High-speed railway to link Laos, Vietnam

Posted on November 8, 2012

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The communist regime of Laos PDR have systematically raped and stolen 99.9% of the funds donated by (1) Euro Union (2)ADB,(3)World Bank,it isn’t a wonder the country is low on foreign reserves,this is a money laundering country, they are pleading poverty, these donors should take time to question as to why there are over 20 different banks and luxury vehicles for a population of aproximarely six million including wildlife.  Where has the money gone ?  How many millionares in the Laos PDR?  Something to think about [RFA’s reader]

Chinese companies move out from a massive high speed train project in Laos. However the Lao government confirms to pursue the project seen of strategic importance.

A high-speed railway connecting Laos and Viet Nam, the first of its kind, will soon enter its construction phase and is expected to be operational in the next five years.

The US$5 billion project will be funded by Malaysia’s Giant Consolidated Limited group.

A signing ceremony for the construction contract was held in the Lao capital city of Vientiane on Monday in the presence of Lao Prime Minister Thongsing Thammavong and Malaysian Prime Minister Najib Tun Abdu Razak.

The high-speed railway spans 220 kilometers, running from the Lao central province of Savannakhet to the Lao Bao border gate of neighboring Vietnam.

The railway will be part of the Southeast Asian railway network, which when completed will ensure uninterrupted connectivity between Laos and nearby countries and the city of Kunming in Yunnan Province, southern China.

Jakarta Post

19 – October – 2012 – The Laos-China rail project will go full steam ahead despite China’s withdrawal from the venture.

Parliament in Laos has given the go-ahead for the construction of a U.S. $7 billion Lao-China high-speed railway line project despite China’s withdrawal from the venture, according to a report.

A Chinese construction company has pulled out of the original 420 kilometer (261 mile) joint venture, but China will provide a loan to implement the project, a report in the state-run Vientiane Timessaid Thursday.

RFA – The proposed railway will connect China’s Yunnan province to the Lao capital Vientiane.

Approval for the project was made at an extraordinary session of the National Assembly Thursday “after concluding that it is essential for national development at a time when economic integration is viewed as the future of the region,” the report said.

“The railway is now set to go ahead without any other direct stakeholders, but will be financed by a loan from China,” it said.

“Laos has now decided to assume sole ownership of the project, as it considers that transforming the country from being landlocked to a land link is central to the future of the nation’s development.”

‘Not profitable enough’

The Chinese construction company pulled out of the project “because they felt it would not be profitable enough,” theVientiane Times said.

Leaders from Laos and China are expected to perform a project ground-breaking ceremony during a summit of the Asia-Europe Meeting (ASEM) forum on November 5-6.

The rail project will connect the Lao capital Vientiane to the country’s Luang Namtha province along the border with China, with the network linked further to a line from Kunming, the capital of China’s Yunnan province

Lao Deputy Prime Minister Somsavat Lengsavad reported on the project to the National Assembly, saying the project would attract more foreign investment and boost economic growth.

He said the EXIM Bank of China will provide a loan to cover the cost of construction.

It is not immediately clear how Laos will service its loans for the railway project.

In a report after annual consultations with the Lao government, the Washington-based IMF said on Thursday that the country’s current account deficit has widened and gross international reserves declined, covering only about two months of projected imports, the lowest level in almost a decade.

The Fund said that while Lao macroeconomic policies have remained generally sound, “low reserve coverage and rapid credit growth amid high lending rates have emerged as sources of vulnerability.”

IMF Executive Board Directors stressed to Laos “the importance of replenishing international reserves, to be supported by tightening macroeconomic policies,” among other steps.

In the original rail project agreement signed about two years ago, there were plans for passenger trains to run at speeds of up to 200 kilometers (124 miles) per hour, but the Lao government has decided to reduce this to 160 kilometers (99 miles) per hour for safety reasons, partly due to the route’s hilly terrain, Vientiane Times reported.

Goods trains meanwhile will travel at a maximum speed of 120 kilometers (75 miles) per hour, it said.

More than 100 bridges

Considering the mountainous nature of northern Laos, the railway will require 76 tunnels and 154 bridges, including two bridges across the Mekong River, according to the report.

Under a previous agreement signed between China and Laos two years ago, the Lao government was required to compensate villagers and urban dwellers who will need to be relocated from their land to make way for the rail project.

The compensation plan had represented the Lao government’s 30 percent stake in the project.

But residents have expressed doubts about whether they will receive a fair amount of compensation from authorities.

RFA

Last year, China laid out a plan to extend its high speed rail network all the way to Germany and London to the West and down to Singapore to the south by 2020. And naturally the Internet chorus called it politically untenable and economically unfeasible, a pie-in-the-sky project from an overly ambitious regime. China has a long way to go to prove those naysayers wrong, but thefirst steps are underway. China has hammered out a deal to extend its rail network into northern Laos, the first leg of a line that will–China hopes–ultimately terminate in Singapore.

The eventual plan is to extend the line through Vietnam, Cambodia, Myanmar (Burma), Thailand, and Malaysia on its way to the bottom of the Malay Peninsula. To do so, China will have to negotiate with a host of different governments–some of whom are opposed to one another–in order to economically link Southeast Asia. And it seems China is starting with the path of least resistance.

Laos is one of Asia’s poorest nations, currently maintaining just two miles of railroad. Landlocked and without many natural resources to barter, Laos hopes the railway will increase tourism, revitalize the country’s gambling industry, and otherwise bring outside wealth across the border. Next to Thailand or Vietnam, which may want more control or other political concessions out of the deal, Laos is an easy stretch of track to build and could serve as a demonstration that China is making good on its vision of a connected continent.

Chinese Bullet Train In Shanghai Khalidshou/Wikipedia

As for China, if it can extend its track beyond Laos and into Thailand and/or Burma, it gets an extra layer of economic security via access to the Indian Ocean (and, via oil tanker, Middle Eastern crude) as well as to its Asian neighbors. From a more macro perspective, it’s the first step in integrating a geographic region known historically for sharp political disagreements among neighbors and isolationist regimes (Myanmar, for instance, and formerly Cambodia and China itself). And it’s a first step toward a true trans-Asian network that cold eventually reach west to Russia and beyond. Laos certainly isn’t London, but it’s a start.

PopSci

24 October 2012 – BANGKOK- It was a surprising move announced by China at the end of last week: after confirming and launching two years ago a project of a strategic high speed train line linking Kunming toVientiane as part of the future Trans-Mekong high-speed rail network, Chinese companies involved into the project announced their withdrawal.

China explained its decision by the fact that the project is economically not viable according to a report from the Vientiane Times. But in another surprising move, Laos National Assembly decided in an extraordinary session on Friday to pursue the construction of the US$7 billion high-speed railway project, even though Beijing has withdrawn from the joint venture.

Laos believes that it is of utmost importance to achieve the rail link as it will help to fully decentralize the landlocked country. The small country is in fact the only ASEAN member without a direct sea access.

Laos will meanwhile host a ground-breaking ceremony during the 9th Asia-Europe Meeting Summit on November 5-6 in Vientiane, when top-ranking leaders from both Laos and China will be present.

The 420 km rail project is due to link the capital to Luang Namtha, the border between Laos and China. They would be seven major stops on the way, including two stations in Vientiane and one stop in Phonhong, Vangvieng, Luang Prabang, Oudomxay, Luang Namtha to finally reach the Chinese border.

In the original rail project agreement, trains were due to run at speeds of up to 200 km per hour, but the Lao government has decided to reduce this to 160 km per hour for safety reasons. As the future line will pass through hilly and mountainous terrains, the railway will require the construction of 76 tunnels and 154 bridges, explaining its high cost.

The high-speed rail is due to go further to Thailand, as it will connect with the existing link from the Lao-Thai border to Bangkok. The financing of the last 20 km separating the border rail station to Vientiane city centre was approved earlier this year with loans from Thailand.

The US$ 7 billion cost for the high-speed train will be provided most probably by another Chinese loan, coming from the EXIM Bank of China. The move shows that the Chinese government considers its involvement in Laos as a highly strategic positioning. Over the last decade, China increased its presence in laid-back impoverish Laos by providing aid, loans and ready-made infrastructures. China’s shares in Laos total investment reached already 40% in 2007. Chinese companies are everywhere in the country, building bridges, roads, casinos, airports and massive real estate projects in Vientiane.

What are the reasons to China’s choice of tiny Laos? “Tiny” is a partial answer to it. Poverty is another one. As one of ASEAN poorest country with a GDP of US$ 600 per year, Laos’ needs to get rapidly modernized are immense. Chinese investments were greeted by a rather accommodating attitude from the Laotian government. Of course, shared borders between both countries are also another factor to China’s presence. And finally, with an eye on the future ASEAN Economic Community by 2015, China already gained a privileged position within the unified economic entity…

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