ADB offers $70M loan to improve transportation

THE Asian Development Bank (ADB) has approved a $70 million loan to develop the Kingdom’s transportation infrastructure with the majority of the funding going towards improvements of national roads in Prey Veng, Siem Reap and Svay Rieng provinces.

The loan is part of the ADB-backed Greater Mekong Subregion Southern Economic Corridor programme aiming to link Ho Chi Minh City, Phnom Penh and Bangkok through infrastructure development to enhance the efficiency of cross-border trade, according to a press release. A focus will be on improving 147 kilometres of unsafe and floodprone sections of national roads, while providing all-weather connectivity and climate resilience.

“In Cambodia, roads are the dominant mode of transport, making road transport critical to the country’s social and economic development. However, the road subsector in Cambodia remains inefficient and fragmented,” Oyunchimeg Erdene, a senior transport specialist at the ADB, said in the release.

“Apart from enhancing existing roads in the three focus areas, the project will also help improve the government’s capacity in road asset management.”

According to the ADB, Cambodia’s networks have low levels of connectivity and efficiency due to incomplete regulatory frameworks, low institutional capacity, little private sector participation and a lack of construction initiatives. It said 15,400 kilometres of roads managed by the Ministry of Public Works and Transport are in need of repair or rehabilitation to enhance connectivity domestically and with neighbouring countries.

The loan will also pilot the use of a “hybrid performance-based” contract for the construction and maintenance of road works. The model aims to increase the efficiency and effectiveness of road asset management in Cambodia by expanding the scope of contractors from project executors to road managers.