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Transport Ministry, Industry to Work on Cutting Costs

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City Hall has called for bus companies to not increase fares. KT/ Mai Vireak

Transport Minister Sun Chanthol said yesterday his ministry would work with the private sector to draw up a formula to rein in and cut transport costs.
 
“If we have a formula as a whole, we can discuss with both the public and the private sector ways to cut prices and we would be able to use that formula to make sure people do not just make prices more expensive,” he said.
 
“When we have a formula that looks at costs like gas, people cannot complain about it, because the calculation is open for all the public to know.
 
“We respect the free market. But the government plays a role in guiding the direction for businesspeople to follow.”
 
As well as making travel cheaper for Cambodians, Mr. Chanthol said lower travel and freight costs would make the country more attractive to investors and to foreign tourists.
 
Cambodia Freight Forwarders Association president Sin Chanthy said his group – which represents 70 of the 300 registered companies in the industry – welcomed the chance to look into the issue and seek a solution.
 
“Other companies should join the association to face the problem and solve it altogether,” Mr. Chanthy said.
 
“I also point out that now the ministry lacks regulations to protect logistics and the association and the ministry will cooperate with each other to draft a law in order to alleviate the transportation problems.”
 
Logistical costs in Cambodia are almost double those in neighboring – and competing – countries, experts say, adding the problem is caused by insufficient and poor quality infrastructure and an inefficient customs process.
 
Cambodia’s transportation sector is ranked lower than the regional standard, the recent “Getting Things Moving: Regional and National Infrastructure and Logistics for Connectivity, Growth and Development” conference heard last month.
 
Although Cambodia has made significant progress in connecting trade to markets in the region and the world, the Kingdom still lags behind the rest of the region despite its central location in ASEAN. It has so far failed to benefit from the regional links neighbors such as Thailand and Vietnam have.
 
According to a joint-survey by the Japan International Cooperation agency and the International Monetary Fund released in 2011, Cambodia needs more than $13 billion in infrastructure by 2020 to continue attracting foreign investment.
 
The country needs about $1.2 billion in infrastructure spending each year, the survey said, adding that about half should go to new projects and the other half to maintenance. Between 2008 and 2012, Cambodia’s spending on public infrastructure amounted to about $2.5 billion, according to government data.

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