TRAINS are set to reach Laos by the end of next year, with the signing of an agreement in mid-February between the government and Thai conglomerate Shaviriya Group. This paves the way for the private sector steel, information technology and property group to develop a network of up to 1300 km in the landlocked southeast Asian country.

The first phase covers the 20 km link from the recently-completed Friendship Bridge across the Mekong river to the Laos capital at Vientiane. State Railway of Thailand awarded a contract last year for construction of a 4 km line from its 1000mm gauge railhead at Nong Khai to the bridge (RG 7.96 p408).

Costed at 1bn baht, the Laos section is to be built within 18 months. Construction will be undertaken by a joint venture company owned 75% by Saharviriya and 25% by the Laos government. Equity will be provided by the Thai partners, in exchange for a 60 year operating concession and an optional 30 year extension. The JV will have property development rights for hotels and industrial estates along the route, together with an optic fibre telecommunications network. The government has also offered tax concessions for import of construction materials and on operating revenues for the first 18 years.

Laos government spokesman Songkane Luangmuninthorne says the agreement also provides for development of a national network fanning out from Vientiane (table). The links to the Chinese and Vietnamese borders are expected to play a major role in the developing Asean rail network (RG 5.96 p256).

Vientiane - Luang Prabang 220 km
Luang Prabang - Chinese border 220 km
Vientiane - Tha Khaek 337 km
Tha Khaek - Champasak 352 km
Champasak - Chong Mek 60 km
Borikamchai - Vinh (Vietnam) 69 km
Wang Wien - Xieng Khuang 130 km

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