Japanese ODA Loan
Ex-Ante Evaluation (for Japanese ODA Loan)
Southeast Asia Division 2, Southeast Asia and Pacific Department
Japan International Cooperation Agency
１. Name of the Project（１）Country: Kingdom of Cambodia（２）Project :Sihanoukville Port New Container Terminal Expansion Project (I)（３）Project site/Target area: Sihanouk Province
Loan Agreement: August 6, 2022
２. Background and Necessity of the Project（１）Current State and Issues of the Ports and Harbors Sector in Cambodia
The Kingdom of Cambodia (Cambodia or “the country”) has two maininternational ports, one is the Sihanoukville Port that faces the Gulf of Thailand(“this Port”), and the other is the Phnom Penh Port on the banks of the MekongRiver in the capital city, Phnom Penh. As Phnom Penh Port is a river port, there
are restrictions on the amount of cargo it can handle as large vessels havedifficulty entering the port due to its shallow water depth, so as the only deep-sea
port in the country, this Port handles around 70% of Cambodia’s import andexport container cargo freight.
The volume of container cargo handled at this Port has shown a year-on-yearincrease of 14% on average from 2015 to 2019, corresponding to the steadyeconomic growth of Cambodia like the sewing industry leading the way. Due tothe impact of COVID-19, growth was relatively flat in 2020 at 0.4% compared tothe previous year, but the volume handled started to increase again in 2021, withan increase of about 14% on the previous year (Source: Port Authority ofSihanoukville (PAS) statistics).
Currently, this Port has a container cargo handling capacity of around 750,000
Twenty-foot Equivalent Units (TEU), but in 2021 they handled around 730,000
TEU, so the handling capacity is tight. Responding to this, PAS, which is incharge of running this Port, is trying to take short-term measures to increase thehandling capacity, such as adding cranes and improving the quay of the existing
container terminal, as well as developing the New Container Terminal 1 (NCT1)
that is expected to increase the container cargo handling capacity by about
450,000 TEU through the Sihanoukville Port New Container Terminal
Development Project (the ODA loan agreement (L/A) was signed in August 2017,

the detailed plans were completed in October 2021, and it’s scheduled to start
operations in December 2025).
However, future demand for container cargo handling capacity will be affectedby the opening of an expressway between Phnom Penh and Sihanoukville,
which will be discussed later, (scheduled to be completed in 2022), and while it
will reach 1.2 million TEU in 2026-2027 (total capacity of the existing container
terminal and NCT1) (Source: JICA Sihanoukville Port New Container Terminal
Expansion Project Preparatory Survey (2022), hereinafter referred to as the“JICA Preparatory Survey”) there are concerns that the handling capacity will
once again be tight soon after NCT1 operations start. For this reason, there is anurgent need to increase the handling capacity of this Port by developing a NewContainer Terminal 2 and New Container Terminal 3 (NCT2 and NCT3respectively) with the Sihanoukville Port New Container Terminal Expansion
Project (“this Project”) and procuring cargo handling equipment.
In addition, the volume of container cargo handled at this Port concerning theNorth American and European regions accounts for around 10% of imports andaround 61% of exports (2020 results. Source: JICA Preparatory Survey), so bothregions are a major and important trading partner for Cambodia, but the water
depth of the existing port facilities and the quay extension are insufficient for thelarge vessels in service on the main North American and European sea routes
for container transportation that call in at this Port. Therefore, at present theimport/export container cargo that comes and goes from North America andEurope needs to be transshipped at Singapore, which is disadvantageous interms of transportation time and costs in comparison with neighboring countries
that have a direct transportation service to those regions, so the Cambodian
government is hoping that this Project will help promote trade and improve thecountry’s investment environment, by constructing a quay with the required
extensions and water depth so that the large vessels on the North American andEuropean sea routes will be able to stop at the port. It is estimated that by 2030
the volume of loaded container cargo handled at this Port between the North
American and European regions will reach around 180,000 TEU with North
America and around 270,000 TEU with Europe (Source: JICA PreparatorySurvey).
Furthermore, in the fourth Quadrangle Strategy (2018-2023) of Cambodia’sNational Development Plan, the expansion of this Port is placed in the priority
area of “improving the logistics system and improving connectivity in thetransportation, energy and digital fields.” In addition, this Port is located at astrategic point in the Greater Mekong Subregion Southern Economic Corridor
Towns Development Project spearheaded by the Asian Development Bank(ADB), and is expected to become a regional logistics hub.
（２）Japan and JICA’s Policy and Operations in the Port Sector
Japan’s Development Cooperation Policy for the Kingdom of Cambodia (July2017) sets out “support for promoting industry” as one of the priority areas,
stating that Japan would work on “strengthening distribution networks (roads,ports, customs, etc.) in physical and non-physical aspects, from the perspectiveof enhancing regional connectivity and promoting industry.” “Strengthening theeconomic base” is a priority area in JICA Country Analysis Paper for theKingdom of Cambodia (March 2014), and the development and expansion of thisPort were analyzed as an important issue. Therefore, this Project is consistent
with these policies and analyses. In addition, promoting the development of thisPort that is geopolitically important, locating at a focal point that connects thePacific Ocean and Indian Ocean, contributes to improving connectivity andhelping to spread and establish the rule of law, freedom of navigation, and free
trade in a Free and Open Indo-Pacific. Moreover, this Project will contribute tosustainable economic growth and industrialization through the improvement oflogistics functions, and play a part in achieving Goal 8 (promote sustained,inclusive and sustainable economic growth) and Goal 9 (building resilientinfrastructure) of the SDGs.
By implementing various schemes, Japan has continually cooperated with thisPort that supports the economic development of the whole of Cambodia.
Specifically, development planning survey technical cooperation formulated aplan for port expansion in the Study on Strengthening Competitiveness and theDevelopment of Sihanoukville Port Project (2011-2012), an ODA loan wasprovided for the Sihanoukville Port New Container Terminal Development
Project (L/A signed in 2017), the development of port facilities was promoted
through the acquisition of PAS shares with overseas investment in theSihanoukville Port Development and Operation Project (acquired in 2017, allacquired shares were sold in 2019, and currently two Japanese companies own
PAS shares and provide it with technology and knowledge), and operational
efficiency was optimized in the ODA loan ancillary project, the Project for
Capacity Development on Container Terminal Management and Operation in
Sihanoukville Port Phase 2 (2018-2022).

Through these cooperation activities, JICA has made a large contribution toCambodia’s logistics and has become PAS’s most important partner, and thisPort has simultaneously become a symbol of the friendly relationship between
Japan and Cambodia.
(1) Other Donors’ Activity
A railway was constructed between Phnom Penh and Sihanoukville incooperation with ADB. Even though this railway is used for freight transportation
to this Port, as it takes longer to transport it by rail than by road, currently usage
is limited to empty containers and some of the heavier containers.
China is supporting the development of an expressway between Phnom Penhand Sihanoukville (scheduled to be completed in 2022), and this is expected to
be a new transport route for freight vehicles that travel between the two cities.
３. Project Description（１） Project Description
1) Project Objective
The objective of the Project is to improve the container cargo handling
capacity of Sihanoukville Port, the only international deep sea port inCambodia, by expanding new container terminal and related
infrastructure, thereby contributing to increase in shipping routes callingat Sihanoukville Port and trade promotion in Cambodia. .
2) Project Components
1) Civil engineering work: Development of NCT2 (container cargohandling capacity of around 570,000 TEU, total area of 20 ha, quaywater depth of 16.5 m), development of NCT3 (container cargohandling capacity of around 620,000 TEU, total area of 21.5 ha, quaywater depth of 17.5 m), dredging of routes and berths (water depth of14.5 m), development of terminal facilities (administrative building andother related facilities) , etc.
2)

3)Procurement and installation of cargo handling machines, etc.:
Gantry cranes (6 units), rubber-tired gantry cranes (RTG) (20 units),
yard trailers (35 units), reach stackers (4 units), etc.
Procurement of vessels: Tugboat (2), pilot boat (1)Consulting services: Detailed designs (civil engineering work part), basic
designs (cargo handling equipment, vessels part), bidding assistance,
construction supervision, environmental and social consideration
support, technology transfer, etc.

3) Beneficiaries of this Project (Target Group)
1) Direct beneficiaries: Port Authority ofSihanoukville Port users
2)
Ultimate beneficiaries: Cambodian citizens

Sihanoukville(PAS),（２） Estimated Project Cost
80,250 million Yen (Japanese ODA Loan: 41,388 million Yen)
（３） Schedule
August 2022 - November 2030 (100 months). When all of the facilities
start operations is considered as the completion of the Project.
（４） Project Implementation Structure1) Borrower: The Government of the Kingdom of Cambodia
2) Executing Agency: Port Authority of Sihanoukville3) Operation and Maintenance Agency: Same as above（５） Collaboration and Sharing of Roles with Other Projects and Donors
1) Japan’s Activities
Over time, Japan has repeatedly dispatched “port managementadvisors” (2009-2024), experts in loan fund cooperation, to PAS, toprovide advice on the supervision and promotion of port management andODA loan projects. In addition, there is a plan for the executing agency,
PAS, to further strengthen the operation and management capabilities ofthis port (Container Terminal and SEZ) in an ODA loan ancillary project,
the Project for Capacity Development on Container Terminal
Management and Operation in Sihanoukville Port Phase 3 (2022-2026).
It is expected that the competitiveness of this Port will be increased bycarrying out this Project along with these other projects, through all-roundcooperation in expanding port facilities and optimizing operational
efficiency.
2) Other Donors’ Activities
None in particular（６） Environmental and Social Consideration① Category: B② Reason for Categorization: This Project does not qualify as alarge-scale one as listed in the port sector of the JICA Guidelines forEnvironmental and Social Considerations (announced in April 2010), its
undesirable impact on the environment is judged to be minimal, and it
does not fall into any sensitive characteristics or sensitive areascategories according to the same guidelines.
③ Environmental Permit: The Environmental Impact Assessment (EIA)
report for this Project was submitted to the Ministry of the Environment inApril 2022 and is scheduled to be approved in October 2022.
④ Anti-Pollution Measures : Countermeasures, like the maintenance ofconstruction vehicles, water sprinkling, the use of silt fences andrestrictions on construction times, will be taken during construction toprotect the water quality, air quality, and to restrict noise and vibrations,etc. Dredged soil from the sea will be used for landfill as much as possible,
but residual soil that is not suitable for landfill will be disposed of properlyin accordance with Cambodian law. After the start of operations, air
quality and water quality will be protected by measures like themaintenance of machines and the utilization of the ocean dumping site forwhich an official license has been obtained, so no significant negative
impacts are expected.
⑤ Natural Environment: The area affected by the Project are notdesignated as or near national parks or other sensitive areas, and thelevel of undesirable impact to natural environments is expected to beminimal.
⑥ Social Environment: As this Project will be carried out in an existing
port, it will not involve any land acquisition. However, the development of
New Container Terminal 3 (NCT3) will involve the removal of an existing
breakwater, and 21 of the household’s involved in the aquacultureindustry who use this breakwater will have to relocate their work huts,
aquaculture nets, and floating huts, and this will proceed in accordancewith a simple resettlement plan drawn up in line with JICA’s Guidelines forEnvironmental and Social Considerations and Cambodia’s domestic
procedures and regulations. The affected residents have not expressed
any particular dissenting opinions regarding this Project and theirrelocation. As fishermen reside in and use the existing port, an opening
for the entry and exit of fishing vessels will be installed in the existing
breakwater so that the passage of fishing vessels will not be hinderedduring construction and when it’s in operation. In addition, measures will
be taken to support even safer navigation in and around the port, like
informing the fishermen of construction times and vessel’s sailing times,
and using tugboats for vessels entering and leaving the port.

⑦ Other / Monitoring: During the construction it will be under thesupervision of this Project’s executing agency, the Port Authority of
Sihanoukville (PAS), and the contractors will monitor air quality, waterquality, sludge (excavated materials), waste matter, noise, vibrations, etc.
After operations start, PAS will monitor the air quality and water quality.
Also, the resettlement mentioned above will be monitored by the Ministryof Economy and Finance’s Directorate General of Resident Relocation.
（７） Cross- Sectoral Issues: HIV/AIDS countermeasure clauses will beincluded in the bidding documents, with a plan to implement measures
like providing HIV/AIDS preventative education for the constructionworkers.
（８） Gender Category: [Gender issues] ■ GI (S) (Gender Activities
Integration Project)<Details of Activities/Reason for Categorization> In order to promote theemployment of female staff and the appointment of female management atPAS, the executing agency of this Project.
（９） Other Important Issues: Japan’s advanced technology, such as thecolumn strut construction method is scheduled to be used for the civilengineering in this Project.
４. Targeted Outcomes（１） Quantitative Effects
1) Outcomes (Operation and Effect indicators)
Indicator

Container Cargo Handling Volume (TEU /year)
Annual Average Berth Operation Ratio (%)
Maximum Deadweight Tonnage (DWT) ofvessels entering the port

Target (2031)

Baseline(Actual value in 2021)[2 years after projectcompletion]

730,000

1,700,000

6260

26,000160,000

Note: All baseline values are the actual results from the existing container terminal.
The target for “Container cargo handling volume” is the total amount from the existing
container terminal and the new container terminals (NCT1, NCT2, NCT3), and thetarget for the “Annual average berth occupancy” is the average from both.

（２） Qualitative Effects
An increase in the number of sea routes that stop at this Port including thosefrom North America and Europe, promoting Cambodia’s trade（３） Internal Rate of Return
Based on the assumptions below, the economic internal rate of return of thisProject will be 23.1%, and the financial internal rate of return will be 7.5%
【EIRR】
Costs: Project costs, operation and maintenance costs (all excluding taxes)
Benefits: Reduction of transportation costs, reduction of transportation time
Project Life: 40 years【FIRR】
Costs: Project costs, operation and maintenance costs
Benefits: Port operation income
Project Life: 40 years
５. External Factors and Risk Control（１） Preconditions
・ The preceding ODA loan Sihanoukville Port New Container Terminal
Development Project is carried out smoothly.
・ Installation of customs facilities and deployment of customs officers neededfor the operation of the new container terminals is carried out properly andsmoothly by the Cambodian government.
・ Transformer substations needed for the operation of NCT2 and NCT3 areinstalled properly and smoothly by the Cambodian government.
・ Relocation of residents, which is necessary due to the partial removal of
the existing breakwater for the development of NCT3, will be carried out
properly and smoothly by the Cambodian government.
（２） External Factors
None in particular
６. Lessons Learned from Past Projects
The ex-post evaluations of the ODA loan projects to Cambodia, theSihanoukville Port Urgent Rehabilitation Project and the Sihanoukville Port
Urgent Expansion Project, (evaluations in FY2011), found that on the weekends
when many vessels enter the port, trailer trucks congregated in front of thecontainer terminal gates and obstructed traffic in the neighboring areas, so it wasworth considering construction work to widen the roads around the gates. Basedon this, the JICA Preparatory Survey for this Project estimated the future traffic
volume, and confirmed that the access roads that were being constructed for thepreceding ODA loan Sihanoukville Port New Container Terminal Development
Project would be able to handle the volume of traffic after NCT2 and NCT3 startoperations.
The ex-post evaluation (FY2011) of the ODA loan Batangas Port Development
Project (II) in the Republic of the Philippines found that a lack of differentiation
and an allotment of roles between ports not being carried out as planned, led toa low level of operations. In addition, as the actual movement of cargo wasdetermined by various factors, it was found that target values should not only be
set from macro perspectives like GDP estimates, but should also consider themid- and long-term outlook of industrial structure and requirements from clientcompanies. Taking this into account, the JICA Preparatory Survey for this Project
considered the future role sharing ratio of the two major international ports inCambodia, Sihanoukville Port and Phnom Penh Port, and along with macro
methods, used micro methods like creating demand forecasts of container cargovolume for each major product based on data collection from hearings withindustry groups and related organizations, to confirm that plenty of container
cargo volume is expected after this Project is completed.
7. Evaluation Results
This Project is consistent with Cambodia’s development issues and policies,
as well as Japan and JICA’s cooperative policies and analyses. The expansionof new container terminals at Sihanoukville Port will contribute to increasing thenumber of sea routes that stop at this Port and promote Cambodia’s trade, and itis thought that it will contribute to achieving Goal 8 (promote sustained, inclusiveand sustainable economic growth) and Goal 9 (building resilient infrastructure) ofthe SDGs. Therefore, the necessity of the implementation of this Project is high.
8. Plan for Future Evaluation（１） Indicators to be UsedAs indicated in Sections 4.
（２） Future Evaluation Schedule
Ex-post evaluation：Two years after the project completion
END