Draft White Paper - Nils Bruzelius AB

Latest version: June 1, 2007

Draft Document:

National Strategy on Accelerated Provision of Rural Transport

Infrastructure

Ministry of Communication Transport Post and Construction, Lao PDR

Table of Contents

Abbreviations

Executive Summary

Background 1.

2 Rural Access: Challenges and Opportunities

2.1 General

2.2

2.3

The Cost of Providing and Maintaining Access

Demand and Willingness to Pay

3 Current Arrangements

3.1 Institutional

3.2

3.3

Rural Roads

The Kum Ban Concept

4. The Strategy

4.1 Strategic Choices

4.2

4.3

4.4

The New Basic Access Regime

Prioritisation

Financing of the New Regime and the p

3

4

7

4.5

Role of the Donor Community

Cross-cutting Issues

19

20

5. The Action Plan

5.1

5.2

5.3

Phasing

Phase 1

5.4

Outline TOR for Consultant for Phase 1

– Scope of Work

Phase 2

21

21

21

21

23

Annex 1: The Prioritisation Scheme in the Community Road Model (CRM) 24

Annex 2: Possible Scenario for Financing of Accelerated Provision of

Rural Roads 27

9

9

9

10

12

12

12

13

15

15

16

18

2


Abbreviations

AFD

Agence Française de Développement

CR

CRC

CRF

Community Road

Community Road Committee

Community Road Fund

CRM

CRSP

DCTPC

DoR

GoL

ILO

KfW

Community Road Model

Community Road Support Programme

Department of Communication Transport Post and Construction

Department of Roads

Government of Lao PDR

International Labor Organization

Kreditanstalt für Wiederaufbau

LEC

LRD

Lao Expenditure and Consumption Survey

Local Roads Division

MCTPC Ministry of Communication Transport Post and Construction

NGPES

OCTPC

PRF

RAD

National Growth and Poverty Eradication Strategy

Office of Communication Transport Post and Construction

Poverty Reduction Fund

Road Administration Division

RMF Road Maintenance Fund

SAPRTI National Strategy on Accelerated Provision of Rural Transport Infrastructure

TOR Terms of Reference

UNDP

VMC

VMU

United Nations Development Programme

Village Maintenance Committee

Village Maintenance Unit

3


Executive Summary

Background

In order to facilitate the further development of rural transport infrastructure in Lao PDR, the

Government (GoL) has decided to formulate and adopt a National Strategy on Accelerated

Provision on Rural Transport Infrastructure (SAPRTI). The ultimate aim of the SAPRTI is to make proposals for and launch a new regime for the planning, implementation, maintenance and financing of basic access. It is expected that this new regime in the first instance will serve to accelerate the provision of cost-effective and sustainable basic access to villages in

Lao PDR, thereby increasing the likelihood that the goal - formulated as providing access for all by the year 2020 – actually will be achieved.

The SAPRTI links into, and supplements, existing National Transport Sector Strategies, as well as the objectives outlined in the National Growth and Poverty Eradication Strategy

(NGPES). It has been developed in close consultation with Laotian stakeholders and the donor community.

Rural roads are today a responsibility of the State. However, special procedures are at present being developed for planning for, implementing and operating rural roads in some provinces, one variant of which is referred to as the Community Road Model (CRM). These procedures have been developed by participatory planning methods that involve the villagers, and are also characterised by some form of direct involvement by the affected villagers in road construction and maintenance. It is hoped that by involving local communities in the planning, construction and maintenance of their roads, cost-effective and sustainable solutions for how to provide access will be promoted.

The CRM and its variants have been implemented under projects with donor support. The main problem is to ensure sustainability after the projects have been completed as the districts often do not have funds to support the required routine and periodic maintenance there after.

The Strategy

As the ambitions of the NGPES are very high, there is a need for the GoL to approach the task at hand by making a number of strategic choices. There are two motives for these strategic choices, viz.



The State cannot solve the task of providing access on its own.



There is a need to mobilise significant additional resources in order to provide access.

As concerns basic access, it is believed that it is possible to make more and better use of the resources of the villagers than is currently the case.

There are four strategic choices. The first is to separate basic access from general access as part of planning, implementation and operation. With basic access is meant the final access to a village. This may be a road or a path, or by river. General access is provided by the other roads in the road hierarchy.

4


The second major choice is to vest ultimate responsibility for the provision and maintenance of the basic access infrastructure in the villagers, by way of formal delegation. It is therefore also the villagers who must themselves determine what is considered acceptable basic access.

The third choice is that villagers shall be provided with assistance by the GoL in order to be able to help themselves. This assistance must also be available following completion of the basic access to ensure its sustainability.

And the fourth major choice is that the assistance from the GoL shall be designed in such a way that it prompts initiative. Above all the incentives should work to promote cost-effective solutions and sustainability (appropriate incentives).

To achieve (i) separation; (ii) delegation; (iii) assistance; and (iv) appropriate incentives, a new regime for providing basic access is proposed. It comprises the following four main elements:

1.

Community Road Committee (CRC): These Committees will effectively serve to empower the villagers (delegation). The CRCs are therefore non-government bodies. They are proposed to be formed by registered households living in a village.

2.

Community Roads (CR): These are the roads (or other basic access infrastructure) to be managed by CRCs thereby separating the management of these roads from the general access road network. A Community Road is defined as a road, being either classified under the Road Law as a rural road or an unclassified track, trail or footpath, which links a village (or more than one village) with the general access road network.

3.

Community Road Fund (CRF): This is a new funding mechanism proposed to be set up by the GoL in order to provide public support (assistance) to CRC’s. The purpose of the CRF is to minimise the impact of the uncertainties and lack of transparency that characterise public funding via the budget of the construction and maintenance of infrastructure facilities. The off-budget approach is expected to strengthen the feeling of ownership by the CRCs of the basic access infrastructure supported by the CRF, thereby promoting their maximum involvement and contribution.

4.

Community Road Support Programme (CRSP): Under the CRSP the GoL will be obliged to provide assistance, free of charge, to villages wishing to set up a CRC with (i) the establishment of the CRC; (ii) planning for, design and construction of new or upgraded basic access infrastructure, and (iii) major and emergency repair of it. The MCTPC will be obliged to develop and implement the CRSP and design it in such a way that it will foster appropriate incentives.

Forming a CRC will not be mandatory. The GoL will also assist villages without a CRC (and therefore not served by a CR) to obtain basic access, but without any formal commitment as to when. Moreover, these villages will not be eligible for support from the CRF.

Support under the CRSP will initially only cover the 47 priority districts identified in the

NGPES. Support from the CRF is proposed to be based on the prioritisation scheme currently used by the Ministry of Communication Transport Post and Construction (MCTPC) for the implementation of the CRM. It comprises several elements to ensure that the assistance will

5

Ministry of Communication Transport Post and Construction, Lao PDR promote cost-effective solutions and will be directed to villages with a potential for economic development and in urgent need of better basic access.

The proposed new regime will require support from the donor community. It is therefore further proposed that the GoL should encourage donors to contribute to the CRF, and should also undertake to match such donor funds on a year by year basis.

The total financing requirements have been estimated at some US$ 85 million during the period 2007-2020. The assumptions made by the SAPRTI about financing arrangements imply that over the entire period the GoL will, on average, pay 50% and the donor community, on average, 50% of the total requirements.

The Action Plan

The proposed regime represents a fundamental new way of developing and managing basic access. It will be a challenge to implement not only on account of the magnitude of the task but also as the approach to be used will be very different in nature from what normally is the case today. The MCTPC will play a lead role in the management of the new regime.

To ensure proper launching it is proposed that the new regime be introduced in a phased manner, and in three phases:



Phase 1 shall result in a preliminary design of the new regime. The preliminary design should be based on a number of pilots based on only partly established arrangements.

Phase one is estimated to take up to 18 months to implement.



Phase 2 shall run for a period of about 2 years. In this phase the full new regime shall be implemented but only in a limited number of districts. It shall include a full evaluation after about 18 months which shall result in a final design of the new regime.



Phase 3 after some 3 to 4 years will comprise full operations.

6


1. Background

Some 80 per cent of Lao PDR’s population live in rural areas with the vast majority being farmers. There are 9,262 rural villages, of which less than two-thirds have an all-year motorable road, leaving more than 3,500 villages without proper road access.

The main national goals are the eradication of mass poverty by the year 2010, and to have eradicated poverty and left the ranks of the least developed countries by the year 2020.

Access to goods, services, markets and opportunities is essential to eradicate poverty, so an all-year road (or similar) to every village will be needed before 2020 if poverty is to be eradicated by then. If possible at all, this will be a massive task. At the same time the national road network needs to be completed and the whole network must have adequate and efficient maintenance.

In order to facilitate the further development of rural transport infrastructure in Lao PDR, the

Government (GoL) has decided to formulate and adopt a National Strategy on Accelerated

Provision on Rural Transport Infrastructure (SAPRTI). The SAPRTI addresses the main issues related to the provision and management of rural transport infrastructure that enhances access to rural areas, including:



The institutional and regulatory arrangements;



The role of rural communities; and



Financing of investments, maintenance and other costs related to rural transport infrastructure.

The ultimate aim of the SAPRTI is thus to make proposals for and launch a new regime for the planning, implementation, maintenance and financing of basic access. It is expected that this new regime in the first instance will serve to accelerate the provision of cost-effective and sustainable basic access to villages in Lao PDR, thereby increasing the likelihood that the goal

- formulated as providing access for all by the year 2020 – actually will be achieved.

The development and formulation of the SAPRTI has been entrusted to a Government Sub-

Committee comprising 13 members under the chairmanship of the Deputy Minister of

Communication, Transport, Post and Construction (MCTPC). The other members are from the Prime Ministers Office, Ministry of Finance, MCTPC (4 more members), Ministry of

Education, Ministry of Forestry and Agriculture, the Planning and Investment Committee,

Ministry of Health and the Ministry of Industry and Handicrafts.

The MCTPC has served as the lead ministry, including by providing a secretariat to the

Government Sub-Committee. In order to prepare for the work of the Sub-Committee, the

MCTPC commissioned a consultancy study (‘the Study’) to review the issues at hand, and to make preliminary recommendations for the approach to the formulation of a strategy of relevance to Lao PDR. The Study was financed by the Swedish International Development

Cooperation Agency (Sida); the support of Sida is gratefully acknowledged.

The SAPRTI links into, and supplements, existing National Transport Sector Strategies and

Policies, including the objectives outlined in the National Growth and Poverty Eradication

7


Strategy (NGPES). It has been developed in close consultation with Laotian stakeholders and the donor community

1

.

The SAPRTI focuses on rural transport infrastructure, including roads, paths (and similar) and for access by river, required to enable and sustain basic access to rural communities. The

SAPRTI therefore does not cover national, provincial and (main) district roads, although such roads could be of importance to achieve accessibility for all. These roads and their development are part of a separate Strategy of the MCTPC and the GoL.

2

Nor does it consider the provision, operations and financing of the means of transport.

1 The proposed Strategy also reflects the resolutions made at the 8 th General Party Congress.

2 However, the proposed SAPRTI will cover such district roads that effectively serve to provide basic access to villages; see below.

8


2

2.1

Rural Access: Challenges and Opportunities

General

The Sub-Committee’s preparatory work has shown that rural transport infrastructure is primarily about roads. River transport is significant on parts of the Mekong, as it always has been, and on some of its tributaries. But as the road network has been extended and improved, river transport’s share of the national transport task has declined.

This is not to say that rivers do not play a role in rural transport: in the six districts

3

examined as part of the preparatory work of the Sub-Committee, 12% of villages have footpath access to a river, implying some use of river transport. But for the great majority of villages river transport is a second-best alternative, generally used only where two-season road access does not exist. Elsewhere rivers are more often seen as obstacles in the way of two-season road access than as transport routes.

It is also evident that transport access to villages is about more than roads that are classified as rural roads. District, provincial and even national roads are more important to many communities, and there are still significant gaps and deficiencies in these networks.

2.2 The Cost of Providing and Maintaining Access

The MCTPC’s plan for the five-year period 2005/06 to 2009/10 calls for investments of

US$ 902 million (9,800 billion Kip at the present exchange rate). Of this US$ 783 million

(8,500 billion Kip, or 87%) is for the primary road network – almost all in national roads and associated bridges. This represents a huge increase in the historical rate of expenditure on the national road network.

Moreover, it is estimated that approximately 75% (or 5,500 km) of provincial and district road length requires upgrading to all-year standard. The cost of upgrading will vary greatly from case to case, but at US$ 45,000/km the cost of such a programme could be some US$ 250 million.

There are 11,400 km of rural roads throughout the country. Based on the Sub-Committee’s analysis of six districts’ road inventory, 19% of rural roads are reported to be open all-year.

This suggests a need to upgrade 9,200 km of existing rural roads at a probable average cost of

US$ 5,000/km. The total cost would therefore be less than US$ 50 million.

In addition, about 40% of villages have no road access at all. For those villages the average distance to the nearest road ranges from 0.9 km in Toumlan District to 9.2 km in Xaignabouli

District. Assuming an average of 3 km, the implied total length of rural roads to be constructed is about 11,000 km, almost doubling the existing rural road length. At an assumed average construction cost of US$ 6,000/km, the total investment need would be about US$ 66 million.

3 A ‘sample’ of provinces and districts was chosen for analysis as part of the preparatory study. The six districts are Namo (Oudomxai Province); Sopbao (Houaphan); Xaignabouli; Nongbok (Khammouan); Toumlan

(Salavan) and Kalum (Xekong).

9


Experience of the Community Road Model (CRM) - see further below - suggests that up to about half the cost of rural road upgrading and construction might be contributed in kind

(labour plus locally available materials) by the communities served by the roads. Using the above figures, this could reduce the financial cost of the rural roads to be constructed to some

US$ 60–70 million.

Estimates of maintenance costs for the existing and planned road network suggest that by

2010 about US$ 30 million/year will be needed for maintaining the national, provincial and district road networks.

At present annual expenditures on the road network amount to about US$ 60.8 million for investments and US$ 17.5 million for maintenance, with the bulk of the money spent on the national network. Clearly, in order to improve access by way of improved rural transport infrastructure, additional sources of financing must be identified; as discussed below one part of the solution is increased mobilisation by way local contributions by those who directly benefit from improved access. But the GoL will also have to turn to the international community in order to increase resource mobilisation.

2.3 Demand and Willingness to Pay

Existing traffic volumes on rural and district roads are very low because they are generated by small, scattered communities engaged in largely subsistence activity and with poor quality access to motorable roads – or no access at all. Existing traffic is therefore not a good guide to future demand.

Also demand for access is not the same as demand for transport. Access is about the opportunities arising from the transport of persons and goods, not about the volume of traffic.

It is more important to understand the underlying nature of the demand for access than to quantify demand in terms of traffic volume.

In Lao PDR rural households without road access spend only one-third as much on transport than rural households who have roads. Evidently they walk more and/or make fewer trips.

Evidently also those who have roads are able to generate higher incomes to pay for their increased expenditure on transport.

The point is borne out by a comparison of household expenditure according to whether roads are available or not. An analysis was carried out as part of the Sub-Committee’s preparatory study using the raw LECS-3 data

4

obtained from the National Statistical Centre. A sample of some 1,350 households was examined in three Northern provinces. Although the data showed considerable fluctuation, the evidence suggested that households with single-season road access have at least one-third more spending power than households with no road.

Households with all-year road access have perhaps 50% more spending power than households with no road.

A calculation based on such increases in spending power for an average-size village (80 households), leads to the conclusion that for a typical village road improvement project, an annual net benefit of over 20% would be derived. This finding, although of course based on a

4 Lao Expenditure and Consumption Survey 2002/2003.

10

Ministry of Communication Transport Post and Construction, Lao PDR very simplified analysis, suggests that investment in rural transport infrastructure is normally justifiable on purely economic grounds, without taking into account the social benefits of improved access to education, health and other services. A further implication is that by developing the rural transport infrastructure, significant additional resources will gradually be generated that can be used to pay for the improvement, and operations and maintenance of this infrastructure.

11


3.

3.1

Current Arrangements

Institutional

In Lao PDR the entire road network belongs to the nation and under the 1999 Road Law

MCTPC has overall responsibility. MCTPC delegates tasks to the provincial Departments of

Communication, Transport, Post and Construction (DCTPCs), which are headed by MCTPC staff. Similarly, the DCTPCs delegate tasks to the district Offices of Communication,

Transport, Post and Construction, (OCTPCs), which are headed by DCTPC staff. The village administrations are also expected to assist the OCTPCs on road matters.

The road network is divided into categories according to their function. Thus roads may be designated national, provincial, district, rural or special roads.

Two divisions in the Department of Roads (DoR) in the MCTPC manage the road network, viz. the Road Administration Division (RAD) and the Local Roads Division (LRD). RAD is responsible for the maintenance of the national roads; the actual works are arranged by the provinces on RAD’s behalf. The maintenance of provincial and district roads is generally a matter for the provinces, but assistance is being provided by the LRD, which also assists the

DCTPCs and OCTPCs with roads that are provided with community participation; (see further below).

The maintenance costs of national roads are financed by the Road Maintenance Fund (RMF), with donor contributions. At present only a small part of the funding of the maintenance of provincial and local roads can be mobilised by the RMF and financing is therefore also being made available by donors.

3.2 Rural Roads

Rural roads are today a responsibility of the State. Special procedures are being developed for planning for, implementing and operating rural roads in some provinces, one variant of which is referred to as the Community Road Model (CRM). These procedures have been developed by participatory planning methods that involve the villagers, and are also characterised by some form of direct involvement by the affected villagers in road construction and maintenance. It is hoped that by involving local communities in the planning, construction and maintenance of their roads, cost-effective and sustainable solutions for how to provide access will be promoted.

The ILO (with UNDP support), Sweden, France, Germany and Japan have helped develop and implement different variants of the CRM approach in recent years. There is no specific legal basis for the CRM approach; it has evolved as a consequence of various initiatives financed and sponsored by donors, with the support of the GoL.

Different types of access infrastructure are being provided under the CRM approach. In

Xekong Province, where the terrain is mountainous and the villages are small, some villages have opted to build 2-m wide footpaths rather than fully-fledged roads. Most villages, however, chose a road (or similar). Where footpaths were built in the first instance, it is reported that the villagers go back each year to widen them, so that they eventually develop

12

Ministry of Communication Transport Post and Construction, Lao PDR into being a road. Once the projects have been completed, the district assumes formal responsibility for the road (or footpath) on behalf of MCTPC.

However, under one variant of the CRM approach, Village Maintenance Committees (VMCs) organise the maintenance of the village roads that have been improved under a project.

Normally this will involve initial upgrading of the road by labour-based methods with equipment support. Village Maintenance Units (VMUs) are used to carry out the work.

Routine and periodic maintenance is performed by village labour, with financial support from the district for running costs such as materials and tools, and local transport. If the roads are long and there are few households, the support may include payment to the villagers for them to work additional days, over and above the standard norm of 2 days/year/household.

Under another variant, in Xekong Province, Village Supervisory Committees have been set up; these have a different composition from the VMCs. And in Xaignabouli Province, elected

Road Maintenance Committees collect money from the villagers. The funds are used to pay road maintenance workers. In this case the villagers have not been asked to contribute to construction.

The Secretariat of the Government Sub-Committee visited examples of the CRM approach in

Khammouan Province (with Sida support), in Xekong Province (a UNDP/ILO project), and in

Xaignabouli Province (an AFD project). The main problem appears to be to ensure sustainability after the projects have been completed as the districts often do not have funds to support the required routine and periodic maintenance there after. Labour alone is not enough for this. The Xaignabouli model generates income which may allow for minor repairs in addition to normal routine maintenance, but even in this case the cost of periodic maintenance, or major emergency repairs, cannot be fully covered.

Another concern is quality. Conditions in the country are difficult, with many mountainous areas, lowland areas that are liable to be flooded, and annual periods of heavy rainfall. If materials or compaction are of inadequate quality, or if drainage is insufficient, landslides may occur and/ or materials get washed away, requiring major repair works to be carried out.

At present, the CRM approach cannot deal with this kind of problem.

3.3 The Kum Ban Concept

Under the NGPES, the Kum Ban (‘village group’) concept has been developed. The Kum Ban is expected to eventually become the focal point of infrastructure development, as well as to be served by an all-year road link to the main road network or the district centre. Other infrastructure such as schools, dispensaries, market places, electricity, etc., will also be concentrated at the Kum Ban level. The intention is to encourage integrated rural development, with the Kum Ban as the local centre for infrastructure and markets. Planning will be ‘bottom-up’, with village plans being integrated into Kum Ban plans, which themselves will feed into the district plans.

The individual villages will remain as the centres for income generating activities (farming, livestock, handicrafts, etc.) but they will rely on the Kum Ban centres for infrastructure and main services, thereby enabling the whole country to have access to basic infrastructure much earlier than would otherwise be the case. The individual village are envisaged to be connected to a Kum Ban centre by some form of basic access.

13


The implementation of the Kum Ban approach is expected to take considerable time. The upgrading of the basic access to villages will have to continue, and even be stepped up, in the mean time in order to be able to meet the goals of the GoL. This is one of the assumptions underlying the SAPRTI.

14


4.

4.1

The Strategy

Strategic Choices

As noted, the ambitions of the NGPES are very high, and the goals as formulated – i.e. to provide basic access for all villages by the year 2020 - will be a challenge to achieve. The

Sub-Committee recognises that there is a need for the GoL to approach the task at hand by making a number of strategic choices. There are two motives for these strategic choices, viz.



The state cannot solve the task of providing access on its own, and that applies to planning as well.



There is a need to mobilise significant additional resources in order to provide access.

As concerns basic access, it is believed that it is possible to make more and better use of the resources of the villagers than is currently the case.

There are first and foremost four strategic choices to be made. The first is to separate basic access from general access as part of planning, implementation and operation. With basic access the Sub-Committee means the final access to a village. This may be a road or a path, or by river, and it may even comprise a network of roads. What is considered to be adequate basic access is for the villagers to determine, as argued below, but for satisfactory basic access to be achieved, it is regarded as important, both by villagers and GoL, as stated in the NGPES, that the road or path or whatever should be open more or less the whole year

5

.

General access is provided by the other roads in the road hierarchy. This comprises as stated national, provincial and district roads. General access can, however, also be provided by other types of transport infrastructure. A Kum Ban will normally have direct general access to the rest of the country, and the basic access road will normally link the village to a Kum Ban.

However, the basic access road may also be directly connected to the general access network.

The second major choice is to vest ultimate responsibility for the provision and maintenance of the basic access infrastructure in the villagers, by way of formal delegation. It is therefore also the villagers who must themselves determine what is considered acceptable basic access.

The role of the GoL, through the MCTPC, will be limited to developing and maintaining the networks providing general access. In addition the GoL will be responsible for ensuring that the improvement of general and basic access is properly coordinated, including that basic access involves the relevant Kun Ban where such a centre is being developed.

As stated in the NGPES.

“Local communities will be given the opportunity to participate in the processes of road planning, construction and maintenance. Through this process, road planners can be made more fully aware of community concerns and aspirations, and the community itself can be better informed of what is being planned and how it is likely to be affected.”

5 Under the CRM this has been made more precise by requiring basic access during at least 10 months, with easy access by foot during the remainder of the year.

15


The third choice is that villagers shall be provided with assistance by the GoL in order to be able to help themselves. Even for basic access it may be necessary to construct structures, culverts, etc., which villagers cannot construct themselves. Thus without assistance, the basic access infrastructure may not be completed. This assistance must also be available following completion of the basic access to ensure its sustainability.

And the fourth major choice is that the assistance from the GoL shall be designed in such a way that it prompts initiative, but also ensures that basic access is planned properly, and then built and maintained cost-effectively. And above all the incentives should work to promote sustainability (appropriate incentives). As noted previously, sustainability is an issue as concerns the present CRM approach.

4.2 The New Basic Access Regime

To achieve:

 separation

 delegation

 assistance

 appropriate incentives a new regime for providing basic access is proposed by the Sub-Committee. It comprises the following four main elements (which also respond to the requirements as concerns the elements to be addressed by the new Strategy as set out in the terms of reference (TOR) for the Sub-Committee):

1.

Community Road Committee (CRC): These Committees will effectively serve to empower the villagers (delegation). The CRCs are therefore non-government bodies. They are proposed to be formed by registered households living in a village if a qualified majority of the households in the village decides to do so. The CRC will in effect replace or obviate the need for the current committees established under various donor-financed projects, including the VMCs

6

. The CRC’s will have the following characteristics:



The CRCs will ultimately be responsible for constructing and managing basic access roads, tracks, river terminals, and similar basic access infrastructure. The CRCs are to be made responsible for mobilising a part of the resources required for construction and major repairs.



The CRCs should be made responsible for the annual maintenance and operations of the basic access infrastructure.



The CRC will be given the right to collect cash contributions from their members for defraying the costs related to the implementation and maintenance of its basic access.



The CRCs will be encouraged to form a national association to further the interests of the CRCs at the national level.

6 As part of the work on preparing for the implementation of the SAPRTI, the scope of the CRC’s functions will be examined in further detail, including the question of the overall institutional arrangements for the provision and management of community infrastructure.

16


2.

Community Road (CR): These are the roads (or other basic access infrastructure) to be managed by CRCs thereby separating the management of these roads from the management of the general access road network. A Community Road is defined as a road, being either classified under the Road Law as a rural road or an unclassified track, trail or footpath, which links a village (or more than one village) with the general access road network (or other type of general access infrastructure). A district road may also become a

CR if a CRC wants to assume responsibility for it and if it does not carry too much external through-traffic or heavy vehicles.



A CR will formally be owned by the State but the CRC will be responsible for its construction and management.



A CR will have to be formally proclaimed and registered as such.



A CR can at the same time be either a rural road or a district road in terms of the present Road Law. However, if it is proclaimed as a CR then it will be managed as such a road.

3.

Community Road Fund (CRF): This is a new funding mechanism proposed to be set up by the GoL in order to provide public support (assistance) to CRC’s. The purpose of the CRF is to minimise the impact of the uncertainties and lack of transparency that characterise public funding via the budget of the construction and maintenance of infrastructure facilities. The off-budget approach is expected to strengthen the feeling of ownership by the CRCs of the basic access infrastructure supported by the CRF, thereby promoting their maximum involvement and contribution. The new funding mechanism will be characterised by that:



The CRF will formally be a part of the government but the money in it will exclusively be used for the construction and repair of Community Roads (and other basic access infrastructure).



The long-term solvency of the CRF will be a major operational requirement. The CRF will therefore be obliged to set aside certain sums to be used for future repairs of CRs

(and other basic access infrastructure), including repairs on account of unforeseen events such as heavy monsoon rains. Such repairs will have to be done on a cost sharing basis with the CRCs concerned.



Operational policies for the CRF will be formulated by the board of the CRF, which will also make decisions on allocation of moneys from it. The board will comprise the

Vice Ministers of the following ministries (x, y, z) (or the persons designated by these

Vice Ministers) as well as two representatives of the National Association of CRCs.



The work of the CRF will be supported by the LRD of MCTPC, and the LRD’s resources will have to be strengthened accordingly. Likewise the DCTPCs and

OCTPCs will support the work of LRD and the CRF, and their resources will therefore also have to be strengthened.



The CRF will be subjected to a governance regime which is acceptable to the donor community.

17


As part of the preparatory work on implementing the proposals of the SAPRTI, it is proposed that it be further examined if this new financing mechanism should become a separate fund or should be integrated into other existing financing mechanisms.

7

4.

Community Road Support Programme (CRSP): The MCTPC will be obliged to develop and implement the CRSP. The financing of the costs of the CRSP, being external to the

MCTPC, will come from the CRF. The MCTPC will identify personnel in their district offices to be responsible for managing and implementing the Support Programme at the village level. Under the CRSP the GoL will provide assistance, free of charge, to villages wishing to set up a CRC with (i) the establishment of the CRC; (ii) planning for, design and construction of new or upgraded basic access infrastructure, and (iii) major and emergency repair of it. Various types of rolling courses of importance to the new regime will be offered, normally at the district level, by the CRSP. The CRSP will otherwise be designed so as to support village initiative and maximum contribution by villages towards the construction and maintenance of the basic access infrastructure in a long-term perspective (appropriate incentives):



Assistance under the CRSP will be provided on the basis of transparent rules, which will also apply to the granting of financial assistance from the CRF; see further below.



All financial assistance shall be matched by way of a formal undertaking by the CRC to (i) contribute a share of the costs of construction and major repairs; and (ii) be fully responsible for routine maintenance. If a CRC fails to live up to its undertaking, the assistance shall be terminated. However, if the CRC resumes providing its share, the support shall be continued.



The contribution of a CRC may be in kind. It is for the CRC to decide on whether to match the CRF contribution in kind or with its own funds.



In order to promote cost-effective solutions, the financial assistance for construction and major repairs shall be fixed per km of the actual distance of the CR 8 , but it may be set to vary with the nature of the terrain.

Forming a CRC will not be mandatory. The GoL will also assist villages without a CRC (and therefore not served by a CR) to obtain basic access, but without any formal commitment as to when. Moreover, these villages will not be eligible for support from the CRF.

The proposed new regime is compatible with the proposal for relying on Kum Bans in order to improve service provision in rural communities and to serve as the main access node for a number of villages.

4.3. Prioritisation

There will be a need to establish criteria for the application of the new regime and at two levels in view of limited resources; viz.



Support under the CRSP



Support from the CRF

7 Other examples of such funding mechanisms are the Lao Poverty Reduction Fund (PRF) and the Road

Maintenance Fund (RMF). Mention should also be made of the Synergy Fund in the MCTPC which could well serve as the proxy arrangement referred to in Section 5, below.

8 Appropriate modifications may have to be made in case of river access.

18


Support under the CRSP will initially only cover the 47 priority districts identified in the

NGPES. When the capacity has been strengthened to also cover other districts and the resources of the CRF are adequate, the Support Programme will be extended to the other districts as well.

Support from the CRF is proposed to be based – at least initially - on the prioritisation scheme

9

currently used by the LRD for the implementation of the CRM

10

. It comprises three elements

11

:

1.

Screening to establish a list of eligible projects

2.

Socio-economic ranking in order to create a shortlist of projects.

3.

The calculation of cost-benefit ratios in order to rank short listed projects.

Further information is provided in the Annex 1. The criteria imply, inter alia , that priority is given to projects which serve many people (rather than few) and which will provide access to areas with a high potential for development of agriculture and in urgent need of better access.

12

4.4 Financing of the New Regime and the Role of the Donor Community

The proposed new regime will require support from the donor community. The Sub-

Committee therefore proposes the following:

1.

The GoL should encourage donors to contribute to the CRF, and should therefore undertake to match such donor funds on a year by year basis resulting, initially a contribution by the GoL of 30% of total annual requirements later rising to 60% of annual requirements.

2.

The GoL shall as from 2010 require the Road Maintenance Fund (RMF) to make, on an annual basis, a contribution to the CRF equal to not less than 10% of its annual revenues. This contribution will be viewed as part of the overall contribution of GoL to the financing of SAPRTI.

It is further proposed by the Sub-Committee that the GoL should endeavour to enter into agreement with those donors, who so wish, for support to the CRF. The aim of such agreement is to provide longer term certainty to the funding of the CRF, as well as to ensure that all the cooperating donors will apply the same principles for support to the CRF, CRs and

CRCs, including planning, procurement, and implementation.

Representatives of donors contributing to the CRF will have the right to attend meetings of the Board of CRF as observers.

9 As part of the implementation of the new Strategy it will be necessary to evaluate further the effectiveness of this scheme.

10 This is financed under the Basic Access Component (BAC) in the LRD, which is part of the Third Lao-

Swedish Road Sector Project.

11 For full details, see Community Road Model Implementation Guideline, Local Roads Division, MCTPC, 9th

October 2005.

12 This is in line with the resolutions at the 8 th General Party Congress. The prioritisation process will take into account Provincial and District Development Plans where such plans have been prepared.

19


The overall investments required in order to achieve basic access by the year 2020 have above been estimated at some US$ 70 million (excluding the contributions to be made by the villagers, normally, in kind). Some US$ 12 million will be required, in addition, in order to build up the balance of the CRF to enable it to in a longer term perspective contribute to the costs of (i) periodic maintenance; (ii) emergency repairs; and (iii) the operations of the CRSP.

Moreover, some US$ 3.3 million will be required to finance consultancy services in order to design and implement the proposed new regime and to launch the CRSP. The total financing requirements have hence been estimated at some US$ 85 million during the period 2007-2020.

The assumptions made above about financing arrangements imply that over the entire period the GoL will, on average, pay 50% and the donor community, on average, 50% of the total financial requirements of the SAPRTI; see further Annex 2.

4.5 Cross-cutting Issues.

The proposed regime is expected to be driven by the villagers themselves, and this is deemed to be an important property to prime the pump. However, the Community Road Support

Programme will be of crucial importance to the effective functioning of the new regime.

Under it extension services will have to be designed and provided in order to also address other issues which arise in the context of the introduction of a CRC and the building and maintenance of a CR (and other basic access infrastructure). These other issues include how to address possible environmental impacts and the need to ensure an appropriate role for women in the management and work of the CRCs.

As part of the application of the CRM by the LRD, principles and manuals have been developed and applied, including requirements on representation by women in VMCs and

VMUs and the use of MCTPC guidelines for environmental screening. It is expected that these principles and manuals will be applied under the proposed new regime as well, and also developed further based on the experience gained and suggestions made by the donor community.

20


5.

5.1

The Action Plan

Phasing

The proposed regime represents a fundamental new way of developing and managing basic access. It will be a challenge to implement not only on account of the magnitude of the task but also as the approach to be used will be very different in nature from what normally is the case today. The MCTPC will play a lead role in the management of the new regime, but will be required to think through carefully as to what this role will require. Fundamental to the new regime is that it is understood by the MCTPC that its role is to provide satisfactory and effective services to the CRCs.

To ensure proper launching it is therefore proposed that the new regime be introduced in a phased manner, and in three phases:



Phase 1 shall result in a preliminary design of the new regime. The preliminary design should be based on a number of pilots based on only partly established arrangements.

Phase one is estimated to take up to 18 months to implement.



Phase 2 shall run for a period of about 2 years. In this phase the full new regime shall be implemented but only in a limited number of districts. It shall include a full evaluation after about 18 months which shall result in a final design of the new regime.



Phase 3 after some 3 to 4 years will comprise full operations.

The Government, through MCTPC, shall approach a suitable donor to assist with the execution of Phase 1.

5.2 Phase 1

This phase is envisaged to comprise 3 sub-phases



Initial preliminary design – about 9 months



Pilots – about 4 months



Revised preliminary design and preparation for Phase 2 – about 3 months

It is proposed that a consultancy (the Consultant) carry out sub-phases 1 and 3 and rely on

LRD of MCTPC to carry out sub-phase 2. Existing consulting capacity in LRD will be expected to provide ongoing support to the Consultant during the other sub-phases.

5.3 Outline TOR for Consultant for Phase 1 – Scope of Work

Action 1: CRC



Design model statute of CRC, including its legal foundation



Identify steps to form a CRC



Identify systems required for registration and supervision of a CRC



Identify supporting instruments (accounts, accounting, etc.)

21


Action 2: CR



Design detailed policies for proclaiming a CR



Design procedure and arrangements for proclaiming a CR



Develop procedures for how to construct and upgrade a CR – to build on CRM



Develop procedures for how to obtain financial assistance

Action 3: CRF



Design structure of CRF



Design operational policies



Design operating procedures including delegation and auditing



Identify manning requirements



Identify a possible proxy for the CRF (i.e. a simplified solution) to be used in the pilots of Phase 1 13 .

Action 4: CRSP



Design the working procedures of CRSP, including all required material



Design the preliminary organizational structure required to operate the CRSP, to be controlled by LRD



Design the details of the incentive regime

 Identify a typology of accepted ‘interventions’

Action 5: Prepare for pilots (in close co-operation with LRD)

 Identify simplified procedures to be able to operate ‘full pilots’ (a proxy CRF, a proxy for registration offices, etc.)



Identify where and when to undertake the pilots



Identify resources and training required to undertake the pilots

Action 6: Carry out the pilots



Will be done by LRD, with Consultant as observer



Undertake evaluation of the pilots

Action 7: Prepare full preliminary design (in close co-operation with LRD)



Based on the pilots, prepare the full preliminary design



Identify all actions required in order to move on to Phase 2



Prepare proposals for support for implementing Phase 2



Prepare an implementation schedule

13 See footnote 7.

22


5.4 Phase 2

The contents of Phase 2 will be determined more precisely during Phase 1. Given a positive evaluation during Phase 1, the second phase will entail full operations of the new regime for providing basic access, albeit with a focus on some of the priority districts. As indicated, it may be necessary to also during this phase use a simplified solution for performing the functions of the CRF.

23


Annex 1: The Prioritisation Scheme in the Community Road Model (CRM)

There are three main steps involved in the ranking process:

1.

Screening which creates a list of eligible villages

2.

Socio-economic ranking to create a shortlist

3.

Cost-benefit ratios to determine the prioritisation order of the short listed projects.

Screening

To be eligible for support a road must fulfil the following criteria:

1.

The road link must run through an area inhabited by people; there should be a minimum number of people per kilometre of road to justify its construction

2.

The road link should connect with an all weather road or river port and should be part of a network leading to local or provincial markets and/or district centres

3.

The road link must not be closely parallel to or in the area of influence of another allweather road; circuits should generally be avoided

4.

The road link could be maintained using labour and materials (gravel and sand) from the villages served

5.

The road link should serve the people at large and not only a special interest group such as a logging or mining firm

All of these criteria must be fulfilled by a proposed project in order to pre-qualify for construction or rehabilitation. In relation to alternatives to roads, such as footpaths or waterways, criteria needs to be developed for screening and will depend on applications during the first phase of CRM implementation.

Socio-economic Ranking

Socio-economic ranking is utilized to decide which of the prospective village roads or other basic access improvement projects should be subject to a more detailed technical design. It shall be based on the following socio-economic indicators (criteria) and assigned points:

24


Socio-economic Factors Assigned Points

1. Agriculture potential Low = 1

2.Non-agriculture potential Low = 1

Medium =3

Medium =3

High= 5

High= 5

3. Existing health services used by the population

No travel required = 1

Less than 2 hours travel = 3

More than 2 hours travel = 5

4. Existing primary school used by the population

No travel required = 1



5. Existing secondary school used by the population




6. Present access to district centre




7. Present access to market Less than 2 hours travel = 1



8. Road condition before improvement

Fair condition =

1 (trafficable most of the year)

Bad condition =

3 (trafficable less than 6 months of the year

No exiting road or road never trafficable = 5

9. Road condition as a community problem as perceived by women

No problem = 1

(opinion of most villages)

Minor problem

= 3 (most villages identify road as a minor problem)

Very big problem = 5

(most villages identify road access as a big problem

10. Road condition as a community problem as perceived by men

No problem = 1

(opinion of most villages)

Minor problem

= 3 (most villages identify road as a minor problem)

Very big problem = 5

(most villages identify road access as a big problem

11. Road condition as a community priority as perceived by women

No priority = 1

(few or one of the villages identifies road improvement as a priority

Medium priority = 3

(many villages identify road as a second or third priority

High priority = 5

(many villages identify road improvement as a first priority

25


12. Road condition as a community priority as perceived by men

13. Probability that improved road access s will lead to other projects / development initiatives being started in the villages along the road 1

(few or one of the villages identifies road improvement as a priority

No priority = 1

(few or one of the villages identifies road improvement as a priority)

Low probability

= 1

Medium priority = 3

(many villages identify road as a second or third priority)

Medium probability = 3

High priority =

5 (many villages identify road improvement as a fir

High probability

= 5

Cost-Benefit Ratio

The lowest cost-benefit ratio represents the best potential investment project as it is indicating a relatively low investment cost in relation to the number of people served and the perceived benefits.

Total Government Cost

Cost-benefit ratio = Population served * Economic benefits

This three-step procedure will be tested and further refinement and possible simplification may be considered upon review.

26


Annex 2

Possible Scenario for Financing of Accelerated Provision of Rural Roads; US$ million

Period Investment Consultancy Total GoL* Donors

01/07-06/09# 7.0¤ 0.6& 7.6 2.1 5.5

07/09-06/10 5.0” 0.9 § 5.9 1.5 4.4

07/10-06/11 5.0”

07/11-06/12 5.0”

07/12-06/13 7.0”

07/13-06/14 7.0”

07/14-06/15 7.0”

07/15-06/16 7.0”

07/16-06/17 8.0”

07/17-06/18 8.0”

07/18-06/19 8.0”

07/19-06/20 8.0”

0.9 §

0.9 §

5.9

5.9

7.0

7.0

7.0

7.0

8.0 4.8

8.0 4.8

8.0

8.0

1.5

1.5

4.2

4.2

4.2

4.2

4.8

4.8

4.4

4.4

2.8

2.8

2.8

2.8

3.2

3.2

3.2

3.2

Total 82.0** 3.3 85.3 42.6 42.7

# 30 months

& Phase 1 consultant (does not include BAC consultant)

§ Consultancy to support CRSP

¤ This reflects ongoing support via BAC, PRF, KfW

“These costs include CRSP, periodic maintenance and the building up of funds for financing of emergency repairs

*It is assumed that between 01/07 and 06/12, the GoL contributes 30% of investment costs; thereafter 60% of investment costs.

** Includes reserves for repair and periodic maintenance.

27

Draft White Paper - Nils Bruzelius AB

Draft Document:

National Strategy on Accelerated Provision of Rural Transport

Infrastructure

Executive Summary

Related documents

Products

Support

Draft White Paper - Nils Bruzelius AB

Draft Document:

National Strategy on Accelerated Provision of Rural Transport

Infrastructure

Executive Summary

Related documents

Add this document to collection(s)

Add this document to saved

Suggest us how to improve StudyLib