Laos Deputy Prime Minister Somsavath Lengsavad admits that the concession of a 1,000-hectare That Luang marshland to a Chinese company to develop into a residential and economic zone was in exchange for the new stadium and sports facilities that Chinese companies are building for Laos to use when it hosts the 25th SEA Games in December 2009.
The concession has become controversial when rumors surfaced that the government has agreed to allow thousands of Chinese to settle down in the area, creating a Chinatown in Vientiane.
Mr. Somsavad told a recent press conference that it is a case of turning assets into capitals, and the marshland development will be a comprehensive, joint development between Chinese and Lao companies, with the latter holding a 5% stake. The concession is for 50 years, after which the developed area will be turned over to Laos. The concession does not include a 600-hectare lot that will be developed into a water park.
Lao authorities say the That Luang marshland development is necessary to accommodate the population growth and the economic expansion of the capital city, and that affected people will be appropriately compensated.
Listen to our Laos Today report for more details in Lao.