Laos-China Railway Project to be Profitable After 23 Years

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Laos-China Railway bridge crossing the Mekong River in Luang Prabang.
Laos-China Railway bridge crossing the Mekong River in Luang Prabang.

The Laos-China Railway is expected to operate for 23 years before turning a profit, according to the Ministry of Planning and Investment.

The project has a high investment value, and capital recovery will take a long time, Lao National Radio reports.

Director-General of the Investment Promotion Department, under Ministry of Planning and Investment, Mr. Outakeo Keodouangsinh, says the Laos-China Railway project is valued at a total of over USD 5.9 billion and operates under a 50-year concession period.

Some 40% of the investment is self-financed, with the other 60% as a loan from China’s Export-Import Bank, according to Director-General Outakeo Keodouangsinh.

Director-General of the Investment Promotion Department, Mr. Outakeo Keodouangsinh.
Director-General of the Investment Promotion Department, Mr. Outakeo Keodouangsinh.

He said that the Laos-China Railway Company will be liable for maintenance costs and other risks once the 50-year concession period expires and the project is handed over to the government of Laos. The firm may also request an extension of its concession from the government.

“Infrastructure development around the station has been agreed upon at four points, including 1,000 hectares in Oudomxay Province and Vientiane Capital stations; and 500 hectares surrounding Vang Vieng and Luang Prabang stations,” said Mr. Outakeo Keodouangsinh.

He noted that the government of Laos would not provide further land for investment surrounding the Laos-China railway project.

“The Lao-China Railway Company is accountable for the land granted to it, including buildings and rent, as well as compensation or resettlement in accordance with the Law of Laos, which is not included in the cost of the railway project,” he added.