Source: Vientiane Times
Construction of a railway linking Vientiane with the Vung Ang seaport in Vietnam’s central Ha Tinh province is expected to begin in November, an investor involved in the project has said.
The railway, estimated to cost US$5 billion, is a proposed line that the Lao and Vietnamese governments have agreed to jointly develop. It would enable landlocked Laos to access the deep seaport – the closest feasible seaport to Vientiane.
A feasibility study on the 554km railway has been completed, Chairman of the Board of Directors of Petroleum Trading Lao Public Company (PetroTrade), Mr Chanthone Sitthixay, told the President of the National Assembly, Dr Xaysomphone Phomvihane, recently.
The railway is part of the Lao Logistics Link project that PetroTrade – a subsidiary company of PTL Holding Company Limited – was given the green light to partner with the Lao and Vietnamese governments to develop.
The Lao developer is about to submit the results of a feasibility study on the section of railway that passes through Laos to the Ministry of Public Works and Transport for approval.
Meanwhile, a Vietnamese state enterprise has been hired to carry out a feasibility study on the section of the railway in Vietnam. The study is expected to be complete in June and will then be submitted to Vietnam’s National Assembly for approval in the middle of this year.
Previously, a feasibility study on the proposed railway was conducted by the Korea International Cooperation Agency (KOICA), which found the project to be viable.
Mr Chanthone, who is Vice President of the Lao National Chamber of Commerce and Industry, said his company spent millions of dollars on a further feasibility study on a different route based on site surveys. The findings of the study conducted by KOICA were also taken into calculation.
He added that the Vietnamese government has recommended the FLC Group, one of Vietnam’s top 10 largest enterprises and operator of Bamboo Airways, to partner with Laos in bringing the rail project to fruition.
In this regard, the Lao and Vietnamese enterprises are expected to sign a joint venture deal by the end of this month during a planned visit to Laos by Vietnam’s Minister of Planning and Investment.
A concession agreement on the project is expected to be signed next month.
Initially, the developer hopes to construct the section of the planned railway linking Mahaxay district in Khammuan province to the seaport.
If the preparations go to plan, “A groundbreaking ceremony to kick off construction will take place in November,” Mr Chanthone told the NA president.
“If there are no problems on Vietnam’s part, it will take two and a half years to complete construction of the railway from Mahaxay to Vung Ang Port.”
Dr Xaysomphone was briefed on the project during a working tour to the Thanaleng Dry Port and Vientiane Logistics Park in Vientiane, which is also part of the Lao Logistics Link.
The railway will directly connect the cargo markets of Thailand and Myanmar with the Vung Ang Port, in which Laos holds the larger share. The Vietnamese government has agreed that Laos can hold a 60 percent stake in the port.
The Lao-Vietnam Vung Ang Port State Enterprise, a joint venture in which the Lao government holds a 51 percent stake and PetroTrade holds 49 percent, expects to assume management of the port in July.
The port is well positioned to serve as a gateway between central Vietnam, central Laos, and northeastern Thailand.
Shipping cargo through the port including from Thailand’s Issan region to larger Asian markets such as China, the Republic of Korea, Japan and Hong Kong is a cost-effective option.
Meanwhile, incoming cargo destined for Southeast Asian markets will also enjoy more efficient handling.
The railway is also set to link with the Laos-China Railway and onwards to the interconnected rail network that could reach European markets.