Laos-China railway opens as experts raise concerns over mounting debt

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Vientiane [Laos], December 3 (ANI): Laos has opened a USD 6 billion Chinese-built railway on Friday, the biggest public works project in its history, which analysts warn could expose the poor south-east Asian country to financial risk or political coercion from Beijing, reported Financial Times.

The 414 km line — runs from Boten, near the Chinese border, to Laos’ capital Vientiane — has been constructed under Beijing’s Belt and Road Initiative, Xi Jinping’s signature infrastructure programme, said the Financial Times.

Experts have raised concerns over the massive railway line built with the financial assistance of Beijing as they worry in the near future the line might be similar to the Hambantota port in Sri Lanka.

The Sri Lankan Port was also built with China’s financial assistance and was leased to Beijing after Colombo struggled to service its debt.


Experts doubt whether Laos will be able to manage its finances.

“This is one of the main concerns I have: how they will service the debt,” Financial Time quoted Professor of logistics at Thammasat Business School in Bangkok, Ruth Banomyong as saying. Ruth also said that high-speed rail has always been questionable economically.

The railway’s construction costs were equivalent to almost a third of Laos’ GDP. Of that amount, Laos-China Railway Company (LCRC), the special purpose company building and running the railway, has borrowed USD 3.54 bn from China Eximbank, according to the Financial Times. (ANI)

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