The objectives of the project are: (i) to increase the efficiency of transport services within Cambodia and to its neighbors by providing efficient alternative routes and modes of transport for Cambodia's import and export trade; (ii) to reduce the cost of road maintenance and traffic risks by transferring heavy and dangerous cargo to a safe and reliable railway system; (iii) to pave the way for further subregional integration in the future by facilitating achievement of the Singapore-Kunming railway link; and (iv) to increase the transparency and eliminate the current financial losses from the railway by restructuring the railway into a Public Private Partnership, and by establishing a transparent regulatory framework for the railway.
|Project Name||Restructuring of the Railway in Cambodia|
|Project Type / Modality of Assistance||Technical Assistance
|Source of Funding / Amount||
|Strategic Agendas||Inclusive economic growth
|Drivers of Change||Governance and capacity development
Private sector development
|Sector / Subsector||
Transport / Rail transport (non-urban)
|Gender Equity and Mainstreaming||No gender elements|
|Description||The objectives of the project are: (i) to increase the efficiency of transport services within Cambodia and to its neighbors by providing efficient alternative routes and modes of transport for Cambodia's import and export trade; (ii) to reduce the cost of road maintenance and traffic risks by transferring heavy and dangerous cargo to a safe and reliable railway system; (iii) to pave the way for further subregional integration in the future by facilitating achievement of the Singapore-Kunming railway link; and (iv) to increase the transparency and eliminate the current financial losses from the railway by restructuring the railway into a Public Private Partnership, and by establishing a transparent regulatory framework for the railway.|
|Project Rationale and Linkage to Country/Regional Strategy||
The association of South-East Asian Nations (ASEAN) has asked for ADB?s support in establishing a rail link between Singapore and Kunming, which is an ASEAN flagship project. The strategy for the project is gradual rehabilitation and upgrading of the constituent national railway lines to the extent implied by national development priorities, and construction of missing rail links. A central part of the flagship project is the railway through Cambodia and Viet Nam, which provides the strategic link between the existing railway networks in Singapore, Malaysia, and Thailand in the west, and the railway networks in Viet Nam and Yunnan province in the east. The railway link through Cambodia is also an integral part of the Greater Mekong Subregion (GMS) southern economic corridor, which is one of 11 flagship programs under the GMS subregional economic cooperation.
The Cambodia Transport Sector Strategy Study concluded that, as a result of many years of war, the railway was in poor condition and would need to be rehabilitated before the full benefits from rail traffic could be realized. Access to safe and regular regional railway traffic would benefit Cambodia in several ways: (i) by reducing heavy truck traffic on the road network, thus reducing future maintenance and expansion costs; (ii) by reducing the transport of fuel and other dangerous cargoes by road, thus reducing road traffic risks; (iii) by providing cheap transport for bulk cargoes such as cement and fuel, thus reducing the cost of importing and distributing such basic products; and (iv) by increasing the competitive pressure on existing transport systems, primarily road transport and the port in Sihanoukville through the establishment of alternative routes and means of transport, which would help to reduce the scope for monopoly pricing.
The study suggested that railway operations in Cambodia could become financially viable if the railway were rehabilitated and restructured with decisive private sector involvement. Finally, the strategy study noted that railway operations were not financially viable under current circumstances and could not generate the funds required for rehabilitation.
|Description of Outcome||The long-term sustainability of the railway is secured and the Government?s deficit coverage eliminated.|
|Progress Toward Outcome||Railway restructuring reform ongoing.|
|Description of Project Outputs||
1. An approved strategy and action plan for restructuring of the railway
2. A PPP-based commercial railway operator in place
3. Railway passenger services operating in an efficient and sustainable manner
4. A depository authority holding the railway's land and fixed
infrastructure in place
5. An independent transport regulator in place
6. Full public documentation of the process
|Status of Implementation Progress (Outputs, Activities, and Issues)||
Restructuring strategy prepared and policy/principles for restructuring the railway confirmed by the Government in a letter to ADB dated 17 July 2006.
Agreement in Principle between the Government and the selected Railway Operator signed on 13 December 2007. Concession agreement signed between the government and the winning bidder on 12 June 2009. Concession Agreement declared effective on 22 October 2009.
TA completed 31 March 2011.
|Summary of Environmental and Social Aspects|
|Stakeholder Communication, Participation, and Consultation|
|During Project Design|
|During Project Implementation|
|Consulting Services||An international firm of consultant will provide transaction advisory services and implement restructuring of the railway.|
|Responsible ADB Officer||Broch, Peter|
|Responsible ADB Department||Southeast Asia Department|
|Responsible ADB Division||Transport and Communications Division, SERD|
Ministry of Public Works and Transport
H.E. Tauch Chankosal
Corner Norodom Blvd & 106 Street Phnom Penh, Cambodia
|Concept Clearance||10 Mar 2005|
|Fact Finding||08 Mar 2005 to 11 Mar 2005|
|Approval||14 Sep 2005|
|Last Review Mission||-|
|PDS Creation Date||03 May 2006|
|Last PDS Update||02 Sep 2011|
|Approval||Signing Date||Effectivity Date||Closing|
|14 Sep 2005||08 Nov 2005||08 Nov 2005||30 Sep 2007||31 Mar 2011||-|
|Financing Plan/TA Utilization||Cumulative Disbursements|
|850,000.00||1,500,000.00||0.00||0.00||0.00||0.00||2,350,000.00||14 Sep 2005||2,216,437.06|
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