New Phnom Penh Autonomous Port and Chinese Funded Projects

Today I am so happy to be able to join with all of our people, Buddhist monks and HE Pan Guangxue, the Chinese Ambassador and foreign guests to put into official operation the new container port that we call “the Phnom Penh Autonomous Port.” I am so glad that in his term as Ambassador, HE Pan Guangxue and I have been able to put into official use and operation of this large port. I would like to take this moment to express through HE Pan Guangxue our sincere thanks and appreciation to the government of the People’s Republic of China for providing always its support to the development efforts of the Kingdom of Cambodia, this port also included. I am so glad that we have the participation today of 15,000 people to hail our new port achievements.

The agreement to build this port came into effect on December 21, 2009, during the official visit of HE Xi Jinping, then Vice President of the People’s Republic of China and presently the General Secretary of the Communist Party of China, and will-be President in months ahead. The agreement consists of eight projects with a total amount of 400 million USD, one of which is the Phnom Penh Autonomous Port (PPAP). On November 4, 2010, during the visit of HE Wu Bangguo, Chairman of the National People’s Congress of China, Cambodia and China signed the agreement specifically for the construction of the port.

As I convey through the Ambassador HE Pan Guangxue my gratefulness to the government of the People’s Republic of China for the loans it has provided for the Cambodian development, I would inform you that we will soon have more construction sites to launch and also to put into official operation. We will put the hydropower Kirirom II into official operation on February 23 instead of February 21, since I will be busy on that day. I already told HE Suy Sem about that. As for HE Tram Iv Toek’s request for my presence for the ceremony to launch the project to enlarge the national road 6 from the connection to Prek Kadam all the way to Siemreap, I have rescheduled it to March 5 as I have no more free time in February. In late March, there will be also this bridge construction at Koh Thom (over the Bassac River). We will launch the construction of the national road 44 in Kompong Speu in May.

Phnom Penh Autonomous Port – National Treasury

We all have heard just now the report by HE Tram Iv Toek, Minister for Transports and Public Works in relation to the progress of the construction of the PPAP. I am grateful for the efforts made by both the China and Cambodia in realizing this achievement. I thank the Shanghai Construction Group Co. Ltd. as well as the Guangzhou Wanan Construction Supervision Co., Ltd for their combined efforts in making this port a reality. According to the Minister’s report, PPAP here in Kien Svay district of Kandal Province has container port area of 400 meters by 250 meters or ten hectares. There consists also a five storey administrative building. It is to my notice a very important part to the field of transport of the Kingdom of Cambodia.

Historically, the Phnom Penh Autonomous Port that we have been using (in Phnom Penh) was built in 1952. It is similar to my age. As of now, the port capacity no longer responds to the growth of the economy. It is required that we build another port that functions as one part of the PPAP (in Phnom Penh) to handle 75% of the total goods activity of the previous port. While putting into official operation the new port here in Kien Svay, we still have to continue operation of the PPAP in Phnom Penh’s Jroy Jangva. The new port will handle 75% of goods and the old one will handle the remaining ones.

We will have a better capability for goods discharge from visiting ships. Where we have to keep other ships waiting, while unloading goods we now have the ability to let other ships discharge their goods at the alternative port. They do not have to stay idle waiting for their turns anymore. On top of that loading and unloading goods will consume less time which will also help reduce the problem of ships stranding in line waiting for their turns to enter the port, which would result in more costs covering.

I would take this opportune moment to express my sincere appreciation and thanks to the people who live around the port for their cooperation that makes our project running smooth and successful. I am glad that today we have lots of people turning out to welcome the new achievement, which is not for the PPAP alone but for the whole country and people. The 61 years old PPAP in Phnom Penh will continue to be in service and we will refurbish it. As far as this port is concerned, I am sure that even after I and some of the people here pass away more than one time, it will be here as a national property and stand serving for the country’s socio-economic development efforts.

Special Economic Zone Next to the PPAP

We have observed the growing demand for container area as envisaged in the report of Minister Tram Iv Toek. The amount of containers coming and going through Phnom Penh has been up and down. In 2008, there were 47,507 containers coming and going through Phnom Penh port. In 2009, the activities scaled down to 43,312 containers for the world financial crisis and economic downturn. In 2010, because there is a surge in the economy, the container activity grew again to 62,256 and to 81,631 in 2011. In 2012, the number of container has increased to 95,333.

According to our estimate, we hope to improve its capacity to handle between 120,000 and 130,000 containers per annum. Minister Tram Iv Toek said just now that PPAP is looking for development partners in equipping new port machineries, harbors and warehouses. In order to augment storage of container to 300,000 per annum, there has been also effort to seek support for the establishment of special economic zone nearby as well. As is enlightened by HE Tram Iv Toek and HE Hoeu Phavi and requested for support, I would share with you that there will be a special economic zone on the size of 22 hectares land next to the port itself. I am sure there will be more jobs created for our people in the area.

In-equilibrium of Development and Supporting Elements

We have the need for capital to speed up the country’s development. What is difficult for us is that we have not been able to stratify equally our development or there is this in-equilibrium between development and support. Take for instance, the agricultural production that has gained momentum, for example rice and cassava, our ability to attract processing investment and purchasing rice has been far too limited. We have missed this point. The production has gone up quickly to change our country’s status from self-sufficiency with more or less little surplus to a country with abundance of surplus rice.

According to the report by Minister of Agriculture, Forestry and Fisheries, HE Chan Sarun, with regard to food balance, this year we have produced over 9 million tons of rice, which after keeping some for seed and local consumption we still have extra 4 million tons of paddy or roughly 3 million tons of milled rice. In spite of this increase, we lack sufficient financial and technical means to mill, store and purchase rice. Take cassava into consideration, we have surplus of millions tons while we do not have factories that perform as marketing place. These are the problems that I conclude it as our inefficiency to cope with the flow of production. More rice is produced but processing means has been invested insufficiently.

As far as electricity is concerned, as I have said on various occasions, according to the estimation made by major technicians and experts, Cambodian demand for electricity will be around 12% per annum. In reality, demand for electricity has gone up to 24% per annum. The growing demand has gone up in dimension that is far from our expectation. According to a report I have in hand, our demand for electricity now is 456 megawatts while our ability to supply has come to only 400 megawatts.

That is why I say our development has gone on beyond our expectation. We focused so much on production, while less focus has been paid on processing. Once the production has gone up, the ability in the sphere of processing has come to its limit. However, if there were not sufficient rice availability, there would not be anyone to invest in processing too. According to the report by Senior Minister Cham Prasidh, Minister of Trade, we have convinced our Chinese friend to allow 95% goods of free import duty from Cambodia. Previously, in effort for ASEAN-China integration, the People’s Republic of China provided the early harvest benefit for over 400 goods items. Now, there are thousands of goods items to be imported to China. The question now is whether we have the ability to process so as to meet the Chinese market or not.

Out-ward Looking Strategy, Cong Xi Fa Cai

We are now pursuing the outward-looking policy. What is it? It means we are producing to serve the need for export. We will have to think of exporting and not only importing. We are handling this outward looking strategy well that we have prepared our ports in Phnom Penh and Preah Sihanouk for both export and import purpose. We have assured rather huge amount of export if we include also export on land to Vietnam, Thailand and Laos. Outward-looking strategy here means we are looking for markets for agricultural productions from our producers. To reach out to those markets we also have to assure quality through services provided by the quarantine and other quality-assuring standards.

According to the report I have here, the price for fragrant rice has not gone down, which makes it easier to export because it has high quality, good taste and answers to the quality demand too. As for some other items like cassava, based on the report by HE Son Kunthor (Head of the Cambodian state-owned Rural Development Bank), one factor that makes the price of cassava fall could be because the Chinese are preparing for their new year. We expect that the price will pick up again after the Chinese New Year.

HE Pan Guangxue said that in China everything is in preparation for the New Year’s coming but in Cambodia there is also Chinese New Year. He even said “on Chinese New Year’s Day, Cambodians are drunk.” This implies that the ones who are really enjoying the New Year are the Cambodians. While the Chinese are busy with the dragon dance, the Cambodians are busy eating and drinking. In Cambodia, there will soon be a gong xi fa cai period too.

Improve Production for Local Consumption and Export, Cambodia – No Dumping Ground

We must do anything we can to improve our production for both local consumption and for export. We have so many markets for our products but we must make sure they are of quality for export. Take for instance in ASEAN, there are five countries that cultivate rice – Cambodia, Vietnam, Thailand, Laos and Myanmar. Because these countries also have rice, it is not the case that whatever rice we produce can export to other countries. They also make efforts to improve their rice quality as well. They also are after high price as well. They are also preparing their products for competition in the international markets as well. India and Pakistan, for your information, are also producing and exporting rice. India has recently even reduced its stock from between 30 and 40 million tons to only 10 million tons. While attending the ASEAN-India Commemorative Summit, sitting next to the Vice President of India, I learnt from him that India has a difficulty in preserving rice longer in stock.

We have come to quite similar problem this year. We have prepared for a big flooding because it is the Year of Dragon. Both state and private sector have big stocks of rice in preparation for flood situation. To our miscalculation, the flood came in small. In this state of flood situation, both state and private sector have a huge stock of rice and we need to sell them out to the market in order to store newly harvested rice. This development has resulted in over-availability of rice in the market.

That is why I am talking about the fact that our production capacity has overtaken the processing capacity. We have to think about competition – inside and outside the country. Take for instance the local competition of drinking water. Which brand to drink now when it is impossible to remove the cap? Sometimes one can get the water spilled just to try and remove the cap. In this state how could we ensure competitive edge of local products? How about the one we need to compete in regional and world markets? We still have this issue of food safety and quarantine protocol.

Talking about this I would raise an example of ten years ago when someone, I do not disclose his/her name, offered to send two ships of goats to Cambodia as charity. When we dug up the information, it is known to everyone that the goats were supposed to be sent to an Arabian country. The two ships were denied entry because of so many goats were dead. So they returned and wished to make them present for Cambodia. I then rebuked that Cambodia was no dumping site for those dead animals.

As far as investment is concerned I also affirm that Cambodia is no dumping ground of outdated technology. We are now in the digital age. We can’t accept analogue anymore. We can’t accept outdated technology from any foreign country to be used in ours or we will have problem with spare parts. In the 1980’s we accepted various technologies from eastern European countries because they sold at cheaper prices. Take for example an outdated mobile broadcasting vehicle that we had to add an air-conditioner to make it work. Cambodia has got all sorts of experiences as far as these outdated technologies are concerned.

For Export Quality

You may not have difficulty in understanding that while we are careful with products coming from outside, those countries are curious about rice we export to them too. They would not accept broken rice or rice that might contain contagious agents. It is in this understanding that our people should know how to select rice seeds, ways to harvest and maintain the paddy’s quality so that we can guarantee that milled rice will be of good quality for export. In this reason sometimes it is not the rice mill alone that has to be responsible for unacceptable rice quality. Over-ripe rice would also cause milled rice breaking too. Milled rice with too much broken parts would definitely be denied or sold at low price.

On my way I have noticed for instance the flower selling business. People in Kien Svay district seem to have good flower business. People around the capital city of Phnom Penh can make good business in growing flowers. However, there seems to be greater demand for more flowers as in various ceremonies people have to fly in flowers from Thailand. We need to address the demand for local processing and the in-equilibrium between demand and supply. We now have surplus in our country on various products such as over four million metric tons of rice. As we cannot export we need to resort to processing.

Master Plan for Riverbed Restoration

Let me have the attention of HE Tram Iv Toek on the issue of dredging the river in five different places. The challenge ahead is to make way for ships to navigate in and out of the port. In the time to come I would urge us to think about deepening the waterway also for the sake of navigation and all issues concerned, environments also included. Otherwise, allowing so and so to dig deep into the riverbed, they would do so only for places where they can get sand for construction and would not care about the whole river system. This has led to siltation on one side of the river and  erosion on the other. The river has then changed its course. We have to apply comprehensive approach to solve the problem.

In the past I used to swim across the Mekong River (at my village in Peam Koh Sna of Kompong Cham province) and there were a few isles. Now I learn they are gone. In my village, the pagoda, the houses of my grandparents, which was about one kilometer from the river before, has now been removed to a new location. As I said earlier, if we just give the right to suck up sand from the riverbed and they only do at places where they could get construction-quality sand, it would not solve our problem but create more even. As far as I learnt from HE Lim Kean Hor, Minister for Water Resources and Meteorology, there are groups of sand-sucking at night. I order you to take strict measure on them. They are the ones to cause shore erosion; though of course in some instances and locations, land erosion is caused by natural factor.

It is in this note that we are required to come up with a master plan in which we will be able to exploit sand pumping for export and use the income from the business to widen and deepen the silted waterway according to our demand. So I urge that the proposition from the Ministry of Transport and Public Works to hang on a while and incorporate its plan to widen and deepen the waterway together with the Mekong River Commission and the Ministry of Water Resources and Meteorology.

Chinese Loans – Low Interest, Condition Free; Aiming for 6% and 7% Growth

We now have more vehicles and motorcycles while our roads are small. As there is growing demand for building more roads and bridges, we need to seek for more capital. China has been the only country who can give us the fund we need. I would demand to any country that blames Cambodia for taking loan from China to give us some loans instead the so that we do not have to get the Chinese loan. Why do you blame us for accepting the loan from China while you do not give us any? If they were to give us any loan, they impose numerous conditions. We have no choice but to accept the Chinese offer for low interest rate and free of condition.

Last Friday the Cabinet’s meeting of the Royal Government adopted the three-year rolling plan that requires billion of USD more and we are hoping to get part of the funding from China and part from other sources to expedite the development. Cambodia’s development is now compared to an airplane that requires a strong power to push and take off before it stabilizes its cruising speed. Without the push, the plane could not fly. We are aiming for a long-term growth between 6% and 7% and the key issue to get this job done is the infrastructure, in which the port is playing very significant role as far as export and import is concerned.

Water transportation is quite beneficial because it would not damage the roads and help with the traffic circulation as well. It is a good thing that at the start of 2013 while we put this port into operation, we also have the rail running between Phnom Penh and Sihanoukville. They have reduced the amount of transportation on roads which helps improving traffic safety too.

Get Ready for the 100 Day Anniversary and Second Mourning Period

Between today January 22 and February 1 there are ten more days that we will conduct the procession and lighting (of the pyre to cremate the late King-Father’s body.) This evening we will have the Buddhist monks chanting prayers and in the morning of the next day my wife and I will have to be present in the Royal Palace for the celebration of the 100 days anniversary of the passing away of Preah Borom Ratanak Kaod (Samdech Preah Norosom Sihaniuk, the King-Father). I would therefore encourage our people to be in mourning for the second time from February 1 through to 4 as that will be the last time that we will be saying good bye to Samdech Ov and Samdech Ta.

The funeral procession (of Samdech Preah Borom Ratanak Kaod) will be held on February 1, when we will have twice artillery salutes. The first salute will be at around 8 am when we move the embalmed body from the Royal Palace to a carriage to commence the procession and the second salute will be conducted at between 11 am and 12 am. We will have many foreign dignitaries coming to pay their last respects to the King Father with our people too./.