Gov’t Looking to Renegotiate Toll Railway Deal

Transport Minister Tram Iv Tek complained Tuesday that Toll Royal Railway, the joint Australian-Cambodian venture with a 30-year concession to operate the country’s railway network, was refusing to take responsibility for maintaining the tracks or paying concession fees, and said that the government is looking to renegotiate the deal.

The points were listed as the main challenges facing the government’s deal with Toll in a presentation by Mr. Iv Tek to a roomful of other top officials at the Council for the Development of Cambodia (CDC), the government’s foreign investment regulator.

Finance Minister Aun Porn Moniroth and Deputy Prime Minister Keat Chhon, Mr. Porn Moniroth’s predecessor, were there, along with officials from the Commerce Ministry and CDC.

Mr. Iv Tek’s presentation was short on details. But under “challenges” facing Cambodia’s contract with Toll, it said: “TRR does not agree to maintain the railway tracks; TRR does not pay the concession fee and the fee for signing the contract; TRR does not plan to invest.”

According to the presentation, the government will meet with Toll next month to discuss adjusting the concession fee. Mr. Iv Tek added that he would be seeking a new contract, but did not elaborate.

After the meeting, railway department director Ly Borin said the issues with Toll were “under negotiation” before declining further comment. Other officials could not be reached or refused to talk. Requests for comment sent to Toll went unanswered.

According to a safety audit of Toll’s operations by the railway department in November, the company was maintaining the tracks even though it had not officially agreed to take on the responsibility.

Even so, the audit found significant flaws with Toll’s efforts. It said the firm had no system in place to regularly inspect the tracks and lacked qualified inspectors.

Toll financial records that were obtained last year, with figures running up to mid-2011, revealed the firm had to date only spent $3.35 million of the nearly $86 million it promised to spend in the country in a 2010 deal with the CDC.

The statement said much of the money it had spent went to cover salaries, bonuses and travel expenses for its staff. None of it had gone toward the nearly $31 million it was expected to spend on new locomotives, carriages and construction work in the first year.

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