australian company
would suspend operations in the Kingdom.
Neither Toll or the
government have commented publicly on the matter, although local media
reported that cargo shipments would resume this month.
Rail
Services yesterday in a statement hammered on that fact, listing the
numerous issues that have plagued Toll Royal through the rehabilitation,
including Toll’s failure to restart the cargo shipments, lack of
investment, and seeking concessional fee waivers.
The statement
failed to mention that the delays may have been caused by the
resettlement of over 1,000 households, an issue that proved problematic
for the project and garnered international condemnation due to the
government’s handling of the issue.
The statement said, “Toll
Royal: ceased existing rail services and operations in February 2012;
retrenched the majority of its workforce; has not invested in rolling
stock and equipment; has not undertaken rail infrastructure improvements
supplementing the existing rail network; advised the [Royal Cambodian
Government] it was unlikely to recommence rail operations before March
2013; and demanded that the RGC forgo concession fees for years five
through eight and half of year nine, amounting to a waiver of revenues
estimated in excess of $9.5 million.”
Rail Services’ pitch
should sound tempting to Cambodian officials, as it offers up to $850
million in foreign direct investment after years of concessional loans
from regional donors. Rail Services said it would “at no cost to the RGC
[. . .] fully finance [the project]”.
In return, Rail Services
would operate the railway concession between Phnom Penh and Ho Chi Minh
City for at least 60 years and seek to list on the Cambodian Stock
Exchange upon completion of the Kingdom’s current rail network.
The current concession for the northern and southern lines would be extended from 30 to 40 years for Rail Services.
To
work, either Toll Royal would need to give up its 30-year concession or
the government would need to declare Toll in violation of its contract
and push the company out.
Meanwhile, a Chinese consulting firm
has surveyed the 280-kilometre link with Vietnam; previously no company
has publicly shown interest in its development, let alone pledged up to
$750 million needed to finance it.
Rail Services’ interest in
connecting the network to Vietnam is part of its plan to “postion
Cambodia as a true-subregional transport hub”, which would require
further investment on the company’s part to create additional rail
spurs, intermodal rail and freight terminals and connections to the
Special Economic Zones that can be found along the line.
The
offering includes the $90 million to shore up the northern line
shortfall and complete the rail rehabilitation; construction of a
railway mechanical and technical trade school as well as a repair
facility in Bat Doeng; and investment in Sihanoukville port, Poipet,
Sisophon, Battambang, Pursat, Bat Doeng, Kampot and other locations.
“The
government is considering the proposal. There was some interest in it.
They were very polite and are considering its elements,” said Rail
Services spokesman Dealehr.
To contact the reporters on this story: Gregory Pellechi at gregory.pellechi@phnompenhpost.com
Don Weinland at don.weinland@phnompenhpost.com
3 comments:
I want to see our railway system up and running, I love travel by train and subway....you see the countryside lust and green!
Why build a link to HoChiMinh dog? Want to let more youns enter illegallly into Cambodia by the hundreds of thousands everyday? Stop the line at Phnom Penh only.
If Cambodia is to have a rail way extented to Vietnam. Lets have 3 millions Vietnamese sleeping on the train tracks as a payment for the 3 millions Khmer that died under the hands of Vietnamese.
Also the 5 millions landmines planted during the Vietnamese 10 years occupation must also be returned to the Vietnamese. They should be replanted near the railway station along the tracks from the Khmer-Youn border to Prey Nokor, as return for all the dead Khmer that were killed under the the K5 planning.
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