By Somsack Pongkhao
March 22, 2013
Fourteen companies have signed agreements and MoUs to operate in the Thakhek Specific Economic Zone in Khammuan province with total investment capital of more than US$480.3 million.
Their commitments were made after seeing the great potential of the province now that it is becoming better linked to neighbouring countries and the rest of the region.
The zone is located close to the third Lao-Thai Friendship Bridge linking Khammuan province in central Laos to Nakhon Phanom province in northeastern Thailand, which opened in November 2011.
President of the zone’s executive board, Mr Daolay Keoduangdy, told Vientiane Times yesterday that the zone serves as a focal point for attracting foreign investment and tourists to Laos and is significantly boosting the local economy.
Last week, a Vietnamese company signed an agreement with the zone authorities for a concession on an area of 14.5 hectares, to run for 75 years.
The company will spend more than US$152 million to build hotels, villas, offices, tennis courts, duty free shops, restaurants, resorts and other facilities for tourists.
Three other companies are in negotiations to sign an MoU with the authorities to run businesses in the zone. It is expected the MoUs will be signed next month. The three companies are from Thailand, China and Laos.
The Thai company wants an area of 100 hectares to build retirement holiday homes, a hospital, school, and shopping centre, while the Chinese company wants to build hotels and other tourism-related facilities. In addition, a Lao company wants to build a market and offices for rent.
The Thakhek Specific Economic Zone was approved by the government in May last year, covering an area of 1,035 hectares. Under the agreement signed between the government and the zone’s executive board last May, private developers will spend at least US$80 million on infrastructure within the zone, including roads, electricity, water supplies and drainag e.
Of the total figure, US$4.2 million has been spent on various infrastructure projects so far. The developments aim to accommodate foreign investors, and concessions have been granted for more than 50 percent of the zone’s 1,035 hectares to private companies.
Currently, companies from China, America, Singapore, Vietnam and Laos are operating businesses in the zone. These are mostly factories, vehicle assembly plants, hotels, healthcare centres and tourism-related businesses.
The zone’s management will use electronic monitoring systems to ensure the transparency and accountability of the project.
Specific Economic Zones are designed to increase the pac e of economic growth while generating job opportunities for local people, allowing them to earn an income and alleviate their poverty, and enable Laos to move off the list of l east developed countries by 2020.
Laos has been able to maintain political stability, which is a key factor in attracting foreign investment. In addition, the country is getting connected with the rest of the region and the world through new roads and bridges.
Laos also has cheap labour and receives trade privileges from more than 40 countries so businesses can benefit from this potential.