I hope that who ever that has the ultimate power in the lao side won't rush themselves into this kind of deal.
It's a dumb deal, first off - the chinese is treating lao like a retarded party. Only retarded people will get themselves into this kind of contract. Well, maybe not quite, because a small, selected pocket of highly influential people among the lao hierarchy will profit from this deal immensely. The rest of the lao people will, as usual, get fukkkked to the kingdom come.
Let's look at who will profit from this :
* The chinese. The loan, the interests, the collateral, the operation, the maintanance, the usage of the train etc...Apart from the huge loan and interests that need to be paid, how many chinese engineering ( all level of engineers and technicians) crews are needed to run the whole operation. Because they are high skilled, they will demand exorbitant pays. How about the maintenance side - how often the system will go down, each time the system goes down what would it cost to bring the system back up, as far as labor and replacement parts ? Can you get cheaper parts any where else ? no - niet. So, Laos will get screwed. How about other costs, hidden costs, can any body guess ? What if they demand a raise, a better medical insurance or a retirement funding ? Have any answer for these ?
The chinese will use this so called " high speed train " to suck lao blood dry to death. If Laos can't meet her
contractual obligations, the chinese will take many of the lao richesses and natural resources, including some gold mines. China might as well take possession of the bordering northern province of Laos if Laos can't pay back.
* The lao : As a transportion mean, how much revenues can the country generate from the local lao passengers ? who else will use this train ? the tourists that want to ride the train from Laos into China and vice versa ? how many, any concrete numbers that you can play with ? what if they don't come ? Beside, the train will directly compete with the lao aviation for the passengers. That could be costly for the lao aviation.
But, the selected group of lao people who will directly profit from this project will be those powerful group of high ranking lao officials who will have something to do with the signing of this deal. We all know how the chinese business model works - gifts, bonuses and/or commissions... if roughly 10% of the whole package, this can be translated into this number : 10% of US$7 Billions = US$ 700.00 millions into those people pockets. That looks sweet.
The chinese hold 3 of the Aces and they go all in. Laos has 1 Ace and 2 face cards and hope for a miracle to happen. This works exactly like a game of poker....
7.000.000.000 US$+ 2% x 7.000.000.000 US$ = 7.140.000.000 US$
714.000.000 US$per year for totally 10 years payback period (365x1year=365day)
Laos need to pay back per day is 714.000.000/365=1.956.164 US$
if 100US$ per ticket for pass through Boten to Vientiane (Laos area)
19.561,64 passengers per day is needed (20.000 psgr)
I think Laos bussiness man can manage it easily (please do not corruption)
The profit for 20 years left is pure income to Lao PDR the totall sume will be
aproximately
14.280.000.000 US$ Fourteen thousand MILILION US$
Congratulation to all Lao people you are will be a rich man for the next fews years
Your analysis is too simplistic and not realistic. Besides, many flaws in your assumptions and some missing factors in your calculation. You might need help from a professional cost accountant to re-calculate these numbers.
1- Need 20,000 passengers daily to pay US$100.00 each to ride the train. Where will you find these 20,000 people day in and day out ? One rate only - $100.00 ? Only 10 yrs to break-even ?
2- You did not factor in the operating costs of running this train : salaries, advertising, administrative costs, taxes ...
3- The train is a machine and any machine can go down for a various reasons : wear and tear, electrical issues, IS issues, upgrade issues, human issues. Any of these repairs can be very costly.
Your analysis is too simplistic and not realistic. Besides, many flaws in your assumptions and some missing factors in your calculation. You might need help from a professional cost accountant to re-calculate these numbers.
1- Need 20,000 passengers daily to pay US$100.00 each to ride the train. Where will you find these 20,000 people day in and day out ? One rate only - $100.00 ? Only 10 yrs to break-even ?
answer: I think the chinease psgr daily is oready over 20000, just like they like to go to Thailand, Malaysia & Singapore. Out of that we can charge from some of cargo, visa ...
2- You did not factor in the operating costs of running this train : salaries, advertising, administrative costs, taxes ...
answer: By my opinion for the event you mention above salaries, advertising, administrative costs, taxes we can call as operation and maintenance cost , for the first 10 years is aproximately 1% of 714.000.000 = 7.140.000 US$ is enough because its equal to 595.000US$/month or 1000 engineers and technician
3- The train is a machine and any machine can go down for a various reasons : wear and tear, electrical issues, IS issues, upgrade issues, human issues. Any of these repairs can be very costly.
answer: For the first 10 years the train is in the warranty period, that mean no any pay needed
OK we just share the idea for make the project come to the successful future, I hope you understand that.
Your analysis is too simplistic and not realistic. Besides, many flaws in your assumptions and some missing factors in your calculation. You might need help from a professional cost accountant to re-calculate these numbers.
1- Need 20,000 passengers daily to pay US$100.00 each to ride the train. Where will you find these 20,000 people day in and day out ? One rate only - $100.00 ? Only 10 yrs to break-even ?
answer: I think the chinease psgr daily is oready over 20000, just like they like to go to Thailand, Malaysia & Singapore. Out of that we can charge from some of cargo, visa ...
- I hope you are not one of those decision makers on this deal :) Your whole argument still fails to convince me that Laos will benefit from this speed rail project. The chinese experts themselves concluded that there wouldn't be any profits from this project for the first 38 yrs - after a throurough & extended analysis - otherwise they wouldn't have thrown this whole project in its entirety to Laos face in disgust.
For me, the numbers 20,000 chinese that you grabbed out of the air have no validity whatsoever. There might be a possibility that this number is close to reality as for Thailand,Malaysia and Singapore because of their chinese ties
within the population but Laos does not have that special tie and business opportunities in those countries are far more attractive than those they see in Laos. Beside, what is the capacity of the train itself ? How many trips does each one of those trains would have to make to daily service 20,000 people, non-stop ?
Yes, any body can generalize but the devils are in the details. That's a lot of chinese to deal with in each year :
(20,000 X 365 days = 7,300,000 chinese/year ) how can the immigration handle this volume ? Do you think Laos has the ability to track them all down ? Let's say 50% decide to go back, the other 50% stay in what ever capacity. Within 2 short years, the new chinese immigrants would out pace the local population and, sadly enough, because of greed, you're digging yourselves a damned big hole !
2- You did not factor in the operating costs of running this train : salaries, advertising, administrative costs, taxes ...
answer: By my opinion for the event you mention above salaries, advertising, administrative costs, taxes we can call as operation and maintenance cost , for the first 10 years is aproximately 1% of 714.000.000 = 7.140.000 US$ is enough because its equal to 595.000US$/month or 1000 engineers and technician
- Where did you get this data from that you can hire a chinese high speed rail engineer for under US$600.00/month ? Don't you think it's ridiculous ? Don't forget, you have to factor in all of the other benefits as well, such as medical insurance, pension etc...the whole nine yard. What if they quit for what ever reasons? Have a back up plan ?
3- The train is a machine and any machine can go down for a various reasons : wear and tear, electrical issues, IS issues, upgrade issues, human issues. Any of these repairs can be very costly.
answer: For the first 10 years the train is in the warranty period, that mean no any pay needed
OK we just share the idea for make the project come to the successful future, I hope you understand that.
- In conclusion, I personally see that, for the sake of sanity, this high speed rail project has no time and place in our motherland, perhaps in a foreseeable future when things change for the better, this project can be revisited again.
I believe our government has a good policy and good strategies
and bring a country to forward with successful,
all of lao people will happy and social be peace full,
I congratulate you and I support you Lao government long live!!!
I think every Lao people inside or outside of Laos wants Laos to develop and prosper. But in this deal Laos is totally in the mercy of the Chinese alone. Does Laos have engineers and skilled workers for this? The answer is NO. It's extremely risky. Every smart people in the world knows that the Chinese are very clever human beings. LAOS DOESN"T NEED THIS HIGH SPEED TRAIN RIGHT NOW. If the Lao government is mart enough they can first wait a few more years when this high speed train is fully operational between China and Singapore through Thailand. Laos will see what kind of problems exist and what are potential solutions, and whether it's profitable to do the same thing in Laos. Laos will have time to think clearly and form its own necessary engineers and skilled workers. Laos can depend on itself and other countries, not only on China.