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Transport Sector

Lao PDR. Transport Sector. Prepared for the EASSD Transport Sector Retreat Washington DC January 25, 2010. Geography and Economy. Population 6 million, land area 250,000 km 2 ; GDP growth at 7% a year (5% in 2009), GDP per capita $500, 75% of population rural;

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Transport Sector

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  1. Lao PDR Transport Sector Prepared for the EASSD Transport Sector Retreat Washington DC January 25, 2010

  2. Geography and Economy • Population 6 million, land area 250,000 km2; • GDP growth at 7% a year (5% in 2009), GDP per capita $500, 75% of population rural; • Land-locked country  but also land-linked to 250 million population in the Great Mekong Subregion; • Very low population density (24 persons/Km2), scattered settlements, mountainous geography, and monsoon  costly to provide transport infrastructure and services to all parts of the country, and important to prioritize; • Economic development at the early stage  thin markets, low but growing traffic volumes, accessibility crucial

  3. Transport Systems • Roads are dominant mode carrying 98% of passengers and 86% of freight; • 44% of the national roads (6,900 km) unpaved; Over 20% of the rural population without year-round access by road; • Frequent occurrences of landslides, floods, and embankment erosion; • Potential of inland waterways is limited due to rocks and locations; • Railway link 3.5 km extending from Thailand; • Air transport market is small but growing fast; • Urban traffic congestion has emerged in Vientiane (w. pop 700,000)

  4. Government’s Changing Priorities: A Retrospect • Late 1970s to 2000: Mainly rehabilitation of primary national road network • Since 2000: New attention to road maintenance • Since 2005: New policy emphasis on rural basic access improvement • Active participant and primary beneficiary of GMS transport development, and starting to think big in rail, air, logistics, and multi-modalism • Increasing concerns on urban transport as traffic congestion and air pollution started to emerge in major cities

  5. Bank Operations and Achievements • Operations • Rehabilitation of crucial national roads (NR13 S); • Provincial Infrastructure Project (PIP, closed in 2008) in Phongsali and Oudomxay; • Road Maintenance Program Phase 1 & 2; • Lao Road Sector Project (Negotiations on Feb 8, 2010) • Achievements • Delivery of real benefits to people; • Established a provincial infrastructure delivery model • Mini-SWAPs for Road Maintenance Program (PIU no more, using same SBD, joint supervision) • Road Maintenance Fund

  6. Institutional Capacity DevelopmentVientiane Declaration • Government ownership—Government exercises effective leadership and the development policies, strategies, and coordinates development actions; • Alignment—Partners align with the Government’s strategies and use strengthened Government regulations and procedures; • Harmonization and Simplification—Partners’ actions are more harmonized, transparent and collectively effective; • Managing for Results—Government and partners work together to manage resources and improve decision making for results; and • Mutual Accountability—Both government and partners are accountable for results.

  7. Government-Donor Coordination • Small IDA country with many donors (ADB, AusAID, China, Japan, Germany, Korea, Sweden, Thailand, WB); • Formal coordination through Infrastructure Sector Working Group (ISWG) chaired by the Minister; • Aid harmonization: key effort of ISWG • ADB: GMS transport links; • China: road rehabilitation, urban roads, airport • Japan: bridges and technical assistance; • KfW: province-based multi-sectoral comprehensive approach; • Sida: maintenance & rural roads, but phasing out • Thailand: railway and roads

  8. Ministry of Public Works and Transport:A Leader in Institutional Development • MPWT Secretariat for Aid Harmonization • Action Plan for Aid Harmonization • Strengthening MPWT Functions (Country Systems) • Strategic Planning and Management • Safeguard (pilot use of country system with Environmental and Social Operations Manual adopted) • Financial Management System • Internal Control and Internal Audit • Disaster response and mitigation system • Performance-based maintenance contracts • NT-2 revenue supported rural road program

  9. Bank Operations: Way Forward • New CPS process just started; • Key question: How to use limited IDA to achieve best outcomes? • Two-pronged approach: • Continuing effort in aid harmonization and building foundations for sector-wide approaches • Maintaining comparative advantage in strategic and policy advice and capacity development and delivering real benefits to people through lending • Business areas would be determined by National Transport Strategic Plan • Moving to SWAPs……???

  10. Thank You

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