[PHNOM PENH POST]
State-owned Export-Import Bank of China will lend US$302 million to
Cambodia for three road and irrigation projects, officials said
yesterday.
The loan will increase Cambodia’s debt to China by
about 20 per cent to about $1.8 billion, according to figures disclosed
yesterday by Minister of Economy and Finance Keat Chhon.
Exact
figures for the Kingdom’s debt to China have been debated, with Prime
Minister Hun Sen putting the figure at $2 billion in November.
However,
the National Assembly’s finance commission chairman, Cheam Yeap,
projected as much $6 billion just prior to the premier’s estimate.
The
projects covered by the China Exim Bank loan included the 313-kilometre
national roads 214 and 76 and an irrigation system in Kampong Cham,
Keat Chhon said.
In August, Exim Bank gave Cambodia a $198.2
million loan at current exchange rates for Chinese-built Z-9
helicopters, the Post reported.
Increasing future debt
obligations, not only to China but to other creditors, was cause for
concern, Chea Kimsong, manager for the development issues program at the
NGO Forum for Cambodia, said yesterday.
“While more loans may
generate more returns for the economy, revenue collection should be
improved too so that it may balance the future debt obligation,” he
said.
The payment of interest and principle on Cambodia’s total
loans was 3 per cent of the 2012 $2.6 billion national budget, Chea
Kimsong said, larger than the budget for some of the Kingdom’s
ministries.
Interest rates on the loans were not mentioned at yesterday’s signing.
Rates on concessional loans from China averaged 1.83 per cent as of October of last year, according to data from the NGO forum.
The rate is a percentage point higher than the average rate given from other donor countries and banks, 0.83 per cent.
Nor were contractors for the projects identified.
Chinese
loans for infrastructure projects often return to China as companies
such as state-owned companies China Road and Bridge Company tend to win
bids for the contracts, the Post reported last year.
Cambodia
has asked China’s Ex-Im Bank for loans on an additional four projects
worth about $200 million, Eang Sophallet, Prime Minister Hun Sen’s
personal advisor, said after a meeting between the bank and the premier
on Wednesday.
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