Lao People's Democratic Republic : Fourth Greater Mekong Subregion Corridor Towns Development Project

Project Name

Fourth Greater Mekong Subregion Corridor Towns Development Project

Project Number

50099-003

Country / Economy

• Lao People's Democratic Republic

Project Status

Active

Project Type / Modality of Assistance

• Grant

Source of Funding / Amount

Grant 0606-LAO: Fourth Greater Mekong Subregion Corridor Towns Development Project

Source	Amount
Asian Development Fund	US$ 48.00 million

Strategic Agendas

• Environmentally sustainable growth
• Inclusive economic growth
• Regional integration

Drivers of Change

• Gender Equity and Mainstreaming
• Governance and capacity development
• Knowledge solutions

Sector / Subsector

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

Gender

Effective gender mainstreaming

Description

The project will support the government of the Lao PDR in improving urban environmental services and enhance regional economic connectivity in the towns of Paksan and Thakhek, two towns located along the North-South Economic Corridor in the Greater Mekong Subregion (GMS). It will finance: (i) sewage networks and eight small-scale wastewater treatment facilities to improve sanitation; (ii) two controlled landfills and solid waste collection vehicles for municipal waste to improve waste collection and management, (iii) improved drainage and riverbank protection, (iv) rehabilitation of the old-town center to promote regional tourism in Thakhek, and; (v) city master plans to promote regional economic connectivity. The project will accelerate urban node development along the GMS North-South Economic Corridor in Lao PDR.

Project Rationale and Linkage to Country/Regional Strategy

Macroeconomic context. The Lao PDR has had a strong track record in sustaining a high level of economic growth. During 20112016, the average gross domestic product (GDP) rate was 7.5% and was the per capita GDP was $2,027 in 2016. Despite the high rate of recent growth, 23.2% of Lao citizens live below the official poverty line. According to Laos' Five-Year National Socio-Economic Development Plan (20162020), a significant outstanding issue from the previous five-year plan is a lack of inclusive socio-economic development and environmental protection. The current plan highlights the need to address challenges pertaining to rapid urbanization, such as waste management, traffic safety, migration and other socio-economic issues. A key strategy priority of the Government of is the objective to promote economic diversification, profound structural change and enhance competitiveness.

Project in a regional context. ADB assistance will build on its long-standing institutional support for the Greater Mekong Subregion (GMS) Economic Cooperation Program. Urban development in the GMS focuses on economic corridor development and spatial and urban systems as part of spatial planning on a regional basis that links urban areas. Bolikhamxay Province and Khammoune Province are Lao PDR's gateways between the regional economies of Thailand and Viet Nam, and Paksan and Thakhek specifically are situated on the GMS North-South Economic Corridor, along the routes which link Vientiane with its closest seaport, Vung Anh in Viet Nam, and with the other regional capital city Ha Noi. The GMS Program's near and medium project pipeline, the GMS Regional Investment Framework 2022, includes projects in the roads and bridges, rail, inland waterways, and tourism sectors which also have linkage with these projects in Paksan and Thakhek. This includes the planned Vientiane-Ha Noi Expressway, Mekong Bridge at Bunkan-Paksan, Port Construction and Improvement (in Vientiane, Paksan, Thakhek, and Savannakhet), and the recently endorsed expansion of the GMS Economic Corridors. ADB will generate synergies among its operations and complement other development partner assistance.

Impact

Balanced regional and local development achieved

Project Outcome

Description of Outcome

Urban services in Paksan and Thakhek improved

Progress Toward Outcome

Procurement activities in various stages for all civil works packages. To date, 7 civil works packages have been awarded. Grant closing date has been extended from 30 June 2024 to 30 June 2026 (24 months).

Implementation Progress

Description of Project Outputs

Urban environmental infrastructure improved

Institutional effectiveness improved

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

The pre-design was completed in Aug 2022. The public consultation meeting and DED presentation to local authorities/people was completed in May 2023. The final BD submission and IFB expected by Q2 2024.Not yet due. Subprojects are still under construction.Being implemented. The Paksan and Thakhek Stormwater Drainage have been awarded on 29 Nov 2021 and 1 Sep 2022, respectively. As of end March 2024, physical progress for Paksan and Thakhek are 100% and 72%, respectively.Being implemented. Paksan subproject (DWAT-CW02/Lot 1) contract has been awarded on 2 August 2023. Thakhek subproject (DWAT-CW02/Lot 2) contract has been awarded on 29 November 2022. Physical progress is 17.10% and 45.77% respectively by end of March 2024.Being implemented. The Paksan DEWATS was awarded on 2 Aug 2023, with 17 % work progress. Thakhek DEWATS was awarded on 29 Nov 2022, with actual construction progress of 46% by end of March 2024.Being implemented. The Paksan and Thakhek Municipal Solid Waste have been awarded on 29 Jan 2021 and 24 Dec 2021, respectively.As of end Mar 2024, physical progress for Paksan and Thakhek are 100% and 67%, respectively.Being implemented. The Paksan Riverbank Protection subproject was awarded on 3 Apr 2023, with actual construction progress of 11% by end of Mar 2024. Subproject in Thakhek (RB-CW04-Lot 2) had been splited into 2 packages. Package RB-CW04-Lot 2 (None Zone B) called for bid on 28 August 2023 and closed on 12 October 2023. Package RB-CW04-Lot 3 (Zone B) called for Bid on 26 April 2024 and was closed on 11 June 2024.Achieved. PCU has 15 staff, including 8 women (53.3%).Achieved. The PIUs have 29 staff, including 15 women (51.7%). Women's representation in Thakhek and Paksan are 53.8% (7/13) and 50.0% (8/16), respectively.Being implemented. The project training masterplan has been developed. The PIC has conducted 12 on-the-job training courses for PCU, PIUs, and Contractors.Being implemented. The survey for collecting data for tariff roadmap, O&M and CP was conducted in July 2022. The Tariff Road Map and Corporate Plan (including for O&M fund) preparation is ongoing.Being implemented. The UDMP support consultant contract was signed on 11 Nov 2022. The updated inception report was completed and submitted on 28 Mar 2023. Topographic survey was completed. The Consultant is now preparing the draft Master plan and the 1st consultation workshop was held in the end of Nov 2023.

Geographical Location

Muang Pakxan, Thakhek

Safeguard Categories

Environment

B

Involuntary Resettlement

B

Indigenous Peoples

C

Summary of Environmental and Social Aspects

Environmental Aspects

A total of 10 (10) IEEs/EMPs for both Paksan and Thakhek reflecting DED have already been submitted, cleared, and disclosed on the ADB website. Thakhek Riverbank Protection was split into two packages (Zone B and Non-Zone B). Preparation of the updated IEE/EMP for the Thakhek Riverbank subproject (Zone B) is finalized in Jan 2024. The IEE/EMP for the Thakhek Urban Renewal Heritage Conservation (TK-CW05) is pending preparation and submission to ADB. Once cleared the due diligence will be disclosed to the ADB website. The government will oversee EMP implementation with the support of consulting services. Baseline and periodic environmental monitoring of environmental receptors have been included in the costs. Public and stakeholder consultations informed project design and will continue during implementation. A grievance redress mechanism is in place and will continue to help to facilitate resolution of any unforeseen environment related complaints regarding project performance. All project sites have been selected to avoid impacts on sensitive environmental receptors. The construction of wastewater treatment plants and controlled landfills and closure of existing dumpsites, improved drainage, flood protection and improved amenity facilities will have significant environmental and health benefits. It is expected that the project sites will experience short-term, localized impacts during construction, which will be site-specific and reversible (such as surface water quality deterioration, noise, dust, traffic, and waste generation), and can be avoided, minimized, or mitigated to an acceptable level with good construction practices and mitigation measures as defined in the EMPs and the corresponding site-specific construction EMPs (CEMPs) to be prepared and implemented by the contractors.

Involuntary Resettlement

A total of ten (10) RPs have been finalized and disclosed to date. An external monitor has been allocated to monitor implementation. The RPs also set out the grievance redress mechanism and institutional mechanisms for the implementation of the RPs. In total, 507 HHs (219 HHs in Pakxan and 288 HHs in Thakhek) will be affected, however, the impacts to the majority of HHs (468 HHs) will be minor. 39 HHs are identified as severely affected, either needing relocation (24 HHs from the riverbank and 6 HHs from the solid waste facility component) or losing more than 10% of their income due to land acquisition (9 HHs). A total of 39,718 square meters (m2) of residential land (12,213 m2 in Pakxan and 27,505 m2 in Thakhek) and 107,339 m2 of agriculture land (50,348 m2 in Pakxan and 56,955 m2 in Thakhek) will be acquired by the project from 219 HHs in Pakxan and 288 HHs in Thakhek. Upon completion of detailed engineering design, a rapid evaluation shall be conducted to confirm categorization and, should the project severely affect 200 people, rendering the project as a category B, a comprehensive social impact assessment will be conducted to further develop the resettlement plan.

Indigenous Peoples

The Lao PDR encompasses multiple ethnic groups, but the subprojects do not cause any adverse impacts on their identity, social customs, culture, or areas of spiritual importance or interfere with their socio-cultural beliefs and livelihood systems.

Stakeholder Communication, Participation, and Consultation

During Project Design

Consultation activities under the project involve strategic corridor towns development plan (urban master plan and development priorities), disaster risk management, and socioeconomic surveys for project design. Particularly for gender aspect, women's priorities for the project, based on extensive consultations, include reduced local flooding, improved urban services, and affordable urban services. The safeguards consultations and participation meetings were also conducted for informing and finalizing the IEE and RPs.

During Project Implementation

Communities will be informed of project benefits and responsibilities through public awareness campaigns. The project will cooperate with the Lao Women Union to ensure women's participation and benefits. Empowerment of poor and vulnerable people will be strengthened through enhanced security of employment measures. Safeguards consultations will continue throughout implementation as required per the IEEs, EMPs and RPs, and for any confirmation of final design, project variations and updated safeguards due diligence documents and in case of any major grievances.

Business Opportunities

Consulting Services

PISCB consultants (QCBS, 90:10, full technical proposal)*

*ADB funded consultants will be recruited in accordance with ADB's Guidelines on the Use of Consultants (2013, as amended from time to time).

341 person-months

$ 3.66 million

Procurement

Procurement:

International competitive bidding

9 contracts

$ 43.16 million

All procurement under the ADB grant will be in accordance with ADB's Procurement Guidelines (2015, as amended from time to time)

Shopping5 contracts $420,000

Contact

Responsible ADB Officer

Do, Hoang Nhat

Responsible ADB Department

Sectors Group

Responsible ADB Division

Water and Urban Development Sector Office (SG-WUD)

Executing Agencies

Ministry of Public Works and Transport

Timetable

Concept Clearance

30 Sep 2016

Fact Finding

03 Apr 2018 to 10 Apr 2018

MRM

-

Approval

14 Sep 2018

Last Review Mission

-

Last PDS Update

24 Jul 2024

Funding

Grant 0606-LAO