Work will begin on the $9.6 billion deal this year, but concerns have been raised about its impact on the land and people.
wo Chinese companies are investing $9.6 billion in Cambodia to build an iron and steel factory in the north of the country and a 400-kilometre long railway linking it to the south, in what is the biggest ever foreign investment in the country.
The two companies, China Railway Group and Cambodia Iron & Steel Mining Industry Group, signed a deal to build the new factory and railway, as well as a new port and bridge in Koh Kong. The iron and steel plant, to be located in the mining area of Preah Vihear, will cost $1.6 billion. Work is due to begin on all the projects later this year and completion will take up to four years.
According to the Phnom Penh Post, Zhang Chuan You, General Manager of Cambodia Iron & Steel Mining Industry Group, said that the company had received 1,300 square kilometres of land concessions from the Cambodian Government and they would be using 10 square kilometres of that for the factory in Preah Vihear. The route of the rail link has yet to be revealed, but Cambodia’s land concession scheme, in which the government leases large areas of land to companies, is a very controversial one. The Cambodian League for the Promotion and Defence of Human Rights says that over 400,000 people have been affected by land grabs or evictions since 2003.
Speaking on ABC Radio Australia, Yim Sovann, Cambodian MP and spokesperson for the main opposition National Rescue Party, expressed his concerns about the deal. ‘The size of the land is … huge,’ he said, ‘We are concerned about the forest destruction, about the environment and also about the displacement of people.’
With almost 30 per cent of Cambodians living below the poverty line, many welcome foreign investment. China has been Cambodia’s biggest benefactor in recent years with private-sector investments totalling $8.2 billion between 2006 and August 2012. According to the Cambodian Investment Board, the US private sector invested $0.9 billion during the same period.
by Sarah Macdonald