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Logistics sector seeks cash aid but ‘it’s not yet a priority’

Sorn Sarath / Khmer Times Share:
The Sihanoukville deep-sea port. Khmer Times

The Kingdom’s transportation sector, one of the many industries hit hard by the virus outbreak, is seeking financial support from the government even though goods traffic via water is seeing a slight recovery this month.

Sin Chanthy, president of The Cambodia Logistics Association (CLA), said that the viral pandemic has reduced the transportation service as a whole by up to 70 percent while the Kingdom’s air cargo has almost completely closed.

According to Chanthy, 98 percent of air traffic is completely closed after the government decided to suspend flights from Malaysia and Indonesia to contain COVID-19 after the country saw the number of cases soar in the last few weeks.

However, he said goods transportation via water and by land has experienced a recovery of more than 10 percent starting from July, normally the peak season even without the existence of  COVID-19.

“It’s better than the last three months. We have more goods shipping because  traffic activity in the region is still operating well, allowing us to export more agricultural products such as rice but garment exports remain small,” he said.

He said, however, the situation cannot be predicted because of an indication of a global second wave of infection while Cambodia has reported more new cases of COVID-19.

“We insist on help from the government. We need more funds to support the business during COVID-19. We have lost almost a half year and we don’t have capital reserves anymore,” Chanthy said. “It is time to find financial support from outside and we hope for support from the government and trade partners such as banks and MFIs (microfinance institutions) that could provide us loan support otherwise we may cease to exist.”

Referring to the government-private joint SME Bank, which provides financial support for small and medium enterprises (SMEs) affected by the pandemic spread, Chanthy called on the government to help logistics companies to get finance by easing some requirements.

“The government has offered priority for some sectors such as SMEs and the tourism service but not for transportation, which is also an affected industry,” he said. “Our collaterals is already with the banks and we don’t have more left so it is necessary to ask for help.”

Most Cambodian goods shipping via the ports are agricultural products and garments, footwear and electronic products as well as manufacturing-supported raw material products.

Lim Heng, vice-president of the Cambodia Chamber of Commerce, said that COVID-19 has hit hard transportation by air but nonetheless goods traffic remains as normal with just a 30 percent downturn.

“Shipping goods remains a reasonable operation if we compare it with others sectors so it is not on the government’s priority list yet,” he said.

Heng said the government is providing priority support for sectors in which thousands of workers and staff were made unemployed.

“During the meeting with logistic companies in early July, we noted that goods traffic is getting better so getting loans for SMEs would not be easy at this time,” he said.

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