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New Cambodia container terminal underperforming?

The new container terminal at the Phnom Penh Autonomous Port (PPAP) in Cambodia is said to be falling behind in performance expectations.

The US$28-million LM 17 container terminal  is reportedly bogged down by a shallow draft, lack of rail connectivity, poor relations with Vietnam, and weak demand.

All traffic has been transferred from the old terminal, the TS 3, to the new LM 17, but throughput has dropped below expectations.

PPAP authorities have attributed the underperformance to the global recession, but the container terminal is up against much more, according to a report from The Hindu Business Line.

For one, the draft at Phnom Penh port is just 4.5 meters, so only barges with a capacity of 130 TEUs (20-foot-equivalent units) can call at the port’s new terminal.

The location is another setback, as barges have to travel nearly 300 kilometers to reach the nearest port, either Saigon or Cai Mep port, both located in Vietnam.

Efforts to improve the draft at the Cambodian port are hampered by the lack of cooperation between Cambodia and Vietnam, a situation that has historical roots.

The PPAP said it plans to improve the draft to seven meters, but this would be for nothing if Vietnam will not improve their portion of the river as well.

The lack of a railway system leading to LM 17 forces cargo to move by land, which increases costs. But PPAP said it does not intend to provide rail connectivity for the moment, as it wants to build new ring roads to facilitate cargo movement to the port by land, local reports said.



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