Phnom Penh, Cambodia (AP) – Cambodia and China signed an agreement of $ 1.2 billion to finance an ambitious channel project which aims to stimulate trade efficiency by connecting a branch of the Mekong River near Phnom Penh to a port of the Gulf of Thailand, the Cambodian government agency leading the project announced on Friday.
The agreement to finance the Funan Techo canal was signed Thursday during the state visit to Chinese Cambodia President XI Jinpingsaid the agency in a press release. XI returned home Friday after a three nations tour in Southeast Asia which also included Vietnam and Malaysia.
The construction of the 151.6 kilometers (94 mile) canal began last year but was interrupted shortly after August 5 revolution ceremony For reasons that have not been clearly indicated. Cambodian Prime Minister Hun Manet said at the time that the canal will be built “whatever the cost”, stressing that the project promotes “national prestige, territorial integrity and development of Cambodia”.
Described as a public-private partnership contract, the agreement was signed by Deputy Prime Minister Sun Chantol on behalf of the Cambodia government, and by Ieng Sunly of the Funan Techo Coastal-Inland Waterways Company Ltd., the partner of the private sector. The project is being drawn up on a building transfer basis, Cambodian investors holding a 51%stake, and Chinese investors holding 49%.
“The channel will create a new interior corridor of the navigable channel of the maritime capable of managing ships up to 3,000 tonnes of dead weights,” said Friday’s announcement. It will encompass the excavation of the canal and the construction of locks of the ships, the navigation and logistics infrastructure.
“As an interior navigable and major transport infrastructure in Cambodia, the FTC project will become a new engine stimulating national economic growth,” said Wang Tongzhou, president of China Communications Construction Company, in the announcement. He added that “after completion, this will considerably reduce complete logistical costs in Cambodia and promote the Cambodia industry at the intermediate end of the value chain”.
China Communications Construction Company is the parent company of China Road and Bridge Corporation, the construction contractor of the Bassac river project in the coastal province of Kep. The massive state corporation was examined for its meticulous examination for its alleged involvement in financial scandals. It is also put up black by the United States for its role in the aid Chinese military construction and militarize the artificial islands at the southern China Sea.
According to Friday’s announcement, the canal should create “up to 50,000 direct and indirect jobs in Cambodia”.
Critics have raised concerns that the channel could seriously disrupt the Mekong River Natural flood models. These disruptions could lead to a worsening of droughts and a reduction in the silt rich in essential nutrients for the production of vital rice from Vietnam in the Mekong Delta, a region that supports millions of people and is a world exporter of major rice.
The announcement of the signature, however, said that “a rigorous evaluation of the environmental impact, led by 48 specialists, confirmed a minimum environmental impact”.
He added that the Cambodian government has led efforts to minimize resettlement “with a route designed to avoid dense communities and cultural sites” and that “a responsible remuneration and consultation process is underway”.
