Off the rails: AusAID and the troubled Cambodian Railways Project

17 Feb 2012

Since 2009, the Australian Government, through AusAID, and the Asian Development Bank (ADB) have been funding a project in Cambodia to rehabilitate and privatise the railway system.

The project is pitched as an economic driver for Cambodia in which the poor will, in some unarticulated way, eventually share. But as Shiva predicted, a program that uses aid money, money intended to help people overcome poverty, has made life considerably worse for many that stand in its way.
The story begins at least as far back as 2005 when the Asian Development Bank began negotiations with the Cambodian Government to rehabilitate the near unusable railway line, but only on the pre-condition of some form of privatisation. In June 2009 Toll Royal Railways, a consortium of Toll Holdings of Australia and the Royal Group of Cambodia, were awarded a 30-year monopoly concession of Cambodia’s railways after having been in negotiations since its selection as concessionaire in 2007. Subsequently AusAID agreed to contribute substantial funding to the project and the ADB extended extra credit.

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