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| Summary of Project Information (SPI) |
| This Summary of Project Information is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
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| Project number | 21363 |
| Project name | Cambodia Airports |
| Country | Cambodia |
| Sector | Transportation And Warehousing |
| Department | Infrastructure |
| Company name | Societe Concessionaire de l'Aeroport |
| Environmental category | B |
| Date SPI disclosed | October 29, 2003 |
| Projected board date | December 1, 2003 |
| Status | Active |
| Previous Events | Invested: January 28, 2005
Signed: June 16, 2004
Approved: January 9, 2004 |
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| Description of company and purpose of project |
The project company is Société Concessionnaire de l’Aéroport (SCA or the company) – a joint venture between Vinci Airports and Muhibbah Masteron Cambodia), is a special purpose company that holds a 25-year concession (from 1995) from the Government of Cambodia to manage and operate the Phnom Penh International Airport, Phnom Penh and Siem Reap-Angkor International Airport, Siem Reap. Some parts of the operation of the two airports are delegated to Cambodia Airport Management Services Limited (CAMS - a joint venture between Aéroport de Paris, Vinci Airports and Malaysian Airport Berhad), under an operating agreement with SCA.
Given the increasing traffic at the two airports, SCA is required, under the concession, to carry out additional investments in the next five years. The total project cost is estimated at $72.0 million and includes at this stage:
- the financing of the 2003-2007 capital expenditure program for a total amount of $47.1 million, including $23.2 million to upgrade the facilities of Pochentong Airport (runway lengthening and widening, construction of a parallel taxiway, expansion of apron and warehouse facilities and modernization of the airport operating equipment);
- $23.9 million for Siem Reap Airport (major repairs of the runway and taxiway, extension of the taxiway and aprons, construction of a new terminal building, modernization of the airport operational equipment and construction of a new cargo warehouse);
- the payment of $8.2 million due to the contractor for past capital expenditures; and
- the refinancing of $16.7 million of the existing shareholder and shareholder-guaranteed loan. |
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| Project sponsor and major shareholders of project company |
SCA is 70% controlled by Vinci Group (Vinci) from France and 30% by a local holding company, Muhibbah Masteron (Cambodia) Company Limited (MMC). MMC is 70% owned by Muhibbah Engineering Berhad (ME) and 30% owned by two local Cambodian businessmen, Mr Okhna Kong Triv and Mr Okhna Hann Khieng.
Vinci, is one the largest companies in the world providing concession management, construction and related services. It was created in 2000 through the merger of Société Générale d’Entreprises and Groupe GTM, the construction subsidiaries of Veolia Environnement (formerly called Vivendi Environnement) and Suez, respectively, followed by a gradual spin-off of the new entity (Vinci). Vinci is now an independent company trading on the Paris stock exchange with its staff being the largest shareholder with a 9% interest followed by Veolia Environnement with a 2% interest. As of December 31, 2002, Vinci had net worth of €2.6 billion, total debt of €5.9 billion and total assets of €20.3 billion. For the year ending December 31, 2002, Vinci generated net income of €478 million on total revenues of €17.6 billion.
ME is a Malaysian investment holding company which provides civil, marine and structural engineering contract works. ME also manufactures engineering products, distributes and markets construction materials, repairs and builds ships, cranes, trades computer hardware, and invests in properties. ME was listed on the Kuala Lumpur Stock Exchange in 1994. ME’s management owns approximately 30% of the company. As of December 31, 2002, ME had net worth of $63.0 million, total debt of $111.8 million and total assets of $227.9 million. For the year ending December 31, 2002, ME generated net income of $2.7 million on total revenues of $172.4 million. |
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| Total project cost and proposed IFC investment |
| Total project cost is estimated at this stage at $72.0 million. IFC’s proposed investment consists of a loan of up to $10 million for IFC’s own account. Proparco, a French bilateral, will provide a parallel loan of $10 million along with IFC. |
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| Location of project and description of site |
| The project sites are the Phnom Penh International Airport (PPIA), located 10 km west of the capital city of Phnom Penh on a total area of 450 hectares, and the Siem Reap-Angkor International Airport (Siem Reap), located 8 km northwest of Siem Reap city on a total area of 195 hectares. PPIA serves as the main gateway to Cambodia while Siem Reap mainly caters to the tourist traffic visiting the various Angkor temples located in the nearby Angkor Archeological Park, a UNESCO World Heritage site. PPIA handled 948,614 passengers and 18,082 aircraft movements in 2002. International passengers represented 76% of the activity, with the remaining 24% domestic passengers which were mainly tourists transferring to Siem Reap. Siem Reap handled 572,664 passengers, mainly tourists visiting Angkor temples, and 13,605 aircraft movements, in 2002. International passengers represented 66% of the activity, with the remaining 34% domestic passengers mainly transferring to/from Phnom Penh. |
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| Project Development Impact and IFC's Role |
The project will have a significant development impact on the Cambodian economy. The Government of Cambodia is aggressively promoting cultural tourism in the Angkor temple complex near Siem Reap and the capital Phnom Penh, leisure tourism along the coastline near Sihanoukville and ecological tourism in the north part of the country. Tourism has the potential to become one of the most important sectors of the economy (accounting for 5.8% of GDP in 2000 versus 2.2% in 1997 and currently the second largest foreign exchange earner after the garment industry). Expansion and modernization of the Airport’s infrastructure is viewed to be critical to the GOC’s coordinated efforts to grow the tourism industry in Cambodia as the two airports are an essential component of the infrastructure required to support international tourism in Cambodia. In this context, the proposed project would expand the only two international airports in Cambodia and help Cambodia develop the value of its unique cultural assets of Angkor temples.
IFC's investment in the proposed project would provide long-term financing necessary for a concession-based project at a reasonable cost. Long-term limited recourse financing is practically nonexistent in Cambodia from either domestic or foreign sources. The proposed project is the first major infrastructure asset privatized in Cambodia and its successful financing would also have a strong demonstration effect on potential investors by demonstrating the feasibility of limited recourse project financing for infrastructure projects in Cambodia and privatization of airports in East Asia in general. |
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| Environmental and social issues - Category B |
This is a category B project according to IFC's environmental and social review procedure. Environmental and social issues associated with this project include: subsurface contamination; fuel/Hazardous materials storage and handling, including emergency response; air emissions; water supply; stormwater drainage and effluent discharges; solid and liquid waste management; asbestos-containing materials; aircraft noise; employee health and safety, including fire and life safety; cultural and archeological heritage and; airport expansion potential and resettlement.
SCA and the Government of Cambodia have presented plans to address these issues and to demonstrate that the operation of the Siem Reap and Pochentong airports will, upon implementation of the specific measures comprising an associated Environmental and Social Action Plan, comply with applicable Cambodian environmental laws and regulations, the Cambodian laws that control the preservation of nature conservation areas and archeological resources, and World Bank policies and guidelines.
To view the environmental documents for this project, click here |
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| Location of environmental documents in locally affected community |
The environmental documents will be available in the following locations in Cambodia:
- Phnom Penh International Airport, Administrative building, Phnom Penh, Kingdom of Cambodia, and
- Siem Reap-Angkor International Airport, Airport Road, Siem Reap, Kingdom of Cambodia. |
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| To contact the project company, please write to: |
Bruno BLANC-FONTENILLE, General Manager SCA
Phnom Penh International Airport
P.O. Box 1256 – National Road No. 4
Phnom Penh
Kingdom of Cambodia |
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