Lao Economy

Laos; From Land Locked To Land Linked

Source: The Nation


LAOS is embarking on one of its most ambitious projects yet – a series of rail networks which will link the country with dominant seaports in Thailand, Vietnam and Cambodia.

With a population of about 6.7 million, Laos aims to lift itself from the status of least-developed nation to a middle-income country by 2030 by strengthening international economic partnerships, Savankhone Razmountry, Vice Minister of Information, Culture and Tourism, told Asia News Network news editors recently.

In partnership with China, the strategically designed networks are part of the Beijing-inspired One Belt and One Road Initiative, which Laos hopes will help turn it from a land-locked nation into one which effectively links various countries.

The beneficial rail networks will serve both passengers and freight, particularly from China’s adjacent southern-most province of Yunnan. Merchandise will have global market access with the development of not only seaports in Vietnam and Cambodia but also primarily |connecting Thailand’s already well-established Laem Chabang deep-sea port, which lies 670 kilometres south of Vientiane.

Thailand itself is developing a railway network with Laos via two rail projects in the Northeast. The first is to double the existing track for freight, in which the terms of reference for construction will be issued by the Thai Transport Ministry this month.

Another is a parallel new high-speed train project in partnership with China. During the Brics (Brazil, Russia, India, China, South Africa) Summit last week in Xiamen, Prime Minister Prayuth Chan-o-cha witnessed the signing of the design and supervised draft contracts for the first phase of the railway project, according to Transport Minister Arkhom Termpittayapaisith.

253km track

This first phase is a 253-kilometre-long railway track, which will allow trains to hit speeds of up to 250 km per hour, linking the capital Bangkok to the northeastern province of Nakhon Ratchasima.

In the second phase, the line will run from Nakhon Ratchasima to Nong Khai on the border with Laos, where it will connect with the China-Laos railway presently under construction.

After the whole project steams to completion, Bangkok and Kunming – the capital of Yunnan province in China’s southwest – will be connected by the modern railway.

“The railway will be an artery linking Thailand and Laos, China and other countries through China. It will upgrade Thailand’s role as regional transport hub and contribute to economic growth in the region,” Huang Bin, head of the Chinese department at Kasikorn Research Centre, was quoted by Xinhua news agency as saying.

Laos currently has just 3.5km of track linking Vientiane with Thailand’s rail network in Nong Khai. But this is set to change radically.

Work on the Lao-China Rail is already on track, from the Lao border town of Boten.

More than 8 per cent of the work on the 414km route to Vientiane has been done. When completed in 2021, the rail lines will link up with the 3.5km line to Nong Khai. From there, goods can be transported |by Thailand’s own rail network on the 670km journey to Laem Chabang.

This deep-sea port is the 15th largest in the world.

With the new railway from Laos via Thailand’s northeast, the intake of merchandise by rail is projected to increase to 30 per cent from the current 9 per cent.

Deputy director-general of the Lao Railway Department Sengtha-visay Malivanh said Laos hopes to commence the freight rail journey to Laem Chabang by the end of this year.

“We want to start now and not have to wait for 2021. An MoU has already been signed with the Thai Transport Ministry. This will cut transportation costs by trucks, and will be more efficient,” he remarked.

Six rail networks

Laos is building a container yard at its Thanalaeng Railway Station on the outskirts of Vientiane as an extension of the Laos-Thailand railway. This will extend the track from Thanalaeng Station to Vientiane city centre – a distance of 7.5km – and is expected to be ready by July 2020.

This is one of the six rail network projects in Laos, which has taken on the initiative with a geographical strategy in mind. The others are the Laos-China Railway Project, Savannakhet-Lao Bao to the Vietnamese port of Dongha, Vientiane-Thakhek-Mu Gia to the Vietnamese port of Vung Anh, Thakhek-Savannakhet-Pakxe-Vangtau, and Pakxe-Veunkham (Laos-Cambodian border).

The prized Laos-China Railways project is proving a challenge as Laos has little experience in building, let alone managing, railways. Up to 47 tunnels have to be constructed with the help of 17,000 Chinese workers to accommodate trains from Yunnan. The number is set to rise in the coming years.

The US$6.1-billion (Bt202 billion) investment is slated as a public-private partnership under a build-operate and transfer agreement. Lao has a 40 per cent stake in the venture and is forking out $730 million in cash. China, which has the bulk of 60 per cent, is helping to organise a syndication of bank loans. The joint venture operates on a government-to-government basis with special incentives. These include rights for commercial developments alongside the stations to make the project more commercially viable.

200 km/h 

The passenger trains will be able to reach speeds of up to 200 km per hour on flat land and 160 km/h through mountainous terrain; freight trains will travel at 120 km/hour. The trains will go through 32 stations across five Laotian provinces.

A construction consortium of six Chinese companies has been |specially selected based on their experience as the “hi-tech” nature of the project leaves no room for |mistakes, Lao officials assert.

The land to be expropriated on each side of the track is 50 metres on flat land. Negotiations with the owners of land where trains will pass began nine months ago.

Pothong Ngonphachanh, another official from the Lao Railway Department, said construction would not begin until compensation to landowners is settled. He also said more than 100 families near Luang Prabang will have to be moved out to make way for the rail lines.

The Lao government is bringing in some 2,500 personnel to operate the train networks on completion. The initial lot of 200 people are being trained now.