Laos has inked an agreement to build a railway connecting Thailand and Vietnam, just after sealing plans for a rail link to China, in ventures that will cost a combined whopping U.S. $12 billion.
By linking the landlocked nation to its giant neighbor China and mainland Southeast Asia, officials say the high-speed rail network will help open up the impoverished and resource-starved nation to development.
A Malaysian company, Giant Consolidated Ltd., was this week awarded a contract to construct and operate the 220 kilometer (140 mile) railway from Savannakhet, on Laos’s southwestern border with Thailand, to the Lao Bao border gate with Vietnam in the east.
An official from Laos’s Public Works Ministry said work on the U.S. $5 billion railway project, which will runs parallel to the Route 9 highway, will begin next year and be completed in five years.
“The construction work will start next year, from Savannakhet to Vietnam’s Quang Tri province,” the official told RFA’s Lao service, speaking on condition of anonymity.
“It is a double-track railway for passengers and for merchandise transport,” he said, adding that it will run mostly through rice fields.
Giant Consolidated has been granted a 50-year concession for the project and will submit an environmental impact assessment and other studies for government approval, Lao state media said this week.
Lao Prime Minister Thongsing Thammavong and Malaysian Prime Minister Najib Tun Abdu Razak witnessed the signing of the agreement between Giant Consolidated and Laos’s Ministry of Planning and Investment on Monday, on the sidelines of the 49-nation Asia-Europe Meeting in Vientiane.
The investment is the largest yet in Laos by a company from Malaysia, Laos’s ninth largest investor, and follows other joint venture projects including a special economic zone near Savannakhet.
The planned line will form a new branch of the proposed Southeast Asia network through which Laos aims to link up with its neighbors and China.
Last month, the Lao parliament approved plans to launch a 420 kilometer (261 mile) line from Vientiane to southern China’s Yunnan province.
A Chinese company was originally planned to build the railway line but it backed out of the deal.
China will, however, finance the U.S. $7 billion project through a loan from Exim bank.
The planned line will link the Lao capital Vientiane to the country's Luang Namtha province along the border with China, with the network linked further to Yunnan’s capital of Kunming.
The state-run Vientiane Times said that Laos had decided to assume sole ownership of the project because “transforming the country from being landlocked to a land link is central to the future of the nation’s development.”
Laos opened its first international rail route, the 3.5 kilometer (2 mile) Thanaleng-Nongkhai track linking Vientiane to the Thai border, in 2009.
Reported by RFA’s Lao service. Translated by Somnet Inthapannha. Written in English by Rachel Vandenbrink.