CDB provides $79.96 million resource-backed loan for National Stadium Construction Project

CDB provides $79.96 million resource-backed loan for National Stadium Construction Project In September 2007, China Development Bank and the Government of Laos signed a resource-backed loan agreement for the National Stadium Construction Project.

The purpose of the project was to construct a sporting complex in the Viangchan prefecture within capital city of Vientiane — including a stadium with seating capacity for 20,000 spectators, two 3,000-seat gymnasiums, a swimming pool with seating capacity for 20,000 spectators, a warm-up pool, a tennis center, a 50-meter indoor shooting range, and outdoor training grounds — as the venue for the 25th Southeast Asian Games in December 2009.

Yunnan Construction Engineering Group was the EPC contractor responsible for implementation. A formal groundbreaking ceremony took place on April 3, 2007 and construction began on October 28, 2007. The project passed an on-site inspection in December 2008 and construction ended on March 31, 2009. The project was officially completed and handed over to the local authorities on September 22, 2009.

In support of the project, the Chinese Government also reportedly dispatched coaches and supplied various types of sporting equipment. The 25th Southeast Asian Games were successfully held in Vientiane in December 2009.

However, this project was plagued by controversy when reports emerged that CDB issued the loan for the construction of the stadium on the condition that Suzhou Industrial Park Overseas Investment Company be granted access to a 50-year lease and the ability to develop an area of Vientiane into the ‘Vientiane New City’ project.

According to a report from the New York Times, “[a] public backlash [in 2008] over the financing of the Chinese stadium complex in Vientiane was considered by many as a milestone in public dissent toward the traditionally autocratic government.

When rumors circulated that as part of the deal 50,000 Chinese would move into the Chinese-built industrial zone in Vientiane, government ministers were forced to call a news conference — a rare event for the Communist hierarchy.

Deputy Prime Minister Somsavat Lengsavad, who is ethnically Chinese, explained details of the plan: […] China Development Bank would finance the main sports complex in exchange for 1,600 hectares of land on the outskirts of Vientiane, which a Chinese company would convert into what was called the ‘New City Development Project.’ The government said it would lease the land for 50-years to Chinese developers with a possibility of an extension.

But the announcement only served to kindle opposition to the plan.

Farmers who lived on the land and wealthy residents who lived nearby commonly derided the project as ‘Chinese City,’ a term with a pejorative ring in a country where Chinese businesses have mushroomed in recent years.

In August 2008 the [Lao government] backed down and said the Chinese government would only receive 200 hectares, a small fraction of the original deal.

More than a year later the [Lao government] refuses to divulge how it is compensating the Chinese government, which according to Laotian state media paid the full cost of the stadium complex."