The Government of Laos has approved a cost-reduction policy to accelerate road construction and repairs nationwide. The policy aims to lower project costs and increase investment in infrastructure development.
Key measures include reduced import taxes on construction materials and machinery, a lower VAT rate for road projects, and decreased fees for using natural resources. Fuel taxes will remain unchanged. The government estimates the new approach could lower road construction costs by around 17.4 per cent.
The policy also promotes the use of locally sourced materials like cement and steel to boost domestic industries and reduce dependence on imports.
Several national highways are set to undergo pilot upgrades, with the improved roads designed to support heavier axle loads (up to 11 tons). These pilot projects, to last three to five years, will be funded by the state with an emphasis on private sector participation.
To support long-term sustainability, Laos will implement a new toll collection system post-upgrade to fund ongoing maintenance. All projects must adhere to national construction and quality standards.