Regional road and rail projects inching forward to facilitate greater linkage

Economy October 05, 2015 01:00

By THE NATION

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Laos will pursue the development of at least four rail lines that will turn the land-locked country into a land-linked nation.



While a new section of the planned Asian highway linking India, Myanmar, and Thailand was operational in August, Myanmar’s Construction Ministry won parliamentary approval recently for a US$120 million loan to upgrade the Kawkareik-Mawlamyine-Thaton Road.

All countries involved are pushing to make the Greater Mekong East-West Economic Corridor happen. It will not only benefit countries in Southeast Asia but also those in South Asia.

The idea for the corridor was launched in 1992 and involves Cambodia, Laos, Myanmar, Thailand, Vietnam, and Yunnan province in China.

According to the Vientiane Times, Bounchanh Sinthavong, Laos’ minister of Public Works and Transport, said recently that construction of the Laos-China rail project would be a priority.

Initially estimated to cost US$6.8 billion, the rail line is expected to begin in November after both sides agreed on a form of co-finance. The 417-km project will link Vientiane with the Chinese border.

Lao and Thai authorities are also working together to identify a location to construct a new Vientiane-Nong Khai Mekong Bridge to accommodate the regional rail system, which will link China’s Kunming to Singapore, passing through Laos, Thailand and Malaysia.

The second top priority is given to the planned development of the Vientiane–Thakhek–Muya rail project technically known as the A3 rail project that will link the Lao capital with the Vietnamese border over a distance of 450km.

The A3 rail line, linking Laos to Vung Ang seaport in Vietnam’s Ha Tinh province and a Thai seaport, will also connect with the Kunming to Singapore rail network that uses the same 1.435-metre standard rail gauge, the minister said.

He added that the government of the Republic of Korea through Korea International Cooperation Agency (Koica) extended support of US$3 million to carry out the feasibility study, which is set to begin at the end of this year.

In addition, developers and relevant officials are working on detailed design of the US$5 billion Savan-Lao Bao rail project technically known as the 3C rail project that will link the Lao central province of Savannakhet to the Lao-Vietnamese Dansavanh-Lao Bao border checkpoint. Malaysia’s Giant Rail Co Ltd is handling the 220-km project.

The Malaysian developer said the project will contribute to the Lao government’s efforts in linking the East-West Economic Corridor – rail link from Myanmar through Thailand and Laos – to end with construction of My Thuy deepsea port at Dong Ha in Quang Tri province in Vietnam. The initial study on the fourth project, called 3D, is done, the minister said. The project will link Thakhek in Khammuan province to Vang Tao in Champasak that shares a border with Thailand.

Myanmar’s Parliament recently approved the US$120 million loan to upgrade the Kawkareik-Mawlamyine-Thaton Road, a part of the corridor. The Construction Ministry will borrow US$100 million from the Asian Development Bank and $20 million from the ADB’s Asean Infrastructure Fund.

Deputy minister for construction Soe Tint told Parliament that Myanmar agreed to upgrade the Kawkareik-Mawlamyine-Thaton Road by 2012 at the 15th Greater Mekong regional meeting held in Thailand in June 2009. Vietnam, Laos and Thailand upgraded their sections, building a two-four-lane road in line with Asian Highway standards and only Myanmar had to upgrade its section, he said.

The Asian Highway will stretch 3,200 km from Moreh in India and Myanmar’s Myawaddy to Thailand’s Mae Sot.

In June, the cornerstone laying ceremony was held for the building of the Myanmar-Thailand Friendship Bridge No-2, which will link Mae Sot with Myanmar’s Myawaddy.

In August, the 25.6-km road, a part of the highway, was completed.

The Asian Development Bank’s recent study showed that better infrastructure link between South and Southeast Asia would create large gains for both regions. Assuming the removal of all tariffs and a 50 per cent reduction in non-tariff trade barriers applicable to South Asian and Southeast Asian trade, and a 15 per cent reduction in trade costs from improved trade facilitation and infrastructure, the benefits amount to at least $568 billion.

More populous South Asia would see the larger gain of $375 billion (8.9 per cent of combined GDP), while Southeast Asia would see a notable gain of $193 billion (6.4 per cent). The smaller economies in South Asia would likely see the largest gains.

Impediments to the cross-subregional transport persist, though, mostly due to missing links in Myanmar with other gaps in Bangladesh, Cambodia, Laos, Thailand and Vietnam.

Missing road and railway links need to be constructed – transport links such as roads connecting to major highways need to be upgraded, and railways need to be modernised and made compatible. Major ports at Chittagong in Bangladesh, Kolkata in India, and Yangon in Myanmar suffer constrained capacity, efficiency, and connectivity to road and rail networks.

The ADB estimated that the infrastructure investment to link the two subregions would cost US$73 billion: $34 billion for railway projects, $18 billion for roads, $11 billion for ports and $11 billion for energy trade infrastructure.