Talks on Railway Contract Reach ‘Final Stages’

A $73 million agreement to upgrade Cambodia’s railway system, which is in disrepair after decades of conflict and neglect, is soon to be finalized, one of the brokers of the deal said Friday.

“We are in the final stages of negotiating an agreement that should be completed by the end of the Khmer New Year’s,” Paul Power, team leader of the Railway Restructuring Project at the Asian Development Bank, said by telephone Friday, adding that the Aus-tralian firm Toll Holdings will be the concessionaire.

Some $42 million in funding is being provided by the ADB, $13 million by the OPEC Fund for In-ternational Development, with the balance provided by the government, Mr Power said.

Two rail lines—Phnom Penh to Sihanoukville and Phnom Penh to Serei Saophoan in Banteay Mean-chey province—will see major im-provements to infrastructure.

“Seeing as we’re putting $73 million into this, it gives a pretty good indication of the state of the railways in Cambodia,” Mr Power said, adding that it may take more money to renovate the rail network.

One Public Works and Trans-portation Ministry official said the first priority for improving Cam-bodia’s railways will be the rehabilitation of the tracks. “Right now trains can only travel 15 to 20 km per hour,” Undersecretary of State Touch Chankosal said Friday.

Today in Cambodia there are no passenger trains and freight service is erratic, he said.

“The reason for the condition of the railways in Cambodia is a lack of funding,” Mr Touch Chankosal said.

Mr Power said that a project by French-based company TSO is already repairing the rails. The new agreement will continue that work but will also award a 30-year contract to Toll Holdings for operating the system. Toll Holdings will collect the revenue and, beginning in the sixth year of operation, begin payments to the government, Mr Power said. Ownership of the tracks will remain with the Cam-bodian government.

 

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