Work on a $143 million donor project to renovate the country’s creaking railway system, which is already over budget and years behind schedule, is now indefinitely postponed due to a lack of funds, with more than 300 km of rail still to be laid, a transportation official said Monday.
Ly Borin, director of the Transportation Ministry’s railway department, said work on the railway rehabilitation project was suspended in mid-2013 and that there is no prospect of extra funds from the Asian Development Bank (ADB) or the Australian government, the project’s two main financiers.
“The project was postponed since we ran out of money, and the government is seeking more funds,” he said.
Mr. Borin said a study is needed to find out exactly how much money—on top of the original $143 million—is now required to finish the job. But, there is not even enough money to conduct that study, he said.
A year after the government dropped TSO, the French firm contracted to carry out the bulk of the work on the track upgrades and repairs, Mr. Borin said it too had yet to be replaced.
When work on the railroad began in 2007, the ADB said it hoped to have the tracks fully operational by 2009.
Trains have started running along the 256-km southern line between Phnom Penh and the seaside port of Sihanoukville. But of the 383-km northern line from Phnom Penh to the Thai border at Poipet City, the Transport Ministry’s Mr. Borin said that only 42 km of rail had been completed when the last of the money dried up and work shut down last year.
A spokesperson for the ADB said Monday that the 42 km was part of a 48-km stretch between Poipet and the town of Sisophon in Banteay Meanchey. She said another 23 km had also been completed from Sisophon running east.
Government officials have made repeated requests to the ADB and Australia for more money to finish the work.
The ADB deferred questions about the funding shortfall back to the government and the Australian Embassy did not reply to a request for comment Monday.
The project’s financial woes come on top of human rights complaints that have been dogging it for years.
Human rights groups have long said that the 4,000 families losing land to the railroad rehabilitation project were either getting far too little compensation or being sent to woefully under-equipped relocation sites and wracking up heavy debts in the process.
After repeatedly deflecting blame and offering only piecemeal solutions, the ADB last week admitted for the first time that it was failing to adequately protect the families.
The bank said it would draw up an action plan in the next 60 days to bring the project into full compliance with its ethical safeguard policies. It will not say how much the plan might cost.
The ADB said it would not comment on its action plan to help families hurt by the project until it had conducted additional research.
Khuon Prum Sarith, who was forced out of his Phnom Penh home and sent to a relocation site two years ago, said he received a call from the ADB on Sunday asking how his family was coping and what more they needed.
“The ADB called me and asked me what I thought about the compensation and what life was like at the relocation site,” he said.
Mr. Prum Sarith said the $700 he received was hardly enough to cover his moving expenses and he wanted help paying back the $2,600 he still owes on the loan he had to take out to build a new house on an empty plot.
He said some of the other families around him were even worse off.
A study the ADB commissioned in 2012 warned that the families being evicted by the project were facing a debt “crisis” and needed help immediately.
(Additional reporting by Zsombor Peter)