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Photo : The Chinese-built high-speed train at Boten station. Credit: Kalinga Seneviratne - Photo: 2024

China-Built Laos Railway Could Be a Game Changer for Asian Connectivity

By Kalinga Seneviratne

VIENTIANE, Laos | 14 July 2024 (IDN) — A direct train service between the Thai capital Bangkok and Laotian capital Vientiane will begin on July 19 according to Thai Railway sources, that could herald a game changer for the Association of Southeast Asian Nations (ASEAN) connectivity, making the dream of a pan-Asian railway a step closer.

Once this becomes a regular service, it would be practically possible to travel by train from Singapore to Beijing via Malaysia, Thailand and Laos.

At Boten on the Laos-China border, when I visited an exhibition on the first floor of the multi-story headquarters of the Haicheng Development Group, a map of the planned railway connections across the ASEAN region caught my attention.

The exhibits are focused on how the company plans to develop Boten into a modern metropolis like Singapore or Hong Kong—not with a modern port but a railway hub for the region. It shows how the railways coming from China and going through Boten to Laos, Thailand, Myanmar, Cambodia, Vietnam, Malaysia and Singapore would potentially make the region a nirvana for trade, tourism and cultural interaction.

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The map of planned railway connectivity across Southeast Asia through the BRI project.

The China-built 414 km long railway across land-locked Laos costing $5.9 billion is the linchpin of the expanding connectivity across Southeast Asia. The Laos railway is a technological masterpiece that is becoming a major advertisement for China’s Belt and Road Initiative (BRI)—even though it is often described as a “debt trap” by western (and Japanese) media who point out the project cost is about 39 % of Laos’s GDP and Laos will be choked with debts for at least two decades.

But Laotians, who are now patronizing the trains in droves, dismiss any talk of a debt trap.

“I don’t see it as a debt trap. Most Laotians don’t see it that way either”, said a government development economist, who does not want to be named because he has no permission to speak to the media. “China has helped us to catapult into the 21st century. It is an economic opportunity for a land-locked nation. I would like to ask the critics, would you build it for us?”

When I took the high-speed train recently from Boten—on the Chinese border—to Laos’s capital Vientiane, I was greatly impressed with the efficiency of the service, and the technological feat of building such a railway through some of the most rugged terrain in Asia, that included 74 tunnels. With just 3 stops on the way, you arrive at the Laotian capital in just over 3 hours, a journey which would have taken 2–3 days before the railway came.

The high-speed train is operated like an airline, with the stations in the main cities looking like airport terminals. Like at airports, passengers and baggage go through security x-ray machines, and they have to wait in a large transit hall with cafés and shops, until about 5 minutes before the train arrives, when their boarding tickets are checked before entering the platform. During the journey, while the train travels at between 150-160km/hr., cabin crews dressed like air hostesses come with trollies selling eats and drinks.

“People fail to understand that Laos is a landlocked country, and logistically we are disadvantaged at doing business with other countries. Laos shipments were going mainly through Thailand and the costs were very high. This rail has high potential to assist Laos exports of minerals, agriculture and manufacturing produce to China and other countries’” Economics Professor and Vice President of Laos National University, Phouphet Kyophilavong told IDN in an interview. “It’s a big opportunity for us in terms of economic development. It should attract FDIs from China and other countries”.

“Before the railway, travelling to the north was very difficult. Roads were bad, too many accidents and other problems. Now even poor people can travel to Vientiane and other parts, less costly than bus and air”, added Prof Phouphet.

Laos-China Railway Company (LCR) that runs the rail system is a joint venture between three Chinese state-owned enterprises that collectively hold a 70% ownership stake and one Laos state-owned enterprise that owns a 30% ownership stake. The agreement was signed in 2016 as a build-operate-transfer (BOT) concession agreement with the Government of Laos.

Laos—which was a French colony for almost a century in the 19th and 20th centuries—never had a railway. Thus, the Chinese have set up the Laos Railway Vocational Training College in Vientiane to train a whole team of Laotians to run their railway.

Twenty-year-old, Fony Sulijul, who comes from a poor northern Laos village near Boten is training at the College to become a railway technician. He told IDN that the railway is creating opportunities for young people in those remote areas to come to Vientiane to study, because it wouldn’t take 2–3 days to go back home—it takes less than10 hours now.

Chinese experts train

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Photo: Goods trains at Luang Prabang railway station. Credit: Kalinga Seneviratne

While he studies Chinese at a local language school here in the evenings, during the day he is trained at the college to become a railway technician.

“Chinese experts train us in working in the railway electrical system and its management. They teach in Chinese language but with Laos co-trainers,” he said. “After finishing the 3 years diploma course, I want to work for the Laos railway. I would like to be a train driver”. He added, that currently, the trains are driven by Chinese with a Laotian co-driver in the cabin.

Fony said that the Chinese trainers tell them “We want to train you and leave you to run the train system” in three years time.

The World Bank in a report titled ‘Land-locked to Land-linked’ published in 2020 said that, if the countries undertake complimentary policy reforms, the Laos-China railway could make Laos more attractive as an investment destination and link it to major production and consumption areas in China and the ASEAN region, allowing firms to access global value chains.

“A number of planned export processing zones around train stations could serve as attractive investment locations, as long as they are properly equipped and effectively managed. With efficient logistics services, Laos PDR could develop into a logistics hub, while targeted investments in agriculture and tourism could result in new export opportunities” the report said, predicting that with proper government policies, trade flows between Laos and China could be increased 3 folds via the rail network.

Overseas critics have pointed out that the rail stations built in cities like Boten, Luang Prabang and Vientiane are 10 km or more from the city centre. But local development planners pointed out to IDN that this is a deliberate forward-looking strategy to develop industrial zones surrounded by new “villages” to spur economic activity and spread the populations from congested city centers.

Already, container goods trains ply the rail network at regular intervals. Professor Phouphet said he is currently doing a study on how to maximize the use of the railway and what policies the government need to come up with.

He argues that the Laos Railway project would take a long time to see economic returns. “But the social and economic impact on the society is already showing positive results. Surely, we have debts. But with China we can negotiate on that” Professor Phouphet says confidently.  “China will not allow its neighbours to fail economically. Terms are always renegotiated. They(outsiders) always criticize Chinese loans.  But this is a significant loan for Laos economic development”. [IDN-InDepthNews]

Photo (top): The Chinese-built high-speed train at Boten station. Credit: Kalinga Seneviratne

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