The groundbreaking ceremony to begin construction of the Laos-China rail project to link Laos with China and other Asean member counties is expected to begin in November if things go as planned, a minister said on Friday.
Minister of Public Works and Transport Dr Bounchanh Sinthavong briefed the media on the progress made on the high-speed railway project at a press conference held shortly after the closing of the three-day biannual meeting between the Cabinet, Vientiane Mayor and provincial governors where the minister reported about the project.
Construction of the project, which was initially estimated to cost US$6.8 billion, will take about five years to complete.
The two governments agreed that state enterprises of both sides join in developing, managing and operating the railway project, which will connect the Lao capital of Vientiane with the Chinese border at a distance of 417 km.
We are preparing to establish the Lao National Railway Enterprise to joint venture with the Chinese enterprise to develop, manage and operate the project, he told the media.
The two governments agreed to directly contribute 40 per cent of the total investment for the project with the Lao government responsible for 30 per cent of this, amounting to $840 million, and the Chinese government contributing 70 per cent.
The enterprises of the two countries will source and be responsible for the remaining 60 per cent of the total investment.
In the event the Lao government struggles to make its contribution of $840 million, the Chinese side has agreed to provide a low-interest loan of $500 million to Laos while the rest will have to be sourced by Laos.
Revenue to be generated from a bauxite mine and three potash mines in Laos are to be used to secure the Chinese loan. The 20-year loan period will carry an annual interest rate of three percent with an interest-only period, i.e. no repayment of principle, for the first five years.
The minister gave assurance that the revenue to be generated from the mines would be sufficient to repay the loan.
In order to ease public concern that the government will have an untenable debt from the project, the minister said the Lao government is responsible for only $840 million as the remaining 60 per cent of the total investment will be sourced by and be the responsibility of the two enterprises.
Dr Bounchan said his ministry has prepared 11 frameworks for the project's implementation including preparing a draft of the co-finance master agreement.
The planned single track with a 1.435-metre standard-gauge rail network will have 31 stations, including five main stations, and 76 tunnels with a total length of 195.78 km. The line will also have 154 bridges of 67.15 km in overall length.
When being used for passenger transport the trains will travel at a max imum speed of 160 km per hour, but when goods are being transported the maximum speed will be 120 km per hour.
The Lao National Assembly approved the project in 2012 as part of plans to turn Laos from a landlocked country into a land-linked nation.
The planned rail project will form part of the regional rail link known as the Kunming-Singapore rail line over a distanc e of 3,000km. The high-speed line will link China's Kunming all the way down to Singapore, passing through Laos, Thailand and Malaysia
Lao government officials have expressed concern about the interest rate on a U.S. $500 million loan from China to build a multibillion-dollar, high-speed railway through the Southeast Asian nation, and have asked political leaders to negotiate a lower rate, a high-ranking Lao official said.
At a three-day biannual cabinet meeting of the Lao government with the mayor of the capital Vientiane and provincial governors on Sept. 23-25, transportation officials said the loans three-percent interest rate was too high compared to that of other loans that China has issued to the country. The meetings second-day agenda included a briefing on the Lao-Chinese railway project.
I was at the meeting, and some officials commented the government should review Laos legislation on loans and take into account the interests of the Lao people, a high-ranking government official, who declined to be name, told RFAs Lao Service on Tuesday.
Other officials asked government leaders to reconsider the U.S. $500 million with a three-percent interest rate because they believe it is too high and want China to reduce it, he said.
China previously has offered loans to developing countries in the region with a two-percent interest rate for railway, civil engineering and infrastructure projects.
It was an open meeting and many officials raised many questions and expressed concerns about the positive and negative prospects for the project, the official said. But it is unlikely that Deputy Prime Minister Somsavat Lengsavad will do anything [because] he just wants to build it [the railway].
The Lao government has set the start date for construction of the U.S. $7-billion, 420- kilometer (261-mile) railway from Chinas border to Vientiane for November, Bounchanh Sinthavong, minister of public works and transport, said Friday during a press briefing following the cabinet meeting, according to the Vientiane Times.
The Lao government is responsible for providing a total of U.S. $840 million for the project, U.S. $500 million of which will come from the 20-year loan from China to be secured by revenue from bauxite and potash mines in Laos.
Under the loan terms, Laos would not have to pay any principle for the first five years, the article said.
Chinese and Lao state enterprises are teaming up to form a joint venture to finance, develop, manage and operate the railway. Once established, the company will apply for the rest of funding for the railway project, using Laos mines as a bank guarantee.
The railway forms part of a larger 3,000-kilometer regional rail link that will run from Kunming in southern Chinas Yunnan province through Laos, Thailand and Malaysia to Singapore.
The Lao parliament approved the high-speed railway project in 2012 amid hopes that it would lower the cost of exports and consumer goods while boosting investment in the poverty-stricken nation, but the project has faced numerous setbacks.
ส่วนรับผิดชอบโครงการในลาวนั้น มี Ministry of Public Works and Transport (MPWT) และผู้ดำเนินงานคือกรมรถไฟลาว โดยได้รับเงินกู้จากสำนักงานความร่วมมือพัฒนาเศรษฐกิจกับประเทศเพื่อนบ้าน(องค์การมหาชน) สพพ. หรือNeighbouring Countries Economic Development Cooperation Agency (Public Organization-NEDA) ในวงเงินกู้ 70-30 และผู้รับเหมาก่อสร้างโครงการคือบริษัท เสริมสงวน ซึ่งเป็นบริษัทของไทยเนื่องจากเป็นไปตามข้อตกลงของ NEDA ในส่วนของงบประมาณในการก่อสร้างทั้งหมดประมาณ 620 ล้าน
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