Given Cambodia’s vibrant trade environment and consistent growth over the last decade, there are many opportunities there for Singapore-based firms and international partners to explore projects to boost regional connectivity.
This was the key theme of a roundtable organized by Infrastructure Asia and Singapore’s YCH Group on April 20 to connect local logistics firms with potential partners to develop and finance the Phnom Penh Logistics Complex (PPLC).
Plans for the PPLC, which is estimated to cost $200 million, include an integrated port and logistics operations centre, training academy and start-up hub.
A framework agreement to develop the project was inked last month between the logistics company and Cambodia’s Ministry of Public Works and Transport.
More than 30 representatives from Surbana Jurong, DBS Bank, OCBC Bank, Clifford Capital, China Construction Bank, the International Finance Corporation and Silk Road Fund, among others, attended the roundtable in person and virtually.
Stressing the collaborative nature of the PPLC, Infrastructure Asia executive director Seth Tan said a critical success factor is the Cambodian government’s involvement – from earmarking land to develop the port, to setting up meetings between YCH and government agencies to better understand the project details.
“The collaboration between the [Cambodian] government and YCH is quite extensive, and it is this element that gives it a higher chance of success and minimises costs as well.”Infrastructure Asia executive director Seth Tan
Infrastructure Asia, a joint initiative by Enterprise Singapore and the Monetary Authority of Singapore, was set up to connect governments with developers, professional service providers and financiers for the region’s infrastructure needs.
The PPLC is part of the Smart Growth Connect Initiative by the ASEAN Business Advisory Council.
It is the second project under the ASEAN Smart Logistics Network, which supports the ASEAN Connectivity Master Plan 2025 – a road map to seamlessly connect and integrate the regional bloc.
The first project, launched in November and also helmed by YCH, is a joint venture with Vietnam’s T&T Group to develop a logistics center and port in Vietnam.
The PPLC stands to boost Cambodia’s economic growth and connectivity, especially with the Mekong region and southwestern China.
Contract preparation and groundbreaking for the project are slated to take place in 2022, which is also the year in which Cambodia will assume the rotating chairmanship of ASEAN.
Singapore firms have been making forays into Cambodia over the years.
In January, local waste management company 800 Super, with its joint venture partner in Cambodia GAEA Waste Management, was awarded a 10-year contract for waste collection and transportation in the country’s capital Phnom Penh.
YCH Group chairman Robert Yap said that Cambodia has consistently registered high single-digit gross domestic product growth and has the potential to go further.
“Cambodia’s logistics infrastructure is not that well developed today, which is why many multinational companies’ distribution centres are in other countries such as Thailand or Vietnam.”
“Having consulted some of our customers running supply chains in ASEAN, I think they would put their distribution facilities in Cambodia if the country were to have a world-class standard of infrastructure. So this is an opportunity for Cambodia to be in the game.”
He added that YCH’s plan is to roll out similar projects in other ASEAN countries.
“Such projects are multimodal in nature and connect land, air and sea. We are not looking at Cambodia alone, but also its relation to its connectivity to ASEAN, as well as connecting ASEAN to other countries such as China and India.”