Lao Government Blocks Funds For Rural Road Repair in Favor of ASEAN Projects in the Capital

laos-roadphoto-nov252015.JPG A road scheduled for upgrade in Laos' capital Vientiane, in an undated photo.

Government authorities in cash-strapped Laos are withholding funds urgently needed to repair flood-damaged roads in the country’s provinces, saying that available resources must be spent on improvements in the capital Vientiane ahead of regional summit meetings next year.

Provincial public works and transport departments may also not draw funds assigned to other needs to carry out repairs, according to a central-government notice sent out in October, government sources told RFA’s Lao Service.

Authorities are now “rushing to repair and improve roads” in the capital, Nouanta, a deputy director of Vientiane’s Public Works and Transport Department, said.

“This must be done in time for the celebration of National Day on December 2 and to accommodate the ASEAN [Association of Southeast Asian Nations] Summit in late 2016,” Nouanta said.

“The main roads are being upgraded and paved, but some roads linked to the provinces have been in continual use for 15 years, and these need to be repaired,” he said while declining to comment on the suspension of government funds needed for the purpose.

Requests denied

Roads in Laos’ provinces were heavily damaged by floods during this year’s rainy season, an official of the Ministry of Public Works and Transport told RFA, speaking on condition of anonymity.

“Departments in the provinces have asked the Ministry for funds to repair the roads, but the Ministry cannot issue the funds,” he said.

“The Ministry has pointed out that the national main road fund is running out because the money is being used to repair roads in Vientiane.”

“The government is also seeking outside loans to help improve the roads,” he said.

Land grants

Meanwhile, the Lao government has granted three parcels of land to the Simeuang Group Company, a Lao development firm, to pay for the construction of five roads along the border with Vietnam in central Laos’ Savannakhet province, one government source said.

The Nov. 16 agreement was made because the government had no money with which to pay its 45 billion kip [U.S. $5,501,117] debt, RFA’s source said, speaking on condition of anonymity.

The unpaved roads were used mainly by trucks transporting timber to Vietnam, though, and are now heavily damaged, a resident of Savannakhet’s Sepon district told RFA.

“Bulldozers were used to clear the roads from Sepon to Phin districts, but the roads were badly damaged when the trucks passed through,” the source said.

Last year, Vietnam and China accounted for 96 percent of the U.S. $1.7 billion total value of Lao wood exports, most of them illegal, according to a report by the World Wide Fund for Nature (WWF) environmental group.


Road construction and renovation in Laos are usually plagued by corruption with exorbitant costs for substandard quality that becomes apparent only after completion, sources previously have told RFA.

Both urban and rural Lao residents suffer from terrible road conditions with flooding during the rainy season and excessively dusty air from dirt roads during the dry season.

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 of their family members have gotten involved in road construction, driving up the cost of the projects so they themselves can profit.

Reported by Ounkeo Souksavanh for RFA’s Lao Service. Translated by Ounkeo Souksavanh. Written in English by Richard Finney.

Add comment

Add your comment by filling out the form below in plain text. Comments are approved by a moderator and can be edited in accordance with RFAs Terms of Use. Comments will not appear in real time. RFA is not responsible for the content of the postings. Please, be respectful of others' point of view and stick to the facts.

View Full Site