Cambodia breaks ground on China-funded canal and says it will be built ‘no matter the cost’

PREK TAKEO, Cambodia — Cambodia on Monday broke ground on a controversial Chinese-funded canal to link the capital Phnom Penh to the sea, despite environmental concerns and the risk of straining ties with neighboring Vietnam.

The 180-kilometer (111-mile) $1.7 billion Funan Techo canal is planned to connect the country’s capital to Kep province on Cambodia’s southern coast, giving it access to the Gulf of Thailand. Cambodia hopes the 100-meter (328-foot) wide, 5.4-meter (17.7-foot) deep canal will reduce the cost of shipping goods to the country’s only deep-water port, Sihanoukville, and reduce dependence on Vietnamese ports.

The project highlights the enormous role that China plays in Cambodian politics and economy. Meanwhile, concerns persist about the canal’s potential environmental impacts, especially on the flow of the Mekong River, which feeds millions of people in six countries through its fisheries and the agriculture it supports.

The project has Vietnam concerned, both because of the effect on its Rice cultivation in the Mekong Delta and on Cambodia’s departure from its orbit, said Nguyen Khac Giang, an analyst at the ISEAS-Yusof Ishak Institute in Singapore.

“There is concern that most Cambodian exports could be diverted from the current route, crossing the Vietnamese border to Vietnamese ports and moving away from there to Cambodian ports,” he said.

But Hanoi has expressed its concerns quietly, if at all, Giang said. Given the “complex historical legacy” between Cambodia and Vietnam (despite strong bilateral ties, the two nations have a contentious relationship — Vietnam is reluctant to openly criticize Cambodia for fear of being seen as infringing on its neighbor’s sovereignty, he said.

Analysts say the infrastructure project is partly an effort by Cambodia’s ruling elite to revitalize support for Hun Manetwho last year took over the government from his father, Hun Sen, who led Cambodia for 38 years.

The government declared Monday (also Hun Sen’s birthday) a holiday so that Cambodians could participate in the “celebration in a joyful, massive and proud manner.” Thousands of people wearing T-shirts with photos of the father and son began gathering at the canal site, which was draped in Cambodian flags. Billboards promoting the economic benefits of the channel dominated the countryside.

The canal will promote “Cambodia’s national prestige, territorial integrity and development,” Manet said, adding that the country had built larger and more expensive infrastructure projects before. But this “historic” channel was different and had national support, he said.

“We will build this canal, no matter the cost,” he said.

He highlighted that although the canal would be built jointly by Chinese and Cambodian companies, the latter would have a majority stake of 51% and thus maintain control. Vice Prime Minister Sun Chanthol confirmed that Chinese state-owned construction giant China Road and Bridge Corporation had secured the contract to build the canal.

The Stimson Center, a US-based nonprofit, warned that the canal would cause “significant transboundary impacts on water availability and agricultural production in Vietnam’s Mekong Delta.” 90% of the rice exported from Vietnam is grown in this region.

The Cambodian government has dismissed these concerns.

In early April, Vietnam had asked Cambodia to share information about the canal. “We have asked Cambodia to collaborate closely with Vietnam and the Mekong River Commission to share information and assess the impacts of the project on water resources and the ecosystem in the Mekong Delta region.”

Cambodia is a key Chinese diplomatic partnerhelping to dampen criticism of Beijing within the 10-member Association of Southeast Asian Nations, several of whose members, including Vietnam, are involved in Territorial disputes with China in the South China Sea.

China’s enormous presence can be seen in the numerous Chinese-funded projects, hotels and casinos that dot the Cambodian landscape. China’s state banks have financed airports, highways and other infrastructure built with Chinese loans. Nearly 40% of Cambodia’s more than $11 billion in foreign debt is owed to China.

In June 2022, China and Cambodia broke ground on a naval port expansion project that has raised concerns from the United States and other countries that it could give Beijing a strategically important military outpost in the Gulf of Thailand. Hun Sen reportedly granted China the right to establish a military base in 2019. Ream Naval Base. He has long denied this, saying Cambodia’s Constitution prohibits foreign military installations.