Loan to extend Lao railway Bt495 million

Thailand will offer financial aid to Laos to construct a 7.75 km rail line from Tha Nalaeng to Vientiane city due to be completed in two years.

It will allow Thai trains to carry passengers to and from Vientiane and should lead to the first inter-city train services between the two capitals.

Last week, the Neighbouring Countries Economic Development Cooperation Agency signed an agreement with the Lao Ministry of Finance on funding worth Bt1.65 billion; 30% of which is a Bt495 million grant-in-aid and the balance Bt1.15 billion, a low-interest loan with a 10-year grace period.

The Cabinet approved the NEDA grant and loan to Laos, 10 August 2010, to celebrate the 60th diplomatic relationship between the two countries.

Under the first phase, the railway linking Nong Khai province over the First Thai-Lao Friendship Bridge to Tha Nalaeng, about 4 km from the border, was opened in March 2009.

The extension will cover the remaining 7.75 km from Tha Nalaeng to Vientiane station on Khamsavath Road, about 5 km short of the city’s famous That Luang Stupa.

The track will be one-metre gauge but could be adjusted to  standard gauge of 1.46 meters used by high-speed trains later.

Other ongoing projects linked to  financial aid for Laos are: Pakse Airport development Phase 2, Bt184 million; road construction from Phu Du village, Uttradit province to Paklay district, Sayabouly province in Laos, Bt718 million and a road upgrade around Vientiane city to serve the ASEM Summit in November this year.