14 | FORBES ASIA MAY 2018
painted a light, clean gray as part of
the upgrade, Delobel outlined the
company’s eforts to train the work-
force, add connecting lights and
pursue other ways to bring in more
passengers. “We are very open to
discussing with [the government]
the future development of those air-
ports,” he says. “What has to be
stressed to them is that today, in
terms of capacity, we just achieved in
2016 and 2017 a vast development
program.”
he expansion doubled capacity
at the two airports, but the number of
passengers coming through Cambo-
dia’s international airports has grown
by at least 10% annually for the last
seven years. “here will be some lim-
itations at some point, so [within the
government] there’s a desire to tran-
sition to a new airport sooner,” says
Capa Centre for Aviation chief analyst
Brendan Sobie.
He’s not sure, however, that
Phnom Penh and Siem Reap can each
support two airports, if the two Chi-
na-backed airports are built. One way
would be for an airport to emerge as a re-
gional hub, but Cambodia’s small popula-
tion and the lack of a major lagship carrier
works against that. Southeast Asia’s prima-
ry airports are switly reaching capacity as
tourism and investment continue to sky-
rocket. But even if one of their airlines de-
cided to set up a secondary hub outside its
country, there would be plenty of compe-
tition for that business around the region.
“[Competing airports] work in places like
Bangkok, but maybe Phnom Penh isn’t a
city that could support that,” he says.
he new airports face other obstacles.
Phnom Penh’s airport could stall amid a
fresh dispute over the land between local
villagers and rice growers and the gov-
ernment. Sinn, the civil aviation oi-
cial, maintains that the land is owned by
OCIC. Even if the conlict is resolved, says
Sobie, the airport’s construction could
take a decade, allowing time to resolve
Cambodia Airports’ concession.
he concession always included a stip-
ulation to build a new airport in Siem
Reap, according to Tekreth, the chairman
of Cambodia Angkor Air and also the
FORBES ASIA
DEEP POCKETS
secretary of state
of the govern-
ment’s Council
of Ministers. But
Sobie says the government is not sending
a good message to investors by seeming-
ly ending a concession with no evidence
that the public-private partnership failed.
Meanwhile, Cambodia’s tourism in-
dustry continues to soar. It generated $3.
billion in revenue last year, or 12.3% of
gross domestic product. And the main-
land accounts for much of the sector’s
potential. More than a million Chinese
toured Cambodia last year, and the gov-
ernment aims to double that number by- Cambodia’s economy has tradi-
tionally relied on the garment industry,
but growth in the value of garment ex-
ports has steadily declined since 2010,
partly because of declining U.S. purchas-
es, according to the World Bank. Recent-
ly, the U.S. and European Union threat-
ened sanctions against Cambodia ater its
Supreme Court dissolved the opposition
Cambodia National Rescue Party, months
ater its candidates were elected in hun-
dreds of communes.
As mainland visitors tour the coun-
try in droves, Chinese investors are fol-
lowing. Real estate prices rose in re-
sponse to news of both airports, but
Key Real Estate founder Sorn Seap is
skeptical investors will make money
anytime soon. Construction is char-
acteristically slow in Cambodia, and
in the case of Siem Reap, Sorn says the
new airport’s location is far from the
tourist attractions in the city, so devel-
opers will struggle to market business-
es near the airport. “I don’t think [the
airport] is the one factor you should
judge to invest nearby,” he says.
Overall, Cambodia’s economy al-
ready leans heavily on China. Not
only is China the primary source of
investment in the country, at rough-
ly $1 billion of the total $6.3 billion
received last year, but China holds
47.5% of the country’s debt.
One result of the Chinese in-
vestment can be seen in Cambodia’s
port city, Sihanoukville, dubbed a
second Macau for its grandiose ca-
sinos studding the coast as well as
the Chinese money looding in.
North of the port and Kampong
Som Bay, a contested environmental
protection site, China’s Union De-
velopment Group will build a $350 mil-
lion charter airport as part of the compa-
ny’s $3.8 billion investment in the Dara
Sakor Seashore Resort. he city’s airport,
also managed by Cambodia Airports,
drew a measly 386,000 passengers in the
12 months ended in March, according
to Vinci’s irst-quarter report, but Sinn
says the development of the city makes
the small airport worth watching. “Look
at Sihanoukville,” he quips. “here is a
tourism resort, there will be a big port,
and another investment will be oil and
gas. When we consider all that, we want
the Sihanoukville airport to become the
biggest in the country.”
Tekreth says the country will contin-
ue to absorb investment from China, just
as other Southeast Asian countries have
done. “We need jobs for our people, so we
need more investment to follow,” he says.
“his is the irst time in Cambodian his-
tory that you see this kind of investment
in our country.”F SOVANNARA XINHUA NEWS AGENCY/NEWSCOM; REUTERS/SAMRANG PRINGLofty plans: Prime
Minister Hun Sen
(top) and Pung Kheav
Se, owner of OCIC, a
partner in the airport
development.