What does Vietnam benefit from the Vientiane railway?
A railway project worth about 5 billion USD has been agreed to jointly develop by the Lao and Vietnamese governments. In which, the capital for investment in Vietnam is nearly 1.6 billion USD under the PPP model. The Vietnamese government has agreed to allow Laos to access Vung Ang deep-water port – the closest seaport to the capital Vientiane (Laos).
Currently, the Lao side is about to submit the results of the pre-feasibility study of the trans-Laos railway section to the Lao Ministry of Transport for approval. From the Vietnamese side, a Vietnamese state-owned enterprise is carrying out a feasibility study of a railway section in Vietnam. The railway section in Vietnam is expected to be completed in June 2022 and submitted to the National Assembly of Vietnam in the middle of this year.
The route was built from the capital Vientiane of Laos to the port of Vung Ang in Ha Tinh province, Vietnam. Therefore, the Vientiane – Vung Ang railway is one of the key projects that Ha Tinh province is particularly interested in.
Currently, Ha Tinh is focusing on building Vung Ang Economic Zone to soon become a dynamic economic zone of national and international stature. Along with that, Ha Tinh focuses on attracting investment in Cau Treo International Border Gate Economic Zone and industrial clusters in the province.
Therefore, the Vientiane – Vung Ang railway will contribute to meeting the demand for increasing two-way trade turnover between the two regions. According to the People’s Committee of Ha Tinh province, the province will take advantage of this opportunity to form a logistics center, connecting goods to the gateway port.
According to Ha Tinh’s development plan, logistics service is one of the four key economic sectors of the province that need to focus on creating breakthroughs in development from now until 2030. When the project connecting Vientiane – Vung Ang is completed, The route will contribute to turning Ha Tinh into a logistics center of the North Central region.
In addition, according to Ha Tinh Provincial People’s Committee, the construction of a railway connecting the capital Vientiane – Vung Ang port of Vietnam is a combination, taking advantage of Laos’ central position in ASEAN and Vietnam’s maritime advantages.
The two governments of Laos and Vietnam want the railway to help increase the ability to transship goods at Vung Ang seaport. Specifically, the government aims to receive ships from 5,000-100,000 tons and provide services for 50,000-1,200,000 containers, with cargo weight from 3 million tons to 20 million tons by 2030.
In fact, Vung Ang port is a port with a favorable location, a traffic gateway between central Vietnam, central Laos and northeastern Thailand. According to the Vientiane Times (Laos), the railway will directly connect the commodity markets of Thailand and Myanmar with the Vung Ang port of Vietnam.
The Vientiane Times (Laos) said that when the route officially came into operation, the trade in goods from countries in Southeast Asia was faster and more convenient. Thereby, trade between Vietnam and neighboring countries is facilitated to develop strongly.
In addition, the railway connecting Vientiane (Laos) with Vung Ang (Vietnam) was built with the purpose of connecting with the Laos – China railway. More specifically, from the Laos-China railway connection, it may be more convenient to approach European markets in the future.
Besides the Vientiane – Vung Ang railway, the two governments are implementing an additional expressway connecting the capital Hanoi – the capital Vientiane. According to PetroTrade President and Vice President of the Lao National Chamber of Commerce and Industry, the route was built with the purpose of connecting the two economies of Vietnam and Laos.
The two governments have identified the Vientiane railway line – Vung Ang port and the highway connecting Hanoi capital – Vientiane capital as two strategic connection projects. The two countries invested and built these two projects to help meet the need to increase two-way trade turnover between the two countries.
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