Over 100 families living in a part of the Lao capital slated for a Chinese-invested urban development project are refusing to relocate, saying compensation offered for their land is too low.
Officials have touted the planned U.S. $1.6 billion project under construction in the That Luang marsh area as a showpiece commercial center that will bring a modern face-lift to fast-growing Vientiane.
But a group of residents are refusing to move to make way for the 1.25 square mile (3.25 square kilometer) That Luang Marsh Specific Economic Zone, which broke ground in December, saying the compensation offered is ten times less than the market value of their land.
They say the amount is too little to settle into a new life and that they will be forced into debt from borrowing money to build new homes.
A Lao official working on the issue said around 80 percent of the households in the project site had accepted relocation compensation and that the government was working to make disbursements to the remaining residents.
“Now almost 80 percent of the landowners have come forward to receive compensation. For the remaining compensation, the committee will continue coordinating with landowners to give it out soon,” the official said.
Urban commercial, residential center
Developer Shanghai Wan Feng Group plans to create a lagoon in the center of what will become a new urban area that will also include open spaces, a public park, a drainage site, several new roads, a sports center, and trade and service centers with five-star hotels, shopping centers, and entertainment venues.
The groundbreaking ceremony in December was attended by Lao’s deputy prime minister, the mayor of Vientiane, and China’s ambassador to Laos, among other senior officials, and the project is expected to be completed in 15 to 20 years.
Work has also begun on a 6-mile (9.5 kilometer) highway cutting through the marsh to link Sisattanak and Xaysettha districts.
But residents say they have had little say in the decision-making process about development in the area, for which plans have been in the works for several years.
Last year, sources said plans for the project were delayed by a tussle between investors from China and Vietnam.
In 2010, plans for an even bigger urban development project on a 3.9 square mile (10 square kilometer) area in the same location by a different Chinese developer were scrapped because, according to then-minister of planning and investment Sinlavong Khoutphaythoune, the company was reluctant to pay U.S. $400 million in relocation compensation to the roughly 7,000 affected households.
Foreign investment in Laos
Laos, one of the least developed Southeast Asian states, has become the subject of massive foreign investment, especially from companies from China, Thailand, and Vietnam.
Last October, it was announced that the construction of a mega mall set to be Laos’s largest shopping complex in Vientiane’s Sikhottabong district has been suspended after the project’s international developer ran out of funds despite having collected advance rent from retailers.
The planned U.S. $50 million Regal Mega Mall was touted as a landmark center for commerce and entertainment when construction on the seven-story shopping plaza began in 2011.
But its developer, Regal Global Investment Development Group, a Singapore company, halted the project while it looked for another investor to take over, sources had said.
Reported by RFA’s Lao Service. Written in English by Rachel Vandenbrink.