The government is seeking private investors to help upgrade the Royal Railways with a $50 million Asia Development Bank loan, officials said Friday.
The loan would be used to pay investors for upgrading a link from Sihanoukville, on the coast, to Phnom Penh to Poipet, on the Thai border.
The initiative stems from a directive signed in September opening investment for private bidding in public projects, where concession owners would have the right to build, maintain, repair and develop Cambodia's railway.
Following decades of civil war and neglect, nearly 650 kilometers of rail have become unsafe and unreliable, hobbling the country's economic growth.
An upgrade to Cambodia's railway system would increase the transport of heavy goods, providing big returns in the economy, Ministry of Public Work and Transport undersecretary Touch Chan Kosal told VOA Khmer.
"We will upgrade our railways in the interest of our national economy," he said. "The railway can provide transportation for heavy goods, to avoid damage to national highways."
Cambodia has in recent years pushed to improve its roadways, but those projects are often undermined by overloaded trucks that leave highways in disrepair.
As investment companies look for transportation service to feed the country's development, the railway could be more in demand.
Royal Railways business director Rith Doeun said the transport of cement and other goods by rail over the last three years reached up to 30,000 tons per month.
"What I think is that there might be many goods that people would like to transport by rail, especially containers that can be transported from Sihanoukville, and most of those goods could be carried by train," he said. "But presently we need locomotives and train cars, and the railways are old."