You guys are dreaming. Don't be so naive. The Chinese are very smart and tricky. It's not by any chance that they manage to control the economies of most south-east Asian countries. They will try to extract as much as they can out of Lao soil, i.e. the minerals and forests of Laos, for the same amount of money they will loan to Laos. They will ruin Laos. The same method will be used by the Vietnamese as well if Laos turns instead to Vietnam for the loan. They will always be strings attached that we cannot see. Stop being emotional and learn to smell the realism, these guys are real smart thieves with a friendly smile on their face where ever they are.
Interest rate of 5.8% is not at all reasonable for the current global economic situation.
Even Thai government have decided to borrow at the rate around 5% for their 2.2 trillion baht megaproject from the domestic market through issuing bond which already is considered high cost of financing.
4% is the maximum acceptable rate to borrow from the foreign money market. So it is obvious that Chinese are willing to exploit Laos as much as they can.
Moreover, the financial internal rate of return for high speed train is below zero (cost of operating the high speed train is very high).
Therefore, Lao government has to subsidize the project when it starts operating until it reaches the margin (the next 100 years, maybe?).
This similar situation also happens to many countries. However, not only other countries care about the financial rate of return, but also they concern about the economic return (positive externalities to the society, decentralization, creation of new products, industrial deepening, etc.).
In the Lao’s case, it is clear that the economic return is not that efficient comparing to the cost of borrowing that they have to pay for the project.
So I do not see the point of over borrowing that huge amount of money to build the inefficient high speed train.
I’m not going to obstruct the development of Lao, instead of high speed train, I propose the normal dual track train link to Thailand for the logistic purpose. This will benefit the most to Laos economy and their people.
Ps. I support the train that link to Thailand rather than link to Vietnam because
1. Goods can be shipped to the west easier than Vietnam (you don’t need to go past Singapore, just go directly to Dawei deep sea port) 2. The cost of shipping is significantly much lower than Vietnam port. 3. No need to build the rail across the mountain.
How about build hospital/schools/homes that actually work and don't have holes in their roofs.
How about looking at the needs of the people first. Oh, that's right, they don't care about Lao people in Laos. They only care about make money and exploit Laos.
Remember, viets will eat your dog, chinese will help you cook it. The name of the dog is Laos.
