Railway to feature in next five year-plan

The government is planning to include the construction of a national railway and super-highway in its next five year socio-economic development plan, according to a senior official from the Ministry of Planning and Investment.

Investment Promotion Department Deputy Director General Achong Laomao said on Monday the government was looking for sources of funding to roll out the large-scale projects, with the aim of turning Laos from a landlocked to a land-linked nation.

“We will hold discussions with Chinese counterparts about project funding in March,” he told Vientiane Times on the sidelines of an investment agreement signing ceremony in Vientiane between the Lao government and Oji Paper Co Ltd.

Mr Achong said it was still unclear whether the government would participate in the project or hand over investment to the private sector. In the latter case, a private company would build the basic infrastructure for commercial purposes and charge transit service fees.

Investment Promotion Department Director General Houmpheng Souralay said recently that many foreign investors had expressed interest in the construction and operation of a railway and super-highway in Laos .

But investors need special policies and support from the government if they are to make such a project profitable, he said.

Investors not only want the government to support them in construction and operation of a railway. They also want mining concessions and agreement on other natural resource based investments, saying that two such projects will ensure they can make a profit.

Investors also say that investment in railways is a long-term project as it takes time to generate any income. Mr Houmpheng said that operating a mining project would ensure they had enough capital to build a railway.

He said the development of railways in Laos was feasible because Laos could provide overland transport of goods produced by the emerging economies of China , Thailand and Vietnam . These countries need to transport goods through Laos to boost trade volume.

Mr Houmpheng also said Laos would benefit from being a transit country as local people could offer services to tourists and businesspeople travelling through Laos .

Although the Lao government aims to turn Laos into a land-linked country, it still lacks basic infrastructure. At present there is only 3.5 km of railway, running from the middle of the Vientiane-Nong Khai Friendship Bridge to Thanalaeng station in Vientiane .

The Chinese and Vietnamese governments have given Laos funding for surveys for possible railways from the north to the south and the east to the west.

A Malaysian company is now conducting an economic feasibility study for a railway in Savannakhet province. Such a railway would make the transportation of goods and tourists between Thailand and Vietnam through Laos cheaper and easier.

By Ekaphone Phouthonesy
(Latest Update February 3 , 2010)