Prime Minister Hun Sen has asked Chinese firm CRRC Corporation Limited to partner up with Royal Group to develop Cambodia’s railroad network.
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The premier’s request comes a month after the Cambodian government instructed the Ministry of Public Works and Transport to find a partner that can help Royal Railways, a subsidiary of Royal Group, improve the country’s railway system.
At the sidelines of the Belt and Road Initiative (BRI) Forum, held last week in Beijing, Mr Hun Sen met with CRRC’s board members. During the meeting, he instructed Sun Chanthol, the Minister of Transport, to begin negotiations with CRRC.
“We want to have a Chinese railway company working with Kith Meng’s Royal Railways to develop our railroad system and make it more efficient,” Mr Hun Sen was quoted as saying in a press statement released after the meeting.
A CRRC representative said the firm has developed 21,000 kilometres of railroads in China and abroad, but added that the railway development business is not a profitable one. Despite this last comment, CRRC showed a willingness to enter negotiations for the proposed partnership with Royal Railways.
“We are happy to have a discussion with Minister Chanthol and Oknha Kith Meng of Royal Railways to jointly develop the railway system in Cambodia,” the representative said according to the press release.
Mr Hun Sen urged the Ministry of Transport and Royal Railways to be ready for the negotiations.
CRRC vice president Zhang Liquiang told Khmer Times previously that his company has plans to conduct a study to assess the investment potential of Cambodia. He said the company is interested in improving the Kingdom’s railways, a project in line with the BRI.
“In Asean, we have already been to Thailand, Malaysia, and Vietnam. In Cambodia, we will contact the relevant authorities to conduct a market analysis,” he said.
“We don’t have any operations in Cambodia yet. We hope, however, that we can do business there in the next few years,” he added.
In 2009, the government signed on a 30-year concession agreement, allowing Toll Cambodia – a joint-venture between Australia-owned Toll Holding Limited and local conglomerate Royal Group – to manage the operation of the railway system in Cambodia.
In 2014, Toll Holding transferred all its shares to its local partner, making Royal Group the only shareholder. The company was re-named Royal Railways Cambodia.
Cambodia has spent more than $226.5 million to restore the southern and the northern railway lines. About $85 million came from government coffers, with the rest contributed by the Asian Development Bank and other development partners.