Lao People's Democratic Republic: Greater Mekong Subregion East-West Economic Corridor Towns Development Project

Sovereign Project | 43319-022

Summary

This project is a first generation intervention of a long-term engagement in towns of the GMS economic corridors, and is aligned with the strategic framework of the GMS Economic Cooperation Program, 2012 2022, approved by the Fourth GMS Summit on 19 to 20 December 2011. It is also in line with the Asian Development Bank (ADB) country partnership strategy 2012 2016 for the Lao PDR and supports ADB's urban operational plan (2012 2020) and water operational plan (2011 2020).

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Consulting Notices

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Procurement Notices

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Procurement Documents


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Project Name Greater Mekong Subregion East-West Economic Corridor Towns Development Project
Project Number 43319-022
Country Lao People's Democratic Republic
Project Status Approved
Project Type / Modality of Assistance Grant
Loan
Source of Funding / Amount
Grant 0313-LAO: Greater Mekong Subregion East-West Economic Corridor Towns Development Project
Asian Development Fund US$ 14.23 million
Grant 0314-LAO: Greater Mekong Subregion East-West Economic Corridor Towns Development Project
Urban Environmental Infrastructure Fund-UFPF Multi US$ 638,000.00
Loan 2931-LAO: Greater Mekong Subregion East-West Economic Corridor Towns Development Project
Asian Development Fund US$ 26.60 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Regional integration
Drivers of Change Governance and capacity development
Partnerships
Sector / Subsector Water and other urban infrastructure and services - Other urban services - Urban flood protection - Urban policy, institutional and capacity development - Urban sewerage - Urban solid waste management
Gender Equity and Mainstreaming Effective gender mainstreaming
Description

This project is a first generation intervention of a long-term engagement in towns of the GMS economic corridors, and is aligned with the strategic framework of the GMS Economic Cooperation Program, 2012 2022, approved by the Fourth GMS Summit on 19 to 20 December 2011. It is also in line with the Asian Development Bank (ADB) country partnership strategy 2012 2016 for the Lao PDR and supports ADB's urban operational plan (2012 2020) and water operational plan (2011 2020).

The project will enhance the competitiveness of towns along the East West Economic Corridor (EWEC), and will complement years of work on trade facilitation and cross-border trade agreements. The project will transform the corridor towns of Kaysone Phomvihane, Phine, and Dansavanh into economic hubs by improving urban environmental infrastructure and strengthening the institutional capacity of provincial and local authorities. The productivity and sustainability of economic enterprises in these towns will be significantly improved, as the flood control measures will increase climate resilience. The environment will be improved through clean wastewater, disposal of solid waste, and enhanced mobility on improved urban roads. The project will provide environmental infrastructure that will, among others, help reduce the carbon footprint of the towns, making them cleaner and greener, and thus more livable. The project will finance seven subprojects in the three towns.

Project Rationale and Linkage to Country/Regional Strategy

Strategic economic development. The government and ADB place considerable emphasis on developing priority transport corridors to increase physical connectivity between the GMS countries and to establish the foundation for more efficient movement of people, goods, and services. Towns along the EWEC, which links the Lao PDR and Viet Nam with Thailand and Myanmar, are well positioned to serve as dynamic centers of investment and economic growth. The strategic location of the corridor towns provides the stimulus for increased trade and investments along the transport routes. Access to infrastructure and markets will provide many stimuli for the local economy and the hinterland of the corridor towns. Given these development opportunities, and with the rapid growth of the urban population and expansion of urban areas, several corridor towns are now facing demands for urban infrastructure and essential support services.

Core problem. The participating corridor towns in the Lao PDR now face the pressing task of coping with the demands of rapidly growing and expanding urban areas. Local authorities want to plan and manage urban growth using an integrated approach, operate and maintain urban environmental and economic infrastructure, and efficiently deliver municipal services. Despite policy reforms to promote decentralization, local institutional capacity has not kept pace with urban sector development and economic growth. With increasing trade and traffic flows, the capacity of the corridor towns to manage local economic development in an environmentally sustainable manner urgently needs to be strengthened.

Project towns. Three corridor towns along the EWEC were selected as project areas on the basis of their economic potential, infrastructure constraints, and expressed commitments. These towns are: Kaysone Phomvihane, Phine, and Dansavanh.

Impact The towns of Kaysone Phomvihane, Phine, and Dansavanh will become centers of trade and investments in the EWEC
Project Outcome
Description of Outcome Essential urban infrastructure and services are adequate in Kaysone Phomvihane, Phine, and Dansavanh
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

1. SLEDP adopted and implemented in Kaysone Phomvihane, Phine, and Dansavanh

2. Priority urban infrastructure investments implemented

3. Institutional capacities strengthened

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects

The project is Environment Category B. The subprojects are not expected to cause irreversible adverse environment impacts. Initial environmental examinations conducted for all the project cities, identified potential impacts and mitigation measures to be implemented through Environment Management Plans (EMPs) and included inputs from public consultations. Most impacts are site-specific and mitigation measures are readily available. Potential impacts can be mitigated with good construction practices outlined in the EMPs. The IEEs are in accordance with the ADB's SPS, 2009 (Safeguard Policy Statement) and the applicable environment regulations of the Government of Lao People's Democratic Republic. At detailed design stage when the EMPs are updated the final receiving environments for the WWTPs and landfill will be reviewed to ensure that local groundwater and human uses of the affected areas are not adversely affected.

The EMP will be finalized during the detailed design stage of the project. The updated EMP, cleared by the ADB, shall form part of the contract bidding documents. The adequate incorporation of environmental considerations during design, and allocation of sufficient budget for O&M will mitigate the potential adverse impacts during operation. Effective environment monitoring at all stages of the sub-project implementation will be ensured. In compliance with ADBs information disclosure and consultation requirements, the safeguard documents will be posted on ADB's website.

Involuntary Resettlement

The safeguard category for involuntary resettlement is B. RPs have been prepared for the three subprojects which will trigger the application of ADB's SPS involuntary resettlement requirements. Three due diligence studies were conducted and reports have also been prepared for sub-projects without LAR impacts which include (i) Solid waste management in Kaysone Phomvihane (i) MRF in Dansavanh, (iii) MRF Phine as they will not trigger any Land Acquisition and Resettlement impacts for any of these sub projects.

A cutoff date has been established with extensive stakeholder consultation and participation. Project information has been disclosed to affected persons throughout the project preparation and a project information booklet will be updated and distributed during detailed measurement survey.

Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services All consulting services shall be recruited in accordance with the ADB's Guidelines on the Use of Consultants (2010). The scope of services and terms of reference for the consulting services are presented in Section D. An estimated 208 person-months involving the services of 84 international and 124 national consultants are required to provide Project management support and capacity development and training. In addition, direct contract arrangements will be undertaken for consultant's services for financial audit and independent monitoring of social safeguards compliance. Consulting firms will be engaged by the EA and ADB using the quality-and cost-based selection (QCBS) method with a standard quality: cost ratio of 90:10. The higher quality-cost ratio is proposed due to the complexity of Project implementation arrangements where the PMU and 3 PITs work under the coordination and oversight of one implementing agency, and the limited institutional capacities of district and corridor town authorities in managing and implementing urban sector development loan project.
Procurement

All procurement of goods, works and consulting services will be in accordance with ADB's Procurement Guidelines. International competitive bidding (ICB) will be applied for civil works packages exceeding $1,500,000 equivalent.

Within a year of loan effectiveness, the EA shall submit a revised procurement plan to ADB for approval. This revised plan will contain all ongoing procurement activities and those that are planned for the succeeding 18 months. The plan shall be updated annually or as required after every loan review mission or after award of each major ICB contract.

For changes in the procurement arrangements involving threshold, procurement methods and review requirements and contract packaging during Project implementation, the EA shall present its justification for the changes and submit an updated procurement plan for ADB approval. ADB will be responsible for posting the initial procurement plan and subsequent updates on the ADB website.

Modification in Civil Works Contracts. For any contract variation, which would be in aggregate increase in the original contract amount by more than 15%, the EA shall provide detailed justification and seek the no objection position of ADB to the proposed contract variation. If the proposed variation is inconsistent with the procurement plan and the provision of the financing agreement, the ADB shall promptly advise the EA stating the reasons for its position. The EA shall furnish the ADB all amendments to the contracts for civil works for legal and record purposes.

As an essential measure to Project readiness before the loan and grant agreements becomes effective, EA will undertake advance actions related to procurement of consulting services. This is intended to facilitate Project start-up activities and avoid significant project implementation delays due to the limited capacity and experience in undertaking essential pre-Project implementation arrangements. The procurement of services for advance contracting will be undertaken in accordance with ADB's Procurement Guidelines (April 2010, as amended from time to time) and issuance of the invitation to bid will be subject to the approval of ADB.

The scope of services for advance contracting will focus on: (i) engagement of a Team of consultants for PIS and capacity development, and (ii) preparation of detailed engineering designs and construction supervision for the identified priority urban infrastructure subprojects. ADB will engage an individual consultant to assist the PMU select and recruit the PMS consultant.

Responsible ADB Officer Michael E. White
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Urban Development and Water Division, SERD
Executing Agencies
Ministry of Public Works and TransportDept of Housing and Urban Planning, Lao
PDR, Lane-Xang Ave., Vientiane Lao PDR
P.O. Box 206
Timetable
Concept Clearance -
Fact Finding 12 Mar 2012 to 23 Mar 2012
MRM 07 Aug 2012
Approval 06 Nov 2012
Last Review Mission -
PDS Creation Date 19 Apr 2010
Last PDS Update 01 Oct 2014

Grant 0313-LAO

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
06 Nov 2012 04 Dec 2012 15 Jan 2013 30 Jun 2019 - -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 14.23 Cumulative Contract Awards
ADB 14.23 06 Nov 2012 1.25 0.00 9%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 06 Nov 2012 0.81 0.00 6%

Grant 0314-LAO

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
06 Nov 2012 04 Dec 2012 15 Jan 2013 30 Jun 2019 - -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 0.64 Cumulative Contract Awards
ADB 0.00 06 Nov 2012 0.00 0.00 0%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.64 06 Nov 2012 0.00 0.00 0%

Loan 2931-LAO

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
06 Nov 2012 04 Dec 2012 15 Jan 2013 30 Jun 2019 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 32.86 Cumulative Contract Awards
ADB 26.60 06 Nov 2012 3.24 0.00 13%
Counterpart 6.26 Cumulative Disbursements
Cofinancing 0.00 06 Nov 2012 1.51 0.00 6%

Evaluation Documents

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