INFRASTRUCTURE developer Deoca Group of Vietnam has signed a joint venture agreement with Petroleum Trading Lao (PetroTrade) to build a railway between Vientiane, the capital of Laos, and the port of Vung Ang in Vietnam.

The Laos - Vietnam Railway Project (LVRP) would involve the construction of a 555km double-track 1435m-gauge railway, electrified throughout and with a maximum speed of 150km/h. It is expected to cost a total of $US 6.3bn to build.

Deoca and PetroTrade would invest $US 1.2bn in building the 103km section from Vung Ang to the border crossing with Laos at the Mu Gia pass in the Vietnamese province of Quang Binh.

This section of the project would be procured as a public–private partnership (PPP). Deoca chairman, Mr Ho Minh Hoang, says that the two companies will report back to their respective governments to seek approval for the deal.

Last year the government of Laos commissioned a feasibility study for LVRP, which would extend into Vietnam the railway to Vientiane from Kunming in China, which was officially opened on December 3 2021.

In July 2021 the government signed a memorandum of understanding (MoU) with PetroTrade to oversee the study. PetroTrade would be responsible for awarding the consultancy contract, with work expected to be completed within 24 months.

Fuel distributor PetroTrade operates a network of 118 service stations in Laos, supplying over 143 million litres of fuel a year from five fuel storage sites with a total storage capacity of 5.5 million litres.

The company is involved in the development of Vung Ang, the nearest seaport to landlocked Laos, where the government of Vietnam has formed the Vung Ang Seaport Laos-Vietnam Development State Enterprise in partnership with the government of Laos.

According to customs data, trade between Vietnam and Laos grew by 24% year-on-year in 2022 to reach $US 1.7bn. Vietnam exported goods worth $US 656.4m to Laos, up 10.4% on 2021, while it purchased imports from Laos worth $US 1.05bn, up 34.6% year-on-year.

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