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Lao-Thai Train To Provide Logistic Services In 2015

Logistic facilities at Thanalaeng Train Station in Vientiane have begun to take shape after eight months of construction, according to a Lao railway official.

The Lao Railway Authority’s Railway Management Division Chief, Mr Somsana Rasaphone said recently that the new facilities, which will enable the train station to provide freight services, are now some 23 percent complete.

At present, the train station only provides services to passengers who want to travel by train from Vientiane to Bangkok and back due to lack of the logistics facilities.

Construction of the container yard and lifting facilities at the train station began at the end of last year and was scheduled to be completed within 18 months. The Lao government hopes to open the rail freight service ahead of the establishment of the Asean Economic Community.

The construction of the logistic facilities is the second phase of the Lao-Thai railway development project. The project is being financed through a loan and grant from Thailand’s Neighbouring Development Agency amounting to more than 173 billion kip (US$22.1 million).

Thirty percent of this fund is a grant. The remaining 70 percent comes in the form of a 30-year loan with the first 10 years being free of interest and repayments. This means the Lao government will begin to pay back the debt plus interest after 10 years, and will have to repay in full within the following 20 years.

The first phase of the Lao-Thai railway project was the construction of 3.5km of rail from the middle of Vientiane-Nongkhai Friendship Bridge to Thanalaeng train station in Vientiane. The cross border rail service opened for service a few years ago.

The Lao government considers the railway link with the neighbouring country as one of the strategies to turn the nation from being landlocked into becoming a land-link of the region.

The Thai government hopes to expand rail services to neighbouring countries so they can increase trade and tourism exchanges. Thailand is one of Laos’ largest trading partners.

The Lao government has also given the green light to a Malaysian investor to build a US$5 billion high-speed railway to link central Savannakhet province with the Lao-Vietnamese border over a distance of 220km.

The government also plans to build a high speed rail link from Vientiane to China. At present, the government is still in the process negotiating a loan agreement with a Chinese bank. The Lao-China high speed rail project is a part of the China-Asean Railway.

The rail aims to increase trade value between Asean and China after the two economies began to implement the free trade agreement in 2010. Laos expects to gain benefit from the project as it will boost exports and investment in the country.

Source: Vientiane Times