Report and Recommendation of the President to the Board of Directors Proposed Loan and Grant Lao People's Democratic Republic: Pakse Urban ...

 
Report and Recommendation of the President
to the Board of Directors

Project Number: 43316-02
June 2012

Proposed Loan and Grant
Lao People’s Democratic Republic: Pakse Urban
Environmental Improvement Project
CURRENCY EQUIVALENTS
                         (as of 4 May 2012)

               Currency unit       –      kip (KN)

                     KN1.00        =      $0.000125
                      $1.00        =      KN7,986

                            ABBREVIATIONS

ADB        –    Asian Development Bank
C-DPWT     –    Champasack Department of Public Works and Transport
CEI        –    community environment improvement
DPWT       –    Department of Public Works and Transport
EIRR       –    economic internal rate of return
EMP        –    environment management plan
GMS        –    Greater Mekong Subregion
IEE        –    initial environmental examination
Lao PDR    –    Lao People’s Democratic Republic
MPWT       –    Ministry of Public Works and Transport
O&M        –    operation and maintenance
OPWT       –    Office of Public Works and Transport
P-UDAA     –    Pakse Urban Development Administration Authority
PAM        –    project administration manual
PCU        –    project coordination unit
PMIU       –    project management and implementation unit
PPSC       –    provincial project steering committee
TA         –    technical assistance
UDAA       –    urban development administration authority

                                   NOTE

      In this report, ―$‖ refers to US dollars unless otherwise stated.
Vice-President           S. Groff, Operations 2
Director General         K. Senga, Southeast Asia Department (SERD)
Director                 A. Leung, Urban Development and Water Division, SERD

Team leader              A. Jain, Senior Social Sector Specialist, SERD
Team members             L. Adams, Social Development Specialist, SERD
                         I. Ahsan, Counsel, Office of the General Counsel
                         L. Balicanot, Project Analyst, SERD
                         P. Chanthirath, Senior Project Officer (Infrastructure), SERD
                         A. Garrovillas, Associate Project Officer, SERD
                         E. Honda, Principal Portfolio Management Specialist, SERD
                         S. Kotagiri, Social Development Specialist (Resettlement), SERD
                         S. Sandhu, Senior Environment Specialist, SERD
                         S. Schipani, Social Sector Specialist, SERD
                         A. Senador, Operations Assistant, SERD
                         M. White, Urban Development Specialist (Water Supply and
                         Sanitation), SERD
Peer reviewer            V. Joshi, Environment Specialist, Regional and Sustainable
                         Development Department

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.
CONTENTS

                                                  Page
PROJECT AT A GLANCE
I.     THE PROPOSAL                                  1
II.    THE PROJECT                                   1
       A.    Rationale                               1
       B.    Impact and Outcome                      4
       C.    Outputs                                 5
       D.    Investment and Financing Plans          6
       E.    Implementation Arrangements             7
III.   DUE DILIGENCE                                 8
       A.    Technical                               8
       B.    Economic and Financial                  8
       C.    Governance                              8
       D.    Poverty and Social                      9
       E.    Safeguards                              9
       F.    Risks and Mitigating Measures           9
IV.    ASSURANCES AND CONDITIONS                    10
V.     RECOMMENDATION                               10
APPENDIXES
1.     Design and Monitoring Framework              11
2.     List of Linked Documents                     14
PROJECT AT A GLANCE

1. Project Name: Pakse Urban Environmental Improvement Project                             2. Project Number: 43316-012
3. Country: Lao People's Democratic     4. Department/Division:      Southeast Asia Department/Urban Development and Water Division
Republic
5. Sector Classification:
                                        Sectors                                      Primary      Subsectors
                                         Water supply and other municipal               √         Urban sector development
                                        infrastructure and services
                                                                                                  Other municipal services
                                                                                                           Waste management
                                                                                                           Water supply and sanitation
6. Thematic Classification:
                                               Themes                                           Primary    Subthemes
                                               Economic growth                                             Promoting economic efficiency and
                                                                                                           enabling business environment
                                               Environmental sustainability                       √        Urban environmental improvement
                                               Capacity development                                        Institutional development
6a. Climate Change Impact                                                        6b. Gender Mainstreaming
                 No Climate Change Indicator available.                             Gender equity theme (GEN)
                                                                                    Effective gender mainstreaming (EGM)                       √
                                                                                    Some gender benefits (SGB)
                                                                                    No gender elements (NGE)
7. Targeting Classification:                                                     8. Location Impact:
                                     Targeted Intervention                           National                                         Low
                      Geographic                                 Income              Regional                                        Medium
     General                                Millennium
                     dimensions of                              poverty at           Urban                                            High
   Intervention                            development
                       inclusive                                household
                                               goals
                        growth                                     level
         √
9. Project Risk Categorization: Low

10. Safeguards Categorization:
                                               Environment                                                B
                                               Involuntary resettlement                                   B
                                               Indigenous peoples                                         C
11. ADB Financing:
                               Sovereign/Nonsovereign               Modality                       Source                      Amount ($ Million)
                               Sovereign                      Project grant           Asian Development Fund                                   3.2
                               Sovereign                      Project loan            Asian Development Fund                                  24.2
                                            Total                                                                                             27.5
12. Cofinancing:
                                                               No Cofinancing available.

13. Counterpart Financing:
                               Source                                                                     Amount ($ Million)
                               Beneficiaries                                                                                                    .6
                               Government                                                                                                      3.6
                                                     Total                                                                                     4.2
14. Aid Effectiveness:
                               Parallel project implementation unit                        No
                               Program-based approach                                      No
I.       THE PROPOSAL
1.     I submit for your approval the following report and recommendation on (i) a proposed
loan, and (ii) a proposed grant, both to the Lao People’s Democratic Republic (Lao PDR) for the
Pakse Urban Environmental Improvement Project.1
2.     The project will enhance the competitiveness of Pakse as a regional economic and
tourism center of the southern Lao PDR. It responds to the local government’s vision for Pakse to
become a green city and for the greater Pakse urban area to gain official city status in the future2
by improving citywide environmental improvements in solid waste management, flood protection
and drainage, and riverbank erosion protection along the Xedon River; supporting community-
driven initiatives in urban environmental improvements; strengthening local capacity in urban
planning and services; and strengthening local capacity in project management and
implementation. 3 The project contributes to the Government of the Lao PDR’s long-term
urbanization strategy and Pakse Urban Development Strategy, 2011–2030.4
                                            II.      THE PROJECT
A.      Rationale
3.        Pakse is the largest urban center in the southern Lao PDR and the capital of Champasack
province. Since the mid-1990s, it has grown to become a regional commercial and service center
in the country and the Greater Mekong Subregion (GMS). It is becoming an important tourism hub
and staging post for the southern Lao PDR and the GMS. Pakse is strategically located on the
regional road network (Road 13) and on an interconnector link from the East–West Economic
Corridor to the Southern Economic Corridor in the GMS.5 Pakse district’s population in 2010 was
77,647; this is expected to double by 2030 based on annual growth of 3%. The population of
greater Pakse urban area6 in 2011 was about 107,600; this is expected to grow to 138,700 by
2020 and 176,100 by 2030. Champasack’s gross domestic product growth has averaged 9.8%
since 2006, driven largely by industry and services, accounting for 60% of total economic output in
2010 compared to 49% in 2006. Revenue from tourism, banking, transport, and construction have
also surged. Pakse has significant natural attractions and is near major cultural and heritage sites
such as Wat Phou. Tourism development has helped stimulate local investment in tourism-related
facilities and generate local employment. Since 2005, tourist arrivals in Champasack Province
have grown by an average of 20% per year, especially via the Cambodia and Thailand borders.7
4.     Despite these growth opportunities, Pakse is experiencing rapid environmental
degradation caused by significant urbanization and economic growth pressures. It has witnessed
an increase in traffic, tourists, and commercial activities. Improvement of basic urban and
environmental infrastructure and strengthening of local capacity to plan and manage urban growth
are key steps in developing Pakse as a sustainable, livable, and competitive city.

1
  The design and monitoring framework is in Appendix 1.
2
   Based on Champasack Socioeconomic Development Plan, 2011–2015, Pakse District Socioeconomic
   Development Report, and Government Notification No. 1094/GOV/7 June 2011 to gain official city status.
3
   The Asian Development Bank (ADB) provided project preparatory technical assistance (TA). (ADB. 2010.
   Technical Assistance to the Lao People’s Democratic Republic for the Pakse Urban Environmental Improvement
   Project. Manila [TA 7567-LAO].)
4
   The draft National Urban Sector Strategy prioritizes Pakse based on its growth and regional location. Ministry of
   Public Works and Transport. 2011. The National Urban Sector Strategy and Investment Plan to the Year 2020.
   Vientiane: Department of Housing and Urban Planning (final draft). Pakse Urban Development Strategy, 2011–
   2030 was approved by the Office of Provincial Governor Champasack on 8 November 2011 (Decision No. 1445).
5
   The East–West Economic Corridor passes through the Lao PDR, Myanmar, Thailand, and Viet Nam, and the
   Southern Economic Corridor passes through Cambodia, Thailand, and Viet Nam.
6
   Includes 42 villages in Pakse district, 13 villages in Phonthong district, and four villages in Bachiang district.
7
   Pakse Tourism Development (accessible from the list of linked documents in Appendix 2).
2

5.       Urban issues and challenges. Urbanization in the Lao PDR is taking place with minimal
coordination, inadequate infrastructure, and limited consideration for the environment, including
climate change issues. Results include disorganized growth, inefficient land use, damage and loss
of natural resources, and insufficient urban services. The problems can be attributed to weak
urban management, little strategic spatial planning, poor linkages between urban planning and
environmental management, and insufficient investment in infrastructure and community services.
The Pakse Urban Development Strategy, 2011–2030 is a significant step in moving away from
traditional urban master plans to guide Pakse’s future urban growth.
6.      Weak urban management caused by overlapping responsibilities is also a challenge. In
1998, an urban development administration authority (UDAA) was created in Pakse and other
secondary towns to facilitate effective urban management. It was envisaged that UDAAs would
eventually be transformed into autonomous municipalities. A number of regulations support the
decentralization of government functions and clarification of UDAAs’ responsibilities, but the
process has been slow. Preparation of a municipality administration decree will help to clarify the
roles and responsibilities of UDAAs, provincial Departments of Public Works and Transport
(DPWTs), and district Offices of Public Works and Transport (OPWTs).8 In the interim, the project
will support capacity development activities for Pakse UDAA (P-UDAA) and Champasack DPWT
(C-DPWT) based on the approved road map for urban management in transition, which reflects
Pakse’s application to become a city (or Nakhone).9
7.      The urban poor suffer disproportionately from inadequate provision, management, and
maintenance of urban infrastructure and services. Underinvestment and insufficient operation and
maintenance (O&M) of existing infrastructure in low-lying areas have had an adverse impact on
their health and access to livelihood opportunities. The urban poor are vulnerable to risks
associated with externalities in service provision, as they are unable to cope with the effects of
poor drainage, inadequate sanitation and flooding, and poor road quality. About 35% of the
663 households surveyed live below the poverty line.10 The project targets improved drainage in
low-lying areas and supports household sanitation improvements for the poor.
8.      Inadequate solid waste management poses serious environmental and health risks, and
adversely affects Pakse’s ability to function as a regional economic center. The Environmental
Regulation for the Urban Area of Pakse No. 160 (14 May 2001) provides for proper waste
management.11 However, challenges confronting the solid waste sector in Pakse include lack of
financial resources to develop, operate, and maintain facilities; inadequate capacity to manage
services and concession contracts; low environmental awareness of residents; and generally low
willingness to pay for solid waste services. The P-UDAA household collection rate is about 21% in
the greater Pakse urban area, focusing on 28 of 43 villages in Pakse district. Households pay an
average of KN18,000 per month for collection and disposal, while commercial entities pay a tipping
fee of KN100 per kilogram. About 25 tons of waste per day are transported to the landfill site,
located 17 kilometers from the town center.12 About 22% of households recycle at the source and
65% reportedly burn their waste. The project will assist P-UDAA to improve overall solid waste
management, facilitate amendments to the existing concession for waste processing, support
behavioral change efforts, and assist C-DPWT in enforcing environmental protection regulations.

8
   The government envisions that provincial towns will become municipalities before they gain city status. The key
   difference between a municipality and a city is population size, as a city needs to have a population of 80,000.
9
   Champasack Provincial Governor Decision No. 611/CPS (16 May 2012);Prime Minister Instruction No. 01 (March
   2001); Prime Ministerial Decree No. 141 (May 2000); and Law on Local Administration (2003). Urban Institutional
   Analysis (accessible from the list of linked documents in Appendix 2).
10
   Prime Minister Decree No. 285 (October 2009). The poverty line is based on KN240,000 per person per month.
11
   It refers to the Environment Protection Law (3 April 1999) and the Prime Ministerial Decree for UDAA No. 177.
12
   Solid waste composition and volume was surveyed in 2010. Technical Report on Solid Waste Management in Pakse
   (accessible from the list of linked documents in Appendix 2).
3

9.      Poor drainage and increased flooding create poor environmental conditions, increase the
health risk from waterborne and water-related diseases, and contribute to a low quality of life for
residents. Pakse and its immediate surroundings are susceptible to flooding, as it lies at the
confluence of the Mekong and Xedon rivers. Its central area is relatively flat, while the drainage
capacity of small rivers in the town is limited. Flooding often occurs when the small streams back
up because of surface runoff from the surrounding hills during heavy rainfall, or when river levels
rise during the wet season. Property becomes inundated or surrounded by stagnant water. This is
exacerbated when drainage easements are obstructed and retention areas are filled. The project
supports implementation of the drainage strategy, 2011–2015 to manage flood risk better, retain
natural drainage in nine catchment areas, and guide drainage system development in Pakse.13
10.     Riverbank erosion caused by annual floods results in progressive weakening of the
riverbanks and creates instability at various locations. Riverbank erosion along the Xedon and
Mekong rivers is a major challenge. While riverbank protection is expensive, the loss of valuable
riverside land and property such as temples has very high social, cultural, and economic impacts.
Flooding and rapid drawdown of the river level are the dominant causes of riverbank erosion and
damage. The project will support riverbank erosion protection along the Xedon River.
11.      Basic household sanitation and de-sludging services are limited in Pakse. About 30% of
the households surveyed use septic tanks, 67% use pit latrines, and 3% do not have any latrine.
About 73% of households have never emptied their septic tanks, while about 41% complain about
the effluence and bad odor from sanitary facilities. Problems with septic tanks are related to poor
design, poor quality construction, and infrequent cleaning. About 50% of those that use
desludging tanker services emptied their tanks every year. The project will assist poor households
to improve their sanitation facilities and help P-UDAA improve existing de-sludging services.14
12.      Related policies and strategies. The project is in line with the Lao PDR’s Seventh
National Socioeconomic Development Plan, 2011–2015, which envisions graduation from least-
developed country status by 2020. The project focuses on achieving sustainable and inclusive
development by transforming the key urban growth area into a competitive and green urban
center—a strategy central to the government’s draft national urban sector strategy and local
socioeconomic development plans. The project is also in line with the GMS strategy to transform
transport corridors into economic corridors. It has synergies with ADB’s GMS Sustainable Tourism
Development Project15 and the proposed GMS Corridor Towns Development Project. The country
partnership strategy of the Asian Development Bank (ADB) for the Lao PDR, 2012–2016 also
emphasizes stronger rural–urban linkages through improved urban services and municipal
infrastructure. The project is consistent with ADB’s Urban Operational Plan, 2011–2020 under
Strategy 2020, which fosters competitive, inclusive, and green cities by improving performance in
economic, equity, and environment areas.16
13.    Development partner coordination exists and will be strengthened through the technical
working group on infrastructure (subgroup on urban development, water supply, and sanitation),
chaired by the Ministry of Public Works and Transport (MPWT). ADB has been a lead partner in

13
   Ministry of Labor and Social Welfare, National Disaster Management Office, 2011, National Disaster Management
   Plan, 2011–2015 (draft, April, with support from the United Nations Development Programme).
14
   P-UDAA has about 30% of the septage services market on a volume basis and charges KN300,000 per trip. Three
   private entities also provide de-sludging services.
15
   ADB. 2008. Report and Recommendation of the President to the Board of Directors: Proposed Grant to the Lao PDR
   and Loan to the Socialist Republic of Viet Nam: Greater Mekong Subregion Sustainable Tourism Development
   Project. Manila (Grant 0117-LAO, for $10 million and Loan 2457-VIE, for $10 million, approved 15 October).
16
   Ministry of Planning and Investment. 2010. Lao PDR Seventh National Socio-Economic Development Plan, 2011–2015.
   Vientiane; ADB. 2011. Country Partnership Strategy: Lao People’s Democratic Republic, 2012–2016. Manila; ADB.
   2011. ADB Urban Operational Plan. Manila; and ADB. 2008. Strategy 2020: The Long-Term Strategic Framework
   of the Asian Development Bank, 2008–2020. Manila.
4

urban sector development in the Lao PDR. Other key partners include Agence Française de
Développement, Japan International Cooperation Agency, Korean International Cooperation
Agency, Thailand Neighboring Countries Economic Development Cooperation Agency, the United
Nations Human Settlements Programme, the United Nations Children’s Fund, the World Health
Organization, and the Netherlands Development Organization. The Norwegian Agency for
Development Cooperation and United Nations Development Programme previously supported
landfill construction in Pakse. Parallel financing opportunities will be explored during implementation.
14.     Lessons from ADB’s experience in the urban development sector in the Lao PDR are
incorporated in the project design. The project builds on the support provided to Pakse under
ADB’s Secondary Towns Urban Development Project and recommendations from ADB evaluation
reports. 17 Key lessons include: (i) active community participation and decentralized decision
making are key to enhancing ownership and strengthening the capacity of communities and
local government agencies; (ii) support for community planning complements central (or
provincial) urban and regional plans; (iii) overlapping and ambiguous responsibilities should be
resolved prior to investments in the sector; (iv) a more open-ended policy dialogue may be more
helpful than the application of loan covenants; (v) a multisector approach in the urban sector in
Lao PDR is implementable, as subsectors are within the mandate of a single ministry; and (vi)
UDAAs often have insufficient funds and require budgetary support for O&M of infrastructure.
15.     Special features. The project is in line with the Pakse Urban Development Strategy,
2011–2030, which integrates provincial and district socioeconomic objectives with overall national
and sector objectives. It will facilitate efficient urban development and investment through a
phased and more flexible approach. The project supports investments aimed at improving the
conditions of the urban poor and low-income households, thereby maximizing potential project
benefits. It promotes community-driven urban development and community-led service delivery
through village grants, which help to support a balanced approach to urban land use planning and
reinforce the interlinks between urban environmental improvements, health, and well-being. It
includes support for continued policy dialogue and coordination at the national level to strengthen
decentralized urban management and services. It includes support to implement and monitor a
public–private partnership in solid waste management for possible replication in other towns. It
also supports transformation of corridor towns to economic hubs and growth engines.
B.      Impact and Outcome
16.      The impact of the project is improved competitiveness of Pakse as a regional economic
and tourism center of the southern Lao PDR. The outcome will be increased quality, reliability,
and coverage of urban infrastructure and environmental improvements in the greater Pakse
urban area. By 2018, the project will enhance the urban environment, improve public health,
and contribute to improved urban services for about 135,000 residents. It builds on a medium-
term investment planning exercise and prefeasibility study supported by the Cities Development
Initiative for Asia in 2010, which prioritized improved solid waste management, improved urban
drainage, riverbank protection, and institutional capacity development and strengthening.18 The
project will pursue an integrated program of investments in priority infrastructure rehabilitation,
improvement and extension of urban services, and organizational and capacity development of
urban development and management agencies.
17
   ADB. 2011. Critical Constraints to Growth in the Lao PDR. Vientiane; ADB. 2010. Performance Evaluation Report:
   Lao PDR—Vientiane Urban Infrastructure and Services Project. Manila; ADB. 2010. Country Assistance Program
   Evaluation: Lao PDR—Sustainable Growth and Integration. Manila; ADB. 2010. Completion Report: Small Towns
   Development Project in the Lao PDR. Manila; and ADB. 2005. Completion Report: Secondary Towns Urban
   Development Project in the Lao PDR. Manila. ADB. 1997. Report and Recommendation of the President to the Board
   of Directors: Proposed Loan to the Lao People’s Democratic Republic for the Secondary Towns Urban Development
   Project. Manila (Loan 1525-LAO [SF], for $27 million, approved on 26 June).
18
   ADB. 2005. Technical Assistance for the Cities Development Initiative for Asia. Manila (TA 6293-REG).
5

C.       Outputs
17.      The project will have the following four outputs in the greater Pakse urban area:
18.      Output 1: Citywide environmental improvements will focus on the following:
         (i)    Improved solid waste management, including support for better collection,
                transportation, processing, and disposal of waste. This will include procurement of
                solid waste collection and landfill equipment; improvement and capacity increase of
                the existing landfill (or open dump) to a controlled landfill standard; possible landfill
                expansion to accommodate increased volumes of waste resulting from increased
                collection; and improvement of an existing concession contract with Khamtay
                General Agricultural and Trading Co. Ltd. in solid waste processing and recycling.19
         (ii)   Improved flood protection and drainage conditions, including support for drainage
                improvements and maintenance of natural drainage paths, major culverts, and
                floodwater retention areas. This includes installment of new storm-water pumping
                stations, construction or rehabilitation of flap gates, and construction of a new
                outlet channel; construction of primary and secondary drains in priority catchments,
                maintenance of flood retention areas and green space, and improvement or
                construction of access roads for drainage maintenance. 20 The project adapts a
                sustainable approach to floodplain management, consistent with Pakse’s vision of
                being a green and environmentally sustainable city.
         (iii)  Riverbank erosion protection along the Xedon River, which will support riverbank
                reinforcement along three kilometers of Xedon River—along both sides from the
                Russian Bridge to the French Bridge and on the left side at Wat Ban Kea.
19.     Output 2: Community-driven urban environmental improvements will enhance community
participation through (i) improved solid waste collection and management in villages of greater
Pakse urban area through village grants (output 2.1), and (ii) improved household sanitation
through sanitation grants (output 2.2). 21 The project will support each village development
committee in local urban planning, prioritization and selection of small-scale infrastructure
investments, and identification of poor households for sanitation improvements. Output 2.1 will be
financed by the project funds (80%), government funds (10%), and community funds (10%). The
project will also increase public awareness in solid waste management and support P-UDAA to
improve septage collection, treatment, and disposal.
20.     Output 3: Strengthened capacity for provincial urban planning and services supports
urban agencies in Pakse to deliver quality, reliable urban services based on an agreed road
map for Pakse urban management in transition. It includes (i) strengthened capacity of P-UDAA
in urban management and service delivery through better management of private concessions
and improved operational and financial performance; (ii) strengthened capacity of C-DPWT and
participating OPWTs in urban planning and development control; and (iii) enhanced gender
equity in urban planning, management, and service delivery through 1-year project internships
for about 40 students (50% women).22

19
   A sanitary landfill is not feasible in Pakse because of high initial and operating costs, low volumes of waste
   currently generated, high levels of technical expertise required, and people’s low willingness to pay for collection.
   P-UDAA signed a concession contract on 20 June 2011 (contract no. 099/UDAA).
20
   Provincial Governor Notification No. 478/DGPS (10 June 2011) on the enforcement of retention areas and
   drainage easement protection (Pakse Urban Development Strategy, 2011–2030).
21
   Output 2.1 is estimated at $35 per capita per village, and output 2.2 at about $180 per household for pour-flush
   toilets and $450 for a toilet with septic tank. Output 2 builds on ADB’s experience in similar projects (footnote 17).
22
   Interns will be selected from educational and vocational institutions in Pakse, including Champasack University. Each
   intern will sign an agreement with the project management and implementation unit (PMIU) prior to participating in the
   program and receiving a stipend (about $1,250 for per diem, travel, and insurance).
6

21.    Output 4: Strengthened capacity for project management and implementation will focus
on the project coordination unit (PCU) and project management and implementation unit (PMIU).
Capacity development activities may be extended to provincial project steering committee (PPSC)
members, and staff from C-DPWT, P-UDAA, and participating OPWTs in the greater Pakse
urban area. It will include skills enhancement and training in project design and supervision,
gender and community development, accounting and financial management, procurement and
disbursement, environmental and social safeguards, and other areas agreed to in advance with
ADB. It will support on-the-job training for C-DPWT and P-UDAA in urban planning and
development, solid waste collection, and landfill management.

D.         Investment and Financing Plans
22.    The project is estimated to cost $31.74 million (Table 1). The government requested a
loan equivalent to SDR15,904,000 and a grant equivalent to $3.25 million from ADB’s Special
Funds resources to help finance the project.23 The loan will have a 32-year term, including a grace
period of 8 years, an interest rate of 1.0% per annum during the grace period and 1.5% per
annum thereafter, and such other terms and conditions set forth in the draft financing agreement.

                                   Table 1: Project Investment Plan ($ million)
    Item                                                                                                   Amounta
                         b
    A.       Base Cost
             1. Citywide environmental improvements
                 1.1. Solid waste management improvementc                                                      4.46
                 1.2. Drainage and stormwater management                                                       5.39
                 1.3. Riverbanks erosion protection – Xedon River                                              5.87
             2. Community-driven urban environmental improvements
                 2.1. Community-driven infrastructure upgrading                                               6.21
                 2.2. Household sanitation improvement                                                        1.10
             3. Strengthened capacity for provincial urban planning and services                              1.04
             4. Strengthened capacity for project management and implementation                               4.49
                   Subtotal (A)                                                                              28.56
    B.       Contingenciesd
             1. Physical                                                                                      0.61
             2. Price                                                                                         1.87
                   Subtotal (B)                                                                               2.48
    C.       Financial Charge During Implementatione                                                          0.69
                  Total (A+B+C)                                                                              31.74
a
  Includes taxes and duties of about $2.38 million to be financed by Asian Development Bank resources; and land
  acquisition and resettlement of $2.36 million to be financed by the Government of the Lao People’s Democratic Republic.
b
  In 2012 prices.
c
  Includes provision of $0.792 million for possible landfill expansion to be identified during project implementation.
d
  Physical contingency is computed at 0% for resettlement cost and 10% for other base costs. Price contingency is
  computed using cost escalation factors of–1.5%–0.5% progressively from 2012 for foreign cost and 6%–5% for local cost.
e
  Includes interest during construction on the Asian Development Bank loan computed at 1% per annum.
Note: Numbers may not sum precisely because of rounding.
Source: Asian Development Bank estimates.

23.     The financing plan is in Table 2. The government will provide counterpart financing of
$3.65 million to cover its 10% contribution to output 2.1 village grants, entire costs for land
acquisition and resettlement, and the financial charge of the loan during implementation. The
community financing of $0.59 million covers its 10% contribution to output 2.1 village grants. The
government will make the loan proceeds available to the executing agency and implementing
agencies on a grant basis.
23
     ADB will finance (i) taxes and duties on ADB-financed expenditures, as it is within reasonable country thresholds,
     does not represent an excessive share of the project investment, and is material and relevant to the project’s success;
     and (ii) recurrent costs, local transportation, and internship insurance to facilitate project implementation.
7

                                                  Table 2: Financing Plan
                       Source                                      Amount              Share of Total
                                                                  ($ million)               (%)
                       Asian Development Bank (loan)                 24.25                 76.40
                       Asian Development Bank (grant)                 3.25                 10.24
                       Government                                     3.65                 11.50
                       Community                                      0.59                   1.86
                                                   Total             31.74                100.00
                       Source: Asian Development Bank estimates.

    E.         Implementation Arrangements
    24.      The MPWT will be the executing agency and C-DPWT and P-UDAA will be the
    implementing agencies. A PCU will be located in the Department of Housing and Urban Planning
    of MPWT and a PMIU in P-UDAA, with staff from both implementing agencies. A PPSC will be
    established in Champasack province, with the vice provincial governor as chair and the Pakse
    district governor as vice-chair. Ad hoc coordination meetings at the national level will be chaired by
    the vice minister of the MPWT, with the vice governor of Champasack as vice-chair. The PMIU will
    report directly to the Pakse district governor on project-related matters. Implementation
    arrangements are in Table 3 and described in detail in the project administration manual (PAM). 24
                                       Table 3: Implementation Arrangements
 Aspects                          Arrangements
 Implementation period            July 2012–June 2018 (6 years)
 Estimated completion date        30 June 2018
 Management
 (i) Ad hoc coordination        Vice minister, MPWT (chair); vice governor, Champasack Province (vice-chair);
     meetings (national)        representatives from Ministry of Home Affairs, Ministry of Finance, Ministry of Planning and
                                Investment, Ministry of Natural Resources and Environment; Pakse district governor; PMIU
                                director and deputy director; and Lao Women’s Union (participants)
 (ii) Project coordination unit PCU coordinator (head); procurement officer, accountant, treasurer, secretary, and driver (members)
 (iii) Provincial project       Vice provincial governor, Champasack province (chair); district governor, Pakse District
       steering committee       (vice-chair); representatives from PCU, C-DPWT, Department of Housing and Urban
                                Planning, PMIU director and deputy director, Bachiang and Phonthong districts, Department
                                of Finance, Department of Planning and Investment, Department of Home Affairs, Department of
                                Natural Resources and Environment, and Champasack Lao Women’s Union (members)
 (iv) Executing agency          MPWT
 (v) Implementing agencies C-DPWT and P-UDAA. C-DPWT is the sector agency responsible for sector planning and
                                development. P-UDAA is responsible for delivery of urban services and operation and
                                maintenance after project completion.
 (vi) Project management        Project director (C-DPWT); project deputy director (P-UDAA); accountant (P-UDAA),
       and implementation       procurement officers (P-UDAA and C-DPWT); engineers (C-DPWT and P-UDAA); treasurer;
       unit                     environment officer; resettlement officer; social and community development officers (2); drivers
                                (2); and secretary (members)
 Procurement                    International competitive bidding            4 contracts                     $11,336,000
                                National competitive bidding                16 contracts                       $8,949,500
                                Shopping                                    12 contracts                         $343,500
 Consulting services            Consulting firm (QCBS)                  479 person-months                      $4,000,000
                                Individual consultants                    8 person-months                         $92,000
 Advanced contracting           Advanced action for consulting services requested
 Disbursement                   The loan and grant proceeds will be disbursed in accordance with ADB’s Loan Disbursement
                                Handbook (2007, as amended from time to time) and detailed arrangements agreed upon
                                between the government and ADB.
ADB = Asian Development Bank, C-DPWT = Champasack Department of Public Works and Transportation, MPWT = Ministry of
Public Works and Transport, P-UDAA = Pakse Urban Development Administration Authority, PCU = project coordination unit, PMIU
= project management and implementation unit, QCBS = quality- and cost-based selection.
Sources: ADB, MPWT, C-DPWT, and P-UDAA estimates.

    24
         Project Administration Manual (accessible from the list of linked documents in Appendix 2).
8

                                      III.    DUE DILIGENCE
A.      Technical
25.     The project will enhance the urban environment in Pakse through the selection of
technologies focused on durability and sustainability. Citywide improvements target priority areas
where there is maximum impact on local communities and the environment, such as greater
waste collection and organized disposal, drainage in low-lying flooded areas, and targeted
riverbank protection. Engineering solutions for infrastructure and equipment are appropriate and
developed based on technical viability and compatibility with local conditions, particularly with
respect to local O&M capacity. To ensure durability and continuity of the proposed infrastructure,
contract packages will attract contractors with appropriate skills and experience. Community-
driven improvements will respond to local planning and prioritization results. Household sanitation
improvements will be based on function, cost, and long-term durability in an urban setting.
B.      Economic and Financial
26.     An economic analysis was conducted following ADB’s guidelines and best practices. The
project contributes significantly to the improved economic welfare of Pakse residents. Drainage
and sanitation components will significantly reduce the incidence and severity of flooding, reduce
ponding of polluted water in public areas, provide sanitation facilities in public areas and schools,
enhance environmental and living conditions, and improve public health. The base case economic
internal rate of return (EIRR) is 15.8% for solid waste management, 21.8%–39.7% for drainage
and storm water, and 26.2%–30.9% for riverbank protection. All EIRRs are higher than ADB’s
12% economic opportunity cost of capital. Sensitivity analysis showed that the EIRRs are most
vulnerable to changes in anticipated benefits.
27.     A financial analysis was conducted following ADB guidelines and best practices. The
financial viability was assessed for solid waste management improvements, as the project’s only
revenue-earning component. The financial internal rate of return is 3.5%, which exceeds the
weighted average cost of capital of 0.4%, indicating financial viability. The remaining components
are nonrevenue generating, so a financial sustainability analysis for P-UDAA was completed. While
P-UDAA is recovering O&M costs for solid waste management through user charges, the analysis
found that it is unable to meet recurrent costs for collective urban services. The project will assist P-
UDAA to improve its financial performance through activities such as corporate planning, annual
budget reviews, and establishment of an urban services charge. It will assist P-UDAA to undertake
periodic reviews of its solid waste management activities, highlighting the importance of translating
cost recovery into continuous planning, operations, and ongoing construction for landfill expansion
and landfill closure to absorb the amounts of waste collected.
C.      Governance
28.     A financial management and a procurement capacity assessment of the MPWT and P-
UDAA helped to confirm the project implementation arrangements, which follow previous ADB
urban development projects in the Lao PDR. The executing and implementing agencies have
experience in managing externally funded projects and have sufficient capacity to undertake
international and national competitive bidding for civil works packages. Output 4 will strengthen
the capacity of PMIU staff and provide on-the-job support. The PCU will also help build local
capacity through its review of procurement and disbursement documents. ADB’s Anticorruption
Policy (1998, as amended to date) was explained to and discussed with the government and
MPWT. The specific policy requirements and supplementary measures are described in the PAM.
9

D.      Poverty and Social
29.       The project will have significant positive social and environmental impacts, which will
improve the overall attractiveness of Pakse and allow residents to seize commercial opportunities.
It will improve the lives and health of communities and individuals by (i) enhancing air quality from
indiscriminate burning of waste; (ii) improving accessibility, which may be otherwise hampered by
flooding; (iii) reducing vulnerability along the Xedon River; and (iv) enhancing local ownership and
awareness about environmental sanitation. The project is category II—effective gender
mainstreaming. It will improve women’s access to basic urban infrastructure and services. A
gender analysis and action plan has been prepared for the project, which creates opportunities for
women to access training (33%) and project internships (50%), to participate in project
implementation units (33%), and to be employed in community infrastructure O&M (40%).
E.      Safeguards
30.      The safeguard category for indigenous peoples is C, in accordance with ADB’s Safeguard
Policy Statement (2009). About 95% of the population in the greater Pakse urban area is
Tai Kadai (Lao majority). The Mon-Khmer ethnic group and some foreign migrants (Vietnamese
and Chinese) also reside in the project area. Most of the Mon-Khmer group lives in Bachiang
district, and are well-integrated into Lao society. No adverse impacts are anticipated on Mon-
Khmer group or migrants in the project area.
31.     The safeguard category for involuntary resettlement is B. A resettlement plan and
resettlement framework25 have been prepared. About 224 affected households or 1,250 affected
persons will incur minor impacts. One affected household (or three affected persons) will be
severely affected by riverbank erosion protection. The cost is estimated to be $2.36 million, which
includes base costs, allowances, and contingencies. A cutoff date has been established with
extensive stakeholder consultation and participation. A project information booklet has been
disclosed to affected persons, which will be updated and distributed during implementation.
32.     The safeguard category for the environment is B. An initial environmental examination
(IEE) and an environmental assessment review framework have been prepared. The potential
environmental impacts are related to siting, design, construction, and operation, and are not
expected to cause irreversible adverse environment impacts. Environment management plans
(EMPs) have been prepared for solid waste management, drainage, and riverbank erosion
protection. The EMPs will form part of the bidding and contract documents. The potential adverse
impacts during construction are expected to be temporary and can be mitigated through
compliance with the EMPs. The project includes support for EMP implementation and monitoring.
33.     Resettlement and environment documents have been prepared in consultation with local
communities and are in accordance with ADB’s Safeguard Policy Statement and Lao PDR laws
and regulations. The documents have been endorsed, approved and posted on the ADB
website.26 A grievance redress mechanism will help to facilitate resolution of complaints regarding
project performance. The resettlement plan, IEE, and EMPs will be updated and disclosed after
detailed design and cleared by ADB prior to contract awards.

F.      Risks and Mitigating Measures
34.    The key project risks and mitigating measures are summarized in Table 4 and all risks are
described in detail in the risk assessment and risk management plan.27

25
   Also referred to as land acquisition and compensation plan and land acquisition and compensation framework.
26
   The Ministry of Natural Resources and Environment issued its Certificate No. 2271/MONRE on 30 March 2012.
27
   Risk Assessment and Risk Management Plan (accessible from the list of linked documents in Appendix 2).
10

                       Table 4: Summary of Risks and Mitigating Measures
Risks                                                                          Mitigating Measures
Trade and investments in Pakse and Champasack           The project includes environmental improvements focused on
province are adversely affected by natural disasters.   flood control, erosion protection, and solid waste management.
The concession contract with the private sector for     The project includes capacity development activities to strengthen
the waste processing facility fails.                    P-UDAA’s ability to manage public–private partnerships.
Urban residents are unaware of the links between        The project includes measures to increase community awareness,
health and environmental sanitation.                    ownership, and responsibility for environmental protection.
Nonavailability of qualified national consultants       The project includes consulting services that will provide on-
residing in Pakse                                       the-job training to PMIU and institutional staff.
Lack of sufficient resources to support delegated       The project requires consulting services are based in Pakse and
project management and implementation                   the PCU to support the PMIU in implementation procedures.
P-UDAA = Pakse Urban Development Administration         Authority, PCU = project coordination unit, PMIU = project
management and implementation unit.
Source: Asian Development Bank.

                               IV.      ASSURANCES AND CONDITIONS
35.     The government and the MPWT have assured ADB that implementation of the project
shall conform to all applicable ADB policies including those concerning anticorruption measures,
safeguards, gender, procurement, consulting services, and disbursement as described in detail
in the PAM and loan and grant documents.
36.     The government and the MPWT have agreed with ADB on certain covenants for the
project, which are set forth in the financing agreement. In addition to the standard conditions for
the award of civil works, the government and the MPWT have agreed to the following additional
conditions: (i) civil works contract will not be awarded until a comprehensive feasibility study
together with the appraisal report is submitted to ADB showing that relevant works meet ADB’s
and the beneficiary’s social and safeguards, technical, economic, financial, and institutional
requirements as set forth in the PAM; and (ii) the government will not award any civil works
contract which involves involuntary resettlement impacts until a report from the external
resettlement monitor has been submitted to ADB confirming that there are no resettlement issues.

                                       V.       RECOMMENDATION
37.   I am satisfied that the proposed loan and grant would comply with the Articles of
Agreement of the Asian Development Bank (ADB) and recommend that the Board approve
      (i)     the loan in various currencies equivalent to SDR15,904,000 to the Lao People’s
              Democratic Republic for the Pakse Urban Environmental Improvement Project,
              from ADB’s Special Funds resources, with an interest charge at the rate of 1.0% per
              annum during the grace period and 1.5% per annum thereafter; for a term of
              32 years, including a grace period of 8 years; and such other terms and conditions
              as are substantially in accordance with those set forth in the draft financing
              agreement presented to the Board; and
      (ii)    the grant not exceeding $3,250,000 to the Lao People’s Democratic Republic, from
              ADB’s Special Funds resources, for the Pakse Urban Environmental Improvement
              Project, on terms and conditions that are substantially in accordance with those set
              forth in the draft financing agreement presented to the Board.

                                                                                 Haruhiko Kuroda
                                                                                 President
4 June 2012
Appendix 1        11

                                 DESIGN AND MONITORING FRAMEWORK
                                  Performance Targets and                      Data Sources and             Assumptions and
 Design Summary                   Indicators with Baselines                  Reporting Mechanisms                  Risks
Impact                   By 2021:                                                                        Assumption
Improved                 Increase in per capita income of Pakse             Pakse district annual        Favorable business
competitiveness of       residents to $1,750 (2010: $1,097 per              socioeconomic reports        climate in Pakse and
Pakse as a regional      capita income)                                                                  Champasack district
economic and tourism                                                        Champasack provincial        Risk
                         Gross domestic product in Champasack               reports and economic
center of the southern   province increases by at least 8% annually                                      Trade and investments
Lao PDR                                                                     statistics                   in Champasack and
                         (2010: KN6,225 billion)
                                                                            Reports from                 Pakse are adversely
                         Increase in international tourist arrivals in                                   affected by natural
                         Champasack province by at least 75%                development and trading
                                                                            partners                     disasters.
                         (2010: 301,699 people)
Outcome                  By 2018:                                                                        Assumptions
Increased quality,       At least 125,000 residents benefit from the        P-UDAA monthly reports       The government is
reliability, and         project (2011: 107,000 people).                                                 committed to the
coverage of urban                                                           Pakse district reports and   project.
                         Number of households served by improved            statistics
infrastructure and       solid waste management increased by
environmental                                                                                            Urban communities
                         30% (2011: 21% of 107,000 people)                  Champasack provincial        realize the benefits of
improvements in the                                                         reports and statistics
greater Pakse urban      Annual flood damages to households                                              Pakse as a green and
area                     reduced by 20% (2011: 2,895 households             Consultant reports           clean city.
                         affected)
                                                                                                         Pakse Urban
                         Riverbank erosion along Xedon River                                             Development Strategy,
                         constructed to 1:30 year flood levels                                           2011–2030 is
                         (2011: less than 1:10 year flood levels)                                        enforced.
                         At least 42 urban villages developed
                         participatory urban environmental
                         improvement plans (2012: none)
Outputs                  By 2018:                                                                        Assumptions
1. Citywide              4.2 ha of the existing landfill is rehabilitated   Subproject feasibility and   Safeguard documents
environmental            and 3.7 ha is developed.                           appraisal reports            are approved on time.
improvements
                         P-UDAA operates the existing landfill site         Construction records         Enforcement of
                         as a controlled landfill (2011: open dump).                                     retention areas and
                                                                            Project progress and         drainage easements
1.1 Improved solid       P-UDAA household collection increases to           completion reports
waste management         50% or at least 70 tons per day across 59                                       The government
system                   villages (2011: 21% or 20 tons per day in          Detailed designs of new      pursues the 2010
                         28 villages in Pakse district).                    cell development and         riverbank improvement
                         At least 1 public–private partnership is           waste disposal plans         and protection
                         implemented based on amended contract              Concession contract          proposal along the
                         (2012: 1 contract).                                                             Mekong River only.
                                                                            Census report
                         10 pumping stations and 4 flap gates are                                        Risks
1.2 Strengthened
                         rehabilitated or constructed (2011: 6                                           Concession to develop
flood protection and
                         pumping stations and 3 flap gates are                                           the waste processing
drainage
                         operational).                                                                   facility fails.
                         At least 6,000 m of primary and 7,500 m of
                         secondary drains are constructed (2011:                                         Urban residents are
                         no drains in specified areas).                                                  unaware of the links
                                                                                                         between health and
                         At least 4,400 m of drains are cleaned and                                      environmental
                         rehabilitated (2011: 4,430 m of drainage                                        sanitation.
                         require rehabilitation).
                         At least 2,900 m of roads are improved and
                         600 m of new roads are constructed for
                         drainage easements (2011: 2,965 m
                         require improvement).
                         At least 80% of flood retention areas are
1.3 Reinforced
                         retained (2011: 17.40 ha demarcated).
riverbank protection
12        Appendix 1

                                   Performance Targets and                  Data Sources and            Assumptions and
Design Summary                     Indicators with Baselines              Reporting Mechanisms              Risks
(Xedon River)             By 2018, at least 3 km of riverbank
                          protection constructed in areas where
                          severe erosion occurs
2. Community-driven       By 2018:                                                                    Assumptions
urban environmental       At least 50% of villages in project area       Project progress and         The government is
improvements              receive village grants.                        completion reports           committed to
                          At least 40% of participants in CEI training   Urban village plans and      community
2.1 Improved solid        are women.                                     agreements                   participation.
waste collection and                                                                                  Community and
management                At least 40% of all CEI employment             Construction records
                          opportunities are for women.                                                government
                                                                                                      contributions are
2.2 Improved              At least 12,000 households have improved                                    released on time.
household sanitation      their toilets to pour-flush standards (2005:                                Risk
                          10,577 households have a pour-flush                                         Urban residents are
                          toilet).                                                                    unaware of the links
                          At least 3,000 households have improved                                     between health and
                          their toilets to have a septic tank (2005:                                  environmental
                          832 households have a septic tank).                                         sanitation.
3. Strengthened           By 2018:                                                                    Assumptions
capacity for provincial   At least 33% of training course participants   Project progress and         The government
urban planning and        are women.                                     completion reports           allocates adequate
services                  Integration of environmental management                                     staff and resources for
                                                                         Project performance          PMIU.
                          in urban planning (at least 4 technical        monitoring and evaluation
                          guidelines developed).                         reports                      P-UDAA and local
                          Integration of environmental management                                     government recognize
                          in service delivery (a functioning recycling   Corporate plan updates       the value of corporate
                          program is developed).                         Training records             plans.
                          Pakse urban services charge implemented        disaggregated by sex
                          Green certification program implemented
                          At least 40 interns recruited (50% female)
                          P-UDAA corporate plan is prepared by
                          2013, and updated annually.
                          5-year capital investment plan approved for
                          greater Pakse urban area by 2015.
4. Strengthened           By 2018:                                                                    Assumption
capacity for project      Knowledge on project management is             Project progress and         PMIU has adequate
management and            acquired by the PCU and PMIU.                  completion reports           staff and resources.
implementation            Project implementation modules are                                          Risk
                                                                         Project performance          Nonavailability of
                          developed (including gender-sensitive and      monitoring and evaluation
                          sex-disaggregated information)                                              qualified national
                                                                         reports                      consultants
                          Sex-disaggregated indicators are
                          incorporated in project performance                                         Lack of sufficient
                          management system.                                                          resources to support
                                                                                                      delegated project
                                                                                                      management and
                                                                                                      implementation
Activities with Milestones                                                                      Inputs
1 Citywide Environmental Improvements                                                           Loan and Grant
1.1    Improved solid waste management system                                                   ADB: $27.50 million
1.1.1 Update feasibility study and prepare appraisal report (Q1–Q3 2013)                        Item             Amount
1.1.2 Submit external resettlement monitoring to ADB by Q3 2013                                 Civil works       $18.07
1.1.3 Procure first batch of collection and landfill equipment by Q4 2013                       Equipment           $1.59
1.1.4 Key works include design and construction of roadworks, buffering and                     Consulting          $4.50
       landscaping, installation of landfill monitoring facilities by Q3 2013                   services
1.1.5 Rehabilitate and upgrade leachate pond, construct septage ponds, and procure              Gender equity       $0.06
       landfill equipment by Q4 2013                                                            internships
Appendix 1       13

 Activities with Milestones                                                                   Inputs
 1.1.6 Rehabilitate cells A and D, and raise perimeter bunds of cell A to 7 m by Q4 2013      Recurrent costs       $0.80
 1.1.7 Weekly soil covering of waste (Q4 2013–ongoing)                                        Contingencies         $2.48
 1.1.8 Detailed designs prior to new cell B development by Q1 2014                            Government: $3.65 million
 1.1.9 Determine need for landfill expansion; prepare feasibility study and appraisal report Item                 Amount
        for ADB and government consideration; and include technical, financial (and fee       Land                  $2.36
        structure), economic, and safeguards due diligence (Q1 2014–Q1 2015)                  acquisition and
 1.1.10 Cap and close cell A (Q1 2015) and cells B, C, and D (Q1 2018)                        resettlement
 1.1.11 Procure second batch of collection and landfill equipment by Q3 2015                  Output 2.1            $0.59
 1.1.12 Construct new cell C to 7 m height by Q1 2017, and raise perimeter bunds of cell D contribution
        to 7 m height by Q3 2017                                                              (10%)
 1.1.13 Complete report on PPPs in solid waste management by Q4 2017                          Financial             $0.69
 1.1.14 Monitor safeguards (continuous)                                                       charge during
 1.2    Strengthen flood protection and drainage                                              implementation
 1.2.1 Update feasibility study and prepare appraisal report (Q1–Q3 2013)                     Communities: $0.59 million
 1.2.2 Rehabilitate existing drains (Q1–Q2 2013)                                              Item                Amount
 1.2.3 Submit external resettlement monitoring report to ADB (Q3 2013)
 1.2.4 Award civil works contracts (Q4 2013)                                                  Output 2.1            $0.59
 1.2.5 Monitor safeguards (continuous)                                                        contribution
 1.3    Reinforce riverbank protection (Xedon River)                                          (10%)
 1.3.1 Update feasibility study (including the need for tie-back levies to ensure 1:30 year
        flood level protection) and prepare appraisal report (Q1–Q3 2013)
 1.3.2 Submit external resettlement monitoring report to ADB (Q4 2013)
 1.3.3 Award civil works contract (Q1 2014)
 1.3.4 Monitor safeguards (continuous)
 2 Community-Driven Urban Environmental Improvements
 2.1 Update indicative implementation guidelines for CEI proposals by Q4 2012
 2.2 Participating districts approve Department of Housing and Urban Planning district
       sanitation regulations prior to starting project activities in each district (Q4 2012)
 2.3 Assist villages in preparing CEI feasibility studies (10 phases) Q2 2013–Q4 2016
 2.4 Assist in implementing CEI plans (10 phases: Q1 2014–Q4 2017)
 2.5 Submit external resettlement monitoring reports (10) to ADB (Q3 2013–Q4 2016)
 2.6 Prepare a report on the CEI and lessons by Q1 2018
 3 Strengthened Capacity for Provincial Urban Planning and Services
 3.1 Update the training matrix and capacity development program by Q4 2012
 3.2 Develop an institutional development plan for P-UDAA and C- DPWT, training of
       trainer modules, and internship program by Q2 2013
 3.3 Approve first corporate plan with project support by Q1 2014
 3.4 Prepare and submit annual business plans by 30 March of each year (Q1 2013–
       2018), and prepare initial P-UDAA 3-year corporate plan (Q2 2014)
 3.5 Develop Pakse green certificate program (Q2 2014)
 3.6 Prepare Pakse urban services charge structure within 30 months of effectiveness
       (Q1 2014) and implement within 6 months thereafter (Q2 2015)
 3.7 Prepare a report on lessons from capacity development activities by Q1 2018
 4 Strengthened Capacity for Project Management and Implementation
 4.1 Appoint PCU, PMIU, and PPSC units and members (Q2 2012)
 4.2 Recruit and mobilize individual consultants by Q3 2012, and project management
       and implementation consultants by Q4 2012
 4.3 Develop project performance management system, finalize design and monitoring
       framework, and submit to ADB (Q4 2012)
 4.4 Prepare and submit annual project performance monitoring and evaluation reports
       by 31 January of the following year (January 2013–2018)
 4.5 Deliver gender training to project agencies and communities by Q1 2013
 4.6 Establish grievance mechanism and appoint grievance focal person in PMIU and
       village development committees by Q3 2012
ADB = Asian Development Bank, C-DPWT = Champasack Department of Public Works and Transport, CEI = community
environment improvement, ha = hectare, km = kilometer, Lao PDR = Lao People’s Democratic Republic, m = meter, P-UDAA
= Pakse Urban Development Administration Authority, PCU = project coordination unit, PMIU = project management and
implementation unit; PPP = public–private partnership, PPSC = provincial project steering committee, Q = quarter.
Note: Numbers may not sum precisely because of rounding.
Sources: Asian Development Bank and Ministry of Public Works and Transport.
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