Ministry of Public Works and Transportation (PWT) reveals policy on transportation and logistics service with other countries in order to shift Lao PDR from a landlocked country to a logistic hub. Previously, the Lao government has set aside a massive budget for improving infrastructure together with creating legislation through the signing of bilateral and multilateral transportation agreements with almost all neighboring countries. At present, the government selects nine locations for the development of the international logistics parks in the country. The logistic parks will compile and distribute goods leading to cheaper transportation cost, on-time delivery and increasing competitiveness of Lao PDR’s transportation the future.
Mr. Viengsavath Siphandone, Director-General of Transportation Department, PWT made a speech at the launching of Savan Logistics Company in Savannakhet Province that “the Lao government foresees Lao PDR’s potential as a strategic location. The Lao government has a strategy to transform Lao PDR from landlocked country into the logistic hub in the region. Therefore, the government has approved massive budget for developing and improving the transport infrastructure in order to link with the neighboring countries.
In addition, Lao PDR signed bilateral transport agreements with all neighboring countries except Myanmar with whom the agreement is under the process of negotiation. Also, Lao PDR signed few trilateral and multilateral transport agreements such as Lao-Vietnam-Thailand, Laos-Vietnam-Cambodia, the Great Mekong Sub-Regional Cross-Border Transport Agreement (GMS CBTA), and the ASEAN Framework Agreement. In practice, only the bilateral agreements have been implemented that mainly relates to utilizing vehicles of the neighboring countries due to the fact that Lao transportation vehicles lack capability to travel for long distances to the seaports of the neighboring countries.
In the past, the development and improvement of the infrastructure especially roads, bridges, seaports, and so on could facilitate transportation, travelling and trade only to some extent. It does not endorse and guarantee the country’s strategy to transform completely from a landlocked to a land-linked country. If Lao PDR only has infrastructure in place without logistic services, the logistics operators in the region and neighboring countries will take whole benefit in this area while Lao operators will reap only minor benefits but the country will have the massive responsibility in terms of national budget for the infrastructure’s maintenance.
The Director-General further reveals that to address the situation, the ministry adopted a strategic plan for transportation and logistics in Lao PDR and this plan was officially approved by the Lao government in 2015. Moreover, Lao PDR has also become a member of United Nations Economic and Social Commission for Asia Pacific (UNESCAP) for Dry Ports, which sets aside nine locations that are assigned for the international logistics parks in the country including: 1. Houayxai in Bokeo, 2. Nateuy in Luang Namtha, 3. Xay in Oudomxay, 4. Luang Prabang province, 5. Thanalaeng in Vientiane, 6. Lak Xao in Borikhamxay, 7. Thakhaek in Khammuan, 8. Xeno in Savannakhet, and 9. Vangtao in Champassak. These logistic improvements are underway, particulary, Thanalaeng where there is ongoing negotiation with Japan for the collaborate investment under Private-Public Partnership (PPP) while the logistic park in Savannakhet Province has recently opened for service.
Mr. Viengsavath Siphandone reaffirmed that the implementation of these logistics services is in line with the strategic development plan for transportation and logistics of the Lao PDR as well as the international agreements that Lao PDR is a member. It is urgently important to consolidate, and distribute goods cargo. This will integrate transportation services for both inbound and outbound cargoes and lower transportation costs and help to solve illegal parking of container trucks along public roads, which damages road conditions and power road safety. Most importantly, it will generate real income from cross border transportation services. This will also promote more investment and encourage more production because entrepreneurs will be able to enjoy convenient services for on-time delivery to different destinations with reasonable transportation costs.
Source: Economic-Social Newspaper and Vientiane Times Issue 66 (18 March 2016)
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