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Transport Sector
Prepared for the EASSD Transport Sector Retreat
Washington DC
January 25, 2010
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
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 yearround 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)
Government’s Changing Priorities:
A Retrospect
Late 1970s to 2000: Mainly rehabilitation of
primary national road network
Since 2000: New attention to road
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 multimodalism
Increasing concerns on urban transport as
traffic congestion and air pollution started to
emerge in major cities
Bank Operations and
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)
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
Institutional Capacity Development
Vientiane 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
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.
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
Sida: maintenance & rural roads, but phasing out
Thailand: railway and roads
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
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……???
Thank You