Distinguished Ambassadors and Representatives of International Organizations,
Excellencies, Ladies and Gentlemen,
Today, I have the great honor and pleasure to participate in the inauguration of the 30-Megawatt power plant that is part of 45-Megawatt power plant project invested by a domestic company, Khmer Power Electrical.
The inauguration of today power plant is not only an evidence of increasing business confidence in Cambodia investment climate, but it also reflects improvement of government-private sector partnership. The achievement of private investor in front of us today proves that domestic companies have higher and larger investment capability and can be government’s partners for some important technical fields.
Taking this opportunity, I would like to extend my appraisal and to urge the Ministry of Industry, Mine and Energy (MIME) to develop more joint-ventures with private sector and Cambodia Electricity Company in order to develop electricity sector in Cambodia. On behalf of the Royal Government, I would like to applaud the Khmer Electrical Power Co., Ltd. that puts confidence on the investment climate in Cambodia and at the same time accomplishes this achievement in a short period of time. This also helps the MIME to seek more appropriate solutions electricity shortage in Phnom Penh that experienced during Khmer New Year this year.
Electricity is not just only a commodity for daily life, but it is also an intermediary good which is necessary for the development of other sectors of our economy. Within the “Rectangular Strategy” framework, the development of energy and electricity is one of the top priorities among other sectors, which require government’s attention in order to assure quality, efficiency, sustainability and transparency of electricity production, supply, consumption and management. For this reason, encouragement of investment and development in this sector are keys to accelerating the development of our economy. Factually, demands of electricity are not only for industry, handicraft, trade, agriculture and business, but also for every single person in their daily life.
According to reports from the Minister of the MIME on Electricity Status of Cambodia, I hope that all electricity development projects, which are going to put into action in the near future and the participation of private sector, will produce enough electricity for consumption at a reasonable price.
To ensure long-run efficiency of electricity development, we should begin with the foundation of national electricity system which includes setting up electricity grids linking cities to major urban areas, temporarily importing low-cost electricity from neighboring countries to widen the networks and establishing domestic power plants with low production costs. However, during the temporary stages where we still need to prepare and build the aforementioned foundation, we should not leave Phnom Penh, provincial cities and major urban areas without electricity. In such circumstance, I would like to recommend the MIME to cautiously and accurately balance between short and long run benefits. At the same time, I would like to emphasize the Royal Government’s policy in electricity development is not only to produce enough electricity for consumption, but also lower prices and expand electricity coverage to rural areas in order to make it available for both people living in urban and rural areas as well as to contribute to the development of other sectors in rural areas.
The RG has paid great attention on electricity sector and recognized it as one of the main sectors that not only supports and boosts the development in other sectors but it also contributes effectively to improving people’s livelihood. Moreover, the RG clearly understands that development of the electricity sector requires tremendous investment that needs to be contributed from the private sector since we are aware that public capital investments – both generated from government’s budget, aids and other credits – cannot be sufficient. In this framework, the private sector is truly “the locomotive of economic growth”. For that, the RG’s policy in electricity sector is not only open widely for private sector participation but the RG also exerts all the efforts on establishing favorable, equal and credible environment for private investment in this sector in Cambodia.
From practical experience in developing electricity sector, especially concessions to private sector show that the keys for success in this sector are investors’ capacity in mobilizing capital mobilization and favorable conditions set forth by the RG. For this reason, the RG has prepared the law on electricity for the management of businesses in this sector and the management of supplier-user relations to ensure accountability, transparency, equality and mutual benefit as well as investment security. As determined in the law, the RG has established the Electricity Authority of Cambodia that plays as the regulator and mediator in all business activities in this sector. Furthermore, the RG has also issued sub-decrees and other regulations consistent to what has been stipulated in the law to ensure good governance in the electricity sector for the sake of quality, transparency and efficiency. This task is a great leap of the RG in reforming electricity sector in order to establish a favorable environment for businesses in this sector in Cambodia. This must be an environment that is credible for investors to come to invest in and it must be fair and efficient environment for the good of our society in general.
As for the evaluation of electricity investment projects from the private sector, I would like to suggest the Ministry of Industry, Mines and Energy and Electricity Authority of Cambodia to pay attention on four basic principles:
1. Ensuring transparency and competitiveness while selecting investment project,
2. Determining suitable location and size to be consistent with market trends and development plan of the national networks,
3. Ensuring sufficient time for capital mobilization and construction so that the projection implementation would meet the planning,
4. Ensuring appropriate pricing by considering comprehensive balancing between investors and national interest.
As for the relation with the private sector in implementing investment projects, I urge all institutions in charge of facilitation with the private sector to strengthen smooth and efficient private-public sector partnership. Any intervention taken by an authority in charge must be carefully and comprehensively analyzed. In carrying out any task or activity with the private sector, all state institutions must accurately implement laws and regulations as well as support and effectively facilitate private sector activities. This will surely enhance government-private sector partnership and harbor confidence from private investors.
In order to create a more improved business environment for the private sector to operate, the RG will continue to strengthen laws, regulations and capacity-building to facilitate business activities, trade and private investment especially to create an equal, transparent and accountable playing field for both public enterprises and private companies.
Investment by the Khmer Electrical Power Co., Ltd. for the construction of this 45- MKW diesel plant in Phnom Penh reflects new evidence showing the rise of private investors’ confidence in future economic developments in Cambodia. This investment is mutually beneficial and well targeted to serve immediate needs of our capital city, Phnom Penh. The special point that I must mention about this company is its accountable manner in carrying out its investment agreement and the timely completion of the construction process, so that the first stage of the construction can be completed ahead of the schedule. I think that the perfect success really comes from company efforts with good cooperation, understanding and contribution from concerned authorities and local people. I would like to express my sincere compliments to the company, line ministries and institutions, the authorities of all level and local people who have helped the project completed smoothly and even ahead of scheduled time.
At the same time, another important point that I would like to raise here is the electricity price that the company will set to sell to Electricity of Cambodia (EDC). According to reports, selling price set by the company to EDC is largely cheap comparing with those of other private companies currently operating in Cambodia. On the other hand, the company uses brand new and modern engines and instruments in their production such as WARTSILAR from Finland and ABB from Switzerland and Germany. These are advanced and reliable multi-national companies with world-wide notoriety. Therefore, we not only get cheaper electricity price but we are also sure that the company can ensure electricity supply in Phnom Penh.
I would like to take the opportunity to appeal to the Ministry of Industry, Mine and Energy, Electric Authority Cambodia, Khmer Electrical Power Co., Ltd, EDC, local authorities and other concerned institutions to cooperate to help the this power plant operates with smooth and safe conditions. Finally, I wish you all, Venerable Monks, Excellencies, Ladies and Gentlemen the five gems of Buddhist blessing. I would like to officially announce the inauguration of the First Phase of 45 Megawatt Diesel Power Plant from now on.