PM Denies Loan from China to Build Canal
Prime Minister Hun Manet denied claims that Cambodia would borrow from China to build the Funan Techo Canal. Photo: SHS Media/Telegram
- By Torn Chanritheara
- December 27, 2023 11:55 AM
PHNOM PENH – Prime Minister Hun Manet denied claims that Cambodia would borrow from China to build the Funan Techo Canal.
The project was approved by the government in May and is estimated to cost around $1.7 billion and take four years to complete. It is the first logistics project to connect the Mekong River to the seaway, aiming to expand the country’s transport potential by sea.
The Cambodia Daily quoted an unidentified senior official at the Ministry of Economy and Finance on Dec. 26 as saying that the government will receive a $5 billion loan from China to fund the project and to address other economic issues.
Hun Manet said the report was untrue and baseless.
He said the project will be funded by a private company in the form of Build-Operate-Transfer (BOT). He said that he must clarify for the people and defend his officials who had negotiated the terms with the Chinese company for the best outcome for the Cambodian people.
The new route will make it easy for Cambodians to transport their products by linking other infrastructure projects funded by various partners.
Cambodia and the China Bridge and Road Corporation signed a framework agreement on the project in October in which the Chinese company will invest to build the canal.
The canal will connect Takeo canal of the Mekong River to the Ta Ek canal of the Bassac River to Ta Hing canal in Koh Thom district before reaching the sea in Kep province, passing through Kandal, Takeo and Kampot.
The ministry said the project is not part of the government’s 2023 and 2024 budget to request loans from development partners.
“In borrowing debt from partners, the government always adheres to a prudent principle with a clear debt management strategy and comprehensive analysis in accordance with international standards,” the ministry said.
The ministry said that the government will only borrow amounts the economy can withstand while looking for concessional or low-interest loans. Loans must be used transparently, accountably, effectively and efficiently.
