ChinaLao EconomyTransportation - Vehicles

High-Speed Rail On Track To Connect Vientiane To The Region

Source: News Asia, by Jack Board


On the outskirts of the Lao capital, a blue passenger train rattles from its station and across a dry landscape.

Reverberating sirens ring out as boom gates block a nearby road, a handful of motorcyclists almost bemused by the misfortune of being made to wait.

This is the only operating railway in the entire country.

The connector with Thailand spans just 3.5km of Laos itself before crossing the Mekong river on the Thai-Lao Friendship Bridge and towards Nong Khai.

But if China’s ambitious plans are realised, within five years, Laos could have hundreds of kilometres of high-speed rail line connecting its capital to the southern China border and the strategic city of Kunming.

The construction of the 414km project got off to a symbolic start last December, with a ground-breaking ceremony in the north of the country. It followed previous stalled attempts to begin construction and a decade of negotiations.

For Beijing it means its aspirations to link its mainland with Southeast Asia, all the way down to Singapore, will be a step closer to reality. The Chinese want southern access to the sea as part of its One Belt, One Road initiative.

But for Vientiane, a pit stop on this ambitious pathway, the impact could be profound. An already fast-growing city, the leap towards full connectivity with the region will come faster than most Laotians might have imagined.

The proposed rail would travel at speeds up to 160kmh.

The government is talking up the potential of the railway, emphasising a shift in mindset about what was always considered Laos’ major geographic weakness – the fact it is land locked.

Now, with a physical infrastructure connection to the world’s biggest population coming, it is the land links that Vientiane wants to seize upon.

“Previously we had been talking about the disadvantage of the geographic location of the country. But we are seeing this disadvantage turn into an advantage,” said Dr Leeber Leebouapao from the National Institute of Economic Research, a key policy advisor to the central government.

With the agreed-upon Vientiane-Hanoi highway also in the mid-term pipeline, Dr Leeber said he expected the capital to be “booming” as the central point between China and the region’s other hubs.

“After the railway and highway are completed, connectivity will be facilitating more economic relations, more flow of people and money. Flowing in and out. It is a new phenomenon here,” Dr Leeber said.

“This will become a trade centre for investors, factories, banks. Things will change very fast.”

The short Lao railway connects to Thailand via this bridge over the Mekong River.

While the economic viability of the US$6 billion project is yet to be tested, with fears Laos could be crushed by debt, the Asian Development Bank (ADB) in Vientiane believes the market opportunities will be “incredible” for the city and country.

“Will the train help Laos by helping create economic opportunities in the context of it being a land-linked country? Definitely,” said Stephen Schipani, the officer in charge of the ADB-Lao PDR Resident Mission.

“I always say ‘does Laos have access to the sea?’ And people look at you funny because they know Laos doesn’t have direct access to the sea. But in fact it does. It has access to a sea of people.”

That sea could bring new waves of visitors, including millions of tourists from southern China, as well as up to 100,000 overseas workers expected to be needed to complete the project, given Laos’ lack of expertise in the rail industry.

It could also bring new migration from abroad and domestically, as more people chase opportunities in the capital.

Vientiane is expected to see an increase of population of more than 50 per cent in the next decade, swelling it from a sleepy riverside city into, possibly, a strategic axis for trade and growth.

The only train service in Laos runs just 3.5km.

Laos’ relatively small population means it will unlikely be able compete in sectors like manufacturing, but reduced import and export costs are expected to drive potential in other sectors.

“There are opportunities for value-added food, niche agricultural produce and organic crops are a big potential advantage,” Schipani said. “Scheduled train services can move that produce across borders.”

The proposed fast train will travel at 160kmh, reducing travel time from Vientiane to Kunming to just 10 hours.

But the true value of the project may only be realised if and when Laos’ southern counterparts complete their own segments of the railway, at the behest of Beijing. Negotiations about sections elsewhere are ongoing.

“We are just a small country and there is a big market in China,” Dr Leeber said. “The question is how to take advantage of the opportunity. If we don’t, someone else will.”