Cambodia Needs US$50 billions to Implement 330 Projects in Transportation Sector in 10 Years
The government’s upcoming $50 billion,10-year infrastructure master plan.
Minister of Public Works and Transport Sun Chanthol revealed the plan to Japanese ambassador to Cambodia Masahiro Mikami on June 15, 2022.
At the meeting, Chanthol said the government was preparing the master plan, to strengthen and expand road infrastructure and connect major thoroughfares – especially international border checkpoints – in order to increase Cambodia’s competitiveness, attract foreign investment, and reduce logistics and transport costs and avoid delays.
He said the plan will encompass about 330 projects, including road construction, renovations, widening and other upgrades; connectivity improvements to speed up travel and freight transport; and supporting infrastructure at international border checkpoints.
The projects include the expansion and upgrade of national roads 5 and 7; modernisation of the railway; waterway transport improvements, including a link from the capital to the Kep coastal port via the Tonle Bassac river; and the construction of a bridge across the Mekong River in Kratie province and a road connecting Battambang and Kampong Thom provinces.
Any party wishes to enter a signed MOU to record the agreement in principle and obligations up to the establishment of a SPV together with all the necessary consents, approvals and licenses from the authorities of Cambodia subject to the provisions herein appearing.
Party A – ADAENG DEVELOPMENT CO., ltd
ADAENG DEVELOPMENT CO., LTD party shall be responsible in:
(a) Securing all governmental consents, approvals, licenses and permissions relating to the establishment of the 330 projects from the relevant authorities of Cambodia. This include all necessary land and construction alienation matters, and specified documents as follows:
i. The Ministry of Public Works and Transport of Cambodia. The Ministry is mandated to “build, maintain and manage all the transportation infrastructure such as roads, bridges, ports, railways, waterways and buildings”.
ii. CDC Tax incentive and tax free of import materials.
iii. Local authority for conversion of land for public works and transport.
iv. Others ministries approvals, such as: Fire, environment, construction order approvals, and not limit to any others, as required.
(b) Purchase land, and rightful ownership, such as hard title of land, and transfer to SPV company.
(c) Set up a SPV company for operation, agreed on JV equity, terms of participation, responsibility and scope of works.
(d) Provide appointment and term of compensation agreement to your party.
Party B – Your party shall be responsible in:
(a) Provide detailed Project Proposal and assist to provide information for getting approvals mentioned.
(b) Provide financial statement to project.
(c) Introduce Financial and EPC Parties.
(d) Secure funding for this project.
(e) Provide assistance in securing EPC, audit and approve of design, construction implementation, material specification, schedule, costing.
(f) Provide business, operation and maintenance consultancy.
(g) Assist values contributing parities in forming an SPV and advise terms of collaboration.
(h) Option to own equity in SPV in case capital funding/investment raised from individual or corporation.
(i) Appoint EPC for the following:
i. Provide Engineering, Procurement, construction to this project.
ii. Provide maintenance support proposal
iii. Provide operation and management outline
iv. Provide training, operation procedure, and management consultancy.
Investment Proposal (Step and Expectation from Investor & Investment Options)
1.Investor review the Brief and decide if were to invest into the project.
2.Investor to issue an LOI to ADEANG Development Ltd (ADEANG) to shown an interest to JV with ADEANG to Develop the Projects.
3.Investor will also show Proof of Funds in a form of letter from their bank stating that they have the fund required USD 50 billion for the 330 projects.
4.Upon receiving the proof of fund, ADEANG will then submit the project proposal to MPWT for approval and secure the Registration Certificate from CDC to certify the project as Qualified Investment Project or QIP.
5.Once ADEANG secure the QIP, Investor will then sign the JV agreement with ADEANG to form a new JV Company that will Develop the project.
6.ADEANG will purchase the land under ADEANG LAND (if there is a need to purchase a land) and Lease the Land to the new JV Company for X Year for the development of the project. When the Development is completed, the land title will be transferred to the end buyer of the property (if they are Cambodian) by ADEANG on a separate agreement . If the Buyer is non Cambodian, then the Leasing of the 100 years will still apply (especially for the Commercial Development)
Note: If investor would like to have proxy (a Cambodian) to undertake the share holding in ADEANG LAND, Investor can hold up to 80% of the shareholding and 100% of the Management control. Contact ADAENG LAND via [email protected] for more information.
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