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									                Second Green Growth Policy Dialogue
“Role of Public Policy in Providing Sustainable Consumption Policies:
           Resources Saving Society and Green Growth

                    23-25 May 2006, Beijing, China

   Private Participation in Infrastructure (PPI) Initiatives in Cambodia:
              Ways to Improve Eco-efficient Consumption?

                               CHAN Sopheap
                Ministry of Economy and Finance - Cambodia

1.   Recent Economic Development in Cambodia

2.   Private Participation in Infrastructure (PPI) Initiatives in

3.   Eco-efficiency Enhancement Through Implementation of PPI

Some Economic Indicators:

•   Population: 13.4 million
•   GDP: US$ 4.4 billion
•   GDP per capita: US$ 303
•   On average GDP: 6.7% per year between
•   Inflation declined from 150% in 1993 to
    less than 1.2% in 2003 and has been kept
    below 4 percent
•   Stable exchange rates: 4,000 CR
    (Cambodian Riel) per 1 US$

Optimistic Trend

Positive and progressive changes over the past decade:

   – Sustained and steady economic growth;

   – Stronger integration with the region and the rest of the world;

   – Sharp and spatially widespread reduction in poverty levels;

   – Steadily improvement in fiscal discipline and management;

   – Measurable improvements in various social indicators;

Macroeconomic performance

                          Economic Growth Rate 1999-2006

12%    11.20%
 8%               7.00%                         7.1%                          7.0%
                             5.7%     5.5%



        1999      2000       2001     2002      2003      2004      2005      2006p

On average GDP grew 6.3% per year between 1994-98 and 7.7% per year between 1999-2005
Developments in 2005

The economic growth in 2005 is estimated to be 9.8 percent, reflecting:

    – Stronger agricultural growth, 10.2% (benefiting from good weather
      condition and irrigation systems);
    – Continued growth of manufacturing (7%) and expansion of exports
    – Increased in construction activities (13%), fuelled by housing and
      infrastructure projects;
    – Tourist arrivals increased by 35% to 1.4 million visitors, bringing
      foreign exchange;
    – Inflation is slightly high, at 5.8%.


  Medium term outlook is good:
     – The prospect of the robust economic growth will remain
       valid as Cambodia’s off-shore oil and gas exploration
       provides strong impetus to economic development of

     – The government approved a number of infrastructure and
       real estate projects, which would imply that construction
       activities will drive GDP growth in the next 5-10 years;

Importance of Infrastructure in Economic Development

 •   Cambodia’s economic development in the 1990s began from a level of very low
     provision of infrastructure services;

 •   Recent achievements in infrastructure projects are impressive;

 •   Huge extent of the country needs can be seen clearly in the poor coverage, quality
     and efficiency of much of Cambodia’s infrastructure;

 •   The infrastructure services mainly concentrated in urban areas, where only 15% of
     Cambodian households live;

 •   Coverage and access to infrastructure services in Cambodia is poor compared with
     its neighbours and with countries of similar income levels.

   Private Participation in Infrastructure (PPI) Initiatives in Cambodia:
              Ways to Improve Eco-efficient Consumption?

Infrastructure is defined as the electricity supply, water supply and sanitation,
telecommunications and transport (airports, seaports, highways and railways) industries.

Private Participation in Infrastructure is defined as the transfer of a significant degree of
investment, management and/or operating risk from the public to the private sector.

Improving eco-efficiency of the consumption pattern
involves three major players:

    - Individual Consumer   (user/consumer)

    - Private Sector        (service provider)

    - Public Sector         (regulator)

    The scope of PPI

•    PPI facilitates the financing, construction, operations and management of

•    PPI initiatives include the financing of investment, but also extend to recognise the
     contribution that the private sector can make to improving the efficiency of existing
     and new infrastructure services;

•    The forms of PPI include, but are not limited to, concessions, leases, management
     contracts, operating contracts; sales of existing assets and new build ‘greenfield’
     developments, including joint ventures between public and private organisations;

•    All PPI projects represent a partnership between the private and public sectors in
     the delivery of infrastructure services;

    Guiding principles of PPI
    The main objective of PPI Policy is to improve the governance of PPI project transactions,
    and thereby to maximise the extent of PPI in Cambodia and the value for money achieved
    by Cambodia.

    The Policy follows four guiding principles:

•     Responsibility: The roles of each public entity are clearly defined so that there is no
      uncertainty about who is responsible for each step.

•     Accountability: Each responsible party follows prescribed procedures with provision
      made for the rapid resolution of disputes.

•     Predictability: The procedures have clear guidelines and criteria so that the outcome
      of each step is not subject to arbitrary or political decisions.

•     Transparency: The rules and procedures are followed in an open and fair manner and
      the necessary information will be made available to all.

Eco-efficiency Enhancement Through Implementation of PPI

 •   Rules and procedures through out the PPI process;

 •   Clear responsibilities of government entities involved in procuring PPI projects so
     that they can be held publicly accountable;

 •   Framework for enhancing eco-efficiency through each stage in the process of
     procuring and implementing a project, thereby reducing uncertainty in the outcome
     of each step;

Thank You!!!


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