Minister: Lower Logistics Costs

KHMER TIMES
CHEA VANNAK

The deep sea port at Sihanoukville, where lower logistics costs will help Cambodia's exports and imports. KT/Chor Sokunthea

With the government hoping to attract overseas investment and increase the export of agricultural products, Transport Minister Sun Chanthol is urging a reduction in logistics costs to make Cambodian products more competitive and eliminate corruption in the process.

Nearly half of logistics companies’ total expenses have been found to be unrecorded and it is related to corruption, Mr. Chanthol said in a meeting on Tuesday.

He called on officials as well as relevant ministries and institutions to find a way to reduce the cost of logistics.

“We want foreign investors coming to Cambodia, we want more exports of Cambodian agricultural products because it gives jobs to Cambodians,” he said.

“However, if the cost of logistics is still high, it is difficult to attract investors, it is difficult to export agricultural products.”

In a bid to eliminate unofficial expenses, Mr. Chanthol said that upgrading the logistics process online would increase accountability and efficiency.

He urged private companies and factories to sign a memorandum of understanding (MoU) with the Anti-Corruption Unit to reduce unofficial payments to officials.

“Now the Coca-Cola company signed a memorandum of understanding with the Anti-Corruption Unit.

“I [Coca-Cola] don’t make any unofficial payments and now Coca-Cola doesn’t have any problems and officials stop asking for money from the company,” Mr. Chanthol said, giving an example how the MoU worked to eliminate corruption.

“With an MoU, if I pay you, I will be jailed and you, the recipient, will also be jailed.

“They [corrupt officials] are not happy to see this. Companies used to pay them unofficially and now companies have stopped paying. This is because of deep reforms by the government to attract investment and increase exports.”

Sihanoukville Autonomous Port, the Phnom Penh port and Kampuchea Shipping Agency and Brokers (KAMSAB) reduced logistics fees by 10 percent to reduce product costs. Private logistics companies have also reduced container fees by $5 to $10.

Sok Puthyvuth, president of the Cambodia Rice Federation, told Khmer Times recently that the logistics sector had been improved, but logistics alone was not enough to make Cambodian products competitive. He said it was related to all aspects of production.

“I believe that the government is currently trying to improve the logistics sector, but there is still room for improvement,” Mr. Puthyvuth said.

Beside the logistics issue, producers should try to modernize the production process to lower the cost of products, he added.

Mey Kalyan, a senior adviser to the government’s Supreme National Economic Council, said that work to improve logistics would help accelerate economic growth.

“Logistics is improved but there are still many things that need improvement,” he said. “While economic growth is increasing, the demand for quality logistics is needed to improve efficiency.”

The government is trying to attract investors, offer tax incentives and reduce the price of electricity, but because of poor logistics, goods cannot be exported efficiently, Mr. Kaylan said.