46293-003: Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project | Asian Development Bank

Lao People's Democratic Republic: Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project

Sovereign (Public) Project | 46293-003 Status: Active

ADB is helping the Lao People’s Democratic Republic upgrade tourism infrastructure along the Greater Mekong Subregion corridors. The project includes upgrading roads to provide better access and local market linkages in four provinces - Champasak, Khammouane, Luang Prabang, and Oudomxay.  It will improve tourist and environmental services and help develop tourism-related businesses. 

 
Project Name Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project
Project Number 46293-003
Country Lao People's Democratic Republic
Project Status Active
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 3156-LAO: Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth - Lao PDR
concessional ordinary capital resources lending / Asian Development Fund US$ 40.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Regional integration
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Knowledge solutions
Partnerships
Sector / Subsector

Industry and trade / Small and medium enterprise development - Trade and services

Transport / Road transport (non-urban)

Gender Equity and Mainstreaming Effective gender mainstreaming
Description The project will remove physical and capacity constraints impeding tourism development in Champassak, Khammouane, Luangprabang, and Oudomxay four provinces situated astride the GMS Central Corridor. It will contribute to the creation of 27,000 tourism-related jobs in the Lao PDR by: (i) paving 70 kilometers (km) of rural roads to open new areas for private tourism investment and improve access to markets and social services for 15,000 people; (ii) improving environmental services in areas important for cross-border tourism to reduce public health hazards for 35,000 residents and 2.4 million annual visitors, beginning in 2019; and (iii) facilitating business support services for at least 500 small and medium-sized enterprises.3 The project will strengthen regional cooperation and integration by implementing regional tourism standards, promoting multicountry tour circuits, and supporting structured policy dialogue to reduce nonphysical barriers to travel. The project investment plan is in line with the GMS Tourism Sector Strategy,4 and the government's National Tourism Strategy, 2012 2020.
Project Rationale and Linkage to Country/Regional Strategy

Regional context. Among country groupings in Asia and the Pacific, the GMS has a strong comparative advantage in tourism as a result of its diverse cultural and natural assets, good international air and land transport connections between gateway destinations, and surging demand for intraregional leisure travel. International tourist arrivals are growing by 12.4% per year; in 2012 arrivals reached an all-time high of 44.8 million, and generated $44.3 billion in receipts. Tourism supports 7 million jobs and creates positive economic impacts in other service and productive sectors. About one-third of international arrivals visit at least two countries while travelling in the GMS and millions of residents cross borders each year for day trips. GMS countries are eager to strengthen subregional tourism cooperation and recently reaffirmed their commitment to promote cross-border tourism under the GMS Economic Cooperation Program Strategic Framework, 2012 2022.6 Nevertheless, underinvestment in public infrastructure beyond the major gateways remains a critical constraint that restrains expansion of private tourism enterprises and dispersal of benefits to less-developed areas.

National priorities. The Lao PDR received 3.33 million international tourists in 2012, a 22% increase over 2011, but accounting for less than 8% of GMS arrivals. Travel and tourism contribute 5.3% of gross domestic product and support 134,000 jobs, equal to 4.5% of total employment.8 The government's National Tourism Strategy is consistent with the GMS Tourism Sector Strategy, which prioritizes transport and urban infrastructure upgrades, education and training, and policy enhancements to improve the business enabling environment. The 2005 Tourism Law provides the legal basis for the strategy, setting out the parameters for creation of a sustainable tourism industry that contributes to national development and strengthens international cooperation. Strategic objectives are to: (i) generate employment and income for local people, (ii) strengthen tourism destination management, (iii) expand public private cooperation in tourism, and (iv) diversify tourism products and services. The estimated cost of the government's investment program for tourism between 2011 and 2015 is $118 million.

Key issues. Although the Lao PDR has many cultural and natural tourist attractions with good development potential, tourism is highly concentrated in Vientiane Capital, which accounts for 43% of international arrivals and 47% of hospitality investment. Women comprise about half of tourism workers; however, many are employed in low-skill, low-wage jobs, and are underrepresented in tourism management. The key impediments to more inclusive and geographically dispersed growth are insufficient last-mile transport infrastructure in secondary destinations; weak market linkages between the tourism industry and other economic sectors; and limited institutional capacity to promote local tourism-related enterprise development. Consequently, at least 40% of tourism receipts leave the country in the form of tourism-related imports. Inadequate environmental infrastructure and low service standards suppress tourist length of stay, spending, and yield, resulting in average receipts per visitor of about $154 the lowest in the GMS and much less than the benchmark of $1,390 in Asia and the Pacific.

To remove these constraints and engender a more equitable pattern of tourism development, the project will upgrade access roads that link rural tourist attractions with urban centers, improve environmental services in areas important for tourism, and support training and capacity building for destination management organizations and local entrepreneurs.10 Project investments are designed to catalyze additional private investment in tourism superstructure and services, boost tourist spending and related job creation in underdeveloped areas, and ensure that tourism growth is environmentally and socially sustainable.

Related policies and strategies. The project is consistent with the Lao PDR's Seventh National Socioeconomic Development Plan, 2011 2015, which aims to promote sustainable economic growth and reduce poverty and inequality. Project outputs will contribute to economic diversification and human resource development, and strengthen the participation of women and ethnic groups in national development. The emphasis on improving connectivity between urban and rural areas, strengthening value chains linked to the rapidly growing tourism sector, and creating jobs for unskilled and semiskilled workers is closely aligned with the overarching objectives of the ADB's Lao PDR country partnership strategy, 2012 2016: inclusive and sustainable economic growth and poverty reduction.12 The project reinforces regional efforts to increase cross-border investment flows and develop the GMS corridors into economic corridors.

Development coordination. The GMS Tourism Working Group is the forum for coordinating regional tourism sector assistance. Senior GMS tourism officials and ADB co-chair semiannual working group meetings to guide implementation of the GMS Tourism Sector Strategy and identify policy issues for elevation to the annual GMS tourism ministers meeting and the triennial GMS summit. In the Lao PDR, sector coordination is led by the Ministry of Information, Culture and Tourism (MICT). Other development partners engaged in tourism are German development cooperation through Deutsche Gesellschaft f r Internationale Zusammenarbeit, the International Trade Center, the Japan International Cooperation Agency, the Lux-Development, the New Zealand Aid Programme, Swisscontact, the World Wildlife Fund, and the Wildlife Conservation Society.13 The Pacific Asia Travel Association is the leading industry group with over 1,100 members and an active chapter in the Lao PDR. Parallel financing opportunities will be actively sought during implementation.

Lessons. ADB's GMS tourism sector assistance program and completed tourism projects in the Lao PDR are rated successful.14 Lessons from past projects include the need to (i) analyze tourism demand in project areas to guide selection of infrastructure investments, (ii) improve cross-sector coordination and build synergies with other ADB assistance, (iii) provide capacity building for project management and operation and maintenance (O&M), and (iv) promote tourism-related private enterprise development alongside infrastructure to expand income-generating opportunities for local residents. Applying these lessons, the project has selected relevant infrastructure subprojects based on robust market analysis,15 as well as complementarities with other ADB and development partner assistance for urban development, water supply and sanitation, vocational training, and tourism. Capacity building for entities responsible for infrastructure O&M, and parallel support for small enterprises led by women and ethnic groups, will enhance the sustainability of project outputs and ensure benefits reach vulnerable groups. The project has deliberately selected infrastructure and capacity-building interventions that will connect lower-income groups to basic services and markets and enable them to access tourism employment, education, health care, and other opportunities

Special features. The project will (i) strengthen collaboration between government, the private sector, civil society, and local communities to improve tourism destination management; (ii) demonstrate how tourist entry fees and charges can help finance the maintenance of public goods such as heritage sites, roads, and environmental services; (iii) strengthen knowledge partnerships among GMS and Association of Southeast Asian Nations members; and (iv) leverage service sector opportunities to accelerate widening of the GMS corridors into economic corridors by linking secondary tourism destinations with increasingly affluent

Impact Increased tourism employment for men and women living in underdeveloped segments of the GMS Central Corridor
Project Outcome
Description of Outcome Increased tourism receipts in Champassak, Khammouane, Luangprabang, and Oudomxay
Progress Toward Outcome Overall progress is 65% compared to 75% time elapsed since loan effectiveness. As of Q3 2018, the project is rated on-track.
Implementation Progress
Description of Project Outputs

Last-mile tourism access infrastructure improved.

Environmental services in cross-border tourism centers improved.

Institutional capacity to promote inclusive tourism growth strengthened.

Effective project implementation and knowledge management.

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

Output 1: Last-mile tourism access infrastructure improved.

Activities under this output include upgrading road transport infrastructure and public amenities to improve access to tourist attractions in Khammouane, Luang Prabang and Oudomxay provinces.

(i) Xang Cave Access Improvements, Khammouane province. Contractor was mobilized in July 2017 and all works are progressing well. Physical progress is estimated at 80% and are expected to be completed in Q4 2018.

(ii) Chomphet Heritage District and Ban Xang Hai Tham Ting Cave Access Improvements, Luang Prabang province. Contractor was mobilized in November 2017. Physical progress is estimated at 30%. The works re expected to be completed in Q2 2019.

(iii) Chom Ong Cave Access Improvements. Oudomxay province. Contractor was mobilized in December 2017. The works re expected to be completed in Q2 2020.

Operational and maintenance plans with sustainable finance mechanisms for these subprojects are being prepared; and compliance with safeguards requirements are being implemented and monitored.

Output 2: Environmental services in cross border tourism centers improved.

Activities under this output focus on improving environmental services and tourist amenities in That Sikhottabong, Khammouane province. Contractor was mobilized in July 2017. All works progress is estimated at 90% and on schedule to be completed by the end of 2018.

Output 3: Institutional capacity to promote inclusive tourism growth strengthened.

Five destination management organization were formed, four provincial and one national. Destination management plans in all project provinces have been developed. Destination management network (DMN) task forces created covering marketing, hospitality skills, and product development (34% of DMN board members are women).

- A total of 3,941 people participated in awareness seminars for heritage protection measures, health and safety, and tourism impact management (32% women, 8% people from ethnic groups).

- A total of 1,421 people participated in destination management training (38% women, 9% people from ethnic groups).

- 1,813 operators of small and medium enterprises received trainings in tourism-related business topics (54% female, 11% people from ethnic groups).

Output 4: Effective project implementation and knowledge management.

MICT continues to actively collaborate with GMS Tourism Working Group officials, development partners, and private stakeholders to implement GMS and ASEAN initiatives. Key activities completed since the previous review mission include (i) Lane Xang Heritage Quadrangle planning workshops and joint surveys with Thailand; (ii) Lao PDR 2016 annual statistics report production (1,500 copies); (iii) the highly successful 2017 Mekong Tourism Forum and first Mekong Innovative Tourism Startup, organized in cooperation with the Mekong Tourism Coordinating Office and ADB/Australia-supported Mekong Business Initiative; and (iv) ASEAN tourism standards pilot implementation (homestay, community-based tourism, green hotel, clean toilet, and clean city).

-PCU and PIU have sufficient equipment and skills development ongoing; 33% of all PCU and PIU staff are women.

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

All safeguards documents have been prepared in accordance with ADB's Safeguards Policy Statement (SPS, 2009). Compliance with safeguard requirements is satisfactory. Semi-annual safeguard monitoring reports were submitted and disclosed.

The safeguard categorization for environment B.

Involuntary Resettlement The safeguard categorization for involuntary resettlements is B.
Indigenous Peoples The safeguard categorization for indigenous peoples is B.
Stakeholder Communication, Participation, and Consultation
During Project Design The project team had conducted consultations with the project stakeholders during the project processing stage.
During Project Implementation Consultations with the project stakeholders regularly conducted during project implementation stage.
Responsible ADB Officer Xayyavong, Phoxay
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Lao Resident Mission
Executing Agencies
Ministry of Information, Culture and Tourism
Lane Xang Avenue, Vientiane
Lao Peoples Dem Rep
Timetable
Concept Clearance 30 Nov 2013
Fact Finding 01 Dec 2013 to 15 Dec 2013
MRM 13 May 2014
Approval 08 Sep 2014
Last Review Mission -
Last PDS Update 28 Sep 2018

Loan 3156-LAO

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
08 Sep 2014 27 Oct 2014 14 Jan 2015 31 Dec 2019 31 Dec 2020 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 43.57 Cumulative Contract Awards
ADB 40.00 08 Sep 2014 26.51 0.00 73%
Counterpart 3.57 Cumulative Disbursements
Cofinancing 0.00 08 Sep 2014 12.81 0.00 35%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Satisfactory - - - -

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.

Title Document Type Document Date
GMS Tourism Infrastructure for Inclusive Growth Project: Audited Project Financial Statements (January-December 2017) Audited Project Financial Statements Jun 2018
GMS Tourism Infrastructure for Inclusive Growth Project: Audited Project Financial Statements (October 2015-December 2016) Audited Project Financial Statements Jun 2017
GMS Tourism Infrastructure for Inclusive Growth Project: Audited Project Financial Statements (14 January-30 September 2015) Audited Project Financial Statements Mar 2016
Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project: Project Data Sheet (Lao Translation) Translated PDS Mar 2015
Loan Agreement (Special Operations) for GMS Tourism Infrastructure for Inclusive Growth Project Loan Agreement (Special Operations) Oct 2014
Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project: Report and Recommendation of the President Reports and Recommendations of the President Aug 2014
Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project: Gender Action Plan Gender Action Plans Aug 2014
Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project: Project Administration Manual Project/Program Administration Manual Jun 2014
Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project: Procurement Plan Procurement Plans Jun 2014
Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth - Lao PDR Initial Poverty and Social Analysis Mar 2014

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.

Title Document Type Document Date
GMS Tourism Infrastructure for Inclusive Growth - Luang Prabang, Oudomxay and Khammouane Provinces, Lao PDR: Semi-annual Safeguards Monitoring Report (June-December 2017) Environmental and Social Monitoring Reports Jul 2018
GMS Tourism Infrastructure for Inclusive Growth - Lao PDR: Chom Ong Cave Access Improvements Subproject Resettlement Plan Resettlement Planning Documents Nov 2017
GMS Tourism Infrastructure for Inclusive Growth - Lao PDR: Chom Ong Cave Access Improvements Subproject Initial Environmental Examination Environmental Assessment and Measures Nov 2017
GMS Tourism Infrastructure for Inclusive Growth - Lao PDR: Chomphet Heritage District Access Improvements Subproject Resettlement Plan Resettlement Planning Documents Jun 2017
GMS Tourism Infrastructure for Inclusive Growth - Lao PDR: Luang Prabang Province Subprojects (Output 1) Initial Environmental Examination Initial Environmental Examination Jun 2017
Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth - Lao PDR: Khammouane Subprojects Resettlement Plan Resettlement Plans May 2017
Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth - Lao PDR: Khammouane Subprojects Initial Environmental Examination Initial Environmental Examination May 2017
Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth - Lao PDR Initial Environmental Examination Apr 2014
Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth - Lao PDR: Luang Prabang Province Environmental Management Plan Environmental Management Plans Jan 2014
Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth - Lao PDR Indigenous Peoples Plans/Indigenous Peoples Development Plans Jan 2014
Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth - Lao PDR: Khammouane Province Environmental Management Plan Environmental Management Plans Jan 2014
Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth - Lao PDR: Chom Ong Cave Access Improvements Resettlement Plan Resettlement Plans Jan 2014
Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth - Lao PDR: Chomphet Heritage District Access Improvements Resettlement Plan Resettlement Plans Jan 2014
Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth - Lao PDR: Xang Cave Access Improvements Resettlement Plan Resettlement Plans Jan 2014
Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth - Lao PDR: Chom Ong Cave Access Road Improvements Environmental Management Plan Environmental Management Plans Jan 2014

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.

Tenders

Tender Title Type Status Posting Date Deadline
L3156-LAO: Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project [TIIG-LAO-W02] Invitation for Bids Closed 27 Jul 2017 18 Sep 2017

Contracts Awarded

Contract Title Approval Number Contract Date Contractor Contractor Address Executing Agency Contract Description Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
NATIONAL CONSTRUCTION SUPERVISOR SPECIALIST Loan 3156 02 Mar 2018 MR. BOUNTHANH SAYAVONG BAN THATKHAO, SISATTANAK DISTRICT VIENTIANE LAO PEOPLE'S DEM REP Ministry of Information, Culture and Tourism Consulting Services 153,510.00 153,510.00
PACKAGE TIIG-LAO-W02 CHOMONG CAVE ACCESS IMPROVEME NTS Loan 3156 24 Nov 2017 CHITCHAREUNE CONSTRUCTION CO., LTDS KAYSONE PHOMVIHANE ROAD, BAN PHONPHANAO, SAYSETTHA DISTRICT, VIENTIANE CAPITAL LAO PEOPLE'S DEM REP Ministry of Information, Culture and Tourism CONSTRUCTION 9,566,035.00 9,566,035.00
PACKAGE TIIG-LAO-W03: CHOMPHET AND BAN XANG HAI-TH AM TING CAVE ACCESS IMPROVEMENTS Loan 3156 23 Oct 2017 R8CE-PKCC-TSC JOINT VENTURE BAN TANMYSAY, XAYTHANI DISTRICT, VIENTIA NE CAPITAL LAO PEOPLE'S DEM REP Ministry of Information, Culture and Tourism CONSTRUCTION 4,563,596.00 4,563,596.00
Access and Environmental Improvements at Xang Cave and That Sikhottabong Loan 3156 15 Jun 2017 Dala Construction Sole Co.,Ltd Ban Vatkeo, Phongsali District, Phongsal I Province, Lao People's Dem Rep Ministry of Information, Culture and Tourism Construction 1,899,816.00 1,899,816.00
International Tourism Specialist Loan 3156 02 May 2017 Paul Frederick Eshoo 120 Forest Lane Menlo Park, Ca 94024 United States Ministry of Information, Culture and Tourism Consultancy 215,925.00
International Tourism Specialist Loan 3243 02 May 2017 Paul Frederick Eshoo 120 Forest Lane Menlo Park, CA 94024, United States Ministry of Information, Culture and Tourism Consulting Services 215,925.00 215,925.00
Recurrent Cost and Resettlement Cost Loan 3156 23 Jan 2017 Various Various Lao PDR Ministry of Information, Culture and Tourism Others 311,660.91 311,660.91