SE Asia to seek $2 bln for transnational railway

MANILA Mon Aug 27, 2007 12:11pm IST

ASEAN Secretary-General Ong Keng Yong gestures to reporters during a news conference at the end of the Association of Southeast Asian Nations (ASEAN) Economic Ministers meeting at a hotel in Manila August 27, 2007. REUTERS/Cheryl Ravelo

ASEAN Secretary-General Ong Keng Yong gestures to reporters during a news conference at the end of the Association of Southeast Asian Nations (ASEAN) Economic Ministers meeting at a hotel in Manila August 27, 2007.

Credit: Reuters/Cheryl Ravelo

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MANILA (Reuters) - Southeast Asian nations will seek to raise $2 billion later this year to complete a railway system that will eventually stretch from China to Singapore and link eight countries in the region.

The Singapore-Kunming Rail Link working group will hold an investors' seminar later this year, possibly in Kuala Lumpur, to raise the funds, said Ong Keng Yong, the secretary-general of the Association of South East Asian Nations (ASEAN).

"Financing has not been easy because there has been so much resistance to using rail as a means of communication," Ong told reporters in Manila after a meeting of the ASEAN Mekong Basin Development Cooperation group.

"Everybody now uses low budget airlines. But at the end of the day it (rail) is still the cheapest way of transporting many of our goods across borders."

"More importantly our leadership feels that the railway will facilitate greater travel and people-to-people contact. It will contribute to a freer flow of people across borders."

The rail system is slated for completion by 2015, when ASEAN will convert itself into an EU-style economic community. The region also hopes to have a free trade agreement with China fully in place by 2010.

The entire system, which builds on existing rail links within nations, is likely to cost $10 billion. China has said it will invest about $6.4 billion in the project by 2010.

The railway will link Kunming, the capital of the southern Chinese province of Yunnan, to Hanoi, Ho Chi Minh City, Phnom Penh, Bangkok, Kuala Lumpur and then Singapore.

Separate lines will link Laos to Vietnam, and Myanmar to China.

The 5,000-km (3,000-mile) Singapore-Kunming link was originally proposed in 1995 but has been slow to get off the ground.

Ong said the "missing links" were from Ho Chi Minh City in Vietnam to Phnom Penh, the Cambodian capital; and from the Thai border to the Cambodian town of Sisophon.

A rail link would also be built from Laos to central Vietnam, to link with the Singapore-Kunming line.

ASEAN comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

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