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

Sovereign Project | 45041-002 Status: Active

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
Miller, Jeffrey M. Southeast Asia Department Request for information
  • Lao People's Democratic Republic
  • Grant
  • Loan
  • 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 US$ 1.84 million
Grant: Vientiane Sustainable Urban Transport Project
Asian Investment Facility US$ 6.90 million
Loan 3250-LAO: Vientiane Sustainable Urban Transport Project
Concessional ordinary capital resources / Asian Development Fund US$ 35.00 million
Loan: Vientiane Sustainable Urban Transport Project
European Investment Bank US$ 20.00 million
Private Sector US$ 6.41 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 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.
Implementation Progress
Description of Project Outputs

1. A sustainable urban transport management agency for Vientiane established

2. High-quality bus services and BRT 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 non-motorized transport in the core area of Vientiane improved

Status of Implementation Progress (Outputs, Activities, and Issues) Recruitment of project implementation consultants (EIB and EU-AIF financed contract) is underway.
Geographical Location Vientiane City

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.
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.
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

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.

Notice of Invitation to Prequalify for Project Implementation Consultants for Vientiane Sustainable Urban Transport Project with funding from the EU Asian Infrastructure Fund (EU-AIF) and administered by the European Investment Bank (EIB) was published on 7 February 2017 in OJS26 [ access link ]

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 Staff

Responsible ADB Officer Miller, Jeffrey M.
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 30 Mar 2017

Grant 0471-LAO

Approval Signing Date Effectivity Date Closing
Original Revised Actual
10 Mar 2015 03 Mar 2016 29 Aug 2016 31 Dec 2020 - -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 1.84 Cumulative Contract Awards
ADB 0.00 10 Mar 2015 0.00 0.00 0%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 1.84 10 Mar 2015 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 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 49.55 Cumulative Contract Awards
ADB 35.00 10 Mar 2015 0.00 0.54 2%
Counterpart 14.55 Cumulative Disbursements
Cofinancing 0.00 10 Mar 2015 0.00 0.26 1%

Loan 8303-LAO

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

The Public Communications Policy (PCP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

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

None currently available.

The Public Communications Policy (PCP) 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.

Requests for information may also be directed to the InfoUnit.