Cambodia gets more loans from China and Japan to develop its highway system

PHNOM PENH - Cambodia is looking to become the transit nation of Southeast Asia, capitalizing of trade and visitors flows between Thailand and Vietnam.

Last March, Cambodian Prime Minister Hun Sen confirmed the important role of China to build up highways. China's Shanghai Construction (Group) General Company was awarded the concession to build Cambodia National Road N6A, which stretches over almost 250 km. The road is seen as one of the most important in the country as it links Kampong Cham province in the East to Siem Reap and the border to Thailand in the Northwest. It will also pass through Cambodia’s capital Phnom Penh. The project is costing US$ 248 million and is expected to be completed within 42 months. The price tag is covered by a loan from China.

"This road is very important to connect traveling from Phnom Penh City to various provinces including the tourism province of Siem Reap and to the Thai border. It will be hugely contributing to developing the Cambodian economy and tourism,” explained the Cambodian Prime Minister at the groundbreaking ceremony.

When completed, the road will be the most modern and the longest in Cambodia. China already delivered paved roads to Cambodia with the total length reaching over 2,000 km.

But not only China is involved into the construction of highways in Cambodia. Last week, both Japan and Cambodia signed a contract representing an investment of US$ 90 million to improve and enlarge 83.5 km of highway of Cambodia’s National Road 5. The loan is provided by the Japan International Co-operation Agency (JICA) and will help improving the road between Battambang, Cambodia’s second largest city, and Sisophon at the border to Thailand.

According to JICA Vice President Arakawa Hiroto, the project will be very beneficial, as it will help reducing travel time between Thailand and Vietnam via Cambodia. “This is critically important for the logistics networks that will contribute to attract foreign direct investment,” Arakawa said during a presentation. “Private companies will get more benefit from this connection and will contribute to Cambodia’s economic growth.” 

The construction is scheduled to start in June 2015 and will be completed by May 2018. The loan’s interest rate is 0.01 per cent per annum with a repayment period of 40 years including a 10-year grace period. Japan helped so far Cambodia with loans and aids reaching over two billion US dollars following the return of democracy back to 1992.

Sourced: TravelDailyNews