In a significant move to bolster their respective railway sectors and enhance regional trade within the Pan-Asian railway initiative, the Lao National Railway Enterprise (LNRE) and Keretapi Tanah Melayu Bhd (KTMB) have signed a memorandum of cooperation this month.
Under the terms of the agreement, Laos will open its rail network to KTMB trains, enabling them to operate within its borders. In reciprocity, LNRE trains will also gain access to the Malaysian rail network. In this regard, both parties have committed to strictly adhere to international technical standards for railway operations.
This collaboration signifies a notable stride for Laos as it asserts itself as a pivotal player in the Pan-Asian Rail network, following the nearly two-year successful operations of the Laos-China Railway—a 409-kilometer link connecting Vientiane Capital in Laos to Kunming in China.
By leveraging the high-speed railway, Laos is positioning itself as a vital logistics hub for Southeast Asia, particularly in trade with China. With escalating costs associated with sea and freight transportation, KTMB’s Executive Officer, Mohammad Rani, informed that a rail journey to China takes merely eight days compared to the 14 to 21 days required for sea transport, resulting in significant cost savings.
The Vientiane line is a crucial link in this network that offers three key routes: the central route linking Kunming, Laos, and Bangkok; the western route extending through Myanmar and Thailand; and the eastern route traversing Vietnam, Cambodia, and Thailand before converging in Bangkok and extending southwards towards Malaysia and Singapore. These options will forge fresh trade opportunities in Southeast Asia, ultimately driving down logistics costs as regional countries prioritize their infrastructure development.
The Pan-Asian Railway is a network of railways that connects Kunming, Singapore, and all the countries of mainland Southeast Asia. The Pan-Asia rail network is also part of the much more ambitious Trans-Asian Rail network, which plans to facilitate trade and travel between Europe and Asia.