Shipping article(s)
September 30, 2019
Phnom Penh city iStock-1132054323
Higher than expected throughput is leading the Phnom Penh Autonomous Port to bring forward extensive development plans for the port.

Higher than expected throughput is leading the Phnom Penh Autonomous Port (PPAP) to bring forward extensive development plans while remaining a feeder port, attendees at the 17th ASEAN Ports and Shipping Conference were told during a site visit.


The port, some 30 kilometres southeast of the Cambodian capital on the Mekong River, expects to grow by 10% this year, a decrease from last year’s 16% growth, an official from the port said. The official asked not to be named.


Container growth of 32% in the first eight months of this year prompted a speeding up of plans to improve connectivity, especially as the port is planning on further growth. “We are still having positive growth and maybe it will continue for a bit,” the official said.


PPAP’s strategy is twofold: improve its existing resources (and water courses) and build new facilities.


The key to the latter is moving up the schedule of the port’s third phase of development, which will add scope for another 200,000 TEUs capacity. It was the knowledge that the port would broach its existing 300,000 TEU capacity two years ahead of schedule – it was originally penciled in for 2022 – that helped prompt the rethink, the official added.


Phase three, which involves another jetty and hardware at the LM17 container terminal, is to be done over three years and in stages, the official added. A fourth phase is also being planned, which will bring container capacity to 900,000 TEUs in total by developing a nine-hectare riverside site.


Other plans include developing the very upriver UM2 multipurpose terminal at Tonle Bet – PPAP has a very large catchment area as part of its government mandate – as a consolidation, and deconsolidation, centre.


Supplementing this is the establishment of three sub-feeder ports along the rivers in northern Cambodia at Prek Kdam, Preak Tamaek and Kratie, all upriver from Phnom Penh on the Mekong and Tonle Sap rivers, and will bring PPAPs facilities to eight, although two are passenger complexes in Phnom Penh.


The three feeder ports are to support agricultural exports, especially fruits such as mango, durian and pineapple, and will be helped by plans for a cold/dry warehouse at the current LM17 facility.  There is not enough money for cold storage at each of the three, the official noted.


Development is moving on. The feasibility study is being finalized, the PPAP official said. “I think they will send us the document this month,” said the PPAP official briefing attendees at the conference.


A popular trucking service operated by the PPAP will see 24 new trucks join next month and is earmarked for more. “Next year we will continue to expand” the trucking service, said the PPAP official.


Underpinning all of these is the plan for logistics centre “across the road” from the current LM17 facility. The centre is actually going to be some 3.5 km due south of where the planned phase four will be; a sizable area has been set aside for it.


PPAP, though, is keen to stress one thing: It will remain number two, and coastal Sihanoukville on will be Cambodia’s main maritime gateway. Phnom Penh, despite its growing facilities, will remain more a feeder port for the country’s interior. “We know our role,” said the PPAP official.


This might explain why phase four will have the focus it looks likely to have: rice. Under consideration is a facility for consolidating and processing rice.


The second part of the strategy mentioned above, improving existing resources, is about making more of its location. Essentially a river port, PPAP plans to make its location and Cambodia’s rivers work for it. “We are using the Mekong and other rivers,” said the PPAP official.


This is going to be challenging, as will involve a great deal of dredging. Currently, the barges using PPAP, bringing in largely construction materials from China and taking out mostly garments, are restricted by a maximum draft of 5.5 metres, which limits barges to 200-250 TEUs.


PPAP currently gets 22 per week, but the ability to receive larger barges of up to 400 TEUs would stop the emerging bottlenecks. The problem is the scale of the task.


“Our plan in the future is to have 7.5 metres [draft] all the way to the Vietnam border,” said the official. That is around 130 kilometres of river; most of the current base ranges between 4.5 and 5.5 metres. It would have to coordinate the project with Vietnam, and “special permissions” would likely be required.  


Money is the other challenging issue. In mid-September, the Singapore-based ASEAN+3 Macroeconomic Research Office (AMRO) said in a press release that Cambodia should expect continued growth. “Following a stronger than expected growth of 7.5% in 2018, Cambodia’s economy is projected to grow at a more sustainable pace of about 7.1% in 2019 and 2020, while inflation has remained relatively low and stable,” AMRO lead specialist Seung Hyun Hong said after AMRO’s annual consultation visit to Cambodia from September 10-18. Growth aside, Cambodia is still a poor country and PPAP is not going to become the gateway. Not helping matters is the cautious approach Cambodia has taken on private public partnerships in the past.


Public bidding by private companies for the construction work is as far as it gets. PPPs between the government of Cambodia who own 80% of both PPAP and Sihanoukville are not yet done, said the PPAP official. “It will be done by ourselves,” she said.


By Michael Mackey

Southeast Asia Correspondent | Phonm Penh

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