Plans to restore a French railway in Champassak province, which is nearly 100 years old, have fallen through because the principal investor has pulled out.
Director of the Champassak Planning and Investment Department, Mr Anousak Xattakhoun, yesterday said the company, from the Republic of Korea , had signed a memorandum of understanding with the provincial authorities to renovate the Done Deth-Done Khone railway line in Khong district in 2007, but had now decided to withdraw from the project.
“The company did not give a reason why they have quit, but we think they have been unable to access funds for the project,” Mr Anousak told Vientiane Times on Thursday.
According to the MoU, the Korean company was going to invest US$6.5 million to rebuild and renovate the old railway, built by the French, to make it a tourist attraction. The railway was built in 1917 as a detour for river transport around Khonephapheng waterfall. The renovation project was set for completion by the middle of this year.
New lines, a train station and an imported engine to run on the tracks would have allowed passengers to explore the area. The Lao government would have held 40 percent of the investment, according to railway officials.
Mr Anousak said the decision of the company to leave the project made it a missed investment opportunity.
“We will not fine the company because there is no agreement on the punishment of contracting parties who break the conditions,” he said, adding this would be a factor for provincial authorities to consider in future projects.
The project's director of engineering Somsana Ratsaphong said another Korean company had expressed interest in continuing the project, but no agreement had been signed yet.
Mr Somsana said the new company would need time to study the details of investment and future benefits before making a decision.
Mr Anousak confirmed the provincial administration was negotiating with the new company and drafting a new MoU, which he said would be more concrete to prevent the investor from withdrawing.
“We will check the financial status of the new company thoroughly and will allow it to continue only if they really have the funds in hand,” he said.
The designs for the proposed railway have already bee n completed, he added.
Mr Anousak said there was a lot of business potential in turning the old railway into a new tourist attraction, because the scenery was picturesque and the area was close to Khonephapheng, one of the largest waterfalls in Asia .
“We could make the train journey a part of the Siphandone experience for tourists, a single tour to see the beautiful scenery and visit the waterfall, and then go to Vat Phou, one of the two UNESCO heritage sites in Laos ,” he said.
Their decision was probably right. Building a railway for trains just to serve tourists in that area would be less economic benefit. Perhaps, they think after 100 years they still would not be able to gain their money back, not to mention a big profit.
How many tourists come to that place every year? Probably less than 2000, if not less. On top of that some tourists would prefer to use the another kind of transportion which is more affordable, say buses or even bicyles.
The moral of this topic from my part is "econimic benefit is more important than that we just want to have it."
Unfortunately, our Lao authorities always choose the second one: just to have it, no matter what. The money is from government budget, not from their pockets, they propbably think.
