Laos Expands Rail Projects

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Sep. 3 – At the end of August a Thai contractor, Sermsaguan Construction Company Ltd., began construction on facilities at Laos’ Thanalaeng station. This station is the start of a railway linking Laos’capital city Vientiane with Thailand’s Nong Khai province. This is just one of many upcoming rail projects for Laos.

The first phase of this project will cost US$18.3 million. The second phase is projected to cost US$22.1 million and the funds will be provided by the Thai government in the form of a grant (thirty percent) and a thirty-year loan (seventy percent). As part of the second phase, the Lao government has engaged a Thai-based consulting company, Team Consulting Engineering and Management Company Ltd., to provide consultancy services.

The Deputy Director General of the Railway Department, Sonesack N. Nhansana, has stated that the new facilities need to be built because of the increasing need of cross-border rail transport for passengers and goods. In addition, this project will further the governments efforts to build an “efficient logistics system for the Lao capital.”

The government has also voted to approve the construction of a US$7 billion high-speed railway to link Vientiane with the Lao-Chinese border, covering a distance of 421km. The project will be financed through a 30-year loan from the Export-Import Bank of China.

The railway is an extension of the Kunming-Singapore Rail route, a leading project of ASEAN, and seen as being integral to further integrating the ASEAN countries. Furthermore, the rail route is part of a larger idea lead by the UN Economic and Social Commission for Asia-Pacific (UNESCAP) for the creation of a Trans-Asian Railway Network – a proposed 114,000km rail system that will link 28 countries across Asia and Europe.

Additionally, Laos has approved a Malaysian investor’s proposal to build a US$5 billion high-speed railway linking the central Savannakhet province with the Lao-Vietnamese border. The company completing the project, Giant Consolidated Ltd, will receive a 50-year concession from the Lao government as part of the agreement.

Pierre Chartier, an economic affairs officer for UNESCAP’s Transport Division, has described railways such as those being built in Laos as a “potential catalyst for trade expansion, economic growth and cultural exchanges at a regional and international level.”

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