Savannakhet economic zone seen as money spinner

The government has made the development of the special economic zone in Savannakhet province a top priority, hoping to attract foreign investment and bolster the national economy.

It has given the green light to two developers, from Thailand and Malaysia , to develop the necessary infrastructure so that business operators can invest in the East West Economic Corridor.

“As a transit country, if we don't build a special economic zone, we will only benefit from the fees we collect from vehicles using the Mekong Bridge and local roads, which won't amount to much,” the Vice Governor of the Savan-Seno Special Economic Zone Authority, Mr Thongsay Sayavongkhamdy, told Vientiane Times yesterday.

The government signed an agreement with a Thai developer, Thai Air Ground Services Company, in July 2007 for the concession of zone services development on an area of 270 hectares near the Lao-Thai Friendship Bridge between Savannakhet province, Laos , and Mukdahan province, Thailand .

The company will spend US$48 million to develop infrastructure including roads, electricity, water supply and telecommunications for future investors.

The zone will include hotels, a golf course, duty free shops, a convention and exhibition centre, a financial institute, banks, amusement parks, a heath care centre, and holiday homes for older people visiting from overseas.

“Several investors from France and China have proposed investments in hotels, a golf course and amusement parks,” Mr Thongsay said

“We are now building houses to relocate the people living in this area. After Lao New Year, we will relocate 80 households and then construction will begin.”

The Special Economic Zone consists of four sites – site A is located near the Mekong Bridge and will be managed by the Thai developer, site B is in Seno district and will house a Japanese logistics project, site C is at km 10 in Kaysone Phomvihane district and will be developed by Malaysia's Pacifica Streams Development Company as a commercial and industrial park, and site D will house relocated families.

The Malaysian company signed an agreement with the government last month to begin work on their project.

The provision of skilled labour poses a challenge for the authorities in keeping pace with the growth of the industrial sector.

“At present we're developing human resources without looking at what jobs are available; unfortunately, as we have seen, many graduates have no jobs because their qualifications do not match those needed in the job market,” he said.

A committee to oversee the Savan-Seno Special Economic Zone has been established to ensure that all those involved are working towards the same goal and to facilitate investment in the new economic zone.

Mr Thongsay said the authority was drafting a document outlining the role the committee would play, as well as one for the launch of one-stop services for investors.

Savannakhet province has the largest population of all the provinces. It is hoped that development projects here will discourage people from crossing the border to find work in Thailand.

By Somsack Pongkhao
(Latest Update March 05, 2008)