Lao People's Democratic Republic: Vientiane Sustainable Urban Transport Project

Sovereign Project | 45041-002

The Asian Development Bank is working with the Lao People’s Democratic Republic to build a bus rapid transit system, and develop other transport solutions, to ease traffic in Vientiane, the country’s fast growing capital. The project is financing over 11 kilometers of dedicated bus lanes, 24 enclosed stations, and over 90 climate-friendly buses. It will also fund new signal lights at key intersections and a central traffic control center, as well as a national vehicle registration system.

Project Details

  • Project Officer
    Mizusawa, Daisuke
    Southeast Asia Department
    Request for information
  • Country
    Lao People's Democratic Republic
  • Modality
    • Grant
    • Loan
  • Sector
    • Transport
Project Name Vientiane Sustainable Urban Transport Project
Project Number 45041-002
Country Lao People's Democratic Republic
Project Status Active
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Grant 0471-LAO: Vientiane Sustainable Urban Transport Project
Global Environment Facility Grant US$ 1.84 million
Grant: Vientiane Sustainable Urban Transport Project
Asia Investment Facility US$ 6.90 million
Loan 3250-LAO: Vientiane Sustainable Urban Transport Project
Asian Development Fund US$ 35.00 million
Loan: Vientiane Sustainable Urban Transport Project
European Investment Bank US$ 20.00 million
Loan 8303-LAO: Vientiane Sustainable Urban Transport Project
OPEC Fund for International Development US$ 15.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Knowledge solutions
Private sector development
Sector / Subsector

Transport / Urban public transport

Gender Equity and Mainstreaming Effective gender mainstreaming
Description The Vientiane Sustainable Urban Transport Project (VSUTP) will improve the quality of life in Vientiane by improving access and mobility. The project will do this by establishing a sustainable urban transport management agency (SUTMA), a high-quality public bus transport system, a parking management system, and a national electronic vehicle registration system, and by improving traffic management and accessibility for pedestrians and nonmotorized transport (NMT). The project promotes gender mainstreaming, greenhouse gas reduction, and public private partnership.
Project Rationale and Linkage to Country/Regional Strategy

Vientiane, the capital of the Lao PDR has an estimated population of about 750,000. The principal urbanized areas have an estimated population of 500,000. The central core of the city has a mixture of government, educational, religious, and commercial institutions, as well as residential areas, and is also the tourism center, with many hotels and historical and cultural attractions. Many of the roads in Vientiane are narrow, and many of the intersections operate in an inefficient manner. The total number of private vehicles registered in Vientiane increased at an average annual growth rate of 17% during 2000- 2009, and has increased at a growth rate of more than 10% since then, placing Vientiane on an unsustainable transport development path, as the city is starting to experience congestion, increased incidence of road accidents, and deteriorating local air quality. The expanding use of private vehicles is also increasing greenhouse gas emissions. Motorcycles are the primary mode of transport, accounting for 67.0% of daily trips, while public transport only accounts for an estimated 0.6% of daily trips. Public transport in Vientiane is largely provided by privately operated vehicles, particularly tuk-tuks (motorized tricycles). While Vientiane Capital State Bus Company (VCSBC) provides service from the central bus station in the core area to other points in Vientiane, there is no bus service linking points within the core area. VCSBC lacks (i) staff with sufficient skills, (ii) competition, (iii) incentives to improve efficiency, and (iv) capital. There is no parking management system in Vientiane, with no charge for on-street parking and little enforcement of parking regulations.

The project supports the objectives of the Lao PDR's sustainable development strategies, including the Strategic Framework for National Sustainable Development Strategy and the National Rio+20 Report. The National Rio+20 Report specifies the government's long-term sustainable transport strategy and action plan. The project will support achievement of a number of the strategy's goals, including promoting (i) travel without the use of motorized vehicles; (ii) public transport in urban areas; and (iii) bus rapid transit (BRT) in Vientiane.

The project supports the strategic priorities of the Asian Development Bank (ADB) for 2014- 2020 stipulated in ADB''s Midterm Review of Strategy 2020 by improving the enabling environment for inclusive growth through capacity building, increasing assistance for sustainable transport, mobilizing private sector investment, facilitating access to global and regional funds, and contributing to ADB''s cofinancing target. The project is consistent with ADB''s country partnership strategy, 2012- 2016 for the Lao PDR, which has as its overarching objective inclusive and sustainable economic growth and poverty reduction, with a focus on improved urban services to meet the challenges of the rapid urbanization agenda. The project is supported by ADB''s Sustainable Transport Initiative and is included in ADB''s Lao PDR Transport Sector Assessment, Strategy, and Roadmap.

Impact Development of the Vientiane core area in an environmentally sustainable and pedestrian-friendly manner
Project Outcome
Description of Outcome Improved urban transport operations and capacity in Vientiane
Progress Toward Outcome

ADB loan and GEF grant agreements were declared effective in August 2016. International advisor 1 commenced work in October 2016. The consultant will provide independent advice and assistance to MPWT's Project Coordination Unit (PCU) to facilitate project implementation.

The Project Implementation Consultant (PIC) commenced services in July 2018. The PIC is tasked with preparing concept, preliminary and detailed design, procurement and supervision of the works.

Overall project implementation progress. As of May 2021, was 35.8% against (i) the implementation schedule of 80.5%; and (ii) the elapsed implementation period of 72.4%. since OFID loan effectiveness and ADB loan/Global Environment Facility (GEF) grant effectiveness, based on the closing date of the OFID loan on 30 June 2022 and those of the ADB loan/GEF grant on 31 December 2022, respectively. The detailed engineering design and draft bidding documents for civil works and systems were expected to be completed in September 2021 but they have been delayed.

Implementation Progress
Description of Project Outputs

1. A SUTMA (sustainable urban transport management agency) for Vientiane established

2. High-quality bus services and BRT (bus rapid transit) operating in Vientiane

3. Traffic management in the core area of Vientiane improved

4. Paid parking system and national vehicle registration system established

5. Accessibility for pedestrians and other NMT (non-motorized transport) in the core area of Vientiane improved

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

As of June 2021, the work progress is restricted in general, due to COVID-19 pandemic and travel restrictions hampered project field work.

1. SUTMA for Vientiane established

TA 9499 supported this output. A draft Urban Transport Management Section (UTMS) organization and staffing proposal has been prepared and presented in a workshop on 25 June 2020. The proposal is expected to be endorsed by DPWT and approved by the Vientiane Capital Administration in Q3 2021. TRTA plans to provide training and capacity development to the UTMS after approval. It is expected that UTMS will be upgraded to SUTMA in the near future.

2. High-quality bus services and BRT (bus rapid transit) operating in Vientiane

The BRT vehicle specifications were prepared in October 2019. The draft specification, tender documents and contract for procurement of 115 BRT e-buses of 12m long was submitted in March 2020 and awaiting approval. The design of BRT stations was presented in February 2021. The design is being revised incorporating some comments and will be presented to MPWT and VCA for final decision. The design for the bus depot at Km 16 on NR13S is being prepared. The draft fare policy and fare structure along with the draft technical specifications, tender documents for automatic fare collection were prepared for approval. Terms of Reference is being prepared for the Quality Control consultant who will monitor and evaluate performance of the two private companies for BRT system operation and another company for parking system operation.

3. Traffic management in the core area of Vientiane improved

The draft traffic management plan was prepared in March 2021 and awaiting approval. The draft final design for the central control center is prepared and awaiting approval.

4. Paid parking system and national vehicle registration system established

The draft detailed parking management plan is being finalized. The draft specifications, contract and bidding documents for parking management company were prepared in April 2021 and awaiting approval.

5. Accessibility for pedestrians and other NMT (non-motorized transport) in the core area of Vientiane improved

The draft business model and operational plan is being updated. The draft specifications, bidding documents for pedestrian infrastructure around BRT stations were prepared in April 2021 and awaiting approval.

Geographical Location Vientiane
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects

The project is category B for environment, and an initial environmental examination (IEE) has been prepared based on ADB's Safeguard Policy Statement (2009). The IEE has been disclosed on ADB's website. The project does not involve major civil works. Adverse impacts such as elevated noise levels, dust emissions, traffic disturbances, and other construction-related impacts will be experienced in the vicinity of the project sites. These impacts, however, are considered minor, being short term and localized in nature. The parking and traffic management systems will involve works of a minor nature with negligible environmental impacts. During operation, the overall environmental impact of the project will be beneficial. The project will contribute to reduced traffic congestion, improved conditions for walking and cycling, improved community livability, and better air quality. The project will reduce emissions of greenhouse gases by shifting transport demand from private vehicles to buses. Potential adverse impacts from operation of the bus depot and bus staging areas are considered insignificant and can be addressed through good design and implementation of mitigation measures specified in the environmental management plan (EMP) included in the IEE. The EMP includes environmental mitigation measures for all project phases, and monitoring requirements and responsibilities for EMP implementation. The EMP will be incorporated in the civil works contract documents. Public consultations have been conducted for the project, and a grievance redress mechanism will be developed to facilitate resolution of project-related environmental impacts.

The IEE and EMP will be updated as (i) the location of the BRT corridor has been changed and two depots have been added in the project scope, and therefore (ii) there would be environmental impacts that are not captured by the 2014 IEE (in terms of the area of impacts) although the nature of expected impacts are the same as that in the 2014 IEE. The BRT corridor has been changed starting from Fa Ngum Park - Patuxay via Souphanouvong-Setthathirath-Mahosod-Nongbone roads (Package CW1A) and other section from Patuxay on Kaysone Phomvihane to intersection of 450-year road with turning left to NOUL (Package CW1B).

Involuntary Resettlement

The project is categorized as B for involuntary resettlement in accordance with ADB's Safeguard Policy Statement. All affected land and structures identified are owned by government organizations. The proposed stations for the BRT system will only require clearance of small strips of government right-of-way land and public parks. Structures affected are roadside pavements and curbsides, streetlights, electricity poles, sewage intakes, and tree and garden fences. For the proposed bus staging areas, the project will acquire the entire compound (with three office buildings) owned by the Institute of Mass Media and Culture (about 2,700 square meters) and a portion of land with no structures (about 1,500 square meters) owned by the Vientiane Department of Education and Sports. The area for the depot (about 1.7 hectares) is vacant land and is owned by the MPWT. No previous land acquisition occurred in anticipation of ADB financing. Due diligence has been conducted to confirm that the depot site to be used by the project is not used by any person (i) who may be economically displaced, (ii) whose structures have been or will be demolished, and/or (iii) who will be restricted from using the specified area. All affected organizations have been consulted, and key information in the resettlement plan such as project entitlements, grievance redress, institutional arrangements, schedule, and cost estimates have been discussed and disclosed during the preparation of the resettlement plan.

MPWT/PIC is updating the resettlement plan (RP) based on the additional scope (i.e., the section of BRT corridor and the number of depots from 1 to 3) and is developing stand-alone RPs for CW1A, CW1B, and CW1C (original CW1 package to be split into 5 individual packages CW1A to CW1E) to address the involuntary resettlement impacts pertaining to land acquisition and temporary business closure. There are no permanent nor temporary involuntary resettlement impacts under packages CW1D and CW1E.

Indigenous Peoples The project is categorized as C for indigenous peoples in accordance with ADB''s Safeguard Policy Statement.
Stakeholder Communication, Participation, and Consultation
During Project Design

Widespread consultations have been conducted with community members and business owners along the BRT route, as well as the Tuk-Tuk Association, Taxi Association, independent taxi drivers, Pick-up and Van Association, international nongovernment organizations, and the government. To encourage more meaningful participation, numerous interviews and small focus group sessions with stakeholders have also been conducted. Native language information materials about the project have been provided at these consultative meetings. The draft stakeholder communication strategy, which will be finalized during project implementation, will ensure the ongoing participation of key stakeholders during project implementation.

Consultations have been conducted with nongovernment organizations and various transport associations (e.g., the Tuk-Tuk Association, Taxi Association, and Pick-up and Van Association), and these stakeholders will continue to be consulted during implementation.

During Project Implementation

MPWT has established a hotline system with telephone number 1518 to allow public feedback on the project. The hotline was officially lunched on 1 November 2017. Dissemination of clarifications to any complaints will be publicized in Pasaxon newspaper, MPWT website, and newsletter of MPWT. The Project Implementation Consultants (PIC) will implement all consultation activities in coordination with ADB, MPWT, DOT, and Vientiane Capital.

As of June 2021, the following consultation meetings and training on resettlement were conducted: (i) Chanthabouly and Sisattanak District Resettlement Committee on 9 July 2020; (ii) Xaysettha District Resettlement Committee on 10 July 2020; (iii) Xaithany and Sikhottabong Districts Resettlement Committee on 19 August 2020. Regarding the resettlement, resettlement survey/detailed measurement survey (DMS) including social economic survey of affected households (SESAH) were conducted in September 2020. The resettlement plan for civil works Package CW1A and CW1B is being updated.

Business Opportunities
Consulting Services

All consulting services to be financed out of the proceeds of ADB will be recruited according to ADB''s Guidelines on the Use of Consultants (March 2013, as amended from time to time). Please see project procurement plan on ADB website. The Urban Transport Advisor - I mobilized on 7 October 2016. The project external auditors (C5), Accmin Consulting and Services Co. Ltd., mobilized on 26 April 2018.

The Project Implementation Consultants (PIC), with funding from the EU (EU-AIF) and administered by the European Investment Bank (EIB), mobilized on 23 July 2018.

Procurement All goods and works to be partially or fully financed out of the proceeds of ADB shall be subject to and governed by ADB''s Procurement Guidelines (April 2015, as amended from time to time). Please see project procurement plan on ADB website.
Responsible ADB Officer Mizusawa, Daisuke
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Transport and Communications Division, SERD
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 12 Dec 2011
Fact Finding 18 Mar 2014 to 28 Mar 2014
MRM 21 Aug 2014
Approval 10 Mar 2015
Last Review Mission -
Last PDS Update 22 Sep 2021

Grant 0471-LAO

Approval Signing Date Effectivity Date Closing
Original Revised Actual
10 Mar 2015 03 Mar 2016 29 Aug 2016 31 Dec 2020 31 Dec 2022 -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 1.84 Cumulative Contract Awards
ADB 0.00 18 Oct 2021 0.00 0.00 0%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 1.84 18 Oct 2021 0.00 0.00 0%

Loan 3250-LAO

Approval Signing Date Effectivity Date Closing
Original Revised Actual
10 Mar 2015 12 Mar 2015 29 Aug 2016 31 Dec 2020 31 Dec 2022 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 49.55 Cumulative Contract Awards
ADB 35.00 18 Oct 2021 0.92 0.00 3%
Counterpart 14.55 Cumulative Disbursements
Cofinancing 0.00 18 Oct 2021 0.87 0.00 3%

Loan 8303-LAO

Approval Signing Date Effectivity Date Closing
Original Revised Actual
23 Jul 2015 09 Oct 2015 04 Feb 2016 31 Jan 2020 30 Jun 2022 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 15.00 Cumulative Contract Awards
ADB 0.00 18 Oct 2021 0.00 0.00 0%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 15.00 18 Oct 2021 0.00 0.00 0%

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

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The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

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Tender Title Type Status Posting Date Deadline
International Advisor II (Urban Transport Advisor II) Individual - Consulting Closed 27 Jan 2021 02 Feb 2021
External Auditor Firm - Consulting Closed 30 Sep 2017 29 Oct 2017
LAO: Vientiane Sustainable Urban Transport Project Advance Notice Archived 08 Nov 2014

Contracts Awarded

Contract Title Approval Number Contract Date Contractor | Address Executing Agency Total Contract Amount (US$) Contract Amount Financed by ADB (US$)

Procurement Plan