Indonesian consortium plans $2 billion Vietnam-Laos railway link

By Sen    October 22, 2019 | 01:40 am PT
Indonesian consortium plans $2 billion Vietnam-Laos railway link
A worker operates a railway switch in Vietnam. Photo by VnExpress.
The Indonesia Railway Development Consortium is planning to build a 400 km Vietnam-Laos rail route for an estimated $1.9 billion.

A cooperation agreement on the rail route has been signed by the consortium, Vietnam's HT Construction company, and Laos's Petroleum Trading Lao Public Company (PetroTrade), Vietnam News Agency quoted an Indonesian government official as saying on Monday.

The deal was struck on the sidelines of a bilateral meeting between Indonesian President Joko Widodo and Lao Prime Minister Thongloun Sisoulith in 2017.

The project is scheduled to begin construction by the end of 2021 and be completed in 2024. PT INKA, an Indonesian rolling stock manufacturer, plans to invest 9,000 billion rupiah ($639 million) in the project.

Budi Noviantoro, CEO of PT INKA, said his company was still waiting for PetroTrade to finish up their field survey.

The proposal is for trains to run at 90-120 kph on the 400-kilometer route linking Thakhek town in south central Laos and Vung Ang Port in Vietnam's central province of Ha Tinh.

The project will bolster trade between Indonesia and Laos. Indonesia exports 6.5 million of tons per year to and imports a million tons of potassium per year from Laos.

The Vietnam-Laos railroad is a continuation of INKA's ambition to dominate the rolling stock market in Southeast Asia by 2020.

In 2018, the company shook hands with Thailand's Thanakorn company to carry out large scale projects of the Thai government involving seven double-railroads with a total length of 933 kilometers for an estimated investment of $3.76 billion.

In March, Vietnam and Laos announced a mutual agreement to build a 555-kilometer railroad linking Laos capital of Vientiane with Vung Ang. The two countries are carrying out a feasibility study for the project with support from the Korea International Cooperation Agency (KOICA).

The March announcement did not specify the investment involved, only saying that funds will be drawn from both nations' national budgets, private sector and other sources.

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