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| TA Name | Restructuring of the Railway in Cambodia | |||
| Country | Cambodia | |||
| TA Number | 4645 | |||
| Project Number | 37534- 01 | |||
| Fund Source/Amount[Approved] |
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| Thematic Classification |
Economic growth
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| Project Outcome | ||
| Description of Outcome | Progress Toward Outcome | |
| The long-term sustainability of the railway is secured and the Government?s deficit coverage eliminated. | Railway restructuring reform ongoing. | |
| Implementation Progress | ||
| Description of Project Outputs | Status of Implementation Progress (Outputs, Activities and Issues) | |
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1. An approved strategy and action plan for restructuring of the railway
2. A PPP-based commercial railway operator in place 3. Railway passenger services operating in an efficient and sustainable manner 4. A depository authority holding the railway's land and fixed infrastructure in place 5. An independent transport regulator in place 6. Full public documentation of the process |
Restructuring strategy prepared and policy/principles for restructuring the railway confirmed by the Government in a letter to ADB dated 17 July 2006.
Agreement in Principle between the Government and the selected Railway Operator signed on 13 December 2007. Concession agreement signed between the government and the winning bidder on 12 June 2009. Transaction advisory to MPWT on the bidding process and closure of the railway concession contract remobilized after signing of the concession agreement. Inception Report, Due Diligence Report and Strategy Report received by ADB on 21 February, 3 April and 12 May, 2006, respectively. Prequalification Report submitted on 4 January 2007. Progress Report submitted 17 July 2007. Bid Evaluation Report submitted 28 January 2008. Progress Report for May-October 2008 received on 3 November 2008. Progress Report on the Finalization of the Concession Agreement covering the period October 2008 to February 2009 received on 17 April 2009. Progress Report on the Finalization and Signing of the Concession Agreement dated July 2009 received on 17 August 2009. Awaiting effectiveness of the Concession Agreement. TA Completion Date extended up to 31 December 2009. |
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| Linkage to Country/Regional Strategy | The association of South-East Asian Nations (ASEAN) has asked for ADB's support in establishing a rail link between Singapore and Kunming, which is an ASEAN flagship project. The strategy for the project is gradual rehabilitation and upgrading of the constituent national railway lines to the extent implied by national development priorities, and construction of missing rail links. A central part of the flagship project is the railway through Cambodia and Viet Nam, which provides the strategic link between the existing railway networks in Singapore, Malaysia, and Thailand in the west, and the railway networks in Viet Nam and Yunnan province in the east. The railway link through Cambodia is also an integral part of the Greater Mekong Subregion (GMS) southern economic corridor, which is one of 11 flagship programs under the GMS subregional economic cooperation. The Cambodia Transport Sector Strategy Study concluded that, as a result of many years of war, the railway was in poor condition and would need to be rehabilitated before the full benefits from rail traffic could be realized. Access to safe and regular regional railway traffic would benefit Cambodia in several ways: (i) by reducing heavy truck traffic on the road network, thus reducing future maintenance and expansion costs; (ii) by reducing the transport of fuel and other dangerous cargoes by road, thus reducing road traffic risks; (iii) by providing cheap transport for bulk cargoes such as cement and fuel, thus reducing the cost of importing and distributing such basic products; and (iv) by increasing the competitive pressure on existing transport systems, primarily road transport and the port in Sihanoukville through the establishment of alternative routes and means of transport, which would help to reduce the scope for monopoly pricing. The study suggested that railway operations in Cambodia could become financially viable if the railway were rehabilitated and restructured with decisive private sector involvement. Finally, the strategy study noted that railway operations were not financially viable under current circumstances and could not generate the funds required for rehabilitation. | |
| Geographical Location | Greater Mekong Subregion | |
| Summary of Environmental and Social Issues | A concern would be retrenchment in Royal Railways of Cambodia (RRC) as part of the PPP process, where adequate compensation schemes may need to be developed and funded. | |
| Consultations Planned or Carried Out | The recommendations and the process of the PPP will be exhaustively documented, to allow for monitoring and emulation of the process elsewhere. The PPP process will require extensive consultation with a wide range of stake holders, inclusive of the concerned government institutions in Cambodia and Thailand, current and potential railway users and potential private investors, the staff and management of RRC, the general population living in the vicinity of the railway, and local authorities affected by the project, notably in Poipet. | |
| Responsible ADB Officer |
Peter Broch |
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| Responsible ADB Department |
Southeast Asia Department |
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| Responsible ADB Division |
Transport and Urban Development Division, SERD |
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| Executing Agencies |
Ministry of Public Works and Transport H.E. Tauch Chankosal Secretary of State, MPWT Corner Norodom Blvd & 106 Street Phnom Penh, Cambodia cmc_info@online.com.kh, |
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| Timetable | ||
| Fact-finding | 08 Mar 2005 to 11 Mar 2005 | |
| Approval | 14 Sep 2005 | |
| Financing Plan / TA Utilization |  Top
TA Amount |
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| ADB | Others | Gov | Total | Approved Amount | Revised Amount |
| $1,500,000.00 | $343,000.00 | $300,000.00 | $2,143,000.00 | $1,500,000.00 | $2,350,000.00 |
| Total Commitment | Uncommited Balance | Total Disbursement | Undisbursed Balance |
| $1,849,459.00 | $500,541.00 | $1,654,534.93 | $695,465.07 |
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