Cambodia formally accepted a $200-million loan from China on Tuesday that will be used to build a new National Route 8 through the north of Prey Veng province.
The money will also build bridges over the Mekong River and Tonle Sap in Kandal province and build a road connecting Mondolkiri capital Sen Monorom to Snoul in Kratie province.
From the $200 million, Chinese firm Shanghai Construction Group will be paid $28.9 million to build a bridge at Prek Kdam in Kandal, linking National Route 5 and National Route 6 by way of Route 61. The company will also be paid $43.5 million to build a bridge at Prek Tamak linking National Route 6 to the new National Route 8. At a cost of $71.5 million, National Route 8 will connect to Vietnam in Prey Veng’s Kamchay Mear district.
The China Road and Bridge Corp will also be paid $51.9 million to reconstruct National Route 76 from Snoul to Sen Monorom.
“I stress that financing for Cambodia’s development from China strengthens national sovereignty,” Finance Minister Keat Chhon said after inking the loan agreement with Chinese Ambassador Zhang Jin Feng at the Council of Ministers. “There has been pressure…we are reforming, [other donors] did not understand,” he added.
The 30-year, 2 percent interest loan is part of $600 million pledged in aid from China earlier this year.
Cambodia agreed to the contracting of the two Chinese construction companies, to undertake the work outlined in the Chinese loan, in April, according to documents released at the signing.
SRP lawmaker Son Chhay, chairman of the National Assembly foreign affairs commission, said that the Chinese will make a huge profit, financially and politically, from lending money to Cambodia.
Unlike China, which ties aid to the condition that Chinese firms are used, other foreign donors must use competitive bidding for project they fund.