Report Shows Lack of Information on Chinese-Funded Railway

Chinese Iron Group compound in Rovieng district, Preah Vihear province (Photo:Reuters)

By Simon Lewis and Neou Vannarin - March 7, 2013
The Cambodia Daily

“Examples from around the world show that in a climate of weak governance this revenue often fails to benefit the poor, can worsen corruption and lead to conflict,” the report states.

ROVIENG DISTRICT, Preah Vihear province – With locals demanding dialogue with the Chinese firms behind a proposed multibillion dollar rail line to Preah Vihear prov­ince, an NGO report re­leased yesterday highlights the dearth of information that has been made available on the project.

Chinese company Cambodia Iron and Steel Mining Industry Group (CISMIG) has said it will build a 404-km railway connecting a new steel mill in Preah Vihear province and a new port in Koh Kong province, in a project estimated to be worth a total of $11.2 billion that is supposed to get under way in July.

CISMIG holds a license to ex­plore for, though not yet extract, iron ore on a massive 130,000 hectares of land located in Preah Vihear’s Rovieng district.

Locals in Rovieng say they have not been told anything about the project, which would presumably require huge quarries to be dug, an iron ore smelting plant constructed and a railway built through the rural district.

Kheang Sochea, a Rovieng local and a Kuy ethnic minority community representative, said the community held a meeting with local NGO Development and Partnership in Action last month to raise their concerns about the project and its likely impact on their lives.

“We hear a lot about what the government is doing in other sectors, but we are not told anything about this,” he said. “What the community wants is a discussion with the company, so that we can try to avoid the negative effects mining has had in other countries. They [local people] want some benefit when [companies] find things.”

CISMIG’s compound in the district town was quiet last week, the gates unguarded and adorned with Chinese New Year decorations. Not far from CISMIG’s Rovieng compound stands a new, but small, CPP district office, which was built with $200,000 do­nated by CISMIG, according to the district governor.

In the briefing paper published on Tuesday, NGOs Equitable Cambodia and Focus on the Global South highlight the lack of publicly available information on the project.

According to the NGOs, the port component of the project is contracted to a subsidiary of China’s state-owned SINOMACH, and the railway part is contracted to a subsidiary of China Railway Group, which signed a memorandum of understanding with CISMIG in December.

“In a 2009 Chinese language article, CISMIG’s chairman stated that during exploration for iron ore, ex­tensive coal deposits were also discovered, which will be used to fuel an onsite power plant, and to use in the steel plant’s furnaces,” the report states, quoting Phnom Penh-based Chinese newspaper Sin Chew Daily. The article also es­timates that the concession in Rovieng could produce 3 million tons of iron ore a year for 55 years.

“Little is known about the true extent of reserves, or their quality, which has led to some speculation in Cambodia about the likelihood of the project going forward,” the report adds. “Although this is the biggest infrastructure project in Cambodia’s history, only limited information is currently publicly available.”

While government officials claim to know little of the port, railway and iron ore project, the report cites another Chinese-language news report, which reportedly quotes a company representative as saying the project has the backing of Prime Minister Hun Sen.

The report also notes that Cambodia has no experience with large-scale extractive projects or the revenues involved, and that such enterprises come with risks.

“Examples from around the world show that in a climate of weak governance this revenue often fails to benefit the poor, can worsen corruption and lead to conflict,” the report states.