Indonesia announces start date for $1.9bn Vietnam-Laos rail link

The Indonesia Railway Development Consortium has announced plans to begin work in 2021 on a 400km rail line between Vietnam and Laos for a price of $1.9bn

The consortium is made up of INKA, Indonesia’s state-owned train maker, and Indonesian Railways Company, its main operating company. It also includes electronics company Len Industri and contractor Waskita Karya.

The consortium has signed a cooperation agreement with Vietnam’s HT Construction company and Laos’ PetroTrade.

The deal was first proposed during a 2017 bilateral meeting between Indonesian President Joko Widodo and Lao Prime Minister Thongloun Sisoulith in 2017. The project is now scheduled to begin on site by the end of 2021 and to be complete in 2024.

One of the main investors will be INKA, which plans to raise $640m for the scheme. Budi Noviantoro, the chief executive of INKA, said his company was waiting for PetroTrade to complete its survey of the route before announcing more definite plans.

The partners aim to run trains at up to 120km/h between Thakhek in south-central Laos and Vung Ang Port in Vietnam’s central province of Ha Tinh.

In March, Vietnam and Laos announced an agreement to build a 555km rail link between Vientiane, the capital of Laos, and Vung Ang. The two countries are carrying out a feasibility study for the project with support from the Korea International Cooperation Agency.

Meanwhile, China is building a $7bn north-south rail line through Laos. This a 414km link, which is more than half finished, runs between the Yunnan provincial capital of Kunming and Vientiane. It is due to enter service in December 2021.

Image: The town of Thakhek in Laos, where the line will have its eastern terminus (Tango/CC BY-SA 4.0)

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