Cambodia’s attempts to revive the road sector-
Efficient road infrastructure is critical for economic growth. Cambodia’s road sector is marked by slow growth in the road network and absence of paved roads. When compared to other countries in the region, Cambodia has been a laggard in developing its road sector. To match pace with its counterparts, the country has recently chalked out an ambitious plan to add over 2,000 km of expressways to its current road network. These expansion projects will entail significant investments. Given Cambodia’s strained fiscal state, private investment will play a key role in the implementation of these projects. Towards that end, the formulation of effective implementation strategies and conducive policies will go a long way.
Abysmal state of infrastructure
Cambodia’s total road network currently stands at about 51,000 km. About 68 per cent of this network is classified as rural roads and the remaining consists of one- and two-digit national roads and three- and four-digit provincial roads. Cambodia’s road density stands at about 0.29 km per square km, which is significantly lower than that of its regional counterparts like Vietnam, Thailand, Malaysia and Brunei, and that of other countries like India (1.42 km per square km), the US (0.67 km per square km) and China (0.4 km per square km).
Road development in Cambodia falls under the ambit of the Ministry of Public Works and Transport (MPWT) and the Ministry of Rural Development. Between 2008 and 2012, the road network grew at a compound annual growth rate of 14 per cent. While the absolute growth in the network is impressive, the quality of road infrastructure continues to be poor. This is highlighted by the proportion of paved roads in the total network, which increased marginally from about 7 per cent in 2008 to 10 per cent in 2012. This situation, in turn, means high logistics costs. According to the World Bank’s Global Competitiveness Index for 2014–15, Cambodia ranked 93rd out of the 144 countries surveyed in terms of the quality of road infrastructure. In terms of score, the country fares low too. On a scale of 1 to 7, Cambodia was rated 3.4. Both in terms of score and ranking, Cambodia lagged substantially behind most of its regional counterparts like Thailand and Singapore.
Ongoing programmes and big-ticket projects
In a bid to step up infrastructure development, the Cambodian government formulated the National Strategic Development Plan (NSDP), which entails creation of transport infrastructure, including roads and highways. The government has reported making considerable headway in rehabilitation and construction of national roads under the most recently concluded NSDP 2009–13. By end-2012, the MPWT had completed 30 rehabilitation and construction projects covering a length of about 1,973 km, while another 35 projects were under implementation. The MPWT also undertook periodic repair and maintenance of over 5,000 km of laterite/paved roads.
Under the NSDP 2014–18, the MPWT will undertake improvement work on about 3,500 km of highways, on one-digit national roads, and on several four-lane roads around the major cities in the country. The ministry will also attempt to increase the pavement ratio of two-digit national roads from 50 per cent to 90 per cent.
In May 2014, Cambodia drafted an ambitious infrastructure development plan to build 2,000 km of expressways. This Expressway Master Plan, which is aimed at meeting the demands of a growing economy, has been designed by China-based Henan Provincial Communications Planning Survey and Design Institute. The expressways will connect the majority of the provincial administrative regions, special economic zones, key transport centres, tourist attractions, border crossings, and strategic areas of national defence. The expressway network expansion project will entail an investment of about $26 billion during 2020–30.
In the near term, Cambodia plans to develop about 850 km of expressways at a cost of about $9 billion. In October 2014, a Chinese developer sought the Cambodian government’s support to construct an expressway between Phnom Penh City and the Phnom Penh International Airport (as part of the Expressway Master Plan). The project is likely to be implemented on a public–private partnership basis.
Besides the above-mentioned efforts, multilateral and bilateral funding has played a key role in stepping up investments in Cambodia’s road sector. So far, the World Bank, the Asian Development Bank, the Japan International Cooperation Agency, and the OPEC Fund for International Development have together lent close to $0.4 billion to over 12 road projects in Cambodia. Further, China and South Korea have been quite active in funding road sector projects. Both the countries together have funded about 20 road projects.
Conclusion
Road development in Cambodia has been characterised by uneven growth. The policy, legal and regulatory framework covering the road sector requires a thorough revamp. While some significant advances have been made, such as the law on road traffic and the law on economic concessions, efforts to improve the effectiveness, efficiency and sustainability of the road system and laws on private sector participation need to be strengthened. Since the government is financially constrained in shouldering the entire cost of project development, involvement of the private sector is crucial. For the government to attract third-party investors, a framework ensuring good governance and a strong legal and regulatory framework are required to protect their interest. As per reports, the government has prioritised a wide range of regulatory improvements. The passage of the law on concessions and other relevant legislation on private sector participation are some steps in the right direction.
