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

Sovereign (Public) Project | 34197-042 Status: Archived
Project Name Northern and Central Regions Water Supply and Sanitation Sector Project - Supplementary
Project Number 34197-042
Country Lao People's Democratic Republic
Project Status Closed
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Grant 0205-LAO: Northern and Central Regions Water Supply and Sanitation Sector Project - Supplementary
concessional ordinary capital resources lending / Asian Development Fund US$ 6.60 million
Strategic Agendas Inclusive economic growth
Drivers of Change
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

The project will improve the quality of life of residents in small towns in the Lao PDR and make the small towns better able to function as market, services, and manufacturing centers

supporting the rural hinterlands. The project will support the government's National Growth and Poverty Eradication Strategy (NGPES 2004), which is aimed at reducing poverty through strong economic growth and increased emphasis on the poorest districts.

The outcomes of the project will be (i) improved access, quality, reliability, and sustainability of water supply services in about 12 small towns in the northern and central regions of the country; and (ii) improved living conditions in the small towns through urban and village environmental improvements.

Project Rationale and Linkage to Country/Regional Strategy

Residents in small towns in the Lao PDR spend considerable time, energy, and financial resources getting water for their daily needs. Low coverage of safe piped water supply, poor

environmental conditions, and low hygiene awareness in small towns have resulted in a high incidence of diarrhea and malaria, and high morbidity. Such unfavorable conditions also constrain the small towns' economic development and their ability to serve the surrounding rural hinterlands. The project supports water supply and associated urban improvement in small towns, the government's highest priorities in small town development. The geographic focus of the project is the poor Northern Region, in line with the geographic focus of Asian Development Bank (ADB) operations, and the Central Region. The project includes significant community participation, poverty reduction, and health and hygiene promotion activities to strengthen local ownership of the project facilities and maximize the intended health benefits and poverty reduction impact.

The project implementation follows a phased approach, with phase 1 covering three towns, phase 2 five towns, and phase 3 four towns. Supplementary financing is required to finance the projected outputs in four phase 3 towns, which cannot be covered by the original budget because of cost increases in the phase 1 and 2 towns. The costs have increased because (i) larger populations will be served by the infrastructure, given a higher-than-assumed growth rate and a revised design horizon; and (ii) increased per capita water demand has increased.

The project implementation progress is found to be satisfactory and it is expected that the supplementary financing will heighten the project's impact by improving the quality of life of an additional 44,000 residents in the four target towns in the Lao PDR. The proposed project towns were selected according to the subproject selection criteria agreed on under the project.

Impact Improved quality of life of small-town residents in the Lao Peoples Democratic Republic
Project Outcome
Description of Outcome Improved water supply services and improved sanitation, including drainage, in the project towns
Progress Toward Outcome Four water supply schemes were constructed and prioritized roads and drainages were improved in the 4 subproject towns.
Implementation Progress
Description of Project Outputs

1. Constructed water supply systems

2. Improved roads, culverts, and roadside drainage

3. Completed village environmental improvement projects such as minor access roads, footpaths, paved public areas, tertiary drains, drainage covers, and improved public and household sanitation

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

(i) Four water supply schemes completed and being supplied to residents in 24 hours.Water pipes installation is complete.

(ii) 17.9 km of road was completed including 3.9 km of DBST and 14.0 km of gravel road.

(iii) VEI works have been identified, surveyed, detail designed, and construction works are completed. Local jobs created under VEI limited, as almost all villagers elected to utilize contractors.

Geographical Location Namkeung (Borkeo), Namor (Oudomxay), Namtha (Luangnamtha), and Ngoi (Luangprabang).
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples B
Summary of Environmental and Social Aspects
Environmental Aspects The project is classified as category B under ADB's environmental assessment guidelines. An initial environmental examination (IEE) was undertaken and an environmental assessment framework was drawn up for the project during its preparation, and were also approved by the Water Resources and Environment Agency. As part of the preparation work for the supplementary grant, IEEs were prepared for the project towns of Namkeung, Namor, Namtha, and Ngoi in accordance with ADB's Environmental Assessment Guidelines (2003) and with the Environmental Protection Law (1999) of the Government of the Lao PDR and its Implementing Decree (2002) and Regulation on Environmental Assessment (2000). These IEEs confirm the category B classification.
Involuntary Resettlement

For each subproject town, land acquisition and resettlement impact must be category B or not significant, according to the project s eligibility criteria. A resettlement framework for the project and a short resettlement plan for Muong Houn, Muong Nan, and Kenethao subprojects have been prepared according to the Lao PDR regulations and ADB s policy on involuntary resettlement.

(please refer to G0016 for safeguard categories).

Indigenous Peoples The Lao PDR is home to 46 ethnic groups, which can be classified into three broad groups Lao Loum (majority), Lao Theung, and Lao Soung. The population in the project area is about 78% Lao Loum, 9% Lao Theung, and 14% Lao Soung. The project is expected to have minimum adverse impact on ethnic groups of Lao Theung and Lao Soung (category B). Nevertheless, an ethnic groups development framework has been prepared according to government regulations and ADB s indigenous peoples policy to help assess potential impact on all ethnic groups during feasibility studies. (please refer to G0016 for safeguard categories).
Stakeholder Communication, Participation, and Consultation
During Project Design Individual subcomponents for each project town were identified through public consultations, workshops, and meetings with different stakeholders. During project design, community meetings were held with beneficiaries to discuss flooding, sanitation, poverty, resettlement, affordability issues, and environmental concerns. Consultations with communities and beneficiaries revealed challenges, strategies, and solutions for project design and implementation. 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 households with female heads. Key stakeholder input and feedback in project design helped the project evolve to its current state.
During Project Implementation During the project implementation and monitoring, primary stakeholders include residents in urban areas, resettlement-affected people, the water supply regulatory committee, the water sector division of DHUP/MPWT, provincial branches of the water supply utilities (PNPs-provincial Nampaps), Office of Public Works and Transport (OPWTs), and the project management unit. Secondary stakeholders include the principal and district governments, department of Public Works and Transport (DPWTs), mass organizations, and relevant line agencies.
Business Opportunities
Consulting Services No consultants will be recruited under the supplementary financing agreement. The current project implementation assistance contract for G0016 has been extended for the required project implementation assistance.
Procurement All procurement to be financed under the ADB grant and the OFID loan will be carried out in accordance with ADB's Procurement Guidelines (2010, as amended from time to time). International competitive bidding procedures will be used for major civil works contracts estimated to cost over $1.0 million. The procurement of civil works valued at less than $1.0 million equivalent will be undertaken through national competitive bidding. Shopping procedures will be followed for small village civil works and supply contracts costing less than $100,000 equivalent. Water meters will be purchased according to a limited international bidding procedure, following the successfully completed earlier purchase of water meters.
Responsible ADB Officer Chanthirath, Phomma
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Lao Resident Mission
Executing Agencies
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 11 Oct 2009
Fact Finding 19 Oct 2009 to 23 Oct 2009
MRM 27 Nov 2009
Approval 27 Jun 2005
Last Review Mission -
PDS Creation Date 04 Jul 2008
Last PDS Update 31 Mar 2014

Grant 0205-LAO

Approval Signing Date Effectivity Date Closing
Original Revised Actual
07 Apr 2010 07 May 2010 08 Jun 2010 30 Sep 2012 31 Mar 2013 16 May 2014
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 7.39 Cumulative Contract Awards
ADB 6.60 07 Apr 2010 6.55 0.00 99%
Counterpart 0.79 Cumulative Disbursements
Cofinancing 0.00 07 Apr 2010 6.55 0.00 99%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Satisfactory Satisfactory Satisfactory - Satisfactory

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