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Tuesday, June 16, 2009

Australia's Toll to help revive Cambodian railway

PHNOM PENH, June 15 (Reuters) - Cambodia has awarded a 30-year contract to manage its railway system to a venture led by Australia's Toll Holdings (TOL.AX), which should boost trade and attract more tourists, company officials said on Monday.

The Southeast Asian country has two lines dating back to French colonial days in the 1930s running over 652 km (405 miles).

Toll is a leading provider of transport and logistics services in Asia. Eugene Cody, its general manager for Cambodia, said Toll would have a 55 percent stake in the venture, with 45 percent going to local partner Royal Group.

He and other officials would not reveal the investment planned nor give details on profit sharing with Cambodia's government, but they said the new system would be in place in 2011, complete with new imported locomotives.

The first line links the capital, Phnom Penh, to Poi Pet near the border with Thailand, while the second links Phnom Penh to Sihanoukville beach, the country's second-biggest tourist destination.

"Can you imagine being able to catch the train from Thailand to Cambodia, down through the rice fields before going to the beach. It's beautiful," said Australian Ray Yager, a spokesman for the Royal Group in Phnom Penh.

The rail infrastructure was badly damaged during the country's civil war in the 1970s but a service has continued for both freight and passengers.

The Asian Development Bank said in March it would provide a loan of $42 million to help renovate the railways. (Reporting by Ek Madra; Editing by Alan Raybould)

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