In February 1997, the Government of Laos formed a joint venture with Thailand's Pacific Transportation to develop 1,700 km of railway throughout Laos, in two phases. The following April, the Laos Peoples Democratic Republic and the Kingdom of Thailand signed a government-to-government agreement on Joint Railway Traffic Working.
Phase 1 will connect Vientiane to Nong Khai and the SRT system, at an estimated project cost of US$40 million. The much more extensive Phase 2 would have provided Laos with international connections to the four other neighbouring countries, Cambodia, China, Burma (Myanmar) and Vietnam. Unfortunately, Pacific Transportation, an affiliate of Thailand's embattled Sahaviraya Group, and which was to have provided (or co-ordinated) most of the finance for the two-phase railway project in Laos, has fallen on very hard times.
Pacific Transportation had developed plans to purchase rolling stock and motive power from Australia, to operate block trains between Bangkok and Vientiane, over SRT tracks. In 1996, in conjunction with Pacific Transportation, SRT conducted special tests over the route, because the Australian rolling stock was oversize for the ruling SRT construction gauge. The results of these trial runs have not been made public, but Pacific Transportation officers believe them to be successful.
A complex technical problem resides in the question of track gauges for Laos. Metre-gauge (1,000 mm) prevails in the railways of mainland southeast Asia, but the trunk railways of China are standardised on the generally more universal (and heavier) Standard 1,435-millimetre gauge. Thus to link Singapore to Kunming, via Malaysia, Thailand and Laos, somewhere there has to be a break of gauge.
The Lao solution, for the time being, is to install metre-gauge in the urgently needed Nong Khai-Vientiane link, but standard in the rest of the country, with, possibly, certain strategic alignments of dual-gauge track. But with four of its five neighbouring countries committed to metre-gauge, this may be open to question.
Construction of the Vientiane railway link was scheduled to start in early 1997, but ground still has to be broken. The current economic crisis means little hope of attracting international finance for infrastructure in southeast Asia.
But Lao ambitions to become landlinked, rather than landlocked, perhaps one day soon the 'Switzerland of Asia', remain undiminished. A possible spur is looming failure to agree more hydropower sales to Thailand. Thus the government of Laos has designated transportation infrastructure as a top national priority, with the rail link to Thailand topping the agenda.