Cambodia National Road 6

In 2012, Shanghai Construction Group Co., Ltd. (SCG), a Chinese state-owned enterprise (SOE), secured the contract to repave and expand the AKTK section, with project oversight from Guangzhou Wanan Construction Supervision Co., Ltd. (GWCSC), which works under the local jurisdiction of the Ministry of Public Works and Transport (MPWT). The MPWT is responsible for managing all road development, construction, and improvements. However, there is no confirmation of whether the MPWT was the executive/implementing agency (EA) and/or carried out procurement activities for this project, as the MPWT only has procurement documents publicly available from 2017 onward.

Reports suggest that 95 percent of the total budget of USD 255 million came from a Chinese concessional loan and 5 percent from the Cambodian government. The loan financing for the construction of NR 6’s AKTK section was granted in a USD 430 million concessional package from China EXIM Bank in 2012. This included funds designated for the AKTK section, another National Road project, and a multipurpose dam in Battambang Province.

The details of the loan term were not publicly disclosed aside from the shared percentage of the loan, of which 95 percent came from China EXIM Bank and 5 percent from the Cambodian government (in a budget of USD 255 million).

A Lack of Transparency

A primary area of concern regarding the AKTK section development is a lack of project transparency around the bidding process, awarding of the contract, and funding allocation. There are multiple news sources acknowledging the existence of the project, but there are competing stories of timelines and financing.

Corruption and Misuse of Funds

As of 2019, ADB reported that the 2014 Road Law, which covered areas such as technical regulations, roads, uses, funding sources, inspections, and penalties, had yet to be properly implemented. Furthermore, there were allegations of embezzlement which was believed to be the reason for the often extremely long construction periods for roads in Cambodia, as disruptions in funds cause delays and confusion. However, there is (naturally) a lack of clarity related to the distribution of potentially embezzled funds, raising a standard question in BRI programming as to how much “project mismanagement” can be attributed to China versus the weak capacity of the recipient state. Another point of importance regards corruption in the bidding process by Cambodian officials looking to extract charges on the bidding.

Quality Issues in Construction

Chinese road construction in Cambodia has been subject to criticism regarding the quality of work and materials used. Articles published in the Khmer Times explain that the paving of NR 6 from Kampong Cham to Siem Reap was completed in November 2016, but inspections by the MPWT found that it was not up to standard. The same criticisms plagued another Shanghai Construction Group Co., Ltd. (SCG) project, National Road 8, for its poor quality. The poor quality of SCG-constructed roads raises multiple questions, as it is not the first time that the SCG has conducted road projects in Cambodia, and the company has largely dominated this section in the country.

To capture different practices, quality and level of transparency, researchers are asked to answer six related questions for each data point. 1 point is assigned for each question to which the answer is “yes.” Each data point therefore has a total score between 0 and 6, where “0” means no information was publicly available at the time of research (not transparent) and “6” means full transparency.