National Road 5 to get $160 million upgrade + New road at Poipet to boost trade ties

[geovalin]

National Road 5 to get $160 million upgrade

Tue, 17 March 2015

Chan Muyhong

Japanese Prime Minister Shinzo Abe announced on Sunday a $160 million soft loan for Cambodia to improve National Road 5, which connects Phnom Penh to the Thai border, strengthening trade connectivity in the Mekong region.

The loan was announced during Cambodian Prime Minister Hun Sen’s five day visit in Japan to attend a United Nations disaster risk conference, according to Kyodo News.

The announcement comes near the completion of the Japanese-funded, 2,200-metre Tsubasa Bridge in Prey Veng province’s Neak Loeung.

“By investing in such high-quality infrastructure, Japan would like to contribute to Cambodia’s efforts to significantly strengthen connectivity with neighbouring countries and achieve sustainable growth,” Abe was quoted as saying by the Japanese Foreign Ministry.

The road expansion project is expected to start at the end of 2015 and finish by 2020, according to Vasim Sorya, the director general of administration at the Ministry of Public Works and Transportation.

“National Road 5 will be expanded from its current average of 11-metres to 24-metres wide with four lanes, which will ease the transport of goods and at the same time reduce traffic accidents,” he said.

“National Road 5 has a very big economic significance not only to Cambodia, but also to the greater sub-Mekong region,” he said. “National Road 1, National Road 5 and Neak Loeung Bridge are all part of the Asian highway.”

Hiroshi Suzuki, chief economist at Business Research Institute for Cambodia, said the concessional loan comes with an interest rate of 0.01 per cent per annum and a 40- year maturity period.

He added that the expansion plans will help attract further FDI and increase Japanese investments in the Kingdom.

“The improvement of South Economic Corridor is the most important to attract FDI in the labour intensive manufacturing sector, especially Japanese automobile and electronic parts manufacturing companies,” he said.

The road and the Tsubasa Bridge are part of the Southern Economic Corridor, a transportation route linking Ho Chi Minh City to Dawei in southeastern Myanmar via Bangkok.

“National Road 5 is a very important project for Japanese companies, which have factories in Thailand and large scale companies, like Toyota and Mitsubishi,” Suzuki said.

“It is expected that the volume of trade between Cambodia and Thailand will increase with the improvements from the Japanese government’s ODA loans,” he added.

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New road at Poipet to boost trade ties

Thu, 19 March 2015

Hor Kimsay

Prime Minister Hun Sen said yesterday that customs revenue from Poipet International Port on the Cambodia-Thai border was over $120 million a year, on account of heavy movement of goods across the border.

Speaking at a ground breaking ceremony for National Road 58, Hun Sen said the development of the new road will faciliate trade in the provinces along the border, thereby strenghtening business cooperation and developement between the two countries.

“If we talk about all check points, Poipet check points is one of the biggest for exchange of goods. Just at the Poipet check point, revenue collection is more than $10 million per month,” he said.

Bilateral trade between Cambodia and Thailand is currently more than $4 billion a year, Hun Sen said, with Thai exports to Cambodia accounting for more than $3 billion.

Son Chhay, deputy chairman of the National Assembly’s banking and finance commission, said that with 75 per cent of goods coming across the Poipet check point, revenues should be higher than are currently being collected.

He said a study conducted in 2012 revealed that the government should be collecting $16 million per month, from the Poipet check point, adding that there are reports about goods being stored at a private dry terminal to avoid paying customs taxes.

“Now, two to three years later it should be higher than this,” he said. “Poipet border check point must receive at least $200 million per year in custom revenues.”

http://www.phnompenhpost.com/business