Lao People's Democratic Republic: Northern and Central Regions Water Supply and Sanitation Sector

Sovereign (Public) Project | 34197-032 Status: Archived
Project Name Northern and Central Regions Water Supply and Sanitation Sector
Project Number 34197-032
Country Lao People's Democratic Republic
Project Status Closed
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Loan 8219-LAO: Northern and Central Regions Water Supply and Sanitation Sector
OPEC Fund for International Development US$ 9.00 million
Grant 0016-LAO: Northern and Central Regions Water Supply and Sanitation Sector
concessional ordinary capital resources lending / Asian Development Fund US$ 10.00 million
Grant: Northern and Central Regions Water Supply and Sanitation Sector
Norwegian Agency for Development Cooperation US$ 1.70 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Knowledge solutions
Sector / Subsector

Transport - Urban roads and traffic management

Water and other urban infrastructure and services - Urban flood protection - Urban policy, institutional and capacity development - Urban sanitation - Urban water supply

Gender Equity and Mainstreaming Gender equity
Description The project goal is to improve the quality of life of small town residents in Lao PDR, and enhance the small towns' roles as market, services, and manufacturing centers supporting the rural hinterland. The specific objectives are to (i) improve the accessibility, quality, reliability, and sustainability of water supply services in about 12 small towns in Northern and Central regions, and (ii) improve the environmental conditions in these small towns. The Project comprises the following components: (i) strengthening water supply sector regulation and management; (ii) water supply development; (iii) urban environmental improvement; (iv) participation, awareness, and community actions; and (v) project implementation assistance and capacity building.
Project Rationale and Linkage to Country/Regional Strategy The Government's policies attach increasing emphasis on achieving equitable development by making small towns as markets and agro-processing and social service centers for the rural hinterlands and as economic links between rural, national, and international markets. The Government's National Growth and Poverty Eradication Strategy aims to reduce poverty through strong economic growth and increased emphasis on the poorest districts. It focuses on health, including WSS, as one of four priority sectors for poverty reduction. The Fifth Five-Year Socioeconomic Plan (2001-2005) prioritizes the development of basic infrastructure and services in urban areas throughout the country to accelerate broad-based economic growth. The poverty reduction partnership agreement, signed in September 2001 by ADB and the Government, includes small town's development as one of the key operational priorities to enhance reciprocal linkages between urban and rural areas. The Government's Policy Statement for the water supply and wastewater sector states its development goal for urban water supply is to provide daily 24-hour access to safe drinking water for 80% of the urban population by 2020. ADB's country strategy is targeted at reducing poverty through sustainable economic growth, inclusive social development, and good governance.
Impact Improved quality of life of small town residents in the Lao People's Democratic Republic (Lao PDR), and enhanced role of urban centers as market, services, and manufacturing centers supporting the rural hinterland
Project Outcome
Description of Outcome Improved accessibility, quality, reliability, sustainability of water supply services, and environmental conditions in the project towns
Progress Toward Outcome Water supply schemes in 8 subproject towns were completed and 24-hour piped water being supplied to residents in the 8 subproject towns as well as Village and Urban Environmental Improvements in those subproject towns. Final reallocation has been finalized; and the grant account was closed on 16 May 2014. PCR was prepared and submitted for interdepartment comments by 28 July 2014 and circulated to the Board of Directors on 26 September 2014.
Implementation Progress
Description of Project Outputs

1. Strengthened water supply sector regulation, planning, policy making and management capacity

2. Constructed water supply systems

3. Improved roads, bridges, drainage, and sanitation complementing piped water supply development in the target towns

4. Improved community participation, awareness, and actions complementing the new water supply systems and drainage improvements in the target towns

5. Improved project implementation and operation capacity

Status of Implementation Progress (Outputs, Activities, and Issues)

8 water supply systems constructed and total of 19,366 connections were made, of which 18,173 were to residential households and 1,193 to nonresidential properties. As of today there were 96,036 people connected to the system; prioritized roads selected, improved and opened to traffic in the 8 subproject towns; the improvement of public sanitation facilities completed and opened for services in the 8 subproject towns; community health awareness and participation (CHAP) activities were 100 percent completed for 8 towns. Total participants were 16,215 persons comprising of 38% male and 62% female (or 6,115/10,100 persons).

32,962 persons participated in the planning, and agreeing of village environmental improvement (VEI) activities in the core villages. Of these, 15,727 (47.7%) were women, and 1% from ethnic groups

The pro-poor sanitation improvement successfully implemented; 515 toilets for poor households in 8 towns have been installed and subsidized; PIU with 23 percent female, CATs with 35 percent female and water supply and sanitation units (WATSANs) with 32 percent female were established timely and trained.

Participation plan has been formulated with beneficiaries and implemented in each village. All subprojects were selected and designed based on the agreed upon criteria and approved by ADB and GOL

O&M VEI were combined with urban environmental improvement (UEI). Phase 1, phase 2 and phase 3 towns were developed with full participation of PIUs and DPWTs and OPWTs. O&M manual was developed and provided to each participating PNPs, as well as training was provided.

Geographical Location 12 small towns in the northern and central regions of Lao PDR
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples B
Summary of Environmental and Social Aspects
Environmental Aspects

The Project will improve the quality, reliability, and sustainability of the water supply and environment in the project towns. The Project has been classified as Category B (nonsensitive), as defined in ADB's Environmental Assessment Guidelines (2003). Initial environmental examination (IEE) carried out for the three sample subprojects showed no significant adverse environmental impact. The main potential environmental impact associated with the water upply system is sludge generation and its impact on the receiving river. While the volume of sludge from the water treatment plant will be higher during the wet season, sludge volume as a percentage of the river flow will be less than 0.01%, and will have insignificant impact. Potential environmental impacts of urban infrastructure improvements are mainly short-term during the construction period and can be minimized by the proposed mitigating measures and environmentally sound engineering and construction practices. The community awareness/environmental improvement programs will complement the mitigating measures and

enhance the sustainable use of the water supply and drainage systems. The environmental assessment and review procedures (EARP) for subprojects will ensure that selection, assessment, and implementation of the remaining subprojects will comply with the environmental requirements of the Government and ADB.

Involuntary Resettlement The Project will have very limited adverse impacts from land acquisition and resettlement (LAR). As part of the project eligibility criteria, LAR in each subproject town must be Category B, or not significant, according to ADB's policy on involuntary resettlement. In the three sample subprojects, about 4,000 square meters (m2) of land will be permanently acquired. Approximately 115 households (606 persons) will experience permanent loss of land or structures. Permanent loss for each household can include, for example, a few fruit trees, a fence or a wall, or a fraction of land along the right-of-way for drainage or road upgrading. Of the 115, 2 households (seven persons) are expected to require complete relocation. A number of factors have helped minimize permanent land acquisition and structural damage: (i) alternative facility locations, (ii) relatively low population density, (iii) abundant public lands, and (iv) use of existing rights-of-way for the route of distribution pipelines and roads. In addition to permanently acquired land, about 4,200 m2 will be temporarily used during construction for pipe-laying and road construction activities. About 60 households (342 persons) will experience temporary loss of land or structures in the three sample subprojects.
Indigenous Peoples The 46 ethnic groups in the Lao PDR are classified into three broad categories'Lao Loum (majority), Lao Theung, and Lao Soung. The project area has approximately 78% Lao Loum and 22% Lao Theung and Lao Soung ethnic communities. All ethnic groups will benefit directly from piped water supply and road, drain, and sanitation improvements. No difference was found in the water supply and urban development needs of different ethnic groups in the three sample subprojects. Ethnic groups with low levels of formal education will benefit through nonformal education activities that are culturally sensitive (i.e. media and drama groups). Specific actions to enhance project benefits or mitigate negative project impacts among some ethnic groups have been included in the different social strategies and short resettlement plans for the three sample subprojects. An ethnic groups development framework has been prepared for the Project to guide the assessment of the impact of the subprojects on ethnic groups, according to Government regulations and ADB's indigenous peoples policy (see Appendix 3). In addition, specific activities are also included to ensure different ethnic groups have access to affordable piped water supply, health, and hygiene information and urban infrastructure. For instance, each ethnic group, shall be represented in each WATSAN depending on the composition of the community it represents.
Stakeholder Communication, Participation, and Consultation
During Project Design A stakeholder analysis was conducted to help identify the key project stakeholders and their interests. During project design, community meetings were held with beneficiaries to discuss flooding, sanitation, poverty, resettlement, affordability issues, and environmental concerns. Socioeconomic surveys obtained information and individual views on current situations and future preferences. Similar surveys, including inventory of loss surveys, were conducted among resettlement-affected populations. Special consultations were held with poor and vulnerable households, including those with female heads.
During Project Implementation

A participation strategy was prepared to consider different levels of cooperation and collaboration of stakeholders. Levels of participation include information exchange, consultation, collaboration, review, and comments on reports. Various forms of communications such as weekly meetings, workshops, reviews, consultation meetings, technical work groups, and planning groups, were used to ensure active participation, project support, and productive feedback. Steps for stakeholder participation and consultation have been integrated into the overall project design and individual social plans.

The Project component participation, awareness, and community actions (PACA) gives communities information on health and sanitation issues. PACA will also generate awareness, facilitate community participation and consultation with District Offices of Public Works and Transport (OPWT) and provincial nam papas, and encourage community environmental and sanitation improvements. The implementation of gender activities are progressing well. To date, about 46% of women's participation in VEI consultation workshops and training on sanitation regulations. Women's representation as members of PIUs, CATs and WATSANs are 20%, 32% and 31%, respectively.

Business Opportunities
Consulting Services To support implementation of the project, a total of 957 person-months of consulting services (144 person-months international, and 813 person-months domestic) will be required. Consulting services will be procured under two separate consulting packages, by associations of international consulting firms and domestic consulting firms or individuals. Package A comprising 50 person-months international and 82 person-months domestic consulting services, to be financed by NORAD, will cover institutional strengthening for WASA and DHUP WSD (component 1). Package B (94 person-months international and 731 person-months domestic) to be financed by ADB, will provide assistance in project management, feasibility studies, design and construction supervision of water supply systems and urban infrastructure, preparation of social assessments with information on poverty, gender and ethnic groups, resettlement, environmental management and monitoring, awareness and participation programs, and village environmental improvement. In addition, the consultants will prepare and deliver training programs, and provide capacity building, general engineering, accounting and management support to PCU, PIUs, OPWT, and WATSANs. They will also provide services for (i) groundwater surveys including drilling and pump tests; (ii) topographical surveys for feasibility studies and design; (iii) water quality testing for feasibility, design, and monitoring during construction; (iv) geotechnical investigations and soils testing for feasibility studies and design; and (v) survey and clearance of unexploded ordnance (UXO). The Government requested that package A consultants be engaged via a renegotiated and renewed contract of the existing consulting firm, which has been providing consulting services for capacity building and institutional development to WASA, financed by NORAD, over the past 5 years. Since continuity is essential for effective capacity building and the performance of the existing firm is satisfactory, the Government's request is considered appropriate. Package B consultants will be engaged in accordance with ADB's Guidelines on the Use of Consultants. The groundwater investigations and UXO clearance will be included in the consultancy contract as provisional cost items to be subcontracted because the scope of such works is uncertain. Consultants engaged under package A will be located in the WASA/WSD office. To minimize costs, the consultants engaged under the package B will be located mainly in the PCU office in Vientiane, and will have representatives stationed in each province to work with PIUs during the project construction stage.

Goods and works to be financed by ADB will be procured in accordance with ADB's Guidelines for Procurement. International competitive bidding (ICB) procedures will be used for major civil works contracts estimated to cost $1.0 million equivalent or more and supply contracts valued at $500,000 equivalent or more. Procurement of civil works valued at less than $1.0 million equivalent will be undertaken through local competitive bidding (LCB) in accordance with procedures acceptable to ADB. International shopping procedures will be followed for materials and equipment packages estimated to cost $100,000 equivalent or more but less than $500,000 equivalent. Equipment items that are locally available and cost less than $100,000 equivalent may be procured through direct purchase. Goods and works to be financed by other cofinanciers will be procured in accordance with the above guidelines or other guidelines for procurement as agreed upon with the respective cofinanciers and satisfactory to ADB. Water meters and service connections will be installed by force account by the branch PNP in each subproject town, using materials supplied and delivered to the town.

There will be a separate ICB contract for the construction of water supply systems, roads, bridges, drains, and public sanitation facilities for each subproject province. Each ICB contract will cover civil works together with supply and installation of materials and equipment. The proposed contract packaging will minimize overall costs of mobilization, management, and coordination for the PCU, PIUs, contractors and consultants; minimize the potential for problems that may otherwise arise at interfaces between contracts; ensure that contracts are large enough to attract competent contractors; and allow each province to proceed with implementation at its own pace, without being delayed by events in other provinces.

For purposes of expediency, standardization, and cost-effectiveness, the PCU will carry out all procurement, except that the PIU in each province will be responsible for procurement under component 4.

Responsible ADB Officer Chanthirath, Phomma
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Lao Resident Mission
Executing Agencies
Ministry of Comm, Trans., Post & Construction
Phomma Veoravanh
[email protected]
3rd Floor, Building of Urban Research Institute, Dongpalane Road, Vientiane, Lao, PDR
Ministry of Public Works and Transport
Dept of Housing and Urban Planning, Lao
PDR, Lane-Xang Ave., Vientiane Lao PDR
P.O. Box 206
Concept Clearance 15 Mar 2005
Fact Finding 17 Jan 2005 to 04 Feb 2005
MRM 31 Mar 2005
Approval 25 Aug 2005
Last Review Mission -
PDS Creation Date 29 Nov 2006
Last PDS Update 30 Sep 2014

Grant 0016-LAO

Approval Signing Date Effectivity Date Closing
Original Revised Actual
25 Aug 2005 24 Oct 2005 14 Jun 2006 30 Sep 2010 31 Mar 2013 16 May 2014
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 15.90 Cumulative Contract Awards
ADB 10.00 25 Aug 2005 9.91 0.00 99%
Counterpart 4.20 Cumulative Disbursements
Cofinancing 1.70 25 Aug 2005 9.91 0.00 99%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Partly satisfactory Satisfactory Satisfactory Satisfactory - Satisfactory

Loan 8219-LAO

Approval Signing Date Effectivity Date Closing
Original Revised Actual
27 Jun 2005 21 Mar 2006 22 May 2006 30 Sep 2010 31 Dec 2013 04 Aug 2014
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 9.00 Cumulative Contract Awards
ADB 0.00 27 Jun 2005 0.00 8.85 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 9.00 27 Jun 2005 0.00 8.85 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory Satisfactory Satisfactory Satisfactory - Satisfactory

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