Businesses eye benefits of Laos-China railway

The Laos-China railway could be a game changer for the development of Laos but the government must have a clear plan on how to maximise the advantages offered by the US$5.9 billion railway, a businesswoman has said.
Vice President of the Lao National Chamber of Commerce and Industry, Ms Valy Vetsapong, told Vientiane Times on Monday that the railway will have a significant impact on Laos’ economy and will provide huge momentum in strengthening Laos’ connectivity with the rest of the region.
“Many business operators will surely switch to exporting products, particularly agricultural products, using the railway as it will save both time and money,” she said. 

“The railway will result in the growth of tourism, trade and investment, especially in the processing industry, with many companies being interested in setting up factories to process agricultural products for export,” she added.
When the first passenger train to run on the Laos-China railway arrived in Vientiane on Saturday, many business operators were excited at the prospect of the benefits rail transport could bring.  
The electrical multiple unit train, which has been named Lane Xang, was officially delivered to the Laos-China Railway Co., Ltd., a joint venture based in Vientiane in charge of the railway’s construction and operation.
The 422.4-km railway is expected to cut the cost of transport through Laos by 30-40 percent compared to travel by road.
Travel between Kunming and Vientiane over a distance of 1,022 km is expected to take less than 10 hours, compared to 30 hours by bus, according to the China Daily.
Laos’ tourism industry is expected to benefit greatly from the expected rise in rail passenger traffic.
Following the opening of the Laos-China railway in December, the development of secondary infrastructure is expected to take place along the railway corridor.
Ms Valy said businesses are keen to learn more about the government’s plans for development along the railway corridor so they can come up with plans and strategies that will tap the potential offered by the railway.
When more information is provided, Lao business operators will be well placed to study investment opportunities and consider joint ventures with other business partners when the railway comes into service.Ms Valy said the government should carefully consider tax exemptions for railway-related projects as this could be of real benefit to the nation.
Trade facilitation is also essential to ensure the smooth transport of goods along the railway corridor.
The Laos-China railway is a strategic part of China’s Belt and Road Initiative and Laos’ plan to use its landlocked status to become a land link within the region.
Construction of the railway began in December 2016 and is scheduled to be complete and operational in December.

By Somsack Pongkhao
  (Latest Update October 19, 2021)