Laos and China to Build Bridge to Thailand as Part of Railway Project

Construction News Laos Vietnam

Laos hopes a railway between Vietnam and Thailand and another connecting Thailand and China will help drive socio-economic development in the impoverished country.

Laos and China will jointly build a bridge linking the Southeast Asian nation with northeastern Thailand as part of a U.S. $7.2 billion high-speed railway project that has been delayed by numerous setbacks for more than four years, a Lao government official said.

Officials from both sides agreed to construct the bridge over the Mekong River to link Laos with Thailand’s Nong Khai province during a meeting in which they resolved to build the much-delayed rail line from Kunming in south China’s Yunnan province to the Lao capital Vientiane, a high-ranking official in the Ministry of Public Works and Transport told RFA’s Lao Service.

The decision was made when a Lao delegation led by Lattanamany Khounnyvong, deputy minister of public works and transport, met with a team of Chinese government officials in China on July 3-6.

“The result of the meeting between Lao and Chinese delegations in China is that both sides agreed to identify the area to link the railway to Thailand’s Nong Khai province, and will build new bridge for the railway separately,” he said.

Landlocked Laos expects the railway’s 420-kilometer (261-mile) route through the country to lower the cost of exports and consumer goods while boosting socioeconomic development in the impoverished nation of nearly 7 million people. It is part of a longer railway that will extend southward through the Malay peninsula to Singapore.

“In addition, both sides agreed to take five years to complete construction of a 500-kilometer (310-mile) leg of the railway in China and in Laos, although they did not schedule a start date, said the official, who declined to be named.

Political and financial setbacks have delayed the Lao-China stretch of the railway. The original construction plan called for work to begin in 2011 and be completed this year, according to the state-owned Vientiane Times.

Although the official said Lao and Chinese negotiators could not agree on how to finance the project, a report on earlier this month said the countries had agreed to a 40-60 split of the initial financing costs.

Laos will pay 40 percent, or U.S. $840 million, of the initial construction costs, while China will pay 60 percent, or U.S. $1.26 billion, the report said.

Chinese venture capital firms would contribute the remaining U.S. $5.1 billion, and receive substantial stakes in the railway once it has been completed, it said.

Last month, RFA reported that Laos was setting up a joint company with China to oversee the construction and financing of the project, which a transport ministry official who declined to be named said would cost under U.S. $7 billion, less than the original amount of U.S. $7.2 billion cited by both countries at the recent meeting.

‘The answer is yes’

After the meeting between Lao and Chinese delegations, Lao Deputy Prime Minister Somsavat Lengsavath, who is in charge of economic affairs, told lawmakers at a parliamentary session on July 9 that the rail line would definitely be built.

“I thank all the people’s representatives for their many questions,” he was quoted by Lao National TV as saying. “The first [question] is if the railway will really be constructed. The answer is yes.”

Somsavat also said Lao officials could not yet estimate how many passengers from Thailand, Malaysia, Singapore would use the railway once it was linked to Thailand.

“If we have it first, people will use it, and they we can say,” he told lawmakers.

Following his comments, some citizens expressed concern about whether the high-cost railway project would be worthwhile for people in the country.

“It is not necessary to invest a large sum of money in the railway project,” a resident of Luang Namth province where the railway begins in the northernmost region of Laos, told RFA. “Each province has many problems with roads. Why not use that money to build standard roads throughout the country, which is what people really need?”

Lao officials in charge of the railway project have yet not publicly disclosed maintenance and other costs not included in the $7.2 billion price tag.