Content Page
1 Introduction 1 1.1 Background 1 1.2 Objectives 1 1.3 Operational Framework 2 1.4 Information for Analysis and Evaluation 3 1.4.1 Policy Statement on International Relations 3 1.4.2 Neighbouring Countries Economic Development Cooperation Agency 3 (Public Organization) 1.4.3 International Cooperation Framework 3 1.4.4 Related Information of Neighbouring Countries in Project Area 6 1) Republic of the Union of Myanmar 6 2) Lao People’s Democratic Republic 10 1.4.5 Field Observation Data and Interview 14 1.4.6 Background Information of Project 15
2 Analysis and Evaluation Result of the Project 19 2.1 Mae Sot/Myawaddy-Thin Gan Nyi Naung/Dawna Range Road Construction Project 19 2.2 Railway Construction from Friendship Bridge to Ban Thanaleng 27 2.3 Wattay International Airport Improvement Project 35 2.4 The Construction of Drainage System in Vientiane Capital City 42
3 Overall Conclusion of Evaluation Result 48 3.1 Lesson Learnt 48 3.2 Recommendation and Suggestion 48 3.3 Strategies for Cooperation with Neighbouring Countries of Thailand 49
Abbreviation
Afghanistan Islamic Republic of Afghanistan Bangladesh People’s Republic of Bangladesh Bhutan Kingdom of Bhutan Brunei Brunei Darussalam Cambodia Kingdom of Cambodia China People’s Republic of China India Republic of India Indonesia Republic of Indonesia Iraq Republic of Iraq Iran Islamic Republic of Iran Lao PDR Lao People’s Democratic Republic Myanmar Republic of the Union of Myanmar Napal Federal Democratic Republic of Napal Pakistan Islamic Republic of Pakistan Philippines Republic of the Philippines Singapore Republic of Singapore South Korea Republic of Korea Sri Lanka Democratic Socialist Republic of Sri Lanka Turkey Republic of Turkey Vietnam Socialist Republic of Vietnam DOH Department of Highways NEDA Neighbouring Countries Economic Development Cooperation Agency (Public Organization) SRT State Railway of Thailand
Abbreviation (Continue)
ACMECS Ayeyawady-Chao Phraya – Mekong Economic Cooperation Strategy ADB Asian Development Bank AEC ASEAN Economic Community AH Asian Highway ASEAN Association of Southeast Asian Nations BIMSTEC Bay of Bengal Initiative Multi – Sectoral Technical and Economic Cooperation CY Container Yard EIRR Economic Internal Rate of Return GDP Gross Domestic Product GMS Greater Mekong Subregion ICD Inland Container Depot IMF International Monetary Fund IRR Internal Rate of Return JICA Japan International Cooperation Agency PATA Pacific Asia Travel Association SKRL The Singapore-Kunming Rail Link Project UNESCAP The United Nations Economic and Social Commission for Asia and the Pacific VOC Vehicle Operating Cost VOT Value of Time
Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 1 Introduction
1. Introduction
1.1 Background
Neighbouring Countries Economic Development Cooperation Agency (Public Organization): NEDA has the mission in providing the financial and technical assistance to the neighbouring countries to cooperate with neighbouring countries in their economic development. In 2012, NEDA has identified a need to conduct the Evaluation of NEDA’s Financial Assistance Project including (Figure 1.1-1):
▪ Mae Sot/Myawaddy-Thin Gan Nyi Naung/Dawna Range Road Construction Project ▪ Railway Construction from Friendship Bridge to Ban Thanaleng ▪ Wattay International Airport Improvement Project ▪ The Construction of Drainage System in Vientiane Capital City
NEDA has commissioned Tesco Co., Ltd. in cooperation with Transpotation Institute, Chulalongkorn University, to serve as the consultant of the study. The consultant contract was signed on 5 April 2012 under the 180 days of operation period.
1.2 Objectives
1) To evaluate the worthiness of project in terms of both functionality and sustainability 2) To evaluate the impacts and benefits of project from the viewpoints economy, engineering, social, environment, resource utilization, and potential of economic activity development in the project area and nearby surrounding 3) To evaluate the requirements and the potential for futher economic and social development in project area and adjacent area by promoting and supporting the utilization of projects to the fullest extent, as well as the creation of value added by proposing the necessary additional investment to be made by both Thai public and private sectors, and the neighbouring countries
Evaluation of NEDA’s Financial Assistance Project 1 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 1 Introduction
Lao People’s Democratic Republic (Lao PDR): . Railroad Construction from Friendship Bridge to Ban Thanaleng . Wattay International Airport Improvement Project . The Construction of Drainage System in VientianeCapital City
Republic of the Union of Myanmar (Myanmar): . Mae Sot/Myawaddy-Thin Gan Nyi Naung/Dawna Range Road Construction Project
Figure 1.1-1 NEDA’s support with 1 project in Republic of the Union of Myanmar and 3 projects in Lao People’s Democratic Republic
1.3 Operational Framework
The study deals specifically with the following issues:
▪ Studying and evaluating the relevance with project objectives ▪ Studying and evaluating the worthiness of project ▪ Studying and evaluating the impacts and benefits of project ▪ Studying and evaluating the measures to ensure the suitability and sustainability of the project ▪ Studying the measures to bring about value added for the project ▪ Studying and evaluating the public and international relations ▪ Concluding on the lessons learnt and recommendation
Evaluation of NEDA’s Financial Assistance Project 2 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 1 Introduction
1.4 Information for Analysis and Evaluation
1.4.1 Government Policies on International Relations
. Policies to advance the reconstruction and development of relations with neighbouring countries and others . Policies to expand the connectivity of economy, trade, investment and marketing under cooperative frameworks and free trade agreements both at bilateral and multilateral levels . Policies on infrastructure, development of rail mass transit system and management of freigh transportation system and services . Policies to advance the promotion and development of relations with neighbouring countries by enhancing cooperation between the public sector, private sector, people and the mass media
1.4.2 Neighbouring Countries Economic Development Cooperation Agency (Public Organization): NEDA
NEDA has carried out all the missions outlined in the agency’s 3-year strategic framework (2012-2014) complying with the objectives and obligation set out in the royal decree establishing Neighbouring Countries Economic Development Cooperation Agency (Public Organization) B.E.2548.
1.4.3 International Cooperation Framework
(1) Association of Southeast Asian Nations: ASEAN
Association of Southeast Asian Nations or ASEAN was established on 8 August 1967 in Saranrom Palace, with the signing of the Bangkok Declaration by the Founding Fathers of ASEAN, namely Republic of Indonesia (Indonesia), Malaysia, Republic of the Philippines (Philippines), Republic of Singapore (Singapore) and Thailand. Brunei Darussalam (Brunei) then joined on 8 January 1984, Socialist Republic of Vietnam (Vietnam) on 28 July 1995, Lao PDR and Myanmar on 23 July 1997, and Kingdom of Cambodia (Cambodia) on 30 April 1999, making up what is today the ten Member States of ASEAN.
Evaluation of NEDA’s Financial Assistance Project 3 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 1 Introduction
(2) The Greater Mekong Subregion: GMS
Greater Mekong Subregion or GMS, which is being supported by the Asian Development Bank (ADB), consist of Thailand, Myanmar, Lao PDR, Cambodia, Vietnam, and South of the People’s Republic of China (Yunan Province and Guangxi). With a total land area of 2.3 million square kilometers (about the size of Western Europe), the GMS is home to some 250 million people. The GMS is rich in natural resources, as well as an important land bridge between and among South Asia, East Asia, and Southeast Asia.
(3) Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy: ACMECS
Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy or ACMECS is economic cooperation framework in the sub-region, with Cambodia, Lao PDR, Myanmar, Thailand and Vietnam. The ACMECS program is established to use strength and diversity of 5 member countries for supporting balance development. Leaders of ACMECS met for the first summit on 12 November 2003 in Bagan, Republic of the Union of Myanmar, and adopted the Bagan Declaration for establishing cooperation framework the “ACMECS”.
(4) Bay of Bengal Initiative Multi-Sectoral Technical and Economic Cooperation: BIMSTEC
On 6 June 1997, a new sub-regional grouping was formed in Bangkok and given the name People’s Republic of Bangladesh (Bangladesh)– Republic of India (India)– Democratic Socialist Republic of Sri Lanka (Sri Lanka)–Thailand Economic Cooperation or BIST-EC, with four original member countries, namely, Bangladesh, Sri Lanka, India, and Thailand. Myanmar joined the organization as official members on 22 December 1997, upon which the name of the grouping was changed to Bangladesh–India–Myanmar–Sri Lanka–Thailand Economic Cooperation or BIMSTEC. Nowadays, BIMSTEC consists of seven member countries, namely Bangladesh, Sri Lanka, India, Thailand, Myanmar, Federal Democratic Republic of Napal (Nepal), and Kingdom of Bhutan (Bhutan). During the first BIMSTEC Summit, the grouping’s name was eventually changed to the “Bay of Bengal Initiative for Multi–Sectoral Technical and Economic Cooperation or BIMSTEC, in order to be more accordant with the aim and group members.
Evaluation of NEDA’s Financial Assistance Project 4 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 1 Introduction
(5) Asian Highway: AH
Asian Highway or AH is the large road communication network which is connected the countries in Asia, and is operated by various countries and Europe and the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP). The route is strated from Western Asia, namely Republic of Turkey (Turkey), Republic of Iraq (Iraq), Islamic Republic of Iran (Iran), Islamic Republic of Afghanistan (Afghanistarn), Islamic Republic of Pakistan (Pakistan), India, Bangladesh, Myanmar, Thailand, Malaysia, Singapore, Lao PDR, Cambodia, Vietnam, China, and Republic of Korea. Myanmar has the total distance about 3,003 kilometers of Asian Highway.
(6) Transit Transport Issues in Landlocked and Transit Developing Countries1
Railway of Transit Transport Issues in Landlocked and Transit Developing Countries Project, through Lao PDR is the route of the Pan Asia or the Singapore–Kunming Rail Link (SKRL) Project. In 2015, the project operation will complete and link Singapore to Kunming (China) which is a major route of region linked transport in ASEAN (China - Vietnam - Cambodia - Thailand - Malaysia – Singapore), with a total distance of 5,382 kilometers. Total construction cost is approximately USD 2.5 Billion, including the connection improvement of missing link. The route, planned to construct at the present, has the total distance of 1,618 kilometers.
1 Transit Transport Issues in Landlocked and Transit Developing Countries Project by United Nations, 2003
Evaluation of NEDA’s Financial Assistance Project 5 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 1 Introduction
1.4.4 Related Information of Neighbouring Countries in Project Area
1) Republic of the Union of Myanmar
1.1) Topography and Climate
Myanmar, officially named the Republic of the Union of Myanmar, is the largest country in Southeast Asia and Indochina. Myanmar has the total area of 678,500 square kilometers, divided into 657,740 square kilometers of land surface and 20,760 square kilometers of water surface. The topography is described as follows:
▪ North – Patkai Mountain as boundary between Myanmar and India ▪ West – Arakan Mountain ▪ Northeast – plateau ▪ South – Tanaosri Mountain as blockade between Thailand and Myanmar ▪ The Central plains of the Ayeyarwady, Sittoung and Salween river
General climate is in a monsoonal tropical zone. High rainfalls are found in front of Arakan Mountain, and drought climate is in the upper central region. The northeastern region is cold and dry.
1.2) Important Economic Indicator
Fiscal year 2011/12, Myanmar registered an Gross Domestic Product (GDP) at USD 51,925 Million (1,583 Billion Baht), representing approximately 0.15 times of Thailand’s economy (Exchange rate at 30.50 Baht / U.S. dollar). Moreover, Adjusted Real GDP Growth of Myanmar is continuously extended with an average rate of 5 percent per yaer.
Evaluation of NEDA’s Financial Assistance Project 6 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 1 Introduction
1.3) Economy and Investment Overview
GDP: In 2011, Myanmar registered GDP value at USD 50.62 Million. Major economic sectors included service sector of 43.6 percent, as followed by agriculture sector of 38.2 percent and industry sector of 18.2 percent. GDP per capita averaged at USD 1,300 (2011). In 2012/2013, IMF estimates the growth rate of GDP at 6 percent from 2011. Since elected government has administrated, Myanmar has changed the institutions of economic administration in the direction of more opened country, espectially opening foreign investment and international trade. Moreover, there is a greater trade opportunity from the trade embargo cancellation of the United States and the European Union.
Agriculture: Myanmar has focused on rice production for consumption and exporting, and also supported other important agricultural products such as rubber, sugar cane and other crops.
Industry: Natural gas industry is the most important export with the value of 13,946 Million Kyat (exchange rate at 800 kyat = 1 U.S. dollar), while other exports are agricultural product, forestry, fishing, and industrial production of clothing. The main trading partners of Myanmar are Thailand and China (including Hong Kong), as followed by India, Singapore, and Malaysia. Myanmar has to import petroleum products, machinery and equipment transport, and other consumtion products.
Tourism: Services industry is growing rapidly. However, the number of tourists traveling to Myanmar is lower than million people per year.
Economic Challenges: ADB evaluates various challenges such as creation of government institutions, finance and banking system, development of labour skill, infrastructure, utilities (electricity and water supply), and transport (road and rail) linked to neighbouring countries for creating the country’s trade opportunities through Myanmar’s abundant resources.
Thailand’s Opportunities for Trade and Investment in Myanmar: According to the Manual Report “Trade and Investment in Myanmar” by Department of International Trade Promotion, Ministry of Commerce, Thailand, Myanmar has the high commercial potential because of huge market with a population of 60 million people, abundant natural resources, and middle country of the ASEAN countries and South Asia. The Myanmar’s location causes the advantage of dealing with trade, export and import, espectially the borderline distance between Thailand and Myanmar for 2,400 kilometers with
Evaluation of NEDA’s Financial Assistance Project 7 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 1 Introduction border crossing throughout, resulting in easing products distribution. However, there are some obstacles; for example: insufficient data in trade using, high border transport cost of Thailand, and inconvenient transport. The border transport of Thailand has high cost from redundancy of local amenities, and low convenient in compared with China’s products transport into Myanmar. The example of inconvenient transport is transport time for the Mae Sot – Yangon Road with only 420 kilometers of distance, taking up to 7 days. Thai’s product with high potential in Myanmar includes the textile products, clothing, transportation equipment, electrical machinery, oil with consumption purpose, medicines, and cosmetics.
For the investment, Myanmar is drafting the new law on foreign investment. This will allow companies to lease a private land, and return profits as the market rate of foreign exchange rate. Special economic zones are defined in various areas Dawei: South of Myanmar, Tilawa: near Yangon, Kyaukpyu: West of Myanmar, Thailand - Myanmar Border: Mawlamyine (the area of tropical fruit and tourism) and Myeik (the area of fishery product).
Evaluation of NEDA’s Financial Assistance Project 8 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 1 Introduction
Myanmar Economy 2011
Population Unit 2011 GDP (purchasing power parity) billion of U.S. dollar 82.68 GDP (official exchange rate) billion of U.S. dollar 50.62 GDP – real growth rate Percent per year 5.5 GDP - per capita U.S. dollar 1,300 GDP – composition by sector Agriculture % of GDP 38.2 Industry % of GDP 18.2 Service % of GDP 43.6 Investment Proportion % of GDP 15.7 International Trade Status Export billion of U.S. dollar 8.196 Import billion of U.S. dollar 5.982 Balance of payment million of U.S. dollar 96.1 Debt payment rate % of payment per export 3.9 Fiscal balance % of GDP -4.3 Thai-Myanmar Import percent of country 22.6 Thai-Myanmar Export percent of country 37.1 Inflation rate percent per year 5.2 Exchange rates (official/marketing) Kyat per U.S. dollar 5.4/800 Source: CIA HANDBOOK, 2012
Evaluation of NEDA’s Financial Assistance Project 9 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 1 Introduction
2) Lao People’s Democratic Republic
2.1) Topography and Climate
Lao PDR, a landlocked country, consists mostly of rugged mountains (approximately 70 percent of total area), filled with dense forest. Lao PDR has the total area of 236,800 square kilometers, consisted of 230,800 square kilometers of land surface and 6,000 square kilometers of water surface.
Climate of Lao PDR is in a monsoonal tropical zone. The climate can be divided into two seasons that are the dry season during December to April, and the rainy season during May to November. During May to September, Vientiane has a greater precipitation than other cities in Lao PDR because it is directly affected by tropical storms caused by typhoon, tropical cyclones from the Pacific and Indian oceans. During the same period, the northern water flows cause rapidly increasing water level in branch rivers. Moreover, the drainage system and flood protection are not fully implemented, resulting in sudden flooding in the Mekong region for many times.
2.2) Economy and Investment Overview
GDP: In 2011, Lao PDR registered GDP value at USD 8.145 Million. Major economic sectors included service sector of 37.4 percent, as followed by industry sector of 34.8 percent and agriculture sector of 27.8 percent. GDP per capita averaged at USD 1,281 (2011). In 2012/2013, IMF estimates growth rate of GDP at 8.6 percent from 2011. The higher growth rate of GDP is remarkable in the context of the economic recession condition of the world's large countries such as USA, EU, and the slowing down of China’s economic growth.
Agriculture: Lao PDR has focused on rice production for consumption in country and other economic crops such as rubber.
Industry: The important industry of Lao PDR is natural resource industries, especially hydropower, and mining, copper, and gold industries. Hydropower is the most important export of the country, with the value of USD 915 Million from the total of USD 2,091 Million. The other exports are agricultural products, forest products, fishery, and clothing in manufacture industry. The main trading
Evaluation of NEDA’s Financial Assistance Project 10 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 1 Introduction partners of the Lao PDR are Thailand and China (including Hong Kong), followed by India, Singapore and Malaysia. Lao PDR also imports the important industrial products, including refined oil products, machinery and transport equipment, and various consumption products.
Tourism: Services industry is growing rapidly. In 2010, the total tourists traveling to Lao PDR is about 2.5 million people, with 1.5 million tourists from Thailand.
Economic Challenges: The assessment of ADB found various challenges, espectially poverty reduction. In 2008, the poverty level was 28 percent of the country's population. The job creation is not enough from the investment in hydropower and mining industry so Lao PDR needed to pay attention to other economic sectors such as agriculture, tourism, and service businesses. Consequently, the productivity of agricultural sector needs to increase, as well as in the industry and service sectors to support workers who have been released from the agricultural sector. The creation of government institutions, finance and banking system, development of labour skill, infrastructure, utilities (electricity and water supply), and transport (road and rail), linked to neighbouring countries will enhance the country’s trade opportunities by accessing the abundant resources in Lao PDR.
Thailand’s Opportunities for Trade and Investment in Lao PDR: According to the Manual Report “Trade and Investment in Lao PDR by Department of International Trade Promotion, Thailand, Lao PDR has the high commercial potential due to continuous development of the country through economic development plans of Lao PDR. Moreover, Lao PDR has the high imports from Thailand so the Lao PDR is still an export market for Thailand. In addtion to the development of various natural resources, it will increase an opportunity of Thai investors to participate in the development in various fields with Lao PDR’s entrepreneurs.
Evaluation of NEDA’s Financial Assistance Project 11 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 1 Introduction
Lao PDR Economy 2011
Population Unit 2011 GDP (purchasing power parity) billion of U.S. dollar 17.41 GDP (official exchange rate) billion of U.S. dollar 8.145 GDP – real growth rate Percent per year 8.0 GDP - per capita U.S. dollar 1,281 GDP – composition by sector Agriculture % of GDP 27.8 Industry % of GDP 34.8 Service % of GDP 37.4 Investment Proportion % of GDP 27.4 International Trade Status Export billion of U.S. dollar 2.131 Import billion of U.S. dollar 2.336 Balance of payment million of U.S. dollar 90.2 Debt payment rate % of payment per export 3.2 Fiscal balance % of GDP -2.5 Thai-Myanmar Trade Thai-Myanmar Import percent of country 65.9 Thai-Myanmar Export percent of country 34.8 Inflation rate Percent per year 7.6 Exchange rates LAK per U.S. dollar 8,043 Source: CIA HANDBOOK, 2012
Evaluation of NEDA’s Financial Assistance Project 12 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 1 Introduction
2.3) Important Development Project of Lao PDR
(1) Tourism Development Strategy Plan of Lao PDR, 2006-2020
Lao PDR has operated Tourism Development Strategy Plan of Lao PDR, 2006-2020 with funding support from the international financial institutions to prepare various aspects, as follows:
(1.1) Improving infrastructure by emphasizing on the renovating and expanding of airports, aviation system, Highway A3, Highway 8, Highway 9, Highway 12, Highway 18B, Mekong River Bridge, road network to tourist destinations, as well as electricity, water supply and telecommunication system (1.2) Establishing the Lao National Tourism Administration to administer and develop personnel on tourism, specify the security measures of tourism, and utilize financial support from foreign countries and cooperate with neighbouring countries and for developing an overall tourism plan, In addition, international organizations, including Pacific Asia Travel Association (PATA), ADB, World Bank, Japan International Cooperation Agency (JICA), and other organizations help fund the tourism publicity plan to promote Lao PDR (1.3) Operating the conservation and development of tourist destinations, as well as specifing the areas boundary in accordance with the urban master plan (1.4) Setting the public relation plan of tourism in each area, accordance with seasons, and operating the construction of infrastructure and transportation with supporting each other
(2) Urban Master Plan in Vientiane Capital
The First Urban Master Plan in Vientiane Capital was developed and firstly declared since 1985, thereafter the Second Urban Master Plan in Vientiane Capital become effective since 2000. The Second Urban Master Plan in Vientiane Capital has been updated the previous plan, through
Evaluation of NEDA’s Financial Assistance Project 13 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 1 Introduction improving landuse, limiting utilisation of buildings in the area, and developing infrastructure system, water resources area, ecosystem area, water treatment and water drainage system, and forestry and agriculture area.
(3) Airport Improvement Plan in Lao PDR
Lao PDR plans to improve and expand the airport in various areas, in order to accommodate charter flights from Thailand, Hong Kong, Taiwan, as well as tourists from Korea and Japan. About 29 percent of the tourists, who visited the Lao PDR’s world heritage, arrived by the plane. Lao PDR has renovated and expanded airports throughout the country, including a new airport in Luang Prabang and Ban Huoeisay Airport with China’s support, Chai Udom Airport with Lao PDR’s own support, Pakse International Airport and Wattay International Airport with Thailand’s support.
(4) The Seventh Five-Year National Socio-Economic Development Plan
The Seventh Five-Year National Socio-Economic Development Plan, 2011-2015 determines that the economy should grow stably by increasing GDP for 8 percent per year and enhancing GDP per Capita for USD 1,700 within 2015. Consequently, Lao PDR needs to budget 127,000 billion of Kip or 32 percent of GDP for economic and social development by including 10-12 percent from government budget, 24-26 percent from foreign funding, 50-56 percent from foreign investment and 10-12 percent from loan, with expectation of inflation rate lower than 8 percent, public debt below 45 percent of GDP, and increasing private saving of 25 percent per year.
1.4.5 Field Observation Data and Interview
1) Interviews of two target groups
The study has set to evaluate the project performance from the extent to which the project has fulfilled both strategtic and operational objectives in serving the needs of involved people. So, this study has identified two target groups, as follows: . Senior officers and operational officers . Local people living in project area
Evaluation of NEDA’s Financial Assistance Project 14 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 1 Introduction
2) Interview Method
Two types of questions were used to collect the information and opinion during the interviews: . Open-ended Questions allowing the interviewees to provide information that seems to them to be appropriate . Closed-ended Questions encouraing limiting the interviewees to provide specific piece of required information
1.4.6 Background Information of Project
1) Mae Sot/Myawaddy-Thin Gan Nyi Naung/Dawna Range Road Construction Project
Project Description
- The project involved constructing a road section with a total distance of 17.35 kilometers, under the grant of 122.9 Million Baht, as detailed below: - Improving existing road in Myawaddy community to be a divided highway with 6 lanes of traffic, 21 meters of surface wide, 3 meters of footpath width, total distance of 1.70 kilometers (km 0+000–1+700) - Construcing new road up to the third Asian highway standard, with total distance of 4.30 kilometers (km 1+700–6+000) - Improving existing road up to the third Asian highway standard, with total distance of 11.35 kilometers (km 6+000–17+350)
Project Outcomes
- The project has been implemented under the policy of deepening relation, promoting border tourism and enhancing trade and investment potential. The Cabinet granted approval in principle of the project on 20 January 2004, under total budget of 122.90 Million Baht. - S. Chaing Rai Construction Co., Ltd. served as the construction contractor, and Department of Highways (DOH) served as the inspection authority.
Evaluation of NEDA’s Financial Assistance Project 15 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 1 Introduction
- The total construction cost was about 122.28 Million Baht, or 99.72 percent of total budget. - Construction was completed on 21 May 2006, and the road was inspected by DOH on 5 June 2006. However, the completion of construction was delayed for 90 days from the original plan and 43 days from the revised plan. - The road made the travel faster and more convenient. Furthermore, the environment is greatly improved especially through the reduction of traffic dust and there appeared greater number of permanent installations built along the roadway.
2) Railway Construction from Friendship Bridge to Ban Thanaleng
Project Description
- The project involved constructing railroad from Nong Khai Province, Northeastern Thailand to Ban Thanaleng, Lao PDR, under grant and loan in total budget of 197 Million Baht. The total budget consists the construction works for 186 Million Baht, consulting services for 9 Million Baht, and administration cost for 2 Million Baht. - Construction of Thai-Lao Freindship Bridge at Nong Khai Province was completed in 1994 and designed to support the railroad structure in the future. Lao PDR planned to construct the railroad from Vientiane Capital to Nong Khai Province by crossing the Mekong River at the Thai-Lao Friendship Bridge. The objective of the project is to transport passengers and goods from Lao PDR to Thailand. - At phase 1, the railroad construction was started from the middle of the Thai-Lao Friendship Bridge on the side of Lao PDR, and ended at Thanaleng Station, totaling 3.5 kilometers long. At phase 2, the project is constructing to end at Vientiane Capital. - This railroad contruction is part of Trans-Asian Railways Singapore–Kunming Rail Link, which is an important line to link the transportation system in the Greater Mekong Sub-region.
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Project Outcomes
- The financial support contract was signed on 20 March 2004. However, Lao PDR signed the consultant contract and construction contractor contract on 10 October 2005 and 26 September 2006, respectively. - The construction was completed and delivered on 30 April 2008, by Sermsanguan Construction Co., Ltd. - After completion, the railways have been in service. Residents and tourists can travel conveniently.
3) Wattay International Airport Improvement Project
Project Description
- The project received financial assistance from NEDA, Thailand for 320 Million Baht of total budget, consisting of 30 percent of Grant and 70 percent of Loan. - The project aims to enhance Wattay International Airport to be of international standard and able to accommodate larger aircrafts. - Operation is divided in to 2 phases, as follows:
Phase 1: The Wattay International Airport has been improved to accommodate larger aircraft (such as Boeing 747), which supported Lao PDR in hosting of ASEAN Summit at Vientiane Capital during 20-28 November 2004.
Phase 2: Improvement of runways distance, taxiways, and aprons
Project Outcomes
- The Wattay International Airport Improvement Project signed the Financial Assistance Agreement on 4 April 2004, and the construction contractor contract with Thaiwat Engineering Co., Ltd. on 10 August 2004. The construction was accomplished on 17 Febuary 2006.
Evaluation of NEDA’s Financial Assistance Project 17 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 1 Introduction
- There was the total budget disbursement for 319.999 Million Baht, representing 99.99 percent of the budget contract.
4) The Construction of Drainage System in Vientiane Capital City
Project Description
- The Drainage Channel Construction Project obtained financial assistance from NEDA, Thailand for 160 Million Baht , in term of loan and grant. - The project aims to improve infrastructure that enhance the economic potential, as well as being the part of the strategic framework on economic cooperation and the cooperation framework between Thailand-Lao PDR.
Project Outcomes
- The project signed the Financial Assistance Agreement on 5 April 2004 and construction contractor contract with Thaiwat Engineering Co., Ltd. on 24 August 2006, and completed and delivered on 28 February 2008. - There was the total budget disbursement for 159.996 Million Baht, representing 99.99 percent of the contract budget. - After completing construction, flooding was greatly reduced both in term of water level and flood duration, resulting in increasing the quality of life, and living conditions of people in the project area.
Evaluation of NEDA’s Financial Assistance Project 18 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 2 Analysis and Evaluation Result of the Project
2. Analysis and Evaluation Result of the Project
2.1 Mae Sot/Myawaddy-Thin Gan Nyi Naung/Dawna Range Road Construction Project
2.1.1 Evaluation Result
1) Project’s Post-Construction Functionality This project was designed to serve as a transportaion link from Thailand’s border to inner Myanmar being a part of the 400- kilometers Myawaddy-Yangoon route, and the so-called East-West Economic Corridor (EWEC). The East-West Economic Corridor was proposed by ADB with the purpose of linking between the Andaman Sea and the South China Sea. It is important for the development of the Greater Mekong Sub-region which consists of Myanmar, Thailand, Cambodia, Lao PDR, Vietnam and Southern China.
Since the road opened for traffic in 2007, the amount of border trade at Mae Sot customs post has rapidly increased. According to total trade statistics, the border trade has increased from 12,080 million Baht in 2007 to 35,095 million Baht in 2012, with Thailand’s export as the majority (97 percent). The project road section in Myanmar has stimulated various developments made possible by the transportation improvement, including the establishement of service center to facilitate the import-export between Myanmar and Thailand, 23 units of warehouses, 226 units of commercial buildings, hotels and areas for reefer container in order to support commercial activities in the future. Nowadays, Government of Thailand has provided assistance to improve mountainous section of the Myawaddy-Tanaosri roadway and construct Tanaosri Mountain-Kawkareik, with the total distance of 46 kilometers.
2) Distinguished Aspect of Project
Project outcomes include the reduction of travel time from 45 minutes to 15 minutes, the ability to accommodate a greater amount of traffic comprising about 50 large trucks, 50 buses, and 800 small
Evaluation of NEDA’s Financial Assistance Project 19 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 2 Analysis and Evaluation Result of the Project vehicles per day, and capacity to support the growing logistics activities along the route in Myanmar and as well as those in Mae Sot district, Tak province, Thailand.
3) Project Shortcomings According to concerns raised by the Myawaddy Administration, the project caused certain problems on the water drainages both in and outside the municipality area leading quickly to the road surface damages, and thereby impairing the confidence in work quality and operating capacity of Thai contractors. According to the field surveys, the study found that the road surface was damaged at several locations. Without future adequate maintenance and strict enforcement of the vehicle weight limits, travels on this road will be significantly impacted.
4) Value Added and Sustainability Approach To fully realize the benefit from the development the road way should be linked with the Myanmar main highway. Simply constructing this 17.34 kilometers section of road was not sufficient, there is a need to further extend this road section (Mae Sot-Myawaddy-Kawkareik-Pa-an-Thaton, with total distance for 198 kilometers). At the present, Thailand has already assisted in construction of Myawaddy-Kawkareik, which will support the fullness of project functionality.
To achieve project sustainability, Myanmar needs to allocate the budget for road maintenance, and stricly enforce the weight limit on the vehicles travelling on this route. In addition, it needs to review the road design standard to reflect the situation actually experienced in Myanmar, to ensure sustainable benefits from the project.
In addition, to generate additional value for Thai entrepreneurs resulting from greater trade opportunities, preparation should be made to develop actitivites at the local level; consultants have suggested that it should be prepared to develop other related activities at the local level requiring cooperation between public and private sectors in the area.
Evaluation of NEDA’s Financial Assistance Project 20 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 2 Analysis and Evaluation Result of the Project
2.1.2 Conclusion of Project Evaluation through Terms of Reference (TOR)
1) Conformity with project objectives
1.1) Policy and Requirement of Myanmar and Thailand
The project is considered to be consisten with the following policies: . Myanmar’s economic development plans on the road transportation to improve the effectiveness on road utilization, and to connect to the neighbouring countries for international transportation . Policy on expediting domestic infrastructure development to foster economic development, foreign investment and neighbouring countries cooperation . Thailand’s policy on transport connectivity with neighbouring countries . Policy on logistics efficiency enhancement and cost reduction
1.2) Economic Cooperation Framwork
. East-West Economic Corridor or Asian Highway No.1, under the Greater Mekong Sub-region cooperation . Asian Highway, connecting Vietnam, Lao PDR, Thailand and Myanmar
The evaluation of conformity with project objectives and other policies yielded a “very good” grade because the project was in line with Myanmar’s requirement, Thailand’s policy, and other cooperation frameworks in this region.
2) Overall Project Worthiness
. The assistance rendered by NEDA resulted in a short road section of about 17.35 kilometers. Even though this road section is relatively short, it is a part of the 198 kilometers highway linking Thailand and Myanmar from Mae Sot-Myawaddy-
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Kawkareik-Pa-an-Thaton and Kawkareik-Mawlamyine which has been an initiative under the regional cooperation framework. . Travel from Thailand border to Tanaosri Mountain became more convenient, resulting in reduction in the travel time valued at 8.9 million baht per year and in the vehicle operate cost (VOC) of 10.2 million baht per year. However, the Tanaosri Mountain-Kawkareik section remains narrow and has been characterized by many bends and turns along the mountaineous section, causing the route to be able to accommodate only one way traffic and a need to alternate the traffic direction every day. Thailand Government presently provides the financial assistance on construction and renovation so this route to be more comfortable in the future.
Table 2.1-1 Conclusion on economic and finance evaluation “Mae Sot/Myawaddy-Thin Gan Nyi Naung/Dawna Range Road Construction Project” Corporate Income Tax 4.3 Million Baht Commodities and Services from Thailand 92.0 Million Baht Multiplying Effect from Consumption 306.6 Million Baht Direct Benefit (Un-discounted) -26.1 Million Baht Direct and Indirect Benefit 280.4 Million Baht Internal Rate of Return (IRR) -85.9 % Economic Internal Rate of Return (EIRR) 16.8 %
The evaluation of project worthiness found the project grade as “very good” because it reduces value of time (VOT) and vehicle opearting cost, and also facilitates travel between Thailand-Myanmar from Myawaddy to Tanaosri Mountain.
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3) Impacts and Benefits of Project
3.1) Society . People have not been affected by the land expropriation. . There is the distribution of benefits to all sectors of the local community. . There is an increase in the utilization of the land along the route. . Quality of Life of residents in the project area is improved by being able to travel more conveniently.
3.2) Environment . Dust density appeared to be lower than the acceptable level. . Occasional flood occurred after the completion of the project.
The evaluation of impacts and benefits of the project showed a grade of “very good” because the project could give rise to furhter development, which is expected to continue into the future.
4) Suitability and Sustainability of Project
. Lack of ongoing maintenance to maintain safe operating condition . Design and construction standard is not consistent with the actual vehicle weights. . Slack enforecemnt on the vehicle weight limit
The evaluation of project suitability and sustainability yielded a “fair” grade given the lack of definite plan on the route maintenance.
Evaluation of NEDA’s Financial Assistance Project 23 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 2 Analysis and Evaluation Result of the Project
5) Measures to Enhance Project Value
. Providing greater benefit to the travel by linking the road section with the main road network of Myanmar and other major cities such as Mawlamyine and Yangon . Establishing Special Economic Zone at Mae Sot . Facilitating cross-border transport and customs clearance
The evaluation of Measures to enhance project value found a “very good” grade as the road can be ultimately linked to Yangon and Asian Highway No.8 which is the main highway to the southern and northern regions of Myanmar. In particular, this extension will certainly satisfy the mutual objective set by both Thailand and Myanmar to promote business and industrial developments in the area.
6) Public and International Relations
6.1) Economy . Products, labours and raw materials can be moved with greater convenience, speed and safety 6.2) Politics and Security . Creating a good image of Thailand as a friendly country . Reducing tension in areas along the borders of the two countries 6.3) Society and Culture . Fostering spatial closeness and cultural exchanges . Enhancing bonding between Thai and Myanmar people, and promoting good relations and cooperation 6.4) Science and Technology . Transfering Thailand’s knowledge of road construction, management and maintenance technologies to Myanmar
Evaluation of NEDA’s Financial Assistance Project 24 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 2 Analysis and Evaluation Result of the Project
The evaluation of project impacts on public and international relations found a “very good” grade because Myanmar and Thailand have received equal shares of benefits from the project and the benefits are expected to increase in the future.
It was concluded that in overall the project merit can be rated as “between good and very good” (3.66 points from total scores of 4.00 points).
2.1.3 Recommendation and Suggestion
1) Recommendation . Strategies for engaging with neighbouring countries should be clearly specified in both proactive and defensive fashions for each sector. Furthermore, the adopted approach to provide assistance to neighbouring countries should be consistent with the strategy for promoting domestic industries of each country. . The support given to infrastructure development in neighbouring countries should be formulated as a pilot strategy for promoting Thailand’s industries in the long term. . There is a need to support the improvement of labour quality in neighbouring countries that would in turn boost Thailand’s domestic industry. . There should be integration of information among relevant agencies.
2) Suggestion on Strategy
2.1) Short Term (1 - 3 years) . Carrying out a study to determine the engineering, economic, financial, and environmental viability as well as detailed designs of extension and improvement on Kawkareik-Pa-an-Thaton and Kawkareik-Mawlamyine project and the provision of service areas for trucks along the route . Establishing Special Economic Zone of Mae Sot . Constructing the Second Bridge of River Mei . Supporting qualified Thai entrepreneurs to make investment in Special Economic Zone of Myawaddy
Evaluation of NEDA’s Financial Assistance Project 25 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 2 Analysis and Evaluation Result of the Project
. Carrying out a Logistics and Transport Network Development Master Plan for Myanmar . Providing training and transferring knowledge on road maintainance to Myanmar officials
2.2) Medium Term (3 - 5 years) . Constructing and extending the Kawkareik-Pa-an-Thaton and Kawkareik- Mawlamyine route . Constructing service areas for trucks . Encouraging Thai investors to participate in the construction and operation of Mawlamyine Port and Asian Highway No.8
2.3) Long Term (> 5 years) . Expanding the achievement of short term and medium term plans
Evaluation of NEDA’s Financial Assistance Project 26 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 2 Analysis and Evaluation Result of the Project
2.2 Railway Construction from Friendship Bridge to Ban Thanaleng
2.2.1 Evaluation Result
1) Project’s Post-Construction Functionality
This aim of the project is to develop a rail transportation route from the Thailand border to the interior areas of Lao PDR as a first line of a railway linkage to the Lao PDR. Completed in 2009, the buildings are in good condition, with 2 trips per day between Thailand and Ban Thanaleng. There were 19,826 passengers in 2010 and 16,291 passengers in 2011.
Currently, the Thai Government is supporting the construction of a railway from Thanaleang to Vientiane Capital, a distance of 7.5 kilometers. Lao PDR plans to extend the railway from Vientiane Capital to Luang Prabang and Boten which will connect to the Yunnan province in China and Laem Chabang Port in Thailand in the future.
2) Distinguished Aspect of Project
The strength points are that this is the first rail connection from Thailand to Lao PDR. It supports the expansion of railway transportation network between Lao PDR, China, and Thailand in the future. It also supports future development activities of international shipping as well, is and consistent with the development plan of the Lao PDR and Asia Railway development plan as part of Singapore-Kunming Rail Link.
3) Projec Shortcomings According to the comments from the Railway of Lao PDR and the evaluation of the consultants, it is found that realization of the benefits from the project was incomplete, and has several limitations. The train transportation between Bangkok and Vientiane Capital takes 14 to 15 hours, and it takes a longer time than traveling by bus which uses only 10 hours. It has the limitation on transportation time
Evaluation of NEDA’s Financial Assistance Project 27 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 2 Analysis and Evaluation Result of the Project with only 2 trips per day while bus transportation can be transported all day. There are also problems in the visa, passport, and border crossing procedures.
Freight transport has not been operated on this route at the present.
For rail movement, the train has to share the space on the bridge with road transport. The road traffic has to be closed to allow rail passage over the bridge, contributing to wasting transport time.
The public relation on providing operation information for the passengers is quite limited.
4) Approach to Increasing Value Added and Sustainability
Realizing full advantage of transportation development will occur when there is linking among the main routes, and changing travel and transportation patterns for both passengers and freight. The consultants found that there are studies, preparation and development of various activities to support and enhance the project value, including the container yard development project at Thanaleng, and the railway bridge construction to solve the problem of the sharing the road space with road traffic.
With regards to the sustainability aspect, the consultants suggest that Lao PDR needs to develop management systems for rail transit system in the country through cooperation on the development of personnel and related infrastructure. In addition, to create value for Thailand’s enterpreneurs from the greater commercial opportunity, the consultants suggest that a development plan on other related activities at the local level should be prepared to mobilize resources from and activate cooperation between both the public and private sectors in the local area.
Evaluation of NEDA’s Financial Assistance Project 28 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 2 Analysis and Evaluation Result of the Project
2.2.2 Conclusion of Project Evaluation through Terms of Reference (TOR)
1) Conformity with project objectives
1.1) Policy and Requirement of Lao PDR and Thailand . Policy and strategy of government (in accordance with Lao PDR’s requirement and Thailand’s foreign affairs policy . First railway of Lao PDR . Landlocked Country into Land-linked Country . Plan on developing and improving Lao PDR’s transportation infrastructure
1.2) Economic Cooperation Framework . Under cooperation framework for subregion’s economic development: Association of Southeast Asian Nations (ASEAN), Greater Mekong Subregion (GMS) and Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS) . Tran-Asian Railway [The Singapore-Kunming Rail Link (SKRL) Project]
The evaluation of conformity with project objectives and other policies yield a “very good” grade because the project concepts and implementation are consistent with Thailand’s Policy on Foreign Affairs which needs to create good relationship with the neighbouring countries, and other cooperation frameworks in this region.
2) Overall Project Worthiness
. The project leaves a short distance that is still unconnected to Vientiane Capital. . Services are limited to passenger transport, without freight services.
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Table 2.2-1 Conclusion on economic and finance evaluation “Railway Construction from Friendship Bridge to Ban Thanaleng” Amount of Payment 138.0 Million Baht Interest between construction/after construction 2.6/31.0 Million Baht Corporate Income Tax 6.9 Million Baht Commodities and Services from Thailand 128.0 Million Baht Multiplying Effect from Consumption 426.7 Million Baht Direct Benefit (Un-discounted) -28.5 Million Baht Direct and Indirect Benefit 398.1 Million Baht Internal Rate of Return (IRR) -5.7 % Economic Internal Rate of Return (EIRR) 8.4 %
The evaluation of overall project worthiness found the project grade as “fair” because the construction is not linked to Vientiane Capital. Moreover, services are limited to passenger transport, without freight services.
3) Impacts and Benefits of Project
3.1) Society . Livelihood of Thanaleng depot/path community is not much different from before the project. . Construction area is outside the community area, so few people are affected by the construction and they have received appropriate compensation. . There is convenient transportation connection linking the project to other areas, especially for connecting to Vientiane Capital City.
3.2) Environment . Noise/dust pollution was not very high during construction. When construction is completed, the pollution was reduced.Current noise pollution is under the standard.
Evaluation of NEDA’s Financial Assistance Project 30 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 2 Analysis and Evaluation Result of the Project
. Accommodation and workplace relocations were given appropiate compensation with agreement of both groups.
The evaluation of impacts and benefits of the project showed a grade of “good”, economic benefits is very high. Although it is not yet realized, the project will be the foundation for significant business extension in the future.
4) Suitability and Sustainability of Project
Management status in present . Lao PDR has established and organized the relevant institutions under Ministry of Public Works and Transport, as follows: - Lao Railway Authority: planning on rail system development, financing for project operation, and administrating all projects in Lao PDR - Railway Protection Organization: servicing train operation, responsing operation, and maintaining railway line . Even though there was limited personnel and insufficient income for administration during first phase, it has been continually developed and supported by State Railway of Thailand (SRT) in personnal training and equipments. . Lao Railway Authority will enhance the ability of organization administration, and extend the rail tracks in the future.
The evaluation of project suitability and sustainability yielded a “very good” grade because of the appropriateness in various aspects. Consequently, there will be continually growth in the future for mutual benefit.
5) Measures to Enhance Project Value
. Developing operation system/station to accommodate freight transport with convenience and sufficiency
Evaluation of NEDA’s Financial Assistance Project 31 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 2 Analysis and Evaluation Result of the Project
. Extending the rail tracks will greater number of passengers and goods depending on the distance, areas, and communities that lay along the route. . Adding invesment on the Container Yard
The evaluation of measures to enhance project value found the project grade as “very good” because the project has potential to continually develop to the next stage such as development of freight transport capacity, and expansion of track for passenger and freight transportation.
6) Public and International Relations
6.1) Public Relations . It is an initiative project of State Railway Lao PDR. The project has been supported from Thailand, and most of Lao people are aware of this assistance. . The project provides connectivity of two countries to create the relationship, conveniently.
Opinion Satisfaction (Total Interviewee) Most Neutral Less Unsure None National Development (10) 5 (50%) 5 (50%) 0 0 0 Community Development (10) 5 (50%) 5 (50%) 0 0 0
6.2) International Relations
(1) Economy . Constructing infrastructure supports development of the Lao PDR’s effort in developing the economy, society and culture, and transportation. . Supporting the economic expansion on logistics between Thailand-Lao PDR
(2) Politics and Security . Creating a good image of Thailand as a friendly country
Evaluation of NEDA’s Financial Assistance Project 32 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 2 Analysis and Evaluation Result of the Project
. Increasing cordial relations between communities along the border of the two countries
(3) Society and Culture . Increasing physical proximity and encouraging cultural exchanges . Binding communities in Thailand and Lao PDR together, and promoting friendly relations and cooperation between the two countries
(4) Science and Technology . Thailand has passed on technologies of management, maintenance and operation of railways to Lao PDR.
The evaluation of project impact on public and international relations showed a grade of “very good” because the opinion of Lao PDR’s people is positive such as causing the better travel and economy.
It was concluded that in overall the project merit can be rated as “between good and very good” (3.50 points from total scores of 4.00 points).
2.2.3 Reccomendation and Suggestion
1) Recommendation
. Expediting the path expansion to Vientiane Capital for opening a new connection between Thailand to Lao PDR, resulting in greater promotion of tourism business in both countries . Expediting investment operation on Container Yard and Inland Container Depot at appropriate location on Lao PDR . Accelerating the reduction of crossing border process both people and products, as well as expense or over fee from public sectors both Lao PDR and Thailand . Cooperating assistance from SRT to railway Lao PDR through continuous and sincere operation, standard determination, and clear and comprehensive plan
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2) Suggestion on Strategy
2.1) Short Term (1 - 3 years) . Promoting and supporting tourism both Thailand and Lao PDR . Expanding capacity, preparing locomotive and carraige, and improving signal system . Constructing railway bridge . Supporting Thai’s Freight Forwarder/ Third Party Logistics in the business partnership with Lao PDR for operating Thanaleng’s Container Yard . Studying and designing the Customs Clearance System at Thanaleng’s Container Yard . Training and building knowledge of Lao PDR’s railway . Promoting Thai’s assurer on the business partnership/ strategic alliance in Lao PDR
2.2) Medium Term (3 - 5 years) . Supporting the technical on the study of feasible construction in railway and container yard at southern Lao PDR . Promoting Thailand’s enterpreneurs in the investment of container yard construction and operation in southern Lao PDR . Studying the feasibility and conducting detailed design of construction a railway connection between Ubon Rachathani and Pakse
2.3) Long Term (> 5 years) . Extending the achievement of short term and medium term plans
Evaluation of NEDA’s Financial Assistance Project 34 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 2 Analysis and Evaluation Result of the Project
2.3 Wattay International Airport Improvement Project
2.3.1 Evaluation Result
1) Project’s Post-Construction Functionality
This project aims to develop the Wattay International Airport, Vientiane Capital to accommodate large aircraft such as the Boeing 747, which would support the ASEAN SUMMIT at Vientiane Capital in 2004. The later utilization is to support the tourism development of the Lao PDR. Before the extended airport began operation in 2005, statistics data (domestic and international) show 9,612 flights and 426,297 passengers. The flight number increased to 19,481 flights, and 793,554 passengers in 2007, and increased continuously to 27,873 flights and 1,146,160 passengers in 2011. The ASEM SUMMIT at Vientiane Capital in 2012 is significant evidence of the enhanced ability of the Lao PDR to handle increased passengers and air traffic transport.
2) Distinguished Aspect of Project The project supported the Lao PDR in having a role on the international stage from hosting of leaders’ meeting, and other international activities such as the international sports competition, contributing to and promoting tourism development of Lao PDR.
3) Project Shortcomings
From observation of the project’s conditions, it was found that there are the cracks at Boeing 747 apron. Civil Aviation Department of Lao PDR operated to repair and provide funds for permanent repair, and overall maintenance of the airport is on a satisfactory level.
Public relations with the passengers is at a limited level concerning the information about the airport improvement, in comparing with the other improvements which other countries have provided assistance to Lao PDR.
Evaluation of NEDA’s Financial Assistance Project 35 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 2 Analysis and Evaluation Result of the Project
4) Approach to Increase Value Added and Sustainability Full advantage of transportation development will occur when there is linkage among the main routes, and changing travel and transportation patterns both passenger and product. The consultants found that Lao PDR has already studied for the preparation and development and various projects to support and enhance the project value, including the tourism development project of Lao PDR, and other domestic airport development projects in order to support the travel and air transportation as more convenient. Thus, it is the good creation of value-added for this project.
In relation to sustainability aspects, the consultants suggest that Lao PDR need to develop management and administration systems of the civil aviation personnel of Lao PDR to enhance the number and the skill of operation. The creation of value-added for Thailand’s enterpreneurs will come from greater tourism business opportunity. The consultants recommend that plans should be prepared to develop other related activities at the local level, through cooperation between public and private sectors in the local area.
2.3.2 Conclusion of Project Evaluation through Terms of Reference (TOR)
1) Conformity with project objectives
1.1) Policy and Requirement of Lao PDR and Thailand . Improvement of airport to accommodate larger aircraft in ASEAN SUMMIT . Improvement of airport to be safety aviation and raise as the international airport . Thailand’s Policy on Foreign Affairs which needs to create the good relationship with the neighbouring countries 1.2) Economic Cooperation Framework . Association of Southeast Asian Nations (ASEAN) . Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS)
The evaluation of conformity with project objectives yielded a “very good” grade. The Wattay Internation Airport Improvement Project, Lao PDR is consistent with the requirements of Lao PDR and Thailand, and the framework of international cooperation.
Evaluation of NEDA’s Financial Assistance Project 36 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 2 Analysis and Evaluation Result of the Project
2) Project Overall Worthiness . There is product and service use from Thailand. . There is greater income from tourists. . There are increased number of enterpreneurs in transportation continually.
Table 2.3-1 Conclusion on economic and finance evaluation “Wattay International Airport Improvement Project” Amount of Payment 224.0 Million Baht Interest between construction/after construction 2.8/58.9 Million Baht Corporate Income Tax 11.2 Million Baht Commodities and Services from Thailand 262.4 Million Baht Multiplying Effect from Consumption 874.7 Million Baht Direct Benefit (Un-discounted) 15.3 Million Baht Direct and Indirect Benefit 890.0 Million Baht Internal Rate of Return (IRR) 2.8 % Economic Internal Rate of Return (EIRR) 61.8 %
The evaluation of project overall worthiness found the project grade as “very good” because it has enhanced the potential on accommodating greater number of flights and larger aircrafts, as well as the development of trade and tourism.
3) Impacts and Benefits of Project
3.1) Society . There are higher number of tourists. . Residents have convenient travel in the area and improved links with the outside world. . There are higher numbers of enterpreneurs on transportation continually.
Evaluation of NEDA’s Financial Assistance Project 37 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 2 Analysis and Evaluation Result of the Project
3.2) Environment . Noise pollution is caused by the airplane landing which is increased engine and number of flights per day, but there is a mitigation plan in the environmental management plan.
The evaluation of impacts and benefits yielded a “very good” grade. It has enhanced airport utilization with landing of large aircrafts, resulting in higher number of passengers and freight transport. Although there are some minor environmental impacts, they can be handled with the environmental management plan.
4) Approach to Increasing Value-Added and Sustainability
4.1) Responsible Organization . Civil Aviation Department of Lao PDR
4.2) Airport Pavement Maintenance . Maintenance through schedule plan . Maintainance through improvement
The evaluation of approach to increasing value-added and sustainability yielded a “very good” grade. The Wattay International Airport is responsible through Civil Aviation Department of Lao PDR. The Civil Aviation Department of Lao PDR has realized the importance on administration, controlled on airport construction, planned to send people to study abroad programs in relevant courses, as a major force in operation, and maintained the runway, taxi way, and aprons.
5) Measures to Enhance Project Value
5.1) Development approach in the future . Development on aviation personnel . Civil Aviation Department of Lao PDR has required cooperation from Thailand in the aviation personnel development.
Evaluation of NEDA’s Financial Assistance Project 38 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 2 Analysis and Evaluation Result of the Project
5.2) Suggestion on aviation personnel development . Supporting education in collaboration with the Department of Civil Aviation of Thailand in courses of land, aviation technology, aviation management, and various maintenances . Sending aviation personnel of Lao PDR to study and develop knowledge in Thailand due to convenience, a little time to adjust, as well as having similar language and culture
The evaluation of measures to enhance project value found the project grade as “fair”. The project has improved runway, taxiways, drainage system, aircraft parking, office building, and access road to the airport. So, with the project, the Wattay International Airport is able to service increased number of passengers, and it is necessary to develop aviation personnel in order to create value added for the project. The Civil Aviation Department of Lao PDR has asked Thailand to cooperate in the aviation personnel development.
6) Public and International Relations
6.1) Public Relation . From an Opinion Survey of Laos’ residents on Thai’s assistance, it was found that there are convenient transportation, better economy, and international trade increasing.
6.2) International Relation . Building good relationship between Thai Government and Lao PDR Government through airport development for supporting ASEAN SUMMIT . Building good relationship, linking people in the area, or connecting to the coherence system of people in the project area . Having various activities, assistances, and creating linkage transportation network, resulting in better deepening relations between the countries
Evaluation of NEDA’s Financial Assistance Project 39 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 2 Analysis and Evaluation Result of the Project
Opinion Satisfaction (Total Interviewee) Most Neutral Less Unsure None National Development (10) 5 (50%) 5 (50%) 0 0 0 Community Development (10) 5 (50%) 5 (50%) 0 0 0
The evaluation of project impact on public and international relations showed a grade of “good”. The construction of the Wattay International Airport contributes to the creation of better relations between the countries through various activities and assistances. Opinion of the Lao’s People for the project is positive although a lot of people do not realize that the project is assisted by Thailand.
It was concluded that in overall the project merit can be rated as “between good and very good” (3.50 points from total scores of 4.00 points).
2.3.3 Recommendation and Suggestion
1) Recommendation . The financial assistance to improve the airport has been extremely useful in the transport system development in Lao PDR. . It allows visitors to travel to Lao PDR conveniently. . There are higher numbers of tourists traveling through Thailand, and most of them use Suvarnabhumi Airport as a hub for air transportation resulting in mutual benefits between Thailand and Lao PDR. . Despite the Wattay International Airport is fully development, there should be provided financial assistance to other airports in the Lao PDR for tourism development of the two countries together.
Evaluation of NEDA’s Financial Assistance Project 40 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 2 Analysis and Evaluation Result of the Project
2) Suggestion on Strategy 2.1) Short Term (1 - 3 years) . Developing aviation personnel of Wattay International Airport, Lao PDR
2.3) Medium Term (3 - 5 years) . Operating the Logistics System and Air Line Telecommunication Development Master Plan for Lao PDR
2.4) Long Term (> 5 years) . Extending the achievement of short term and medium term plans
Evaluation of NEDA’s Financial Assistance Project 41 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 2 Analysis and Evaluation Result of the Project
2.4 The Construction of Drainage System in Vientiane Capital City
2.4.1 Evaluation Result
1) Project’s Post-Construction Functionality
Regarding to the interviews focussing on the local people residing near the project and the offices of the Vientiane Capital to this project. All of them believed that the project resulting in their better. The better drainage also supported good health because flooding caused of dengue and other deseases.
2) Distinguished Aspect of Project
The project support the master plan on environmental quality improvement in Vientiane Capital, which is aimed to increase the quality of life, and promote the urbanization, expending the Vientiane Capital’s economic zone.
A survey of stakeholders at all level including residents in the project area and the authorities at both operation and policy levels shows that this project meets the needs of the public by alleviating the suffering from flooding. Moreover the target interviewees recognize that Drainage Channel Construction Project in Vientiane, Lao PDR is a collaborative project between Thailand and Lao PDR.
3) Project Shortcomings
From the observation of project, it was found that the dumping of solid waste in the drainage pipelines causes odor nuisance to the residents in the adjacent area. The maintenance of drainage channels is not adequate for rapid urbanization. There are weeds in drainage area but the official stated that it will accelerate the maintenance measures.
4) Approach to Increase Value Added and Sustainability
The improvement of urban environment quality benefits the urban economic area with higher production potential, income generation, and employment, as well as provides new business development opportunities such as tourism and other commercial activities. Moreover, the Vientiane Capital also has
Evaluation of NEDA’s Financial Assistance Project 42 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 2 Analysis and Evaluation Result of the Project plans to expand the original drainage system in order to cover adjacent area widely, contributing in supporting the urban development of Vientiane Capital as well.
To meet the sustainability aspect, consultants suggest that Lao PDR is necessary to develop administration system and public participation in the maintenance of drainage environment as availability operation all the time.
2.4.2 Conclusion of Project Evaluation through Terms of Reference (TOR)
1) Conformity with project objectives . Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS) . The Sixth Five-Year National Socio-Economic Development Plan (2006-2010) of Lao PDR, in infrastructure development . Policy of Thailand’s Foreign Affairs on creating the good relationship with neigbouring country
The evaluation of conformity with project objectives yielded a “very good” grade because the project is consistent with Lao PDR’s requirements, Thailand’s foreign policy which is creation of good relationship with the neighbouring country, and other economic cooperation frameworks in the region.
2) Overall Project Worthiness
. There is job creation, and Thailand-Lao PDR trade value by using Thai’s product and service during construction period for 80.13 percent of buget according to the contractor and consultant contracts. . There are import of machinery, rubber, cement, stone, concrete, sand and concrete, steel, and fiber synthesis, as well as workers from Thailand.
Evaluation of NEDA’s Financial Assistance Project 43 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 2 Analysis and Evaluation Result of the Project
Table 2.4-1 Calculation of Loss Value in Case without the Drainage Channel Improvement “The Construction of Drainage System in Vientiane Capital City” No. Item Amount (1) Flood period (day/period) 4.0 (2) Flood period (day/year) 40.0 (3) Amount of household in project area 2,200.0 (4) Population in project area (4 people/family) (people) 8,800.0 (5) GDP per capita of Lao PDR (USD/year) 2,700.0 (6) GDP per capita of Lao PDR (Baht/year) 81,000.0 (7) Income per capita per day (Baht/day) 221.9 (8) Loss of income (Baht) [(2)*(4)*(7)] 78,115,068.5 (without the Drainage Channel Improvement)
Table 2.4-2 Conclusion on economic and finance evaluation “The Construction of Drainage System in Vientiane Capital City” Amount of Payment 112.0 Million Baht Interest between construction/after construction 2.0/25.0 Million Baht Corporate income Tax 5.6 Million Baht Commodities and Services from Thailand 126.6 Million Baht Multiplying Effect from Consumption 422.0 Million Baht Direct Benefit (Un-discounted) -0.8 Million Baht Direct and Indirect Benefit 421.2 Million Baht Internal Rate of Return (IRR) -0.3 % Economic Internal Rate of Return (EIRR) 37.9 %
The evaluation of overall project worthiness found the project grade as “very good”. After the construction is completed, it improves drainage and solves flooding problems in the project area, and provides valuation benefits both direct and indirect.
Evaluation of NEDA’s Financial Assistance Project 44 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 2 Analysis and Evaluation Result of the Project
3) Impacts and Benefits of Project
. Environmental impacts that occurred from the construction are minimal, namely noise and dust during construction, and machinery installation which interferes with local transportation. . There are no impacts on environment and public after completion of construction. . Flooding is reduced around the project area, contributing to a better life quality and public health.
The evaluation of impacts and benefits of the project showed a grade of “very good”.
4) Suitability and Sustainability of Project
. The manintainance of water drainage canal is recomended. . The continuous development planing relatives to the local environment aspects, such as plan on land utilization, wastewater treatment, waste management, and etc are emphacise.
The evaluation of project suitability and sustainability yielded a “good” grade because the maintainance is needed to ensure that the channels is operated efficiently.
5) Measures to Enhance Project Value
. Developing roads along two sides of drainage channel to support community expansion . Linking all drainage ditches with drainage channels . Treating wastewater before draining to drainage channels . Adding drainage channel construction in the southeast area of Wattay International Airport
The evaluation of measures to enhance project value found the project grade as “good”.
Evaluation of NEDA’s Financial Assistance Project 45 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 2 Analysis and Evaluation Result of the Project
6) Public and International Relations
The result of interviews with the authorities at both decision and implementation levels and residents in the project area, are as follows
. Accessing people who is assisted directly . Expanding utilization area into the flooded areas, and using earthen drainage ditches as transportation . Creation on good relationships at residents, staff and policy level
Satisfaction Opinion Most Neutral Less Unsure None Resident National Development (10) 3 (37.5%) 4 (50%) 1 (12.5)% 0 0 Community Development (10) 1 (12.5%) 7 (87.5%) 0 0 0 Authority National Developmwnt (10) 1 (50.0%) 1 (50.0%) 0 0 0 Community Development (10) 1 (50.0%) 1 (50.0%) 0 0 0
The evaluation of project impacts on public and international relations showed a grade of “very good”.
It was concluded that in overall the project merit can be rated as “between good and very good” (3.66 points from total scores of 4.00 points).
2.4.3 Recommendation and Suggestion
1) Recommendation . There are quality standard on the construction, control and inspection with systematic and examination step by step already. . The project lacks of continuous maintenance and follow up evaluation of the indirect impact on land use development projects in the area.
Evaluation of NEDA’s Financial Assistance Project 46 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 2 Analysis and Evaluation Result of the Project
. There should be a policy and strategy to support the empirical results. . Project management should be focused on the plan on land use development, environmental management, and economic development of investment area or support area.
2) Suggestion on Strategy
2.1) Short Term (1 - 3 years) . Maintaining drainage channel according to the standard, and improving original drainage channel . Developing roads along two sides of drainage channel to support community expansion . Training personnel in the organization which is responsible for administraion . Studying the master plan on Vientiane Capital’s infrastructure
2.2) Medium Term (3 - 5 years) . Adding drainage channels construction to the southest area of Wattay International Airport
2.3) Long Term (> 5 yeras) The development on infrastructure and landscape such as roads and transport, water resource, wastewater and wastewater collection system, water drainage, waste, creation on green area and place to relax, and urban landscape are implemented in accordance with the Seventh Five-Year National Socio-Economic Development Plan (2011-2015) of Vientiane Capital and the project for development Urban Development Master Plan in Vientiane Capital 2030. The long term plan should be determined after the evaluation of short term project.
Evaluation of NEDA’s Financial Assistance Project 47 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 3 Overall Conclusion of Evaluation Result
2. Overall Conclusion of Evaluation Result
3.1 Lesson Learnt
1) Priorities should be established for projects which will be undertaken in the future to provide a basis for informed decisions on the investment or further assistance, and collect useful data for evaluation when project is completed. 2) The study on environmental impact and operation on public participation are necessary for large projects. The operation should be in line with international standards, such as those used by ADB or the World Bank. These may be used as a reasonable reference in many cases. 3) The public relation of project is a necessary to allow all parties to track information or project progress. Consequently, the project is responded for the valuable utilization because there are receiving the project information from all parties. 4) The operational period should be increased so neighbouring countries have time to check the related contents and information, and participate in the operation actively, contributing to reduction of misunderstanding and extension of operation time. 5) There should be defined plan on project operation as a step in the future, as well as a feasibility study for the project within a reasonable period.
3.2 Recommendation and Suggestion
1) The projects benefited more widely both personnel and area, contributing in a rather good result of evaluation. The project which obtained the best result for this evaluation is the project on development of land transportation, including road and rail. The project on development of air transportation obtained better result due to limitation on personnel and area, and extension on continual development. Other infrastructure developments obtained a good result due to clustering in narrow personnel and area, including difficulties on value- added creation. 2) The issue of project sustainability is directly related to maintenance and improvement which need the organization to be responsible both administration and maintenance. The preliminary consideration found that the organizations of country which asks for assistance lacks
Evaluation of NEDA’s Financial Assistance Project 48 Fiscal Year 2012 Executive Summary Report • Tesco • Transport Institute, Chulalongkorn University 3 Overall Conclusion of Evaluation Result
preparedness in this matter. Sustainability needs to be carefully considered in the assistance decision, and provide strengthening for the organization and the staff as well. 3) The participation of both the public and private sectors needs to be practiced for the success and advantage in the assistance project. The public sector should plan to assist by cooperating with the private sector to participate in the project from the outset, through consultation procedures This will certainly provide benefit to the project.
3.3 Strategies for Cooperation with Neighbouring Countries of Thailand
1) Connectivity
. Mae Sot/Myawaddy-Thin Gan Nyi Naung/Dawna Range Road Construction Project, Railway Construction from Friendship Bridge to Ban Thanaleng, Wattay International Airport Improvement Project, and the Construction of Drainage System in Vientiane Capital City can be the gateway to connect physical infrastructure and administration. . At the three projects mentioned above, procedures for cross-border both passenger and goods can be developed to be convenient and effecive according to international standard or ASEAN Economic Community (AEC).
2) Relationship
The four projects can develop the personnel at all level, as follows:
. Training careers in countries of assistance recipients, and supporting educational institutions/organizations of Thailand in providing the project on training professional skills . Providing education and health services . Supporting cultural activity to the Thailand’s border provinces with neighbouring countries
3) Mutual Benefit
. Supporting the local participation in the continuous business development for mutual benefit of Thailand and neighbouring countries
Evaluation of NEDA’s Financial Assistance Project 49 Fiscal Year 2012