Railway development to turn landlocked Laos into a land-link

VIENTIANE (Vientiane Times/ANN) - As Laos is preparing a number of activities to mark the 40th anniversary of the founding of the Lao People’s Democratic Republic that falls on December 2, Vientiane Times has published a number of articles to review achievements in national development and protection tasks made over the past four decades. This article tracks the progress the Lao government has made in turning Laos from a landlocked country into a land-linked nation through railway development.

Already struggling to compete with its giant neighbours and hampered by higher transportation costs when trying to promote itself as a production base, the Lao government is pushing for the development of the rail network in an attempt to switch the landlocked Asian country into a land-linked nation and transit hub for bigger neighbouring economies.

On December 2, the Lao government, in collaboration with its Chinese counterpart, planned to break ground in Vientiane to commence the construction of a high speed rail mega project to connect the capital of Laos [Vientiane] with Boten, a Lao-Chinese border checkpoint, over a distance of 417 km.

Among Laos’ planned four rail projects, the Vientiane-Boten rail line will form part of the regional rail link known as the Kunming-Singapore rail network over a distance of 3,000km. The rail line will link China’s Kunming all the way down to Singapore, passing through Laos, Thailand and the Malaysia.

Lao economic planners are of the view that the rail line, which shall enable interconnectivity once it is operational, will give a significant boost to socio-economic development of Laos given that the current time-consuming high-cost road transport is among the core issues that discourages many foreign investors from pouring money into operating businesses in Laos.

“The rail project will bring tremendous economic returns to Laos,” Deputy Minister of Public Works and Transport Lattanamany Khounnivong told local media recently, citing the development of the Vientiane-Boten railway project.

“Currently, it takes about three days if we are going to transport farm products from Vientiane to reach the Chinese border by road through mountainous terrain. With such time-consuming transport routes, the farm products become rotten. But once the railway is operational, it could take only two or three hours to reach the Chinese border.”

Laos’ existing 3.5 kilometre railway linking Vientiane with Thailand’s Nongkhai province has, to date, not been widely used for goods transport due to the absence of necessary facilities.

Without access to sea routes or a rail network, the two cheaper transportation modes, local businesspeople are suffering from tough competition at the hands of their business rivals in countries in the region due to Lao high transportation costs, making their product prices uncompetitive in global markets.

“Transportation costs in Laos are the highest, comparing to countries in the region,” said president of Lao Agro Industries Co Limited, Loumkham Vongsay.

The company currently manufactures products including pickled garlic, canned sweetcorn, sweetcorn milk, sugar palm seeds in syrup, and pineapple juice.

However it has stopped manufacturing some goods as its prices cannot compete with those manufactured in other countries in the region, the company president explained.

In light of the growing needs of railway development amid greater economic integration, the Lao government has engaged in efforts to develop the rail network in Laos.

The governments of Laos and China signed an agreement last month on the construction of the 40 billion yuan (US$6.28 billion) railway project following talks on the joint venture project for years.

China will be responsible for 70 per cent of the US$6.87 billion investment, while Laos will be responsible for the remainder.

Set to be developed to allow maximum speeds of 160 km per hour for passengers and 120 km per hour for freight, construction of the Vientiane-Boten rail project is expected to take about four and a half years to complete.

The government of China has carried out work to construct the section on the Chinese side to connect with Laos at the border and the planned Lao rail will connect to the Thai network in Nong Khai province of Thailand.

In addition, the Lao government has announced ambitious plans to develop another three rail projects to cover the main regions across the country by using the same international standards - the 1.435-metre standard-gauge rail.

According to the plan, Laos intendeds to develop the Vientiane–Thakhaek–Muya rail project, technically known as the A3 rail project that will link the Kunming-Singapore rail network in the Lao capital with the Vietnamese border over a distance of 450km. The A3 rail line will access to Vung Ang seaport in Vietnam’s Ha Tinh province.

Minister of Public Works and Transport Dr Bounchanh Sinthavong said recently that the government of South Korea, through Korea International Cooperation Agency (KOICA), extended support of another US$3 million to carry out the feasibility study for the project, which is set to begin at the end of this year.

In addition, developers and relevant officials are working on the detailed design of the US$5 billion Savan-Lao Bao rail project technically known as the 3C rail project that will link the Lao central province of Savannakhet to the Lao-Vietnamese Dansavanh-Lao Bao border checkpoint.

In 2012, the Lao government signed an agreement with a Malaysian investor, Giant Rail Company Limited, to develop the 3C rail project some 220km in length.

The Malaysian developer said the project will contribute to the Lao government’s efforts in linking the East-West Economic Corridor involving a railway route from Myanmar to Thailand and Laos and ending with the construction of My Thuy Deep Sea Port at Dong Ha in Quang Tri province of Vietnam.

Additionally, an initial survey was completed on the Vientiane-Pakxe-Chongmek project, technically known as 3D rail project. The 452 km rail line will connect Vangtao-Chongmek Lao-Thai border checkpoint in southern province of Champassak with the Savan-Lao Bao railway project and the Vientiane–Thakhek–Mugia rail project as well as the Vientiane-Boten project.

This means all four railways will be connected and once the planned rail lines are realised, Laos will fully become a land-linked nation and transit hub among its neighbours.