Keeping an ambitious railway project on track

A journey of a thousand miles famously begins with a single step. And a hard hat. The Laos-China Railway, part of China’s ambitious trillion-dollar Belt and Road Initiative (BRI) that will bring infrastructure improvements and investment opportunities to Chinese interests on five continents, consists of overland road and rail routes in the eventual Pan-Asia Railway Network connecting China to all of Southeast Asia.

AGCS is the project’s leading reinsurer, providing Construction All-Risk (CAR), as well as the primary layer of Third Party Liability coverages, plus risk consulting services. Gordon Lee, Senior Engineering Risk Consultant at AGCS, and Vincent Liang, Senior Engineering Underwriting Manager at AGCS, are exploring the BRI’s progress up close on a thousand kilometer (621mi) trek across Laos. Joining them, on his first onsite visit, is AGCS Marketing & Communications Officer, Lim Jin Kai.

Measuring 414km (257.2mi) in length, the railway begins in the northern city of Boten, bordering China, and extends south to Laos’ capital city, Vientiane. Urban perils include road and utility diversion works and even relocation of homes (about 4,000 families along the entire rail route, according to the Laotian government [1]).

Third-party exposures exist, also, as infrastructure is tested all along the route. Rural perils involve jungles, raging rivers and steep slopes up to 2000m (6,562ft) high. With nearly half of the railway running through 72 tunnels in remote mountainous regions, there is considerable risk of project delays. Narrow, unpaved roads sometimes damage equipment. Often, roads have to be built before work can begin. Landslides are particularly worrying and can be considerably costly to the project, preventing supplies from reaching the site and causing roadwork delays.

Bridges – 170 total along the route – can be a concern, also. Heavy rainfall, especially during the May to October monsoon season, causes rising water, debris and potential bridge overstressing and damage. “Business interruption is always a possibility in such challenging terrain, given the transport obstacles,” says Lee. “Such disruptions can cost millions and lead to delays in project completion down the line.”