VI. INFRASTRUCTURE DEVELOPMENT PLAN

The Study on the Integrated Regional Development Plan for and Khammouan Region in Lao PDR

Infrastructure Development Plan

CHAPTER VI

INFRASTRUCTURE DEVELOPMENT PLAN

VI-1 TRANSPORTATION DEVELOPMENT PLAN

VI-1.1 Lao Transport Systems

1) General The transport sector in Lao PDR consists of road, river, and air transportation. There is no rail system. The transportation system is relatively underdeveloped compared to adjacent countries due mainly to geographical barriers (mountains) and a shortage of financial resources. Lao PDR relies heavily on road transportation which carries more than 90 % of freight traffic and 85 % of passenger traffic (Table VI1.1). Most of the country‘s road networks, totaling about 18,000 km, was constructed before the 1940s and not designed for the use of heavy commercial vehicles. Only about 18 % of the road network is paved. Historical changes are shown in the tables below.

Table VI1-1 Volume of Freight and Passenger Transport Freight (th.Tons)* Passenger (th. Persons) Year Road River Air Total Road River Air Total 1980 795 34 1.0 830 5,566 179 72 5,817 1985 635 50 0.4 685 9,470 320 87 9,877 1990 561 106 0.5 667 12,588 583 117 13,288 1995 993 476 1.2 1,470 13,243 436 110 13,789 1996 978 537 1.2 1,516 17,557 1,252 366 19,715 1997 1,020 604 1.2 1,625 18,009 1,599 388 19,996 1998 1,004 567 1.9 1,573 18,537 1,262 278 20,077 (%) (65.1) (34.5) (0.1) (100.0) (92.6) (6.0) (1.5) (100.0) Freight (Million tons-km) Passenger (Million pers.-km) Year Road River Air Total Road River Air Total 1997 164.7 26.6 2.2 193.5 1,101.3 45.7 683.2 1,830.2 1998 128.7 21.5 0.7 150.9 1,440.0 30.6 98.5 1,273.1 (%) (85.3) (14.2) (0.5) (100.0) (89.9) (2.4) (7.7) (100.0) Note: * Updated in April 2001. Source: MCTPC, Lao Aviation

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Table VI1-2 Total Road Lengths (Unit: Km) 1975 1980 1985 1990 1995 1996 1997 1998 Paved Roads 1,427 1,935 2,350 3,346 2,837 3,502 3,543 3,706 Gravel Roads 4,371 4,174 3,253 4,775 5,221 8,541 6,051 6,737 Earth Roads 5,664 6,114 6,780 5,850 10,799 10,278 12,026 13,043 Total 11,462 12,223 12,383 13,971 18,857 22,321 21,620 23,486 Source: MCTPC

The government’s priority is to improve and rehabilitate the arterial road comprising the main north-south road along the river and a number of east-west roads that connect the Mekong river to the border with to the east. Despite assistance from the international and bilateral aid agencies, there remains much to be improved in the national road networks.

The number of registered vehicles in Lao PDR is tabulated below. The number of motorcycles are dominant, while motor cars are small.

Table VI1-3 Number of Registered Vehicles in Lao PDR Year Motorcycle Tricycle Motor Car Bus Truck Total 1990 57,878 947 13,276 1,625 6,236 79,962 1991 64,694 992 14,264 1,630 6,319 87,899 1992 71,734 992 15,156 1,636 6,451 95,969 1993 78,566 1,788 16,426 1,648 6,507 104,935 1994 90,517 2,676 17,943 1,658 6,842 119,636 1995 104,879 3,833 20,508 1,673 7,714 138,607 1996 120,373 4,163 22,564 1,080 8,122 156,302 1997 137,755 5,835 25,057 1,232 9,581 179,460 1998 140,375 5,844 26,082 1,725 9,775 183,801 1999 143,846 4,235 27,683 1,776 9,501 187,041 (%) (76.9) (2.3) (14.8) (0.9) (5.1) (100.0) Source: MCTPC

2) The Road Sector

(1) Road Network

The Lao road network has a hierarchical system, consisting of National Roads (including sub-regional roads of important transit links), Provincial Roads, District Roads, Rural Roads, Urban Roads and Special Roads.

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National Roads National Roads (NR) are defined to be “of strategic importance for national economic development, for international trade and tourism and for national defense”. They are expected to be all weather roads open to all kinds of vehicles. They are classified into the following categories:

(a) Roads connecting provincial capitals with , (b) Roads to international border crossings, (c) Roads to ports serving international cargo, (d) Roads to tourist spots of international importance, (e) Roads of strategic importance for national defense, and (f) ESCAP’s Asian Highways.

The NR network consists of paved road (3,134 km or 45% of total NR), gravel road (2,333 km or 34%), and earth road (1,447 km or 21%). Thus 55% of the National Roads are gravel or earth surface, and do not meet the all weather standard.

Provincial and Special Zone Roads Provincial Roads are roads which are strategically important for regional development. They are expected to be trafficable for passenger cars all year round but there might be restrictions for heavy vehicles during the rainy seasons. They fall into the following categories:

(a) Major road connections between provinces (b) Roads from District Centers to the Provincial Capital (c) Roads to river ports serving more than one province (d) Roads to tourist sites of national interests (e) Roads for the exploitation of natural resources of vital interest to the economy of the province (f) Roads from isolated District Centers to river ports

The existing Provincial Roads also fall short of the above specifications and many of their sections are not passable to passenger cars during the rainy seasons.

(2) Road Administration

In Lao PDR, Ministry of Communications, Transport, Post and Construction (MCTPC) supervises sectors of roads and road transport. The Communications Department of MCTPC is responsible for the administration, planning, construction and maintenance of national roads.

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Minister for MCTPC Vice Ministers

General Office Dept. of Dept. of Urban Planning Committee for Committee for (Cabinet) Personnel Audit Institute Water Supply Railway

Dept. of Dept of Dept of Dept of Dept of Dept of Roads Transport Post & Telecomm. Housing & Urban Civil Aviation Planning/Budget

Division of CTPC in Province

Office of CTPC in District

Source: MCTPC Figure VI1-1 MCTPC Organization

(3) Five Year Plan for Road Sector The new five-year plan for road sector for the period 2001-2005 is now under preparation. The summary of expenditure made for years 1996-2000 for road sector is as shown in the table below. Out of total expenditure for road of 3,925 billion kip for years 1996-2000, only 78 billion kip or 2% came from the local budget and the remaining 3,847 billion kip or 98% of the total expenditure was paid by various foreign sources.

Table VI1-4 Five Year Road Sector Expenditure (1996-2000) Total 1996-2000 Description Total Local Foreign Total Amount 3,924,789 77,597 3,847,192 Project Management 43,654 2,252 41,403 Encouraging Budget 276 276 - Road & Bridges Survey/Design 5,039 161 4,878 Waterways Survey/Design 411 411 - Road Construction Project 446,895 29,344 417,551 Bridge Construction Project 555,369 798 554,571 National Road Maintenance P. 79,135 26,661 52,474 Bridge Maintenance Project 3,363 1,941 1,422 Port Construction Project 566 566 Port Maintenance Project 401 401 Waterways Construction/Mainte. 155 155 Erosion Protection 2,861 2,861 Urgent Plan of the Government 14,673 12,061 2,611 Source: MCTPC, Department of Roads

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(4) Road Sector Budget

The road sector budget for the fiscal year 1999/2000 (see Table VI1-5) indicates similar reliance upon foreign sources of fund. Out of the total budget of fiscal year 1999/2000 for the road sector (574,977 million kip), only 23,857 million kip or 4.1% was planned to be financed from Lao Government‘s own source of funds and the remaining 95.9% was planned to be financed from foreign assistance funds.

Table VI1-5 Budget Fiscal Year 1999/2000 Budget FY 1999/2000 (Unit: million Kip) Description Local Fund Foreign Fund Total Total Amount 23,857 551,120 574,977 A. Regular Plan 21,095 551,120 572,215 I Project Management 619 4,246 4,865 1. Project management 619 4,246 4,865 2. Construction project 4,920 233,681 238,601 3. Road & bridge maintenance project 40 840 880 4. Survey project 30 840 870 II Projects Using Local Fund 15,571 33,662 49,233 1. Project management 18 0 18 2. Road and bridge construction project 242 0 242 3. Road, bridge & waterway mainte. project 15,311 33,662 48,973 III New Project 65 0 65 B. Emergency Project 2,762 0 2,762 Waterway Improvement Project 2,762 0 2,762 Source: MCTPC

(5) Road Maintenance

For the maintenance of road network, the biggest problems are lack of financial resources and law enforcement of vehicles weight rules. In order to tackle these problems, the Government of Lao PDR has recently implemented actions assisted by the World Bank and the Government of New Zealand.

Introduction of Road Maintenance Fund (RMF) The current annual needs for the maintenance of the core national road network is estimated about $12 million (ADB estimates). The government has not been able to allocate the required amount fully from the national budget because of competing claims from other sectors. It therefore relies on assistance from aid agencies to make up the shortfall in maintenance expenditure. The aid agencies have been encouraging the Government to establishing a Road Maintenance Fund based on the principle that road user contributes the full costs of maintaining the national road network. Draft decree for the establishment of RMF is already prepared and is studied by concerned departments and agencies of the Government of Lao PDR.

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The World Bank provided advisory services to MCTPC to prepare a plan for the establishment of a RMF. The revenues for the RMF is envisaged to be derived from:

- a fuel levy of $0.01 per liter of gasoline and diesel, which rate increasing 25% per year; - an annual heavy vehicle charge of $15; - tolls on roads that are wholly publicly financed; - international transit charge which might be introduced to charge foreign vehicles entering from adjoining countries; and - any other road user charges.

As of November 2000, the decree of RMF has been signed by the Prime Minister and is effective on 12 October 2000.

The funding of road maintenance is to base on the principle that road users contribute the full cost of maintaining the national road network and progressively contribute to the full cost of maintaining all roads. The priority of funding is as following:

1st priority : Maintenance of National Roads, and Emergency works 2nd priority : Rehabilitation of old roads 3rd priority : Road safety 4th priority : Management of the RMF

Management of the RMF is to be made by the Board of RMF Management, members of which are as following.

Government: Ministries of Finance, CTPC, and Commerce and Trade Private: Chamber of Commerce, Group of Fuel Importers, Freight Forwarders Association, and Transport Association

The World Bank plans to support the Fund and, if the Fund falls into the deficit, a part of it is to be contributed by the Bank.

Heavy Transport Management Program (HTMP) The Government of Lao PDR identifies that the maintenance of the national road network preventing from further unnecessary degradation and ensuring preservation of existing improved roads are priority issues. For those purposes the usage of road assets for heavy vehicles must be in compliance within the

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structural capacity of roads. The use of roads with overloading of heavy vehicles and exceeding their capacities accelerates for the road assets reaching the end of their serviceability life well before designed.

The MCTPC‘s Transport Department started Heavy Transport Program supported by a New Zealand grant, which concentrates on law enforcement and regulations. The MCTPC is planning to establish a heavy transport management strategy, which would be implemented under the above-mentioned World Bank-financed road maintenance funding program. In order to achieve this task, the MCTPC assigned the consultant to carry out review of overloading problems and existing laws and regulations regarding the axle load control management and to recommend an effective axle load control and monitoring system. The assigned task includes modifications of licensing fees, overloading fines, seasonal axle load limits, and mandatory off loading of excess load. The weighbridges are to be set up 9 permanent and 15 mobile stations all over the country. If the vehicle exceeds the maximum permissible weight, the progressive rate of overloading fines will be charged. The collected fines are to be added to the RMF.

3) The Civil Aviation Sector

The share of civil aviation in total freight and passenger transported is almost negligible. However, it provides services to parts of the country where other means of transport is inaccessible or takes too much time.

(1) Civil Aviation Administration

Department of Civil Aviation (DCA) is one of departments of MCTPC. The organizational structure of DCA consists following six Divisions:

- Telecommunication and Aeronautics - Airport - Air Traffic - Air Transport and Flight Safety - Finance - Administration

In addition to above Divisions, Civil Aviation Training Center and four Airport Project Offices exist.

Under the DCA, Lao Aviation Authority (LAA) operates five airports including Vientiane, Luangprabang, , Savannakhet and Luangnamtha airports.

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(2) Airports

There are four airports (Vientiane, Luangprabang, Pakse and Savannakhet) with concrete runways and 10 airfields, where regular services are provided, in the country. Currently, only Vientiane International Airport operates jet aircraft (Airbus 300) of Thai International Airways, Yunan Airways (Boeing 737), and Vietnamese Airline.

Other local airports and airfields are served by ATR, Y-7, Y-12 and Mi-8 helicopter, which require shorter length of runways (less than existing length of 1,800-1,600m at local airports).

The national flag carrier, Lao Aviation, is the sole domestic carrier. Lao Aviation provides regular flights to four major airports and eight airfields. The network is considered to be appropriate at present traffic demands of air transport.

The fleet of Lao Aviation consists one ATR 72 (75 seats), three Y-7 (50 seats), and five Y-12 (17 seats). One Antonov 24 (55 seats/aircraft) is now grounded and awaiting overhaul. The foreign carriers, Thai International (- Vientiane) and Yunan Airlines (Kunming-Vientiane), operates B737 aircraft with 130 seats, which makes Lao Aviation‘s competitiveness with foreign carriers on those routes weak.

(3) Passenger and Cargo Traffic

Lao Aviation currently carries 300 tons of cargo and 49,000 passengers on international flights in 1999, and 1,455 tons of cargo and 267,000 passengers on domestic flights in 1999. Figures in the Tables below indicate that the Lao Aviation‘s competitiveness with foreign carriers on major routes, Vientiane- Bangkok and Vientiane-Hanoi, is weaker in both cargo and passenger transportation, because of its smaller aircraft and customers’ reliability to carriers.

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Table VI1-6 International Air Transportation (1999)

Route Airline Aircraft No. of No. of Passenger Total Load Factor Cargo Flight Seat (persons) (tons) VTE-BKK-VTE QV ATR;Y7 377 26,090 12,149 13,789 46.76 52.85 119.8 148.0 BKK-VTE-BKK TG B737 365 46,355 43,702 43,891 80.36 80.70 588.3 409.3 VTE-HAN-VTE QV ATR;Y7 105 7,190 3,625 3,277 50.41 45.57 7.3 4.6 HAN-VTE-HAN VN FOK;ATR 173 13,640 9,266 7,146 67.93 52.46 33.5 28.3 VTE-PNH-VTE QV ATR;Y7 57 3,790 2,595 2,272 69.15 60.34 3.1 0.8 VTE-KMG-VTE QV ATR;Y7 50 3,200 2,238 1,687 70.09 52.75 1.3 - KMG-VTE-KMG 3Q B737 34 5,066 1,542 1,477 30.45 29.21 3.5 7.2 VTE-CNX-VTE QV ATR;Y7 105 6,410 655 542 10.21 8.50 0.0 - LPQ-CNX-LPQ QV ATR;Y7 104 6,680 2,238 1,828 33.57 27.45 5.0 2.8 LPQ-BKK-LPQ QV ATR 4 280 62 63 22.14 22.50 - - VTE-SGN-VTE QV ATR 53 3,710 1,167 1,079 31.49 29.40 4.3 1.2 Total 1,427 122,411 79,239 77,061 64.73 62.95 766.1 602.2 156,300 63.84 1,368.3 Note: 1)Route:VTE=Vientiane; BKK=Bangkok; HAN=Hanoi; PNH=Phnompenh; KMG=Kunming;

Table VI1-7 Domestic Air Transportation (1999)

Route Airline Aircraft No. of No. of Passenger Total Load Factor Cargo Flight Seat (persons) (tons) VTE-LPQ-VTE QV ATR;Y7;Y12;Mi8 1,165 61,403 50,552 53,997 82.30 87.93 208.1 160.0 VTE-PKZ-VTE QV ATR;Y7;Y12 363 20,077 15,488 15,976 77.14 79.58 117.4 89.5 VTE-ZVK-VTE QV ATR;Y7;Y12 349 17,864 3,331 3,982 18.64 22.29 40.9 12.6 VTE-XKH-VTE QV ATR;Y7;Y12;Mi8 634 28,880 26,858 26,663 92.99 92.34 270.5 144.4 VTE-LXG-VTE QV Y7;Y12 204 9,474 7,839 6,656 82.74 70.25 84.3 31.5 VTE-ODY-VTE QV ATR;Y7;Y12 157 7,798 6,249 6,329 80.13 81.16 58.0 19.5 VTE-NEU-VTE QV Y12;Mi8 726 12,493 10,955 11,737 87.68 93.94 39.2 68.0 VTE-ZBY-VTE QV Y12;Mi8 165 3,635 3,362 3,626 92.48 99.75 22.4 19.9 VTE-HOE-VTE QV Y12;Mi8 137 2,389 4,595 5,242 81.63 93.54 27.3 24.0 VTE-XSB-VTE QV Mi8 63 1,701 1,195 1,182 70.25 69.48 7.8 1.6 VTE-PSL-VTE QV Mi8 35 945 731 725 77.35 76.71 5.1 2.8 Total 3,998 166,659 131,155 136,115 78.70 81.67 881.0 573.8 267,270 80.18 1,454.8

4) Airport Improvements

The Department of Civil Aviation of Lao PDR, with assistance from the United Nations Development Programme (UNDP) and the International Civil Aviation Organization (ICAO), prepared a ten-year Civil Aviation Master Plan (CAMP) in 1991. The purpose of the CAMP was to identify bottlenecks in the civil aviation infrastructures and institutional framework and to propose projects to improve the identified problems. The Asian Development Bank sent a Reconnaisance Mission to Lao PDR in the following year to determine the ADB‘s position for the implementation of the CAMP recommendation. The Mission considered the needs to update the cost estimates prior to the feasibility studies.

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The ADB approved a Small Scale Technical Assistance (SSTA) study to conduct the update review of the CAMP cost estimates. The review was carried out between November 1992 and February 1993. Since then, various improvement projects were implemented based on the CAMP proposals, including Japan‘s grant cooperation for the construction of International passenger Terminal at Vientiane International Airport.

Currently, following projects are underway:

- Pakse Airport Passenger Terminal Construction (completed) - Luangprabang Airport Improvement (Grant from Thai Government, Lao PDR) - Improvement (completed by ADB, OPEC Fund, Nordic Development Fund, Lao PDR) - Staff Training for Airports (Sweden, Singapore, Australia)

The DCA plans to prepare the Civil Aviation Master (2001-2020) and waiting proposal of cooperation from international and bilateral aid agencies.

VI-1.2 Regional Transport Systems

1) Transport Systems in SKR

Roads dominate the transportation in SKR. The national roads link provincial capitals of Savannakhet and , major towns and villages in Provinces of Savannakhet and Khammouan, and make connections to neighboring countries. Among them, NR.13S comprises the main north-south axis, NR.9 and NR.12 function as the east-west axis for both provinces and link Vietnam and : three national roads create the backbone of total road systems in SKR.

The provincial roads connect district centers and larger villages with provincial capitals. Most of them are not yet paved. Local roads connect villages with other villages or district centers. Most of local roads are in very poor condition and usable only in dry season. A number of villages are not yet even connected to road.

The Mekong River is an important, natural means of transport. Two provincial capitals in SKR, Savannakhet and Thakhek, connect to and Nakhon Panom, respectively, crossing the River.

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Domestic air transport is still in very low level. In SKR, Savannakhet airport is connected to Vientiane and Pakse four flights a week by small Y-7 aircraft of Lao Aviation.

Transportation volume of passenger and cargo has also been low by international standards. The low level of passenger traffic volume is caused by small population in wide region and the underdeveloped transport system, with a shortage of all weather road network and vehicles. Although cargo traffic on the roads in SKR is also small, they carry important export commodities of logs and timbers, foods and other essential goods for daily use for the rural communities.

2) Road Systems

(1) Road Network

The road network in SKR consists of:

- National Roads No.13S of North-South direction along the Mekong River, NRs 9 and 12 of East-West Corridor, and NR.1 (NR.1E ~1G) of North-South direction along Eastern mountain ranges. - Provincial Roads which connects Provincial capitals of Savannakhet and Thakhek with District Centers and other main villages in Provinces of Savannakhet and Thakhek. - Local roads including urban roads and rural roads in both Provinces.

Map of current road network in SKR is shown in the following page.

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LEGEND National Road (Paved) National Road (Paving) National Road (Gravel) National Road (Earth)

Provincial Road (Earth) ●Hinbon ●Nakay Local Road (Earth) ● Nhommalad River

● Mahaxay ● Thakhek ●Boualapa

● Xaybouathong ●Xebangfay ● Nongbok ● Vilabuly ● Atsaphone ●Xaibuly

● Atsaphangthong ● Xepone ● ● Phalanxai Outhoumphone ● Khantabuly ● Phine ● ● Xonnabuly Champone ●Nong ●Xaiphouthong

● Songkhone

● Thapangthong

Source: Road Inventory Map in Lao PDR, 20th September 2000, MCTPC

Figure VI1-2 Current Road Network in SKR

(2) Road Conditions Except paved NR.13S of Bolikhamxai/Khammouan border to NR.9B/13 junction, road condition in SKR is generally unsatisfactory. Pavement of other road sections except that of NR.13S is damaged by overloaded vehicles. Repair and maintenance works for those damaged sections are almost unattended. Much of Provincial Roads are passable in dry season only and most of rural roads are uncomfortable to drive even in dry season. Road statistics in 1999 in SKR are tabulated below.

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Table VI1-8 Road Statistics (1999) (Unit: Km) Lao PDR Savannakhet Khammouan National Roads Paved 3,134.5 383.0 150.0 Gravel 2,333.3 98.0 138.0 Earth 1,447.1 116.0 128.3 Sub-Total 6,914.9 597.0 416.0 Provincial Roads Paved 116.3 5.0 7.2 Gravel 2,422.7 521.0 208.9 Earth 4,892.7 634.0 248.4 Sub-Total 7,431.7 1,160.0 464.5 Local Roads Paved 443.4 60.0 21.8 Gravel 1,981.6 19.3 166.6 Earth 6,434.9 0.0 418.4 Sub-Total 8,859.9 79.3 606.8 Total Paved 3,694.2 448.0 179.0 Gravel 6,737.6 638.3 513.2 Earth 12,774.7 750.0 795.1 Sub-Total 23,206.5 1,836.3 1,487.3 Source: MCTPC, Department of Roads

Currently, many road construction/upgrading/improvement projects and bridge construction projects in and around SKR are underway and planned. Those projects include the following:

(National Road Project in SKR) NR.13S Lak 35 - Pakse 199km 1998-2001 IDA 51 Bridges on NR. 13S(Thakhek-Pakse) 1996-2001 JICA Savannakhet - Mukdahan Bridge 2001-2004 JBIC NR.9 Seno - Phalanxai 73km 1999-2002 JICA NR.9 Phalanxai - M. Phin 57km 2001-2004 JICA NR.9 M. Phin - Laobao 78km 2000-2003 ADB NR.12 Gnommalat Jun - Keomuya 91km 2000-2003 Local

(National Road project near to SKR) NR.8 Phouhei - Keoneua 82km 2001-2004 SIDA

In addition to above projects, following rehabilitation/construction projects have recently completed.

(Recently-completed Projects) NR.13S Pakkading - Savannakhet 266km 1992-1997 IDA NR.9B/13S Savannakhet - Seno 56km 1996-1998 IDA NR.13S Xe Banghiang Bridge 1996-1998 Ausaid NR.13S Xe Bangnouan Bridge 1996-1998 Ausaid NR.8 B. Lao - Phouhei 51km 1988-1999 Local

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Figure VI1-3 Ongoing and Recently Completed National Road Projects

(3) Road Maintenance

Because of lack of necessary fund for repair and maintenance works in the national and provincial road budgets, current maintenance works both for routine and periodic maintenance in SKR are not regularly implemented. Only some routine maintenance works were implemented for budgeted sections of national roads in Savannakhet and Khammouan Provinces. The budget, however, is far from sufficient (837,000 Kip/km or 112 US$/km on average in the case of routine maintenance budget of in Fiscal Year 1999/2000).

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(4) Vehicle Fleet and Traffic

Annual average daily traffic is to be regularly counted at five stations in SKR. The traffic count started in 1990 at three count stations, Gnommalat junction of NR.1E and NR.12, Km 36 and Muang Phin junction, and new counting started in 1997 at NRs.12 and 13 junction, and Ban Lao 5 km from Seno on NR.9. As is observed from the Table below, traffic volume is rapidly increasing at Gnommalat junction and Km 36 and Muang Phin junction and this trend continues in the year 2000 (see Figure below). However, since traffic counting stations in SKR is small in number and the historical data of available traffic count are further limited, careful conclusion would be drawn from the existing data.

Table VI1-9 Traffic Volume by Site (1990 - 1997)

Count Station 1990 1991 1992 1993 1994 1995 1996 1997 2000 Gnommelath junction 35 121 N.A. N.A. 350 594 353 Km 36 118 331 N.A. N.A. 442 830 Muang Phin junction 297 285 582 492 198 519 499 2190 NR.12 & 13 junction 9313 Ban Lao 5 km from Seno 300 Source: Traffic Volume 1997, Transport Planning Unit, MCTPC

NR.8 Laksao Vinh

1102

161 NR.1E 441 Hinboun 213 Laos Vietnam

52 313 993 59 254

Thakhek Gnommalat → Vung Ang 99 294 NR.12

NR.13S 40

NR.1F 649 98 690 Savannakhet 116 NR.9 690 M. Phin 690 Dong Ha

42 911 Lak 35 574 1153 386

795 1541 1369 Da Nang NR.1G

Figure VI1-4 Traffic Volume on the Trunk Roads In SKR (April 2000)

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Concerning the traffic volume classified by type of vehicles in SKR, percentage of pick-ups and mini buses, which are major mode of passenger transport in the country and trucks and trailers for major mode of cargo transportation, indicate high percentage. Traffic volume by type of vehicles in 1997 is tabulated below.

Table VI1-10 Traffic Volume classified by Type of Vehicles (1997)

Location Total Pick-ups & CarsTrucks Buses Trailers ADT Mini Buses 2 axles >2 axles Gnommelath junction 594 98 47 207 187 44 11 % 100.0 16.5 7.9 34.8 31.5 7.4 1.9 Km 36 830 301 61 264 88 102 14 % 100.0 36.3 7.3 31.8 10.6 12.3 1.7 Muang Phin junction 499 95 45 199 92 44 24 % 100.0 19.0 9.0 39.9 18.4 8.8 4.8 NR.12 & 13 junction 9313 3521 1155 1306 1936 1064 331 % 100.0 37.8 12.4 14.0 20.8 11.4 3.6 B. Lao 5 km from Seno 300 118 35 81 49 16 1 % 100.0 39.3 11.7 27.0 16.3 5.3 0.3 Source: Traffic Volume 1997, Transport Planning Unit, MCTPC

Although available data are incomplete, products currently crossing border points of the East-West Corridor are estimated to be about 300,000 tons transported by about 45,000 trucks each year (ADB estimates). The major tradable commodities observed on the East-West Corridor in SKR are:

From Thailand to Lao PDR : cement, construction materials, fuel, machinery and foodstuff; From Lao PDR to Thailand : timber; From Vietnam to Lao PDR : cement, fuel, steel for construction works and livestock; and From Lao PDR to Vietnam : logs and gypsum.

(5) Origin-Destination Survey at Savannakhet Ferry

The first Origin-Destination Survey was undertaken in SKR at Savannakhet Vehicle Ferry in 2000 by the technical assistance of the JICA. The large number of vehicle traveled on this ferry was truck (2 axle, 3 and more than 3-axle truck), which covers more than 94 % of all vehicles. Trailer, buses and cars are 5 %. About 52 % of vehicles was empty, since that after delivery of goods to the destinations most of trucks come back empty.

Goods flows by origin and destination are as is presented in the Table IV-11. About 44 % of the cargo transported at this site are agricultural products

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transported mostly from Savannakhet and Northern provinces to Thailand. Industrial goods that constitute 19 % of cargoes at this ferry flow in opposite direction (from Thailand to Laos). Remaining 37 % of goods are timber and fuel. The former flows from Savannakhet to Thailand, while fuel and construction materials from Thailand to Savannakhet.

TableVI1-11 Origin-Destination Survey at Savannakhet Ferry Crossing

1) Agricultural goods (Milled rice, livestock, tobacco, paddy rice, fruit, coffee, banana,etc.) From/To Thailand Savannakhet Vietnam Bdr Northern Pr Southern Pr Total Thailand 6.6 - - - 6.6 Savannakhet 93.4 - - - 93.4 Vietnam Border - - - - - Northern Province - - - - - Southern Province - - - - - Total 93.4 6.6 - - - 100.0

2) Industrial Products (Foodstuffs, drinks, clothings, electrical utilities, machinery, etc.) From/To Thailand Savannakhet Vietnam Bdr Northern Pr Southern Pr Total Thailand 100.0 - - - 100.0 Savannakhet 100.0 - - - 100.0 Vietnam Border - - - - - Northern Province - - - - - Southern Province - - - - - Total 100.0 100.0 - - - 100.0

3) Fuels, minerals, timber and construction materials From/To Thailand Savannakhet Vietnam Bdr Northern Pr Southern Pr Total Thailand 21.2 - - - 21.2 Savannakhet 78.8 - - - 78.8 Vietnam Border - - - - - Northern Province - - - - - Southern Province - - - - - Total 78.8 21.2 - - - 100.0

4) Total: all commodities From/To Thailand Savannakhet Vietnam Bdr Northern Pr Southern Pr Total Thailand 30.0 - - - 30.0 Savannakhet 70.0 - - - 70.0 Vietnam Border - - - - - Northern Province - - - - - Southern Province - - - - - Total 70.0 30.0 - - - 100.0 Source: Traffic Survey Lao PDR, MCTPC, April 2000

(6) Road Development in the Five Year Plan

The new five years plan for road sector in SKR for the period 2001-2005 is now under preparation. The summary of expenditure spent for years 1996-2000 for the roads and bridges projects in SKR is as shown in Table VI-12. As is indicated in the table, major roads and bridges construction projects were mainly expended by or planned to finance from foreign sources of fund.

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Table VI1-12 Road Investment Classified by Funds

DescriptionTotal 1996-2000 Kind of Sources Total Local Foreign Fund of Fund Total Amount (National Total) 3,924,788.85 77,596.54 3,847,192.31 SKR Total 369,392.12 3,915.82 365,588.28

Road Construction Project (Nat) 446,894.97 29,343.57 417,551.40 Road Construction Project (SKR) 52,502.54 2,256.64 50,245.90 Pakkading-Savannakhet Rd 21,503.99 846.95 20,657.04 Credit IDA Savannakhet-Pakse Rd. 18,139.20 580.14 17,559.06 Credit IDA Rusral Rds in 3 Prov(inc KM) 10,368.21 438.41 9,929.80 Grant SIDA RN.12 20.00 20.00 - RN.9(Seno-M.Phin)130km 2,271.14 171.14 2,100.00 Grant JICA RN.9(M.Phin-Deansavanh)78km 200.00 200.00 - Credit ADB

Bridge Construction Project (Nat) 555,368.94 798.07 554,570.87 Bridge Construction Project (SKR) 313,478.81 131.77 313,347.03 15 Bridges along RN.13S 12,244.63 23.44 12,221.18 Grant JICA 3 Bridges along RN.13S & 4 Brds 2,164.14 35.00 2,129.14 Grant AUSAID Savannakhet Bridge 10.00 10.00 - Credit JBIC 51 Bridges 299,060.04 63.33 298,996.71 Grant JICA

NR Maintenance Project (Nat) 79,134.70 26,660.74 52,473.97 NR Maintenance Project (SKR) 2,803.87 1,040.44 1,763.43 RN.9 242km 154.99 50.00 104.99 Credit IDA RN.9 440.00 440.00 - Lao Lao RN.1 (M.Phin-Tathai) 35km 100.00 100.00 - Lao Lao RN.1 (Bkx bor-Jn RN.12)41km 120.00 120.00 - Lao Lao RN.9 (Km58-Vietnam bor) 75km 1,988.88 330.44 1,658.44 Credit IDA

Bridge Maintenance Proj (Nat) 3,363.36 1,940.86 1,422.49 Bridge Maintenance Proj (SKR) 542.94 423.01 231.92 RN.13S (Thabok-Savannakhet) 102.27 25.00 77.27 Credit IDA RN.13S (Savannakhet-Pakse) 149.66 99.01 50.64 Credit IDA RN.12 (Km58-Vietnam border) 179.01 75.00 104.01 Credit IDA RN.9 112.00 112.00 - Lao Lao

Source: MCTPC

(7) Road Administration

The road systems in SKR are supervised by Provincial Departments of Communication, Transport, Post and Construction (DCTPC) in Savannakhet and Khammouan Provinces.

3) Civil Aviation Systems

(1) Savannakhet Airport

Recently, Savannakhet Airport has been improved for its terminal building, runway (repair of pavement), apron, fire fighting facility, and powerhouse by the financial assistance from ADB, OPEC Fund and Nordic Development Fund (NDB).

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Infrastructure Development Plan

The installations of approach lighting system and meteorological equipment have already been completed. The airport is, however, not good enough to receive middle-range aircraft for regional services, because the length of runway is 1.633 meters and not lengthy enough to receive them.

(2) Passenger and Cargo Traffic

The current number of passengers and volume of cargoes at Savannakhet airport are very limited. The number of passengers for the route Vientiane-Savannakhet- Vientiane is 7,313 pax and 53 tons for the whole year of 1999. These results of cargo and passenger transportation are one of the lowest among Lao Aviation‘s destinations. They are resulted from few tourism attractions in Savannakhet compared with other destinations, such as Luangprabang and Pakse. Savannakhet -Vientiane is also served with better connection by road (paved NR.13) compared with other destinations, such as Luangprabang, Luangnamtha, Oudomxay and Houeisay, to which air transportation is sole means to connect faster and more reliable.

(3) Airport Improvement

Figure VI-6 indicates the current layout plan of Savannakhet Airport. Savannakhet Airport is currently under construction of new passenger terminal at the site of former military apron, fire fighting facilities and powerhouse, and under improvement of runway and apron pavement. The approach lighting facilities and new meteorological equipment are already installed. ADB, OPEC Fund, Nordic Development Fund (NDF) and local fund finance this project.. The project is scheduled to complete within year 2000, but will require a little longer period until the year 2001. The current improvement project does not include runway (1,633m) extension, because southern end of the runway is limited by town development. The northern end of the runway is also bounded by road, which could be diverted if it is necessary.

The site of New Savannakhet Airport construction is available at Seno, which is a junction point of NR.13 and NR.9, using old airfield of airforce. Based on the current level of traffic demand, new airport construction would not be feasible for foreseeable future and, when the introduction of jet aircraft to the Savannakhet Airport is required, extension of existing runway seems to be a better choice.

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VI-I.3 Framework of SKR Transport Systems

The communication and transport sector framework, which consists of sector goal, sector objectives and means to realize sector objectives (projects/programs), is worked out based on the procedure indicated in the following Figure. Sector Development Objective is led from the current situation and problems of the communication and transport sector, taking into account the national and regional development problems and the national and regional development needs for productive and social sectors. Sector Development Objective is further subdivided into several Policy Objectives consisted of various communication and transport issues to be achieved by the target year 2020. The means to achieve those Sector Objectives are projects and programs of the communication and transport sector. The list of those projects and programs to be implemented during the planning period up to the year 2020 in order to achieve various communication and transport policy objectives are identified during the surveys in the first and second phase of the Study.

Current Situation and Problems in the National Transport Sector Regional Development Development Problems Problems

National Development Regional Development Needs Objective Development Needs for Productive and for Productive and Social Sectors Social Sectors

Policy Objectives

Means to Realize Policy Objectives (Projects/Programs)

Source: Study Team Figure VI1-5 Transport Sector Framework

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Infrastructure Development Plan

1) Current Situation and Identified Problems in SKR

The following seven issues would be the summary of communication and transport sector problems identified through the analyses of current sectoral situation in the previous section VI-1.2 above.

(1) Trunk routes in SKR yet to be completed:

Although efforts are made for the formation of trunk routes in SKR, the current situation is still in the process of development and the backbone of road network in the region is yet to be constructed. The following projects are now underway:

- NR.13 road & bridges construction project (Savannakhet-Pakse); - Savannakhet-Mukdahan bridge construction project; and - NR.9 road construction project (Seno-Vietnam border).

They, together with NR.12 and NR.1E~1G, would consist of basic communication and transport infrastructures in the Region, and remaining sections in the trunk road network, particularly the upgrading of NR. 1E~1G, need to be accelerated.

(2) Regional Integration yet to be established:

The administrative integration in the Region would be at least achieved through the all-weather linkage between Provincial Capital and District centers of each Province. Currently, this target is not yet met or is severely handicapped in rainy season, particularly at following road sections:

- B. Panam - Boualapha in Khammouan Province - B. Langkhang - Boualapha in Khammouan Province - Nongbok – Thakhek in Khammouan Province - Vilabouri - NR.9 (Sepon) in Savannakhet Province - Nong - NR.9 (B. Dong) in Savannakhet Province - Sonbouri - Kengkok in Savannakhet Province

The all-weather linkage between Provincial Capital and District centers of each Province through upgraded National Roads and Provincial Roads should be achieved as soon as possible.

(3) Accessibility from villages to markets on the trunk roads to be improved:

Access to markets is important for buying daily goods and agricultural inputs, like tools and fertilizer. Both farmers and craftsmen of local industries in rural communities sell their products and earn their incomes through markets.

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Currently, there are few markets along trunk routes of the Region. Only major villages along main routes set up such markets. Access roads from inland villages to markets on trunk routes are also limited. In the cases of Savannakhet Province, the average travel time to the main market is more than three hours. Villagers in some Districts travel on average more than four hours (Vilabuly 428 minutes, Thapangthong 376 minutes, Xonnabuly 314 minutes, and villages of other three Districts). Therefore, access from local villages to market centers contribute to the poverty alleviation of rural communities.

(4) Access for rural communities to Basic Human Needs to be strengthened: According to analyses of IRAP Savannakhet Studies, only 35.4% of villages equip with all year round road access. 13.6% of villages have no road access and, in the case of villages in Sepone District, number of villages without road access account for 41%. Travel from villages to District Centers, to traditional water source, to health facilities and services, to primary and secondary education, visits of agricultural extension workers and veterinarians, all consist basic human needs of rural communities. Reduction of them would greatly contribute to the alleviation of poverty, but the current situation of accessibility is far from satisfactory.

(5) Functions of growth centers for Savannakhet and Thakhek to be upgraded: Savannakhet and Thakhek are capitals of Savannakhet and Khammouan Provinces, respectively, and expected to function as growth poles of the Region. They would be centers of international and domestic trade activities, of supportive services for agriculture, of higher education, and of services for financing, hotels and restaurants, and other entertainment activities. However, the current situation of both towns for such functions is limited to provide partially.

Concerning the transport services, the urban road network in both towns requires rehabilitation and improvement. In terms of the flight connection from/to Savannakhet to/from Vientiane, it is only one flight daily by small aircraft. The Savannakhet Airport is now under repair and improvements including new terminal building construction, by the financial assistance from ADB, OPEC Fund and Nordic Development Fund (NDF). The length of runway of the airport, however, is 1,633 meters and not lengthy enough to receive middle-range aircraft of B-737 or Air Bus for regional services. In order for Savannakhet to function as a regional economic center with Special Economic Zone, the air transport links with other regional centers are indispensable.

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Infrastructure Development Plan

(6) Repair and Maintenance capabilities of the road and bridges to be strengthened:

The Road Traffic Law of Lao PDR regulates the carriage of goods or passengers in excess of the weight or quantity limitation allowed by regulation. However, roads in SKR are severely damaged by overweight vehicles and cause problems for smooth and stable transportation of cargoes and passengers. Although there are damages in pavement and structure of roads, the repair and maintenance activities are rarely be observed on trunk routes in SKR.

The repair and maintenance works of roads and bridges are contracted to private Lao contractors. They are equipped with obsolete construction machines and require substantial and urgent replacements of equipment.

(7) Lack of international competitiveness among local transport enterprises:

Local transport enterprises are basically driver-owner-type and own very obsolete Russia-made trucks of more than 20-30 years old. The supply of spare parts for those old trucks is limited and difficult to acquire. The maintenance workshops of those trucks are under-equipped. Therefore, Lao‘s major export goods of logs and timbers are mainly transported by Vietnamese and Thai trucks. The management and marketing of those enterprises need substantial and market-oriented reforms. There is a fear that major part of cargo transport activities in Lao might be completely taken over by foreign transporters, if current situation would be left as it is.

2) Sector Development Objectives

SKR has not yet realized the regional integration, handicapped from lack of opportunities for income generation, requires building and strengthening of institution, which leads the local development initiatives, and has not yet established the general recognition of law enforcement. In order to establish sustainable transport systems in the Region, these four issues – regional integration, income generation, institution building and law enforcement – are indispensable and constitute development objectives of the communication and transport sector.

Assessing the current situation and problems of the communication and transport sector in the Region and the function of transport systems in the country and neighboring countries, the following would be considered as Sector Goal to be pursued during the planning period up to the year 2020:

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Contribute to the economic and social development in SKR through establishing transport systems of economic, environmental and social sustainability in the Region

The Sector Goal will be realized through achieving a set of following Development Objectives:

- From land-locked country to land-linked country - Complementary society - Economically self-reliant community - Self-governance

3) Policy Objectives

To overcome the problems of transport sector mentioned above in Sub-section 1) and to realize Development Objectives in Sub-section 2) above, following issues of (1) through (4) would be pursued as Policy Objectives for the sector development in SKR.

Development Objectives Policy Objectives Projects/Programs

From land-locked country Open up potentials of regions - Savannakhet-Mukdahan bridge construction to land-linked country along corridor/trunk routes - East-west corridors of NR.9/12/8 - North-south trunk route of NR.13and NR.1E~G - International freight forwarder - Savannakhet airport upgrading

Complementary society Strengthen rural-urban - Linkage of provincial capital - district centers inter-linkage/complementarity - Passenger transport systems - Strengthen regional growth poles

Economically self-reliant Better access to markets - Village to market road community - Savannakhet airport upgrading

Self-governance Capacity building - Rural accessibility - IRAP extension Law and regulation - Traffic law enforcement - Capacity building (Repair and maintenance)

Source: Study Team

Figure VI1-6 Transport Sector Objectives

(1) Open up potentials of regions along corridor/trunk routes:

By the year 2004, main trunk routes in SKR including the NRs Nos 13S, 9, 12 and 8, and Savannakhet-Mukdahan Bridge will be completed. Among them, the

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Infrastructure Development Plan

Savannakhet-Mukdahan Bridge and NR. No.9 is to constitute the Eat-West Corridor of international use, which will open up new potentials of region from land-locked region to land-linked region. The region is expected to utilize this merits and leads the country in this respect.

However, current efforts are directed toward the development of trunk routes in SKR, further construction and improvements of trunk roads and bridges need to be proceeded. The formation of regional backbone is still in the process of development. The Lao Government plans to complete paving of the main national roads by 2005. The development of trunk routes in SKR is to be planned in line with this target.

In order to compete with foreign transport enterprises which are now operating within Lao PDR, the local transport enterprises in SKR need to reform their vehicles, operation and management. They need to equip modern and powerful vehicles and repair shops with modern machines, facilities and technologies, and to reform their operation and management into market-oriented and competition- minded one.

At the same time, improvement of regional accessibility to Savannakhet through upgrading Savannakhet Airport needs to be attended. The Savannakhet Airport is now under repair and improvements including new terminal building construction. The length of runway of the airport, however, is 1,633 meters and not lengthy enough to receive middle-range aircraft for regional services. In order for Savannakhet to function as a regional economic center and to realize the objective of achieving “from land-locked country to land-linked country”, the air transport links with other regional centers are indispensable.

(2) Strengthen rural-urban inter-linkage/ complementality: In order for District Centers to function as local administrative centers, it is essential that all District Centers and Provincial Capital is connected by all weather roads and realize rural-urban inter-linkage. This will ensure the all year round connection from local centers to Provincial centers, improve access from local communities to Provincial centers and also ensure for Savannakhet and Thakhek to function roles of growth poles in the Region.

The spatial structure of a region in the early stage of development like the case of Study Area would generally be polarized into the center of growth and the lagging periphery. Although Savannakhet and Thakhek are currently acting as growth centers in SKR, their centrality is rather weak. In order to act as the growth centers in SKR, their functions of administration, industry, commerce, finance,

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marketing and distribution, various services, all need to be strengthened. The role of communication and transport functions of both Savannakhet and Thakhek must also be strengthened through providing better access to national and regional centers with the upgraded regulations, quality of services, operation and infrastructures for both cargo and passenger services in road and air transportation.

(3) Better access to markets:

In order to upgrade the income levels of rural communities, to establish economically self-reliant communities and to overcome the poverty prevailing the region, the provision of better access to market places along trunk roads will certainly improve the opportunities for selling the rural products. Feeder roads to the main transport corridors are needed to facilitate domestic trade in agricultural products. After the situation that major trunk roads in SKR, such as NR. 13, NR. 9 and NR.12, would be constructed, the upgrading of village to market roads must be a high priority objective from the viewpoint of the income generation and the poverty alleviation in SKR.

From the viewpoint of better access to international markets, Savannakhet airport upgrading will assist to establish economically self-reliant communities.

(4) Capacity building and law enforcement :

The improvement of rural accessibility will realize the minimum access from villages to district centers in order to secure the rural residents‘ access to basic human needs such as primary education, primary health care systems, etc. Those basic services are expected to provide at least in the district centers. Improvement and extension of the rural road network by rural people’s own effort, which was initiated by IRAP, is critical to success of the rural development. Current poor access of a majority of villages in SKR to basic human needs must be greatly improved by the year 2020 through securing access from villages to each district center by building communities’ own capability of road maintenance and rehabilitation.

In order to prevent from damages of roads and bridges and to lengthen the period of use of them in better condition, the strict enforcement of Road Traffic Law and regulations on over-weight vehicles is necessary. The establishment of repair and maintenance center for roads and bridges in SKR with functions of human resources training and transfer of modern technologies is desirable. Since new roads and bridges are recently constructed in the Area, they require routine repair and maintenance activities in order to maintain the good condition.

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