China and Laos will sign a construction contract for a $7.2 billion high-speed railway project planned by cash-strapped Laos, linking the two neighboring countries and extending to Thailand, the Lao government official is charge of the project said.
“Now we are waiting to sign both parties’ contracts on construction between Laos and China,” the Ministry of Public Works and Transport official, speaking on condition of anonymity, told RFA’s Lao Service.
“We’re trying to push for the contract to be signed soon, and it is expected to be inked sometime between the middle and end of this year.”
Lao deputy prime minister and foreign minister Thongloun Sisoulith had discussed the project with Chinese officials last August on the sidelines of a regional meeting in Myanmar
The Chinese side had said that Beijing would speed up studies on the financial implications of the project to pave the way for its commencement, although no specific date had been given.
During Lao Prime Minister Thongsing Thammavong’s official visit to China last April, the two sides agreed that the Lao-Chinese railway project “was crucial to boosting economic and trade cooperation between the two countries,” according to a joint statement.
The original railway construction plan called for China to finance 70 percent of the 420-kilometer (260-mile) rail line linking the capital Vientiane to southwestern China, with work to begin in 2011 and end in 2015, according to the state-owned Vientiane Times.
The Lao parliament gave the go-ahead for the project in October 2012 even after a Chinese construction company pulled out of the venture fearing the rail link would not generate enough profit.
The Manila-based Asian Development Bank has said it believes the project is unaffordable and could plunge Laos into debt.
The railway will form part of a longer link from China’s Yunnan province through Laos, Thailand, and Malaysia to Singapore.
In December 2013, Laos broke ground on another high-speed railway project to connect the country’s western border with Thailand to Vietnam.
The Malaysian company, Giant Consolidated Ltd., is building the $5 billion, 220-kilometer (140-mile) between Savannakhet, on Laos’s southwestern border with Thailand, to the Lao Bao border gate with Vietnam in the east.
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