ABC News: Australia defends role in Cambodia rail project

Liam Cochrane, ABC News, Nov. 7, 2011

MARK COLVIN: Australia’s Ambassador to Cambodia has defended Australia’s involvement in a rail project which critics say is increasing poverty among those displaced from the side of the tracks.

The Rail Rehabilitation Project will spend more than $US140 million fixing the country’s two decrepit rail lines. They link the capital Phnom Penh with a southern port and with the Thai border to the west.

AusAID bills it as a poverty reduction scheme but groups monitoring the relocation say people are being moved so far out of town it’s impossible to earn a living.

Liam Cochrane reports from Phnom Penh.

LIAM COCHRANE: Years of civil war and poor governance have left Cambodia’s rail system in disrepair. Only a few cargo trains ply the country’s two lines and there’s virtually no passenger services.

Here in Phnom Penh poor communities have crowded in ever closer to the tracks, taking advantage of the inner city location to make their living via local trade as motor taxi drivers or as labourers.

But a multi-million dollar rail development project, funded by the Asian Development Bank and by the Australian aid agency AusAID is changing things.

The rail line is being fixed, the system privatised and a joint venture between the Australian company Toll Holdings and Cambodian conglomerate The Royal Group is set to profit.

As part of the project around 4,000 households will be displaced and that’s where the controversy starts.

PENNY RICHARDS: The project has not been trouble free.

LIAN COCHRANE: Penny Richards is Australia’s Ambassador to Cambodia. She points out that AusAID only funds about 15 per cent of the project, with the rest coming from the Asian Development Bank.

The big picture is that improved rail transport will enhance trade and this will help Cambodians work their way out of poverty. The ADB has a policy that anyone resettled in the course of the project will not be worse off when they move.

Ambassador Penny Richards explains the way the project has been designed to avoid negative impacts.

PENNY RICHARDS: People will be compensated for the assets which they’ve left behind. The areas to which they’re moved will have electricity and running water, which of course you can’t take for granted anywhere in the Cambodia countryside which only has 20 per cent electrification.

You mention income restoration projects, that’s part of it because one reason why people like to live in these dangerous areas so close to transport corridors is that there’s a means of small commerce with passing trade. So income restoration is important.

LIAM COCHRANE: The problem is there are fundamental shortcomings in all three of these areas, according to monitors.

To see what they mean, I travel to a resettlement site, 25 kilometres from Phnom Penh, with Nora Lindstrom, the program development manager of a non-government organisation called Sugar Palm Leaf but better known by the Khmer language acronym STT.

(A car driving along)

LIAM COCHRANE: Ironically the dusty resettlement site is within view of the Royal Cambodia Phnom Penh Golf Club, where the country’s politicians and businessmen play on manicured fairways.

The site is made up of almost 200 small plots of land, each 7 by 15 meters, and each having a freestanding lavatory at the back. As we walk around, we see dwellings ranging from small concrete houses to wooden stilt homes to the most basic of shelters.

NORA LINDSTROM: Well it’s a tarpaulin tent with some bits of zinc that they probably salvaged from their previous household. You can see a door there on the ground as well and from our last visit I remember it’s a home for a family.

(Sounds of locals talking)

TRANSLATOR: So her name is Matsupa (phonetic) and she is 58-years-old. It’s completely different how we will have a small house at the railway but we have plenty things to eat, we have completely freedom but when we came here we have a big car but we have nothing to eat.

LIAM COCHRANE: Nora Lindstrom says the compensation for building materials has not allowed for five years of rapid inflation in Cambodia, and even then has been systematically under-valued.

STT says 90 per cent of affected households received less than $US2000 compensation and most families we spoke to got between $400 and $700.

And as for helping relocated families find ways to earn a living…

NORA LINDSTROM: Well to my knowledge the income restoration program has not started here. However, my organisation was suspended just before the re-settlement in Phnom Penh started so we haven’t been able to monitor that to the same extent that we were before.

LIAM COCHRANE: The monitoring group STT released a report in July calling for a halt to resettlements while the problems with the project were sorted out.

The Cambodian government promptly suspended the NGO and issued a warning to the other main group monitoring the rail project, Bridges Across Borders Southeast Asia.

MARK COLVIN: Liam Cochrane reporting from Phnom Penh.