VIENTIANE, July 2 (Xinhua) -- Laos and Thailand have agreed to start Phase II of the construction of the Laos-Thailand railway, which will link the existing suburban station to central Vientiane, local daily Vientiane Times reported on Tuesday.
The Department of Railways under the Lao Ministry of Public Works and Transport signed a Memorandum of Understanding (MoU) on the project with Thailand's Sermsanguan Construction Co., Ltd on last Friday in Vientiane. The 7.5 km expansion is expected to be completed at the end of 2021, said the Tuesday report.
The MoU was signed by the Director General of the Lao Department of Railways, Sengthavisay Malivanh, and the Project Manager of Sermsanguan Construction, Pongsak Roopkaew, and witnessed by Lao Minister of Public Works and Transport Bounchanh Sinthavong.
Under the agreement, Sermsanguan Construction will take 27 months to complete the work.
Speaking at the MoU signing ceremony, Project Manager for the Laos-Thailand railway Phase II Hinphet Lakhonevong said that the project was financed by a loan from Thailand's Neighboring Countries Economic Development Cooperation Agency (NEDA).
Thailand has provided more than 994 million baht (about 32 million U.S. dollars), of which 30 percent is in the form of a grant and 70 percent is a low-interest loan. Laos currently has only 3.5 km of railway linking the capital to Thailand's Nong Khai province via the Laos-Thailand Friendship Bridge. When the expansion is complete, the track will be 11 km long.
Authorities said that when the railway project is finished and operational, it will result in a significant increase in passenger numbers and tourist arrivals. The railway will provide a shorter route into central Vientiane than travelling by road.
The Railway Management Division said work on Phase II of the railway also includes construction of a container yard, dormitories for staff, and a rail operations office, as well as improvements to signals.