MINISTRY OF PUBLIC WORKS AND TRANSPORT, LAO PDR

3rd Meeting of Working Group on Dry Ports

13-14 November 2019

Logistics Strategy and Logistics Development Plan in Lao PDR

Mr. Sonephet SOMEKHIT Division of freight and logistics

Department of Transport 1 Outline

I Background of Dry Port

II Objective

III Actions to Achieve

IV Status on Transport and Logistics Development

V Vision 2030 and Strategic Plan (2016-2025)

VI Development Plan (2016 – 2020)

2 I. Background of Dry Port

• 2005, Studied by JETRO; • 2011, Completed Master Plan Logistics system supported by JICA (identified and Pre-design of 3 Logistics parks in Lao PDR) • 2012, the Strategy was started and improved through consultation procedures and also organizing meetings with the relevant sectors; • 2013 Signed Intergovernmental Agreement on Dry Port; (9 location of dry port identified) • 2014 continued to finalise and submitted to government for approval; • 2015 approved by the government II. Objectives

• Transform from a land-locked to a land- linked country in GMS Region by: ✓ Providing efficient and reliable transport infrastructure and facilities, especially on transit routes, e.g. Central Corridor, and North-South Corridor. ✓Facilitating cross border transport on goods and passengers between and among neighboring countries.

Source: http://economists-pick-research.hk tdc.com/business-news/article/Research-Articles/The-ASEAN-Link-in-China-s-Belt-and-Road4- Initiative/rp/en/1/1X000000/1X0A3UUO.htm III. Actions to achieve the Goal 1. Domestic Road laws: - Road Transport Law (revised in 2012); - Road Traffic Law (revised in 2012); - Multimodal Transport Law (newly developed 2012). 2. Intergovernmental Cooperation - Agreement :

Name of Agreement Contracting Parties Date Agreement on Road Transport Between Lao PDR and –Vietnam 23 Apr 2009 Agreement on Road Transport Between Lao PDR and China Laos–China 12 Mar 1993 Agreement on Road Transport Between Lao PDR and Laos–Thailand 03 May 1999 Agreement on Road Transport Between Lao PDR and Laos-Cambodia 21 Oct 1999 Framework Agreement on the Facilitation of Goods in Transit ASEAN 16 Dec 1998 Cross-Border Transport Agreement GMS 1999

- MoU on Road Transportation between and Among Cambodia – Laos - Vietnam; - MoU on Road Transportation between and Among Laos – Thailand - Vietnam; - Intergovernmental Agreement on ; - Intergovernmental Agreement on Trans-Asian Railway Network; 5 - Intergovernmental Agreement on Dry Ports. III. Actions to achieve the Goal (Cont.)

Road linked to bordering countries. Asian Highways : - AH 3 : Houyxay – Nateay (206km) - AH11 : – -Veunkham (853km)

- AH12 : Thanaleng – Boten (679km) AH13 - AH13 : Muang Ngeun – Oudomxay (340km) AH3 - AH15 : Ban Lao–Lak 20-Namphao (132km) AH12 - AH16 : – Dansavan (242km)

- AH131: -Ngommalad-Naphao (146km) AH15 AH131 - AH132 : Phiaphay-Samakkhexay-Phoukeua (Lao-Vietnam Border) (218km) VIENTIANE Total AH : 2,816 km AH11 AH16 Remark : Only, AH 3 & AH 16 have road bearing max. capacity 11 tones/axle. The other AH need to be upgraded. AH132 Border Crossing Points with neighboring countries • Laos – Cambodia : 1 Border • Laos – China : 1 Border • Laos – Thailand : 10 Borders • Laos – Vietnam : 15 Borders 6 III. Actions to achieve the Goal (Cont.)

Bridges Construction

❖ 4 Laos-Thailand Friendship Bridges have been completed

❖ 1 Laos-Myanmar Friendship Bridge (Xiengkok - Khenglab) opened in May 2015

7 RAILWAY DEVELOPMENT IN LAO PDR

CHINA 1. Lao-China RW Project, starting from Laos China Border to Vientiane MYANMAR Capital: 414 km (under construction). 2. Lao –Thailand RW Project: 2.1 Phase I: RW track 3.5 Km (complete) VIETNAM 2.2 Phase II (Section 1): Container Yard (complete) 2.3 Phase II (Section 2): RW track 7.5 Km (on going) 3. Savannaket–Laobao (Lao-Vietnam border) RW Project: 220 km 4. Vientiane –Thakhek–MuGia (Laos- Vietnam border) RW Project: 455 km THAILAND 5. Thakhek–Savannaket–Pakse– VangTao (Lao-Thai border): 345 km 6. Pakse–VeunKham (Lao–Cambodia border): 150 km

CAMBODIA III. Actions to achieve the Goal (Cont.)

Existing 3.5 km cross border railway between Laos (Vientiane) and Thailand (Nongkhai)

Open in 2009 for only passenger transport

Open for goods transport in August this year

9 IV. Status on Transport and Logistics Development

Challenges  Sectors related to transportation at central and local levels don’t recognized or deeply understand the role of logistics, don’t grasp the significant contents of the region’s treaties and agreements on transportation;

 Only infrastructure on communications - transportation, but development of logistics such as: product collection and distribution centers have not yet been developed, including lack of business entrepreneurs in logistics; IV. Current Transport and Logistics Situation (Cont.)

OPPORTUNITY

 Economic development in Asia and opportunity on integration on trade and transport will encourage new model of trade which will increase production and volume of goods distribution which will lead to perfect condition for logistics development;

 Development of infrastructure to link neighboring countries will facilitate future efficient transport. IV. Current Transport and Logistics Situation

OPPORTUNITY

 In the integration condition, domestic company will compete and cooperate with foriegn company in order to upgrade quality of service and labor.

 To realize logistics development, we have laws on highways, transport, multimodal, traffic and . . . etc. V. Vision 2030 and Strategic Plan (2016-2025)

Vision 2030 “Highly effective and efficient connectivity services, domestic freight transport and logistics is competitive and sustainable”. V. Vision 2030 and Strategic Plan 2016-2025 (Cont.)

• Improve domestic transport businesses, especially freight transport and logistics companies by strengthening company models allowing them to improve services and capabilities to compete with foreign firms and link with international transport companies along with improving the transport association.

• Open more logistics transport businesses to make services highly competitive and able to connect with local and international markets while building high credibility and confidence amongst domestic and foreign consumers. Dry Port Location in Lao PDR 1. ThanalengDry port, Vientiane location (under in LaoFS) PDR CHINA 2. Nateuy, Luangnamtha (under negotiation for Vientiane – Boten

conducting FS) MYANMAR Luang Namta

3. Savanakhet, Savanakhet (in operation) Houay Xai •Oudomsai

4. Pakse, Champasack (detailed designed) VIET NAM 5. Thakhek, Khammouane (under FS)

6. Laksao, Borikhamsai (under negotiation for Laksao conducting FS) Vientiane - Savannakhet -

7. Houyxai, Bokeo, (no proposal) Thakek Lao Bao NongkhaiTHAILAND- Vientiane - 8. Luangprabang, Luangprabang, (no proposal) Thakhek - Mu Da Savannakhet 9. Oudomsai, Muangxai, (no proposal) THAILAND International Logistics Hub

Regional Logistics Hub - Pakse - 1. Boten ICD (in operation) Pakse Hub for SpecificSavannakhet Product – Laobao 15

Losgitics Zone 2. Thakhek ICD (in operation) International Logistics Route CAMBODIA15 Example of a Dry Port

Savanakhet Dry port

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Source: https://worklivelaos.com/lao-driving-test-to-be-computerised/ Thakhek Dryport Dry port Thanaleng Dry port

Container Yard

Platform

Warehouse

Gate/ Weight Station Operation Office VI. Development Plan (2016-2020)

Focused group of projects on Infrastructure and transport 2016 to 2020 as follows:

1) Highway improvement/Upgradation 2) Railway Construction 3) Development of dry port (logistics park), distribution centers, truck terminal 4) Logistics Legislation and regulation development 5) Development project on Common Control Area. 6) Development of standard for border checkpoint 7) Border improvement and Border facilities improvement 8) Installment of IT system onto logistics services

20 Thank you

Mr. Sonephet SOMEKHIT Division of Freight and Logistics Department of Transport Ministry of Public Works and Transport

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