Lao government officials are renegotiating a company’s bid to upgrade a major highway agreed to by the country’s previous prime minister at exorbitant cost, further highlighting concerns over cost overruns and corruption in the landlocked and impoverished Southeast Asian nation.
The Dongdok-Sikeuth road, a highway connecting the campus of Laos National University in the capital Vientiane with the country’s Route 13 North, was to have been improved at a cost of U.S. $54 million, a public works official told RFA’s Lao Service.
“The offer was supported and backed by former prime minister Thongsing Thammavong in February before he stepped down, but under the new prime minister, Thongloun Sisoulith, the price is being changed,” RFA’s source said, speaking on condition of anonymity.
A new agreement has not yet been reached, because government officials estimate the project’s true cost to be $45 million, including $40 million for the work itself and $5 million for interest payments over nine years, the source said.
“The company is now asking $49 million, though,” he said.
Speaking last year in a television program, Minister of Public Works and Transport Bounchanh Sinthavong confirmed that highways and urban roads in Laos “are not up to standard, based on their costs and construction methods.”
Bounchanh added he was able to obtain much lower cost estimates for projects already under construction after assigning independent technicians to inspect them.
Road construction and renovation in Laos are often plagued by corruption, with high costs charged for work of substandard quality that becomes apparent only after completion, sources have previously told RFA.
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, sources have said.
In addition, some family members have gotten involved in road construction, driving up the cost of the projects so they themselves can profit.
Reported and translated by Ounkeo Souksavanh for RFA’s Lao Service. Written in English by Richard Finney.