Russian firm exploring potential rail deal

Source: The Phnom Penh Post / Tue, 29 March 2016 by

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Workers secure a cargo container filled with rice for export at Phnom Penh Royal Railway Station in Phnom Penh in 2013. Vireak Mai

A visiting representative of JSC Russian Railways, the state-run firm that manages rail infrastructure and operates passenger and freight services in Russia, met executives of Cambodia’s railway operator yesterday to discuss possible cooperation between the two companies.

John Guiry, CEO of Royal Railway, the Royal Group subsidiary that has a 30-year concession to operate rail services in Cambodia, said the two companies discussed the potential for developing the Kingdom’s rail network.

“Our railway is now processing, but it is a bit slow, so it is really important to have the Russians supporting us in order to expand the railway project,” he said.

Guiry said the visit comes as the government looks to improve logistics in Cambodia to make production costs more competitive with neighbouring Thailand and Vietnam.

Royal Group previously operated the railway network in a joint venture with Australian listed logistics firm Toll Group. Toll, however, offloaded its 55 per cent stake in the project in December 2014 citing lower-than-expected returns.

Guiry did not disclose whether the potential cooperation with JSC could involve a joint venture, but said further meetings would explore various scenarios.

JSC’s visit came as part of business matchmaking session organised by the Cambodian Chamber of Commerce (CCC), involving 16 Russian firms and 20 Cambodian companies. Other Russian firms present included technology firm Rostec, computer security specialist InfoTecs and energy holding company Inter Rao Group.

CCC chairman Kith Meng, who is also chairman of the Royal Group, urged the JSC representative to work together with Royal Railway on developing the railway network. He stressed the importance of improving rail services to benefit the Cambodian people and economy.

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