New container terminal may not deliver for Cambodia

Santanu Sanyal Phnom Penh | Updated on August 26, 2013

Challenged by general conditions, slowdown

Shallow draft, lack of rail connectivity, uneasy relations with Vietnam, and the general slowdown may leave LM 17, Cambodia’s brand new $28-million container terminal near Phnom Penh, up the strait.

Even if the terminal achieves the targeted throughput of 110,000 TEUs (it has moved 70,000 so far) by December, the rate of growth will be lower than what the old terminal (TS 3), located about 30 km away, achieved in 2012 (95,333 TEUs) over 2011 (81,631 TEUs) and 2010 (62,256 TEUs).

The growth in throughput at Phnom Penh Autonomous Port’s LM 17 — one 300-metre long berth with the capacity to handle 150,000 TEUs — will be slow despite the transfer of the entire volume of traffic comprising containerised cargo and export of rice, sugarcane and tapioca, totalling 184,000 tonnes, from the old terminal to the new.

The old terminal remains non-operational as the Customs authorities refuse to work at two ports simultaneously.

According to the PPAP authorities, who recently met a delegation led by the International Union of Conservation of Nature (IUCN), the slow growth is due to the recession gripping the global markets. However, that does not give a full picture of the port’s performance.

Like the Kolkata port on the Hooghly, the Phnom Penh port, too, is a river port on the Mekong river. But the available draft at Phnom Penh port is just 4.5 metres — much lower than that in the Hooghly. As a result, only shallow draft barges of 130 TEU capacity can call at Phnom Penh port’s new terminal. This automatically restricts the port’s handling capacity.

Moreover, barges have to travel nearly 300 km to reach the nearest port — either Saigon or Cai Mep — both located in Vietnam.

The survival of the Cambodian port, therefore, depends largely on the co-operation of the Vietnamese authorities. Unfortunately, the two countries are not in best of terms due to historical reasons.

“We would like to improve the navigability of the river to allow larger vessels to come to our port, but we cannot do it unless the Vietnamese authorities too do the same in their portion of the river and we’ve no knowledge of what they are doing or if they are doing anything at all,” said Sam Olan, Deputy Director-General, PPAP.

The two nations have an agreement on river navigation but its implementation leaves much to be desired. Phnom Penh plans to improve the draft to seven metres and has identified three hotspots for dredging in three phases totalling five million cubic metres.

“However, our exercise remains largely theoretical in the absence of a firm commitment from Vietnam,” he observed.

There is an alternative route to the Vietnamese port via the Bassac river, a distributary of the Mekong which is more navigable. However, the route takes a longer time and is expensive. “We’re not seriously considering the alternative route because there is no point as the river again crosses into Vietnam,” he said.

It is also not entirely right to say Vietnam is not co-operating at all. The number of checks of vessels to and from Phnom Penh has been reduced from four to one. “But it is not enough,” said Sam Olan, adding: “in true spirit of the agreement, we want removal of all checks, except the one at our level, as we want seamless movement.”

Rail connectivity

There is no rail connectivity to LM17 and cargo is moved by road which is costly. “We’ve no plans for rail connectivity at least in the near future as we intend to construct new ring roads to facilitate smoother cargo movement by road to the port.”

As with ports around the globe, political forces have a hand in the operation of LM 17. For instance, every container is subject to compulsory screening at an additional cost of about $80. This is unheard of in major container ports where screening is done at random and less than one per cent of the boxes get examined.

Also, PPAP co-operates with private firms such as Pan Continental Freight and Mekong Sentosa Logistics to run warehouses. There is no inland container depot at the port. About nine hectares was acquired to set up a depot near the old terminal, but the plan has been abandoned as the terminal is non-operational now.


PPAP also plans to develop a Special Economic Zone in the port area and the Japan International Co-operation Agency is interested in helping with the project on the condition that it is a private sector initiative.

“However, there has not been much progress and the land reclamation is yet to take place,” Sam Olan added.


(The writer visited Cambodia on a trip organised by the International Union of Conservation of Nature.)

Published on August 26, 2013

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