Railway rehabilitation puts families in debt, desperation

Shane Worrell and Khouth Sophak Chakrya, Phnom Penh Post, Jun. 20 2012

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Workers at the Phnom Penh Railway Station in 2010. Photograph: Sovan Philong/Phnom Penh Post

Families relocated last year to make way for a national railway rehabilitation project have plunged into debt and are being kicked off their land by informal lenders, a Trapeang Anhchanh community representative said yesterday.

Ros Bopha said four families had been evicted at the site in Dangkor district on the capital’s outskirts, after failing to make repayments on loans they used to build on their land.

“Some of these people have had no money to pay the interest to their creditor for up to five months. So the creditors have built fences around their homes until they pay,” she said.

About 160 families were relocated to Trapeang Anhchanh in September to make way for the Rehabilitation of the Railway in Cambodia Project, which involves the government and is funded mainly by the Asian Development Bank (ADB) and the Australian Agency for International Development (AusAID).

“We have asked ADB to support us . . . Do we have the money to save when we do not have enough to buy food?” Ros Bopha said.

Her story coincided with the release of Losing the Plot: Rapid Assessment of Household Debt in Trapeang Anhchanh, a report by NGO Sahmakum Teang Tnaut (STT) that says families are earning far less than in their former villages, but it is not clear how many are in debt.

“Households did not receive advice regarding how they might attempt to construct their new homes within their limited compensation budgets,” the report states. “Households have surrendered original land receipts as collateral against the loans [and] the contracts stipulate that the lender is entitled to expropriate the borrower’s land if the borrower fails to make the agreed interest payments.”

One family’s monthly income had dropped from US$330 per month to just $16 and they had borrowed $1,650 to build a house.

Sok Hou, 47, told the Post she had borrowed $1,500 from an informal lender and could repay only $50 of the $70 monthly repayments.

“I’m worried about losing my home,” she said. T

rapeang Anhchanh village four chief Chan Shyara, said he had tried to stop creditors from building fences around homes and some had agreed.

Ee Sarom, programs co-ordinator at STT, said the parties involved needed to provide debt relief.

“We call on the Cambodian government as well as ADB and AusAID to take measures to ensure no household relocated under the project loses their plot due to debt,” he said.

An ADB spokesperson said the bank was in discussion with the government about the reported debts.

“Under the Extended Income Restoration Program [EIRP], initial funds will be transferred within the month to the self-help groups that are ready to commence the program. The EIRP has a social safety net component which the relocated households can avail of in times of crisis and emergencies,” the spokesperson said.

An Australian embassy spokesman said it would provide a full response today.

Nhean Leng, president of a railway development impact inter-committee, could not be reached for comment.