Toll Royal Railway signed an agreement yesterday afternoon with companies that will supply locomotives and parts for Cambodia’s railway network.
As a result of the agreement, international tenders will be called in the coming months for the procurement of up to four new 2,000-horsepower locomotives and 100 new container wagons.
A strong contender to be the equipment supplier is one of the world’s largest makers of locomotives, France’s Alstom Transport, because 10 of the company’s locomotives are already in the possession of Toll Royal Railways. In a ceremony at Cambodiana Hotel,Cambodia’s Minister of Public Works and Transport Tram Iv Tek joined Royal Group’s Kith Meng, Toll Royal Railway CEO David Kerr and Richz Electronic Services’ Peter Ng Meng Cheng and a number of others to sign a memorandum of understanding.
“We have been waiting for the opening of the southern line. We’re going to buy some more locomotives. We will call for a transparent international tender,” said Toll’s David Kerr.
“This agreement is for OEM components. It puts Alstom in a good position where they are, but they will be subject to a transparent process,” Kerr said. “We’ll be working with the Ministry of Economy and Finance, with a concession management committee and a new railway department to make sure the process is totally transparent.”
Yesterday’s MOU is seen as the necessary precursor for the acquisition of new rolling stock for Cambodia’s railway transport system, of which the southern line to Sinhanoukville is schedule to open by the end of this year, the northern line to Battambang is estimated to open in 2014 or 2015.
Cambodia’s Minister for Public Works and Transport HE Tram Iv Tek said yesterday’s ceremony had been a long time coming.
“We need modern locomotives and rolling stock for Cambodia. Up to now we just fixed old locomotives. This is the first step in new railway activity and now because of this ceremony Toll will make a business plan for Cambodia.”
Minister Tram Iv Tek said the advantages of trains were fewer trucks on the road and a lower carbon footprint for Cambodia.
“The advantages are fewer trucks on the road and fighting against the climate change,” he said. “We will now discuss with Toll to seek the solution of how to complete the northern line.”
The Asian Development Bank’s Peter Brimble described the event as an important step in the development of Cambodia’s railway system.
“This is a key enabling factor to permit this project to go to the next stage of fund raising and development from the point of view of the concessionaire,” Brimble said. “It means that they are going to be sourcing blue chip equipment which then will support the funding of those purchases.
Brimble said the completion of the southern line would bring transport capability that would also speed the completion of the northern line, both of which would contribute to Cambodia’s overall economic integration and growing status as a regional hub.
“Cambodia will become a possible place of choice for people looking to locate and people to live. They are already doing that with Japanese firms coming in. I think Cambodia is developing in to a kind of hub and this railroad is part of that hub.”
Brimble said that from ADB’s point of view, there remained a full commitment to successfully completing Cambodia’s critical infrastructure projects. “We are not a party to the railway concession agreement, but we see it as a critical part of the process. With the concession agreement in place, we can work with the government and private stakeholders to get this project completed.”
Royal Group Chairman Kith Meng said the agreement would change the dynamic of the transport business.
“This will bring most of the transport business from trucks onto the railroads. It will also give competitiveness in terms of pricing, since Cambodia is part of ASEAN and we are the chair of ASEAN this year. This signing is symbolic that Cambodia is a good place to invest,” he said. Other companies involved in the parts supply are Singaporean-owned Richz Electronic Services and Romic-Ace International Pte Ltd, both authorised resellers for Alstom, the giant French supplier of locomotives. Richz Electronic Services’ Chairman Peter Ng Meng Cheng said the signing ceremony was the culmination of talks that had taken place since last year.
“They found that we are a good strategic partner and contribute to their operation.”
Also on hand was Singapore Ambassador HE S Premjith, who said “I’m very happy that a Singapore company is participating in a key project in Cambodia that will potentially be a game changer for Cambodia’s economic competitiveness”.
Others joining the event were Robert Coleman, Managing Director of Romic-Ace International Pte Ltd, specialising in rail spare parts and equipment, as well as Yannick Bazerque, Director of Alstom Transport Services and Vinojit Ambalavaner, director of Toll Royal Railway.