Laotian authorities balk at China’s loan terms for railway project – Radio Free Asia
Lao government officials have expressed concern over the interest rate on a $ 500 million loan from China to build a multibillion-dollar high-speed railroad through the South Asian nation “Is, and have asked political leaders to negotiate a lower rate,” a Lao official said.
In a three-day biannual meeting of the Lao government cabinet with the mayor of the capital Vientiane and provincial governors from September 23 to 25, transport officials said the 3% interest rate on the loan was too much. high compared to other loans that China has issued to the country. The agenda for the second day of the meeting included a briefing on the Lao-Chinese railway project.
“I was at the meeting and some officials said the government should review Laos’ loan laws and take into account the interests of the Lao people,” said a senior government official, who declined to give his name. , in the Laotian service of RFA. Tuesday.
Other officials have called on government leaders to reconsider the US $ 500 million with an interest rate of 3% because they think it is too high and want China to reduce it, he said. he declares.
China has previously offered loans to developing countries in the region with an interest rate of 2% for railway, civil engineering and infrastructure projects.
“It was an open meeting and many officials raised many questions and expressed concerns about the positive and negative prospects for the project,” the official said. “But Deputy Prime Minister Somsavat Lengsavad is unlikely to do anything [because] he just wants to build it [the railway]. ”
The Laotian government has set a start date for construction of the US $ 7 billion, 420-kilometer (261-mile) Chinese border railroad to Vientiane for November, Bounchanh Sinthavong, Minister of Public Works and Human Resources, said on Friday. Transport, during a press briefing. according to the council of ministers, according to the Vientiane weather.
The Laotian government is responsible for providing a total of US $ 840 million to the project, of which US $ 500 million will come from China’s 20-year loan that will be secured by revenues from the bauxite and potash mines in Laos.
Under the terms of the loan, Laos would not have to pay principal for the first five years, according to the article.
Chinese and Laotian state-owned enterprises are joining together to form a joint venture to finance, develop, manage and operate the railway. Once established, the company will seek the rest of the financing for the rail project, using the mines in Laos as a bank guarantee.
The railway is part of a larger 3,000-kilometer regional rail link that will stretch from Kunming in southern China’s Yunnan province through Laos, Thailand and Malaysia to Singapore .
The Laotian parliament approved the high-speed railway project in 2012 in the hope that it would lower the cost of exports and consumer goods while boosting investment in the poverty-stricken country, but the project has experienced many setbacks.
Reported by the Laos service of RFA. Translated by Ounkeo Souksavanh. Written in English by Roseanne Gerin.