Regional : Second Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project

Industry and trade / Small and medium enterprise development

Transport / Road transport (non-urban) - Urban roads and traffic management - Water transport (non-urban)

Water and other urban infrastructure and services / Urban flood protection - Urban solid waste management

Cambodia and the Lao PDR actively promote tourism because it produces substantial national income, local employment, private investment and trade in services. Tourism directly contributes 12.4% to Cambodia's gross domestic product (GDP) and 4.6% to Lao PDR's GDP, generating 70%78% of service exports and $1.1 billion annual investment. There are about 1.1 million tourism workers in the two countries. Most are women employed by small and medium-sized enterprises (SMEs). Tourist visa on arrival is permitted for 180 countries and 15-day tourist visa exemptions granted to ASEAN citizens. Government efforts to upgrade gateway airports, transnational railways and highways, and secondary roads to facilitate travel and tourism are supported by the Asian Development Bank (ADB) and other development partners. ASEAN and GMS policies to liberalize aviation services and ease cross-border vehicle movements complement physical infrastructure investments.

Even with these strengths and opportunities Cambodia and the Lao PDR rank low in the World Travel & Tourism Competitiveness Index, mainly because secondary destinations lack modern transport infrastructure and quality urban environmental services. Other underlying constraints are inadequate tourism planning, low service standards, and a weak business enabling environment. Consequently, in 2016 the two countries received only 8% of ASEAN's total tourist arrivals. In the same year Cambodia's international tourist arrival growth decelerated to 5%, about half the medium-term rate, and Lao PDR's arrivals fell 9.5% compared to 2015. Fewer visitors and lower spending because of poor sanitation and hygiene reduces economic benefits by about $90 million per year. Average expenditure per visitor in Cambodia ($641) and the Lao PDR ($171) is far below Asia and the Pacific's benchmark $1,500. Imbalances within the countries is also a problem. About half of international tourist arrivals and corresponding visitor expenditure, destination investment, and direct tourism employment accrue to just 3 cities: Phnom Penh, Siem Reap, and Vientiane Capital.

The GMS central and southern corridors are vulnerable to climate change, particularly increasingly severe weather events in Cambodia's coastal zone and flooding in Lao PDR's Mekong and Nam Xong River valleys. Climate vulnerability and risk are exacerbated by limited country capacity to integrate adaptation and mitigation solutions. Countering climate change requires finance and knowledge to retrofit and construct climate-resilient infrastructure and better prepare for natural disasters. Resource-efficiency certification programs, including the ASEAN green hotel standard, and public awareness campaigns to promote lower-carbon travel, emissions offsets, and environmentally-friendly tourism services are also needed.

To help address these constraints the project builds on the ongoing GMS Tourism Infrastructure for Inclusive Growth Project by strategically financing climate-resilient road, water transport, and urban infrastructure in areas with comparative tourism advantages. Priority investments include (i) road improvements to decongest urban areas and link secondary towns with nearby tourist attractions; (ii) coastal and river passenger ports to increase handling capacity and provide private operators with the facilities needed to expand water transport and recreation services; (iii) storm water drains and riverbank protection in flood-prone areas; and (iv) modern solid waste and septic management systems with expanded collection services, materials recovery, and hygienic disposal facilities

Sustainable, inclusive, and more balanced tourism development achieved.

Tourism competitiveness of secondary towns in Cambodia and the Lao PDR increased.

L3701-CAM: As of 30 June 2023, physical progress is estimated at 82.15% compared to the elapsed implementation period of 82.82% since approval. G0599-LAO: as of 30 Jun 2023, physical progress is 70.40% against time elapsed of 70%.

G0599-LAO: As of 30 September 2023, physical progress is estimated at 72% against the time elapsed of 74% since effectiveness.

Output 1. Urban-rural access infrastructure and urban environmental services improved.

Output 2. Capacity to implement ASEAN tourism standards strengthened.

Output 3. Institutional capacity for tourism destination management and infrastructure O&M strengthened.

CAM (0.5ha): More than 40 ha of flood protection as a part of the coastal road construction. Improved drainage includes 15 new pipe culverts and 18 box culverts along coastal road.

LAO (24.5ha):

- Contract of TIIGP2-LAO-W01: Nakasang and Don Det-Don Khone Access Improvement was awarded on 30 Dec 2019, which includes 0.5ha catchment area of flood protection and drainage improvement. The subproject is completed.

- Detailed design for package TIIGP2-LAO-W03a: Vang Vieng Urban Renewal was completed during the first half of 2020. This package includes 24 ha catchment area of flood protection and drainage improvement. Commencement of the procurement process to be confirmed in 2023.

The project will construct flood protection and drainage for a total of 24.5 ha catchment.

CAM: As of March 2023, the cumulative total: 203 participants (F110/54%).

(i) Koh Tunsay consultation meeting on 22 to 24 October 2019, total 82 participants (F37/45%)

(ii) Koh Tunsay consultation meeting on 28 to 29 May 2020, total 34 participants (F21/62%)

(iii) Koh Tunsay Consultation meeting on 24 Nov. 2020 with 7 community representatives (F7/100%)

(iv) Training on GAP implementation, ADB's gender results and Social Risk Mitigation in Worker Camp-HIV-AIDS-human trafficking and Child Labor Prevention. 80 participants (F45/56%)

Progress is 100% for this indicator.

LAO: 50.4% (119 out of 236) of people consulted to optimize inclusiveness, gender responsiveness, and employment opportunities during and after construction were women.

Additional consultations are planned, in which women participation will be encouraged to ensure the target of 50% will be maintained.

CAM (15m3/day):

The leachate treatment capacity of the Kep landfill is 405m3/day.

Kep Landfill subproject contract was signed on 7 May 2020. By 31 December 2021, progress at Kep Landfill is estimated at 96% of the updated total contract value after VO3 and the pending woks are limited to the supply and installation of the equipment parts included in the approved VO3. Construction period was extended until 31 October 2022 due to delays in delivery of leachate treatment equipment and landfill machinery. Progress for this indicator is 100%.

LAO (15m3/day): TIIGP2-LAO-W04: Vang Vieng Landfill Improvements, which was awarded on 19 Feb 2021. Overall progress of the subproject was 82.25%. This package includes 20m3/day septage sludge treatment facility, and wastewater treatment under W02 and W03 (Kaeng Yui) will be included.

CAM (10.4km): As of June 2023, the DMS, RCS and draft DRP were prepared by GDR/PMCES from August to December 2021. Project was signed on 27 Dec 2021. GDR completed the payment of compensation to 77 AHs, on 6 July 2022. NOL for partial handover of about 8 km of road without social impacts was issue 19 Jan 2022.

NOL for the final handover of the entire road works area was issued on 11 July 2022

LAO (62.6km):

- Contract of TIIGP2-LAO-W01: Nakasang and Don Det-Don Khone Access Improvements was awarded on 30 Dec 2019, which includes 21km of improvement of access road to tourist sites. Progress was 100%. Handover was conducted on 18 Jul 2023.

- Contract of TIIGP2-LAO-W02: Nam Ngum Reservoir Access Improvements was awarded on 26 Apr 2021, which includes 6.73km of concrete road. Progress was 67.47%. Progress was delayed and the catch up action plan was developed and closely monitored.

- Contract of TIIGP2-LAO-W03: Kaeng Yui Waterfall Access Improvements and Western Loop Rural Access Road and Bridge Improvements was signed on 23 Jul 2021, which includes 6.00 km of concrete road and 25.97 km of DBST road totaling 31.97km of access road improvement. Progress was 59.43%, delayed. The catch up action plan was developed and closely monitored.

- Contract of TIIGP2-LAO-W04: Vang Vieng Landfill Improvements was awarded on 19 Feb 2021, which includes 1.26km of access and internal road. Progress was 82.25%.

- The remaining roads are included package TIIGP2-LAO-W03a: Vang Vieng Urban Renewal, which includes 0.67 km of concrete road and 0.39 km of DBST road totaling 1.05 km of access road improvement. The DED was prepared, and endorsed by ADB. Commencement of the procurement will be confirmed in 2023.

A total 62.01 km road will be improved under these 5 Works packages.

CAM (2): As of June 2023, the Contractor completed the preliminary activities for the preparation of CEMP and UXO clearance of the area on 10 November 2021. ADB authorized the start of Construction works on 14 November 2021.

The Contractor has completed the detailed investigation survey and the construction of the camp was completed on March 2022. A pier redesign was requested by local community and supported by Kep Province in order to increase the mooring capacity. This additional works and the greater cost for renting the only large barge available for hire was the subject of a CVO-1. The unavailability of suitable barge affected the transportation of equipment and material to the island for the past 9 months, which caused a delay of works under this subproject.

LAO (2):

- Contract of TIIGP2-LAO-W01: Nakasang and Don Det-Don Khone Access Improvement was awarded on 30 Dec 2019, which includes improvement of one ferry port. Overall progress of the subproject was 100%.

- Contract for Package TIIGP2-LAO-W02: Nam Ngum Reservoir Access Improvements was awarded on 26 April 2021, which includes passenger/ferry port improvement. Overall progress of the subproject was 67.47%.

A total of 2 passenger/ferry ports will be improved.

CAM (1,600): Progress for this indicator is 100%. The number of homes and businesses receiving SWM collection services has been validated by PMCES. Based on 2022 Cambodian Economic Census stating 1,975 out of 4,164 households in Kep Municipality (47%) and 2,045 out of 2,337 business (87%) have access to waste collection services, with waste delivered to the new landfill.

LAO (4,100): Under contract of TIIGP2-LAO-W04: Vang Vieng Landfill Improvements, which was awarded on 19 Feb 2021. The project will support improving institutional capacity for enhanced solid waste management in Vang Vieng.

The targeted number of households and businesses for improved solid waste management services is 4,100 (number of beneficiaries to be confirmed).

National Assessment Committees (equivalent to assessment frameworks and certification boards) being established for all seven ASEAN Tourism Standards.

CAM:

- MOT has established one national ASEAN Tourism Assessment framework that comprises of national and provincial assessment committees

- The gender target for this indicator has been achieved with a total 38 national assessors (F12/31.58% average female percentage across 3 national assessment committees)

- Five standards have been selected for implementation in the four southern provinces including (i) Green hotel standard (ii) Clean city standard (iii) Homestay standard (iv) Community-based tourism standard and the (v) public toilet standard.

- There are 4 MOT departments responsible for the following standards (i) Green Hotel - Accommodation and Food Services Department (ii) Clean City - Clean City Assessment Department (iii) Public Toilet Standard - Clean City and Contest Promotion Department (iv) CBT and HS Product Development Department

- There are three national certification committees have been established for (i) Clean City and Public Toilet Standard, (ii) CBT and Homestay and (iii) MOT has approved the Hotel Rating Committee as the assessment committee for Green Hotel Standard

- The GAP target of 30% female membership has been achieved with 38 members (F12/31.58%) of the three assessment committees (average female membership)

- There are 4 provincial assessment committees following the National Assessment Committee structure

- The NATSS has been working closely with the relevant MOT standards departments to create the guidelines and manuals for the national certification bodies.

- Three sets of guidelines and manuals are being finalized for the Public Toilet, CBT and Homestay, and Green Hotel Standard

- Progress for this indicator is OP 2 ATS is estimated at 100%

LAO: One national assessment framework established comprising:

- National and Provincial Assessment and Certification Committees (equivalent to certification boards) for all 7 ASEAN Tourism Standards

- ASEAN Tourism Standards (5 of them adapted to Lao national context) in English and Lao languages

- Assessment and certification manuals for all 7 standards

CAM:

The GAP target of 30% female membership has been achieved with 38 members (F12/31.58%) of the three assessment committees (average female membership)

LAO: National and provincial tourism standard assessment committees (equivalent to the 'certification bodies referred to in the PAM) have been set up for all seven standards, with this count of membership:

- National Level: 51% (48 out of 94)

- Champasak Province: 34% (14 out of 41)

- Vientiane Province: 33% (6 out of 18)

- Vang Vieng District: 30 % (9 out of 30)

- Luang Prabang Province: 25% (4 out of 16)

Total at provincial level: 31.4% (33 out of 105)

CAM (43):

- The MOT-ATS team developed the TORs and mobilized trainers to assist MOT establish the Green Hotel Standard assessment committee.

- Guideline and manuals for Green Hotel Standard were completed in December 2022.

- The MOT has designated Hotel Rating Committee as the assessment committee for Green Hotel Certification.

DMF targets for the Green Hotel standard have been reviewed. Baseline targets have been verified by PCUs in Lao PDR and Cambodia with assistance from Lao TIIG-2 International ASEAN Tourism Standards Specialist.

- Since 2007, 9 Hotels have been certified and awarded the Green Hotel standard in the project's target area. 2 certifications are current and 7 have expired.

- In January 2022, 2 hotels in Preah Sihanouk were awarded the Green Hotel Standard: Jin Bei Hotel and Songsa Private Island Resort

- 28 hotels that were assessed in Q1 2022 failed to meet the standard and will be reassessed from Q2 2023 through the national/provincial ATS frameworks.

- Progress for Green Hotel certification is 30% as of 31 March 2023 (8

current out of 27 certifications that are required during the project term)

LAO (64):

2017 Baseline corrected from 29 to 21.

Out of the 34 hotels that have been certified since 2008, 8 have active certification, the others are expired. An effort is being made in 2022 to re-certify the expired properties, along with certification of additional properties.

As the hotels partially or fully closed their operations during COVID-19 pandemic and recently resume their operations after the gov's announcement of full reopening of the country in May 2022. The target facilities being consulted and confirmed. The certification cycle is 2-year, the last round was in Jan 2022), and the next round will be in 2024.

CAM (35):

- The ATS team has conducted National Consultation Workshop on the assessment guidelines and manuals for Homestay and CBT Standards.

- The DMF targets have been reviewed by Cambodian ATS team and new certifications began in September quarter and will continue throughout 2023.

- Progress for Homestay certification is 30% as of 30 June 2023 (5 of 20 certifications that are required during the project term).

- ATF 2023 ATS Homestay Awards: Eagle, Black Bear and Mien Mien in Koh Kong province; Trapaing Sangke in Kampot province

LAO (113):

3 homestay villages certified in target provinces, with a combined number of 23 service providers in 2016:

- Ban Naduang (Kaeng Nyui waterfall site), Vang Vieng District, Vientiane Province (2016, renewed in 2018)

- Ban Hua Don Deng (Don Deng Island), Pa Thoumphone District, Chamapasak Province (2017, renewed in 2019)

- Ban Don Kho (Don Kho Island), Xanasomboun District, Champasak Province (2017, renewed in 2019)

2017: 25 service providers

2018/2019: 28 service providers

2020: 28 service providers

All three certifications are now expired. An effort is being made in 2022 to re-certify the expired villages, along with possible certification of additional villages.

Target may need to be reviewed at mid-term review.

CAM (3): Three cities have already achieved the Clean City Standard: Kep in 2018, Kampot in 2020 and Sihanoukville in January 2022. Two clean city certifications have expired (Kep and Kampot). Sihanoukville certification is current.

- Progress for Clean City certification is 100% as of 30 June 2023 with two Clean City certifications being awarded for Sihanoukville and Kampot during project period.

LAO (3):

(i) Luang Prabang City, Luang Prabang Province, was certified in 2018, and renewed its certification in 2022..

(ii) Pakse City, Champasak Provincewas certified in 2022.

(iii) Vang Vieng Town, Vientiane Province, is working towards certification in 2022.

An effort is being made in 2022-2024 to re-certify the expired units in these villages, along with certification of additional households in other villages. So far, additional 36 HH will be targeted.

LAO (300): SME needs assessment was completed. SME development plan to be finalised by Q3 2023.

Data available to date 45.7% (384 out of 845) participants in SME development activities were women.

CAM:

- As of March 2023, cumulative total Cumulative for SME support services is 437 participants (F224/44.80%).

- The target for 60% female participation is 300 beneficiaries

- SME training activities include food street, development of new tourism products, food street vendors training on food hygiene and safety, community guide training for better and quality guide services, awareness raising on food safety and hygiene, applying tourism safety rules to tourism service businesses including COVID-19 and communicable diseases training and solid and liquid waste management.

- Progress for SME support is 87.00%.

LAO (4): Five destination management plans completed (National, Luang Prabang, Southern Laos, Vang Vieng, and Vientiane Province).

CAM:

- As of March 2023, 4 existing DMPs for Kep, Kampot, and Koh Kong for the period 2019-2023 have been completed in consultation with tourism public and private stakeholders.

- To support DMP development and M&E, the Royal University of Phnom Penh has completed training for "Destination management for international good practice" which was delivered to 4 coastal DMOs in 2022.

- A destination management plan for the coastal zone will be drafted during the formulation of the Coastal development Plan in Q1 2023.

- Progress for implementation of destination management plan is 80% with 4 out of 4 plans being completed.

- The final plan will be the DMP for the coastal zone as a single destination and PCU will submit the revised TOR for ADB's NOL and then advertise the position by mid-February with the aim of mobilizing the consultant in April 2023.

LAO (3,870): To date, of the residents and tourism workers who have participated in destination management training and awareness-raising activities, 46.7% were women (1,807 out of 3,870)

CAM (2,000):

- As of March 2023, cumulative total is 1,305 participants (F713/54.60%) for destination management training and awareness raising activities include tourism legal frameworks, boat and ferry safety, HIV/AIDS and COVID-19 prevention, participation in World Tourism Day, food hygiene and clean city, waste management, and the prevention drug trafficking in the tourism sector.

- The project will focus on the destination management training to 821 residents and tourism workers which will include 456 women to achieve 50% female participation.

Progress for destination management and training is 65.25%

- Progress in the March 2023 quarter included awareness raising on the proper garbage disposal and liquid waste management were conducted with 486 participants attending destination management training and awareness raising activities (F300/61.70%).

- The gender target for this indicator is on track with 54.60% female participation.

LAO (50%): Of 4,270 residents and tourism workers who have participated in destination management training and awareness-raising activities, 48.5% were women (2,041 out of 4,270).

CAM: The cumulative total is 1,305 participants (F713/54.60%) for destination management training and awareness raising activities include tourism legal frameworks, boat and ferry safety, HIV/AIDS and COVID-19 prevention, participation in World Tourism Day, food hygiene and clean city, waste management, and the prevention drug trafficking in the tourism sector.

LAO (1): Internet-based tourism repository developed and the project contimues to upload the information.

DMN website https://www.laos-dmn.com.

CAM (1):

- Project website has been established. Additional websites will be identified to disseminate tourist data and information (e.g. MOT, RUPP tourism website).

- Provincial DMPs will be uploaded to the respective provincial websites once these are ready for dissemination.

- The project website was updated in November 2021 and includes progress reports and press releases.

- DOT websites are updated regularly including new designations and tourist products.

- Progress for internet-based tourism knowledge repositories is 50% with the project website established for dissemination of tourism knowledge products which is currently limited.

- In Q1 2023 PCU discussed how tourism knowledge products and repositories will be established to disseminate the manuals, documents, reports, strategies and plans developed under OP 2 and Op 3. The Lao TIIG-2 project has created an ATS standalone well-structured website which Cambodia can adopt and localize for the dissemination of ATS standards , self-assessments and online applications for Green Hotel, Public Toilet, Homestays and CBTS certifications.

LAO (60%):

-SME needs assessment was completed and SME development plan will be finalised by Q3 2023.

CAM (60%):

- As of March 2023, the progress in the first quarter of 2023, there were 54 (F28/51%) entrepreneurs received MSME support from the project.

- The project will priorities SME training for at least 76 entrepreneurs all of which will be women to achieve the numerical and gender targets for this indicator.

LAO (90): No capacity building activities related to tourism management and infrastructure O&M held to date. Site management plan and O&M plans are under preparation.

CAM (60):

- Progress on the implementation of the Kep Landfll O&M-PPP contract is being negotiated with MEF, Kep Provincial Governor's Office, MPWT, and PDPWT with support of PMCES international PPP specialist.

- Progress for Output 3 O&M activities is not yet due. A road map for landfill O&M has been produced by the PMCES and submitted to PMU and Kep Provincial Administration for comment review and implementation.

LAO (30%): No capacity building activities related to tourism management and infrastructure O&M held to date. Site management plan and O&M plans are under preparation.

CAM (30%): As of March 2023, the exact number of public works and tourism site managers will be calculated by infrastructure PMU and PIU as well as by MOT PIUs for tourism sites in the 4K provinces including Koh Rong CBT (Preah Sihanouk Province).