Thai Airports Ground Services  (TAGS) will spend almost Bt2 billion to transform Savannakhet in Laos into one of the best cities in Indochina and a top Asian logistics hub in 10 years.

Given approval by the government of the Lao People's Democratic Republic, TAGS signed a memorandum of understanding with the Prime Minister's Office's Savan-Seno Special Economic Zone Authority to develop 2,680 rai in the western Lao province into Savan City, the company's president and CEO Anuphong Rojnucharin said at press conference yesterday.

The project is close to the second Thai-Lao Friendship Bridge, which connects Thailand's Mukdahan with Savannakhet in Laos. The site is an ideal location for logistics and tourism, he added.

The development project is divided into three phases and the initial stage will start on a 1,200-rai plot, comprising a hotel and integrated entertainment complex, a duty-free shopping mall, shops, office buildings and a lake for recreational activities.

The second development phase will soon follow with residential units, a recreational park, a sports complex and more shops and office space, which will be built on a 780-rai plot. The last phase will take the remaining 700 rai and will house more residential units, a world-class golf course, another sports complex and more shops and an international education complex. The renowned University of California Berkley has been contacted to develop the study centre.

Once completed, the entire project is expected to employ at least 50,000 Lao people and raise the country's tourism revenues 800 per cent in five years to US$700 million (Bt25.06 billion), Anupong said.

Tourist arrivals are expected to more than double to 2 million in 2010.

"Eventually Savan City will also become a true logistics hub," Anupong said.