phnom penh

Cambodia plans to build new airports, to support tourism development. For Phnom Penh, the Belt and Road initiative means better regional integration and the development of the infrastructure necessary for its ambitions.

Phnom Penh new international airport

In late January 2020, Cambodian authorities announced the construction of Phnom Penh new airport by a consortium of three Chinese companies. The first construction phase could be completed by 2023. The objective is to welcome 30 million passengers by 2050. Located around thirty kilometers south of the capital, the new airport will cover an area of ​​2,600 hectares (i.e. equivalent to Schiphol Airport in the Netherlands), and can accommodate long-haul flights. This is a major project, that would cost up to $ 1.5 billion.

Phnom Penh current airport had already been renovated in 2018, and its runway had been extended to 3,000 meters; however due in particular to the tourism boom in Cambodia and the increase in real estate on the outskirts of the capital, the government has favored the construction of a new airport.

Other Cambodian airports

Airport projects are not just about the capital. The aviation sector will experience a strong growth in the coming years in Cambodia.

A new airport in Siem Reap has also been under construction since 2018. In 2017, the Cambodian government signed an agreement with the Chinese company “Shanxi Mechanization Construction Group” for the construction of this airport. Vibrations caused by the current airport, just 5 km away from the temples, is a threat to Angkor Wat. The new, more distant airport (about 40 km from the temples) will also provide a better experience for visitors.

In Sihanoukville, air traffic has increased very sharply due to the influx of Chinese tourists. The seaside citywith its casinos, has become a major destination for Chinese visitors. But the Cambodian government’s recent decision to ban online casinos is expected to impact air traffic between China and Sihanoukville. The seaside town will however remain a major destination for Chinese tourists and businesses wishing to set up on the Cambodian coast. In September 2019, a plan to expand Sihanoukville Airport was approved with an extension of the runway to accommodate long-haul flights. The first phase of this project is expected to be completed before the ASEAN summit is held in 2022.

Cambodian airports

Other smaller airports are expected to open in Cambodia. Thus, the old Battambang airport could be renovated and offer new regional services, thanks to the Air Avia Ta project developed by French entrepreneurs.

By late 2020, a new airport will open in the province of Koh Kong thanks to Chinese investments. Dara Sakor International Airport will accommodate visitors from around the world who want to explore one of the most authentic regions of Cambodia.

What role for Vinci?

The three international airports currently in service in Cambodia (Phnom Penh, Sihanoukville and Siem Reap) are managed by the “Cambodia Airports”, a consortium formed by the French Vinci (70%) and the Cambodian-Malaysian group Muhibbah Masteron (30%). The company is concerned about its future in Cambodia with the construction of two new airports in Phnom Penh and Siem Reap. The Cambodian government offered a 45-year concession in 1995 to operate Phnom Penh airport. What will happen when the new airport is operational? Will compensation be paid to Vinci?

The Vinci group remains welcome in Cambodia and new infrastructure projects are already benefiting Vinci, which in November 2019 won a contract for a water treatment plant in the kingdom.

Tourism in Cambodia

In 2018, the number of foreign visitors to Cambodia reached 6.2 million, three times more than a decade ago, with nearly 30% of visitors from China. The Cambodian government hopes to continue developing tourism in the country to attract 12 million visitors by 2025.

The rapid development of tourism is not without causing some problems. First, at the environmental level, the country will have to invest heavily in infrastructure for tourists (waste management electricity, etc.), and protect its agricultural and fish-farming resources.

The country must also continue to promote responsible tourism, which benefits the local population, by eliminating “zero dollar” tours (organized by companies that encourage visitors to buy very expensive products from their partners).

Paradoxically, the construction of these new airports could increase tourism diversification in Cambodia. The sector is now dominated by visitors from China. The airports of Phnom, Penh, Siem Reap and Sihanoukville are each connected to around twenty Chinese cities with direct flights, while no European airline serves them. European tourists generally have to stop in Bangkok and then take another flight to Cambodia. The new  and larger Cambodian airports will offer direct connections to European and American markets, and will therefore make the destination more attractive worldwide

Beyond airports

With the BRI, Cambodia is committed to modernizing most of its infrastructure. In addition to airports, new residential and industrial districts are planned, and so Cambodia is looking for more foreign investors. For example, in Siem Reap, a new urban center is to be built  in order to unclog the historical city. In Sihanoukville, authorities plan to build a new Shenzhen.

Chinese, but also European investors are invited to take an interest in the opportunities the kingdom offers.

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