Government authorities in Laos have selected a new company to upgrade a major thoroughfare in the capital Vientiane, after the firm submitted an estimate that was lower than one quoted by a Chinese company believed to have ties to the country’s national leaders.
A survey conducted by Chinese firm The Third Railway Survey and Design Institute Group Corporation (TSDI) between November 2014 and January 2015 estimated the cost of upgrade work on a roadway connecting Laos National University’s Dongdok campus to Route 13 North at U.S. $80 million.
RFA had reported in April that TSDI’s quote was four times more than similar projects, according to an expert who had requested anonymity, indicating a lack of transparency in development in the capital.
But now Vientiane’s Public Works and Transportation Department, which is responsible for the Dongdok-Sikeuth road project, has selected Tangchaleun Group to finish upgrading the nine-kilometer (5.6-mile) long, nearly 30-meter (98-foot) wide road, which was built 10 years ago, at a cost U.S. $54 million.
According to a notice from the Ministry of Public Works and Transport in July, TSDI had lowered its proposal to $68 million, but the government decided to go with Tanchaleun instead, although the current cost is still too high, said the road construction expert, who also owns a construction company.
“Nine kilometers of concrete at 30 meters in width with lampposts on both side costs U.S. $54 million, so upgrading one kilometer (0.6 mile) would cost U.S. $6 million,” he told RFA’s Lao Service. “That is still high, and the fair cost is around U.S. $4 million because not much clay soil is needed [before laying the concrete] to upgrade the road.”
Contract to be signed
The Lao government now must make a final decision on the road design and sign a contract with Tangchaleun.
“We do not know when the construction work can start because the Ministry of Public Works and Transport is currently working on the design and will submit it to the government for approval,” said Nounta Hompathoum, deputy director general of Vientiane’s Public Works and Transportation Department.
The department held a technical meeting with district authorities and Tangchaleun representatives on Aug. 14 to agree on the final design of the road upgrade project, according to minutes from the meeting.
The upgrade project has generated controversy because it is being overseen by the son of Lao Prime Minister Thongsing Thammavong, and because TSDI is believed to have connections to members of the Lao national leadership.
TSDI had initially proposed a cost of U.S. $75 million for the project, but increased the estimate by U.S. $5 million after completing its three-month survey, so that the work would have cost slightly less than U.S. $9 million per kilometer.
In April, the road construction expert said the upgrade project should not cost more than U.S. $20 million, or $2.2 million per kilometer, including administrative expenses, lampposts and sidewalks. The company performing the work would still turn a profit at this price point, he said.
At the time, Dethsongkham Thammavong, the prime minister’s son and a leading official in Vientiane’s Public Works and Transportation Department, told RFA the actual cost of the road upgrade was likely to cost significantly less than what the survey estimated.
Many road construction projects in Laos lack transparency, and high-ranking officials are known to use state funding to build roads to their own homes.
In addition, some of their family members have gotten involved in road construction, driving up the cost of the projects so they themselves can profit.
Reported by RFA’s Lao Service. Translated by Ounkeo Souksavanh. Written in English by Roseanne Gerin.