(KPL) An enlarged meeting of the government for 2014-2015 held from 23-25 September in Vientiane under the chairmanship of Prime Minister Thongsing Thammavong has approved an action plan of the Ministry of Transport and Public Works to start the construction of the Laos-China rail project by early November 2015 if things go as planned.

Dr Bounchanh Sinthavong, Minister of Public Works and Transport briefed the media on the progress made regarding the high-speed railway project at a press conference held shortly after the closing of the meeting on the construction of the project, which has been initially estimated to cost US$6.8 billion and take about five years to complete.

The two governments agreed that state enterprises of both sides joint venture 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 percent of the total investment for the project with the Lao government responsible for 30 percent of this, amounting to US$840 million, and the Chinese government contributing 70 percent.

The enterprises of the two countries will source and be responsible for the remaining 60 percent of the total investment.

In the event the Lao government struggles to make its contribution of US$840 million, the Chinese side has agreed to provide a low-interest loan of US$500 million to Laos while the rest will have to be sourced by Laos.

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 US$840 million as the remaining 60 percent 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 maximum 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 distance of 3,000km. The high-speed line will link China's Kunming all the way down to Singapore, passing through Laos, Thailand and Malaysia.

KPL