(Yicai Global) Dec. 26 -- Construction of the railroad connecting China to Vientiane, the capital of Laos, officially commenced over Christmas.
The five-year project has received investments totaling almost CNY40 billion (USD5.8 billion) and will play a critical role in a planned China-Thai railroad.
The line begins at the Mohan-Boten border between the countries and runs for 400 kilometers, ending in the Laotian capital. Over 62 percent of the line will consist of bridges or tunnels and its trains will travel at up to 160 kilometers per hour, according to state-run news agency Xinhua.
The track is a joint venture between China and Laos, who hold 70 percent and 30 percent shares in the project respectively. This is the first jointly operated international railway project directly connected to China's rail networks with China as the major investor. The entire line will be built using the majority stakeholder's equipment and in line with its technical standards.
At the commencement ceremony, Bounchanh Sinthavong, Laos' vice minister of public works and transport, said the project will boost both countries' standing in sectors like the economy, trade, investments and tourism whilst reinforcing economic ties within the China-ASEAN Free Trade Zone.
The China-Laos railroad is part of a larger project that aims to connect other Asian countries, including Thailand. It was initially proposed in 2013 but was not progressed until 2015.
This month, the two countries signed a new memorandum of understanding that schedules building work to begin in early 2017. The first phase of the 900-kilometer long track is expected to be completed in the next three years, with the entire project, running from Bangkok to Kunming, set to wrap up by 2022.