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

Project Name

Greater Mekong Subregion East-West Economic Corridor Towns Development Project

Project Number

43319-022

Country / Economy

• Lao People's Democratic Republic

Project Status

Closed

Project Type / Modality of Assistance

• Grant
• Loan

Source of Funding / Amount

Grant 0313-LAO: Greater Mekong Subregion East-West Economic Corridor Towns Development Project

Source	Amount
Asian Development Fund	US$ 14.23 million

Grant 0314-LAO: Greater Mekong Subregion East-West Economic Corridor Towns Development Project

Source	Amount
Urban Environmental Infrastructure Fund under the Urban Financing Partnership Facility	US$ 638,000.00

Loan 2931-LAO: Greater Mekong Subregion East-West Economic Corridor Towns Development Project

Source	Amount
Asian Development Fund	US$ 26.60 million

Strategic Agendas

• Environmentally sustainable growth
• Inclusive economic growth
• Regional integration

Drivers of Change

• Gender Equity and Mainstreaming
• 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

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, 20122022, 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 20122016 for the Lao PDR and supports ADB's urban operational plan (20122020) and water operational plan (20112020).

The project will enhance the competitiveness of towns along the EastWest 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)

Construction has been completed for all subprojects, except for DEWATS (under wastewater management) and MRF.

The Kaysone Phomvihane Wastewater Management sub-project involves the construction of a HLK channel with a length of 830 meters and a pumping station. A DEWATS was added through a contract variation in 2020. Works are to be completed in February 2021.

The Kaysone Phomvihane Road subproject has total length 6,182 meters. The works have been completed in May 2020.

The Fa Ngum Road is composed of three (3) main roads with a total length 2,149 meters. These works were completed in July 2020. An additional 350 meters have been proposed. ADB is currently reviewing necessary due diligence. Works are to be completed in June 2021.

Kaysone Phomvihane Municipality Solid Waste Management subproject covers a total area of 10 hectares, primarily for the improvement of the existing landfill. The works have been completed in June 2020. A proposal for small works for the closure of the old landfill are being reviewed. Works are to be completed by June 2021.

Construction of an MRF within the new landfill is undergoing. Works to be completed by February 2021.

Construction of 980 meters river embankment protection with a width of 50 meters. Construction was completed in December 2020.

Phine Urban Roadshas a total length of 9,978 meters. Construction was completed in late 2019.

Dansavanh Urban Roads has a total length of 3,884 meters. Construction was completed in January 2020.

Three SLEDPs with gender specific measures incorporated were completed early in the project. The SLEDPs were updated and approved in December 2020.

Operation and Maintenance Systems and Procedures Course was delivered for the roads subprojects.

An English Fluency course for the DPD has been completed.

Economic Empowerment activities for affected women on the Kaysone Phomvihane road subproject was conducted for remaining roads subprojects.

The Quality Control and Field Inspection course was conducted. The Gender Sensitization Workshop was held in the Q3'19.

Geographical Location

Khoueng Savannakhet, Muang Phin, Savannakhet

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.

Contact

Responsible ADB Officer

Souannavong, Souadalay

Responsible ADB Department

Southeast Asia Department

Responsible ADB Division

Lao Resident Mission (LRM)

Executing Agencies

Ministry of Public Works and Transport

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

27 Jan 2021

Funding

Grant 0313-LAO

Grant 0314-LAO

Loan 2931-LAO