IT’s a Saturday morning on a holiday weekend in Phnom Penh, the capital of Cambodia, and the Royal Railway station is buzzing with activity. The two passenger trains that depart every day are ready, their loud horns announcing to the locals saying goodbye to loved ones, and tourists posing for photos on the platform, that the train is ready to depart.

The first train leaves at 06.40, heading north on the 388km metre-gauge line to Battambang in the northwest of the country. It has an estimated journey time of 6h 20min and is scheduled to return at 15.00, arriving at 22.30. The second train departs the capital 20 minutes later, heading 266km south to Sihanoukville, where it is due to arrive at 12.40.

After slowly snaking through the Phnom Penh suburbs at around 25km/h, the southbound train soon reaches its maximum speed of 55km/h. However, with the train forced to wait in passing loops for northbound freight trains to clear the line ahead, by the time it reaches Kampot, where IRJ disembarks two hours from the train’s final destination, it is running 1h 40min behind schedule. Many of the other passengers also leave the train here. They are replaced by others, perhaps a little frustrated, but not necessarily surprised, at the late running. The train was scheduled to return at 14.00, arriving at 20.00.

“We had about 1000 passengers on Saturday for the holiday,” says Mr John Guiry, Royal Railway’s CEO, a career railwayman from Victoria, Australia, who has been in Cambodia since 2010. Royal Railway reintroduced a daily service in February 2022 following a Covid-induced suspension and Guiry says it is carrying 200-300 passengers on a typical weekday. The operator ran Friday - Monday pre-pandemic, and according to Guiry, the increase has grown revenue from the passenger business from $US 20,000 a month to around $US 100,000 now.

Onboard the coach, which seems freshly painted and was built by Waggonfabrik Uerdingen, Germany, in 1969, there are rows of two-by-two bench seats that face one another and are packed with passengers: families and groups of young people, with the odd western backpacker mixed in. Many of them are using the train for the first time and while they say they are not sure if they will do so again, it is a much safer experience than the busy road that runs south from the capital.

Passengers can also enjoy views of rice paddies, farms and small villages, as well as the odd hill in the distance. The intermittent air-conditioning meant it was a little uncomfortable in the 30°C heat - there were cheers when some passengers forced their window open - but it was an enjoyable experience, a definite throwback, and for just $US 9 for a single ticket, something of a bargain.

When IRJ returns to Phnom Penh station a couple of days later, the scene is very different. That day’s passenger trains have already departed, with just a few coaches left on the platform for use on the busiest days and a few tank wagons of diesel fuel lying idle in the middle of the station, ready to refuel locomotives the next day. The coffee shop is deserted, with only the odd vendor selling tickets and confectionary left behind.

Guiry escorts IRJ to his office, which sits adjacent to the platform. In the centre is a large meeting table and on the wall are four flat-screen plasma TVs hooked up to several desktop PC towers.

John Guiry monitors live feeds of activity across the railway from his office at Phnom Penh station.

Across the screens is a mosaic of live CCTV footage from key points across the railway network: level crossings, sidings, freight terminals, maintenance workshops, and the operations control centre are all shown. The screens are Guiry’s eyes across the network. He can quickly zoom in on any one view from anywhere in the country to fill an entire screen. He can also access the footage as well as a live GPS locator of the railway’s rolling stock on his smartphone, so he can keep tabs on developments wherever he is. On the day of IRJ’s visit he zooms in on a particular siding where several tank wagons are awaiting the arrival of a freight train later that day. He says such insight is proving critical to managing Royal Railway’s growing business and the team of mostly young people that runs it.

Guiry says the TV screens that would form part of this sophisticated information centre were found in one of the railway’s warehouses. “The guys looked at what we might be able to do with them and this is the result,” he says.

This a story typical of a railway running on limited resources and striving to make the best of the opportunities that present themselves. It has made notable progress in more recent years following a period of upheaval and false starts.

Royal Group

Royal Group’s involvement dates to 2007. The railway had ceased operation at this point following years of mismanagement and under investment, which resulted in infrastructure falling into disrepair. Guiry insists that it had previously been “a good little railway” and this potential ultimately attracted Australia’s Toll Group to enter into a $US 143m joint venture with Royal to form Royal Toll Railway.

The group was awarded a 30-year concession by the Cambodian government in November 2007, but protracted negotiations meant the contract was not signed until June 2009, holding up the rehabilitation project. Under this agreement, the group would oversee the infrastructure upgrade and restoration of service, including the 48km link to the Thai border, which had been completely destroyed by war in the 1970s, and construction of a new 225km link to Loc Ninh on the border with Vietnam.

The $US 142.56m upgrade project benefited from a package of aid and loans, including $US 82.4m from the Asian Development Bank (ADB), $US 13m from the Opec Fund for International Development, a $US 26.9m grant from AusAid, and the remainder from the Cambodian government. And while reconstruction work commenced on the southern line in 2010, by 2014 TSO, the French track renewals company contracted alongside Nawarath, Thailand, to conduct civil engineering work, had suspended its activities with 70% of work completed. Toll was soon following TSO out of the door, exiting the partnership with Royal in December 2014, citing lower than expected returns and delays in track rehabilitation work by external contractors.

A review of the Cambodian railway rehabilitation project published by ADB in May 2022 described the outcome as “ineffective.” Following Toll’s departure, the focus shifted to rehabilitating the Southern Line, where freight services resumed in 2013 and passenger trains in 2016. However, when the ADB loan closed in 2016, only 23km of the northern railway was serviceable, along with a 42km section of the 48km link to the Thai border. Plans for the link to Vietnam and to upgrade maintenance and freight logistics facilities were dropped.

It is within this context that Royal Railway has worked to increase service levels. Despite a Chinese-backed consortium offering a 60-year, $US 850m takeover of the railway in 2014, the Cambodian government reaffirmed its commitment to Royal Group. A 30-year operating licence was signed at the end of 2014 to run train services and maintain infrastructure and rolling stock. Guiry, who had served as chief operating officer of Toll Royal, was appointed CEO.

As well as government funding, Royal Group CEO and Cambodian businessman, Mr Kith Meng, has ploughed $US 134m into Royal Railway since 2014 and Guiry reports how the railway has worked diligently and creatively to upgrade levels of service.

Guiry says work will start later this year on a new rehabilitation project to improve line speeds on some sections.

He says services were restored to the Northern Line in 2018 within four months of starting a rehabilitation project that he led. Work involved rebuilding the subgrade, relaying ballast, and installing steel sleepers and used rail from Thailand that had been stockpiled. 22 bridges and 2000 culverts were also replaced. “We basically put it back together again,” Guiry says.

Trains are now operating at 35km/h-55km/h on the line. Guiry says some sections could support 80km/h but speeds are limited because of the proximity of the railway to villages and the abundance of level crossings on the line. Indeed, he says the railway has huge issues with getting motorists to stop at level crossings. He also reports constant problems with people piling sand on the track to create a new way to cross the railway.

Guiry says work will start later this year on a new rehabilitation project to improve line speeds on some sections and to extend five or six of the line’s 11 passing loops from 450m to 1000m, providing a critical boost in freight capacity. Similar work will take place on the southern line, which has longer sections of 55km/h operation.

While the northern passenger service currently terminates at Battambang, Guiry says Royal was running into Popiet before the pandemic and he is hopeful of restoring this soon. He also reveals that he is negotiating with State Railway of Thailand (SRT) to extend SRT services that currently terminate at Poipet across the border into Cambodia. Discussions are underway on the commercial side of the agreement, but Guiry is optimistic that operation could start as early as next month.

“They have services that terminate on the Thai side of the border and some of those trains sit there for 19 hours,” Guiry says. “What we’re saying is that we extend that into Phnom Penh or Battambang, we could run four or five services in addition to what we run now. That would transform the offer.”

Freight traffic already runs across the border, including a service from the Ford factory in Rayong province. Guiry says Royal’s trains are transporting up to 130 cars per train every three or four days, carrying nearly 4000 since the service commenced in August 2022, providing some useful revenue. Overall, Royal Railway’s traffic is divided between 48% intermodal, 48% diesel fuel and petroleum, and 4% bulk commodities such as sand, rock, lime and cement. The railway is now recording around $US 1.1m of revenue per month from its freight operation and Guiry says all of this is sunk back into the railway to improve the level of service.

In February, the railway is in its peak season. All of the railway’s mishmash of second-hand locomotives sourced from around the world are in use, along with the fleet of 430 wagons. Only three or four wagons are in the workshop for maintenance at one time, with checks made daily in the field. Indeed, Guiry says his biggest challenge at the moment is sourcing enough wagons to keep up with customer demand.

Wagon investment

A recent $US 24m bond issue is supporting a $US 34m investment in 340 mixed short and long flat wagons and well wagons from a South African supplier. Guiry reports that the wagons are 15 years old and come in $US 40,000-50,000 cheaper than new. Gauge conversion is taking place in South Africa and the supplier is due to send batches of 45-60 wagons to Cambodia, with completion scheduled for the end of the year. However, delivery has been held up and Guiry is now sweating on when they will arrive as pressure grows from customers desperate to use the railway.

The addition of well wagons to Royal Railway’s fleet will enable the introduction of double-stack container services for the first time, offering a further boost to intermodal capacity, a step that is a “no-brainer,” according to Guiry. He says work to adjust cabling and trial operation to check performance in curves has already been completed and he wants to start operation as soon as possible. Initially double-stack trains will carry empty containers for customers such as garment manufacturers, which can face hefty storage costs at ports if they do not move containers after four days.

“One of the advantages of using rail is that you can bring 500 containers a day out of the port,” Guiry says. “I don’t want to do loaded just yet, but that will come in a few years when we get used to running with the empties. We’ll do it step by step.”

Intermodal accounts for 48% of Royal Railway’s freight traffic.

Signalling upgrades are also on the horizon. Royal Railway currently uses a train order system with drivers contacted by radio or phone, often slowing down the train to receive the order. The railway currently operates at 38-40% of its potential capacity and Guiry hopes the introduction of a more sophisticated signalling system could boost this to 45-50%. He says quotes are being sought from prospective suppliers and he expects to have an idea of what kind of system the railway could afford to install in the next few months.

Royal Railway’s relative success with very limited resources is commendable. However, a real step-change in performance still requires a major investment in upgraded infrastructure. The Cambodian government certainly talks up such opportunities and appears to be making headway. News at the end of January that China Bridge and Road Corporation (CBRC) had completed a feasibility study to upgrade the Phnom Penh - Poipet line was followed on February 10 by the pledge of Yuan 300m ($US 44m) by Chinese president, Mr Xi Jinping, to support the railway upgrade project.

“It is going to totally, totally, totally change the way everyone looks at rail in the future.” If you want to export to Europe, why would you go by ship? You would go by train.”

John Guiry

The announcement came during a visit to Beijing by the Cambodian prime minister, Mr Hun Sen, who also met with several Chinese contractors, including CBRC, with the goal of encouraging them to back the railway rehabilitation project as well as other infrastructure schemes in Cambodia.

The CBRC feasibility study proposes electrifying the line and converting it to standard gauge to support speeds of up to 160km/h. It estimates the cost at $US 4bn.

Rather than conversion or dual gauge, Guiry favours building a new line alongside the metre-gauge railway, which would remain operational, rightfully pointing out that any standard-gauge line would not connect with the Thai metre-gauge network. However, with Thailand and China pursuing the construction of a standard-gauge line to Poipet from Laos and China, which should be completed by the end of this decade, Cambodia could join a new network that will transform connectivity and freight logistics in the entire region.

“It is going to totally, totally, totally change the way everyone looks at rail in the future,” Guiry says. “If you want to export to Europe, why would you go by ship? You would go by train.”

This proposed investment is in a different stratosphere to the ADB-led project and what Royal Railway has contended with since 2014. The government is seeking a build-operate-transfer agreement with China for the project, in which the debt incurred would be repaid through revenue generated by the railway. However, there is understandable concern among analysts about Cambodia’s reliance on China and its already high level of indebtedness: 41% of its $US 9.47bn debt burden is with China. Cambodia’s GDP was $US 26.96bn in 2021.

Reports of a French consortium also offering its services to support the rehabilitation scheme suggests other possible avenues to deliver the project. Guiry also recalls similar studies by Korean, Japanese and other Chinese groups in recent years and points out that it is an election year, so a lot of promises are being made. Yet he says the government is “pro-rail,” and while he does not feel the project will happen as soon as many people hope, it is the logical next step for rail development in the Cambodia. Royal Railway, after all, has demonstrated its potential. “We’ve proven that rail is a viable option, it is a true alternative,” Guiry says.

Rail has certainly come a long way in Cambodia in the last 15 years. Guiry has played a central role in this. From guiding the railway’s revival and development, to training and mentoring staff who knew nothing about the sector when they joined but have now become informed railway people in their own right. His experience and know-how have pushed the railway onwards and upwards, and to the verge of its next major transformation.

“It’s probably the best payback you can get when you start something from nothing and then see it operating,” Guiry says. “Like when we put in a new siding. There was a pond there before and no-one believed me when I said that we are going to install the loop. And then I am standing there watching us move 160 20-foot containers at the same time. It gives you a warm feeling.”