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Lao-Thai rail expansion project starts
Publication Date : 28-08-2013
A Thai contractor starts work today on building facilities at Thanalaeng station, which is the start of the railway linking Vientiane with Thailand's Nong Khai province.
Sermsaguan Construction Company Ltd. won the bidding contest and signed a contract with the Lao government on Tuesday to build the facilities at a cost of almost 144 billion kip (US$18.3 million).
Work to be carried out under the second phase of the railway development project includes building a container yard, dormitories for staff and a rail operations office, as well as improving railway signals, said Deputy Director General of the Railway Department, Ministry of Public Works and Transport, Sonesack N. Nhansana.
Construction is set to be completed within 18 months.
The second phase will be financed through a loan and grant from Thailand's Neighbouring Development Agency amounting to more than 173 billion kip ($22.1 million).
Thirty per cent of this amount will be provided as a grant. The remaining 70 per cent comes in the form of a 30-year loan with the first 10 years free of interest and repayment. This means the Lao government will begin to pay back the debt plus interest after 10 years, and will have to repay in full within the next 20 years.
The 3.5km Vientiane-Nong Khai railway, which opened for service a few years ago, is the first rail link between Laos and Thailand's Nong Khai province, connecting to Thanalaeng village in Hadxaifong district, Vientiane.
Sonesack described the second phase of the project as an ‘effective investment', saying he recognised the need to build the new facilities to meet the growing need for cross-border rail transport for both passengers and goods.
He said the project will add fuel to the government's efforts to create an efficient logistics system for the Lao capital.
The contract was signed on Tuesday by officials from the parties involved, including Lao project director Chanthon Sayakan, his Thai counterpart Pongjareon
Chuenpanichayakun, and Director General of the Lao Railway Department Dr Sompong Pholsena.
The government recently signed a contract with a Thai-based consulting company, Team Consulting Engineering and Management Company Ltd, to provide consultancy services for the implementation of the second phase.
The Lao government is also developing other railway projects as part of efforts to turn landlocked Laos into a land link by becoming a transit hub for neighbouring countries.
The government confirmed to a recent National Assembly session that it will go ahead with a Laos-China high-speed rail project.
The decision was made following approval by the National Assembly some time ago to build the US$7 billion railway to link Vientiane with the Lao-Chinese border over a distance of 421km.
The government has also given the green light to a Malaysian investor to build a US$5 billion high-speed railway to link central Savannakhet province with the Lao-Vietnamese border over a distance of 220km.