Cambodia strives to become a new regional logistics hub

PHNOM PENH: To help Cambodia deliver on its aim—to become a new regional logistics hub in Southeast Asia, the International Finance Corporation (IFC) has signed a new deal with the Ministry of Public Works and Transport to set up a public-private partnership (PPP) for a logistics complex in Preah Sihanouk province.

The document – (FASA) – was signed here on April 19 between , Senior Minister and Minister of Public Works and Transport, and Mr. Asad Yaqub, IFC Resident Representative for Cambodia.

The new agreement will see IFC—as the exclusive lead advisor— structure the PPP transaction and support the government to conduct an internationally competitive tender to select a qualified private developer in accordance with the country's PPP law.

The project is expected to be developed in phases, with an overall capital cost estimate of about US$200 million.

The Sihanoukville Logistics Complex is one of the two priority logistics hubs to be developed in Cambodia. Our objective is to position Cambodia as a regional logistics transfer hub in Southeast Asia, said H.E. Sun Chanthol.

“By working with IFC, we can leverage their global expertise as we explore best options to leverage private sector engagement in the development of this critical logistics infrastructure in the country,” he said.

With its strategic location in Cambodia's coastal southwest and well-connected to roads, railways, and an airport, the complex can supplement the Sihanoukville port, which is Cambodia's only international and commercial deep-sea port, handling two-thirds of the total container throughput in the country.

A modern and transport-integrated logistics complex supporting the port will help accelerate the movement of exports and imports and reduce port congestion. The project will improve efficiency and lower logistics costs in Cambodia, which are now among the highest in East Asia and one of the key bottlenecks to competitiveness and diversification.

The developer is expected to finance, develop, and operate the infrastructure, facilities, and systems within the complex under a long-term PPP contract with the government. The tender award to the winning bidder is likely to be granted by late 2024, with the hub to be constructed over three years.

Large-scale investments in infrastructure are vital to support Cambodia's export-oriented manufacturing industries and boost the country's supply chain and logistics connectivity with the region, said Mr. Asad Yaqub, IFC Resident Representative for Cambodia.

“With IFC's support, this is a project which will be structured in line with global best practices to create a competitive market and draw qualified investors. Bringing in private sector financing will help reduce the burden on the country's finances and also set a precedent for developing transport and logistics PPP transactions in the country,” he underlined.

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