Boston, MA -- (SBWIRE) -- 05/02/2014 -- Cambodia's infrastructure sector failed to maintain its red hot pace of expansion in 2013, with real growth dropping from 16.3% to 6.4%. Although 2013 saw a return of foreign investment and an increase in domestic project financing in Cambodia, several risks continue to dampen the near-term growth potential of the sector - namely greater policy uncertainty following the outcome of the July 2013 general elections - growing competition from Myanmar, limited upside to foreign investment and the resolution of land disputes in the favour of local residents. We therefore envisage only a moderate pick-up in activity for 2014, with the industry's real growth forecasted at 8.2%.

Key Trends And Developments

- In February 2014, Malaysia's GUH Holdings Bhd announced it would acquire a substantial stake in Leader Universal Holdings Bhd's 100MW coal-fired powerplant in Cambodia. However, the purchase remains uncertain and officials have since declared negotiations are still in the early stages. GUH Holdings already has a 20% stake in a 37.1MW diesel-fired power plant in Cambodia, making the potential acquisition its second such operation in the country.
- Construction on the Siem Reap International Airport's new passenger terminal has been delayed again, with the first construction activity on the project now expected to begin in August instead of March 2014. The terminal, which is a joint venture between South Korean construction companies Camco Airport Co and Lees A&A, is designed to handle up to 15mn passengers a year and is expected to cost more than US $1bn.
- In November 2013, officials at the Sihanoukville Autonomous Port announced the construction of a new multi-purpose terminal is scheduled to start in 2014. The US$80mn project is funded by a loan from the Japanese government and is scheduled to be completed in 2016. In January 2014 the weight of goods transported through the port grew by an impressive 26% year-on-year (y-o-y), reflecting what is expected to be strong demand for the additional capacity promised by the new terminal at the proposed time of completion.
- In November 2013, a joint venture consisting of France-based Vinci and Malaysia-based Muhibbah Engineering won two contracts (worth US$87mn) to build and expand the terminal building and refurbishment of the airports in Phnom Penh and Siem Reap. The contracts are expected to be completed by end-2015. Once completed, both airports will double their capacity to 5mn passengers a year. The contracts were awarded by airport operator Cambodia Airports. Cambodia Airports is 70% owned by Vinci Group, while the remaining 30% is owned by Muhibbah Masteron Cambodia. Cambodia Airports holds the concession for the development and the management of Cambodia's three international airports in Phnom Penh, Siem Reap and Sihanoukville.

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