Technical Assistance Consultant’s Report

Project Number: 49387-001 October 2018

Kingdom of , Lao People’s Democratic Republic, Socialist Republic of Viet Nam: Second GMS Tourism Infrastructure for Inclusive Growth Project (Financed by ADB PPTA)

The document is prepared by Norconsult AS(NORWAY) in association with NORCONSULT MANAGEMENT SERVICES, INC. (PHILIPPINES)

For Ministry of Tourism, Kingdom of Cambodia Ministry of Information, Culture and Tourism, Lao People’s Democratic Republic Ministry of Culture, Sport and Tourism, Socialist Republic of Viet Nam

This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents. (For project preparatory technical assistance: All the views expressed herein may not be incorporated into the proposed project’s design.

Appendix 2.1 Details of Workshop Helds

II. INTERIM / FINAL PROJECT DESIGN WORKSHOPS

A. Cambodia

1. Agenda

PPTA 9090 REG: Preparing the Second Greater Mekong Sub region Tourism Infrastructure for Inclusive Growth Project

INTERIM WORKSHOP - CAMBODIA Venue: Hotel Cambodiana, 313 Sisowath Quay, , Kingdom of Cambodia Tuesday, 10 October 2017

AGENDA Time Presenter/Topic 08.00-08.30 Registration of participants 08.30-08.50 Welcome address by Ministry of Tourism 08.50-09.00 ADB Remarks-Steven Schipani, Senior Portfolio Management Specialist, Asian Development Bank 09:00-09:15 Strategic Priorities for Tourism Development in Cambodia by the Ministry of Tourism 09.15-09.50 Project Overview: Keith Perry PPTA Consultant Team Leader. PM International - Background and rationale - Impact and outcome - Outputs Preliminary Design Process - Field visits and stakeholder consultations - Socio-economic surveys and tourism demand analysis Technical Approach for Infrastructure Subprojects - General approach /principles – lessons from past projects - Landfill, roads and ferry piers - Special design features – models for climate-resilient beachfront development Safeguards Due Diligence - Overview of ADB and Government social and environment safeguards - Social and poverty analysis - Gender action plan - Resettlement - Environment - Indigenous people Economic and Financial Due Diligence - Economic and financial analyses approach - Economic and financial analysis preliminary results 9.50-10.10 Discussion led by Chair, Ministry of Tourism 10.10-10.30 BREAK 10.30-11.30 Project Outputs: Keith Perry, PM International Output 1: Solid Waste Management Improvements Seaside Access and Environmental Improvements Sihanoukville and Passenger Piers Improvements - Summary rationale, main components and beneficiaries - Cost estimates - Institutional arrangements for O&M Output 2: Capacity to implement ASEAN Tourism Standards strengthened - Rationale, scope, and beneficiaries - Activity summary - Cost estimates

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Output 3: Institutional capacity for tourism destination management and infrastructure O&M strengthened - Rationale, scope, and beneficiaries - Activity summary - Cost estimates Project Management Support - Activity summary - Cost estimates 11:15-12:00 Discussion led by Chair, Ministry of Tourism 12.00-13.00 LUNCH 13.00-13.30 Financing, Implementation Arrangements and Development Coordination Keith Perry. PPTA Team Leader, PM International Project Financing - Cost summary by output - Proposed financing plan Implementation Arrangements and Development Coordination - Project supervision and implementation arrangements - Executing and implementing agency roles - Opportunities for private sector participation and public-private partnerships - Synergies with other ADB projects and development partners 13.30-14.00 Project readiness, ADB and Ministry of Tourism - Key issues - Next steps, ADB and Ministry of Information, Culture and Tourism 14.00-14.45 Open discussion - Issues and priorities: government agencies and other key stakeholders 14.45-15.00 Closing remarks by ADB Closing remarks by the Ministry of Tourism

15.00-16.00 Refreshments

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2. List of Workshop Participants

No. Name Position Organization

1 Mr. H.E. Tith Chantha Secretary of State MOT 2 Mr. Sok Sokun Director, Tourism Planning and MOT Development Department 3 Mr. Yin Nat Deputy Director, Tourism MOT Planning and Development Department 4 Ms. Hout Sinuon Deputy of department MOT 5 Ms. Som Chenda Director MOT 6 Mr. Men Phecha Director MOT 7 Mr. Norm Sang Deputy director MOT 8 Mr. Monh Ty Chief Officer MOT 9 Mr. Phat Khemara Chief Officer MOT 10 Mr. Khut Kimhout Staff MOT 11 Ms. Un Solida Officer MOT 12 Mr. Choun Srey Cheat Staff MOT 13 Mr. Prak Thearith MOT 14 Mr. Phorn Sopeak Officer MOT 15 Mr. Chhey Poly Officer MOT 16 Mr. Yos Chhom Narady Under Secretary of State MLMUPC 17 Mr. Hang Bunnak Advisor MLMUPC 18 Ms. Kong Sovan Rangsey Official MOI 19 Mr. Sao Sopheap Deputy Director MOP 20 Mr. Mel Sopheap Deputy Director MOP 21 Mr. Sun Chhun Hpeng Deputy Director MOP 22 Mr. Hang Sochivy Deputy Director MPWT 23 Mr. Chrea Thavirith Deputy Director MPWT 24 Ms. Ouk Reksmey Director of Office MPWT 25 Ms. Puthrea Solyda Deputy Director FIA 26 Ms. Ing Vanna Deputy Director General of MRD MRD 27 Mr. Sim Nath Project Officer MEF 28 Mr. Bin Bunheng Deputy Chief MEF 29 Mr. Veng You im Chief MEF 30 Mr. Say Bunchheng Chief Officer MFA 31 Mr. Mean Naro Assistant MOE 32 Mr. Chhey Rithyra Officer CDC 33 Ms. Tith Sokha Governor Kep 34 Mr. Mam Touch Director DPWT Kep 35 Mr. Chin Vuthy Deputy Director DPWT Kep 36 Mr. Vao Sokha Director Kep 37 Mr. Oul Phearun Deputy Director Kep City Council 38 Mr. Cheat Sok Director of office of city Kep City Council development 39 Mr. Chhun Chanvan Thouch Director of implementation Kep City Council 40 Mr. Phay Bunvannak Deputy Director Sihanoukville City Council 41 Mr. Tang Sovath Krisna Director Sihanoukville Department of Tourism

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No. Name Position Organization

42 Mr. Touch Norn Officer DOE SHV 43 Mr. Im Panharith Director DOE Kep 44 Mr. Tes Dara Director Island Speed Ferry 45 Mr. Leng Sivon Manager Island Speed Ferry 46 Mr. Meas Davuth E.C CATA 47 Mr. Ieng Mengly Staff of KRGC Koh Rong Dive Centre 48 Mr. Seng Khangteang Assistant Mayor of Koh Rong Koh Rong 49 Mr. Steven Schipani ADB Officer ADB 50 Mr. Keith Perry Team Leader PPTA Consultant/ PM Group 51 Mr. Rik Ponne Tourism Planner PM Group/ADB 52 Ms. Nguyen Phuong Chi Coordinator PPTA Consultant/ PMG 53 Mr. Som Mithonarath General Managing Director Key Consultants Cambodia 54 Ms. Som Vannita Planner Key Consultants Cambodia 55 Mr. Sim Sen Civil Engineer Key Consultants Cambodia 56 Mr. Mel Sophanna Resettlement Expert Key Consultants Cambodia 57 Ms. Tep Vandy Note taker PMG

ADB = Asian Development Bank; CATA = Cambodia Association of Travel Agents; CDC = Council for Development of Cambodia; DOE = Department of Environment; DOT = Department of Tourism; DPWT = Department of Public Works and Transport; FIA = Fisheries Administration; MEF = Ministry of Economy and Finance; MFA = Ministry of Foreign Affairs and International Cooperation; MLMUPC = Ministry of Land Management, Urban Planning and Construction; MOE = Ministry of Environment; MOP = Ministry of Planning; MOT = Ministry of Tourism; MPWT = Ministry of Public Works and Transport; MRD = Ministry of Rural Development.

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3. Presentation

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4. Summary minutes of Interim Workshop in Cambodia

1. The Interim Workshop in Cambodia was held at Cambodiana Hotel, Phnom Penh, on 10 October 2017. The workshop was chaired by H.E. Tith Chantha, Secretary of State, Ministry of Tourism (MOT), and co-chaired by Mr. Steven Schipani, ADB Senior Portfolio Management Specialist. About 57 people attended, including Deputy Governors of Kep and Preah Sihanouk Provinces, representatives from national and provincial government offices, and the private sector. The main purpose of the workshop was to present to stakeholders the proposed project’s scope and preliminary design and obtain their feedback and comments.

2. In his opening remarks, H.E. Tith Chantha emphasized that the proposed project and subprojects are relevant because (i) they address problems in emerging destinations that are attracting increasing numbers of visitors and (ii) are in line with the objectives of the Sustainable Development Goals and the Government’s policy and strategic plans, including Cambodia’s Tourism Development Strategic Plan 2012–2020. The TA consultants presented the findings of the interim phase and an overview of activities undertaken to date.

3. The workshop provided ample time for discussion. In terms of project scope, representatives from Kep Province proposed the project to consider including additional subprojects in Kep Province, including: (i) water supply on the islands; (ii) enhancement of Kep beaches; (iii) a tourist pier on Rabbit Island; (iv) upgrade of access road to ; and (vi) the creation of a crab bank and artificial reef. Preah Sihanouk Province proposed the addition of a tourism and culture center, including tourist information heritage interpretation and public toilets. The meeting notes these subprojects were not shortlisted for PPTA feasibility studies. However, as Kep is included in the ongoing GMS Tourism Infrastructure for Inclusive Growth Project, the government could explore using loan savings, if available, to support selected activities under the current project.

4. In response to the proposed infrastructure subprojects, participants suggested: (i) reorienting the proposed pier at Victory Beach (Sihanoukville) to create a more sheltered marina together with the “Russian Pier”; (ii) ensure coordination between beach road upgrading and a proposed Viet Nam-funded project to construct a road from the airport to the southeastern end of Otres Beach; (iii) studying other ongoing and planned urban development projects to prevent overlap and promote synergies; (iv) that all seaside roads proposed by the project be made in concrete to ensure durability and include footpaths, bicycle lanes, parking areas and public toilets; (v) that public toilets meet ASEAN Public Toilet Standard; and (vi) that infrastructure should be of international standard to ensure Sihanoukville can benefit from hosting international events. MOT will incorporate most of these into the project design.

5. In terms of capacity building activities proposed for outputs 2 and 3 of the project, participants suggested: (i) that programs be included to promote tourist safety, particularly focusing on coastal tourism activities; (ii) that support for the organization and hosting of tourism events is included in output 3; and (iii) that the project assists with establishing public- private partnerships for the operation of tourist ports and solid waste and land fill management. It was clarified that these proposals were already included in the project.

6. Participants also emphasized the need for adequate environmental protection, climate change resilience and long-term sustainability and suggested the project should ensure: (i) effective environmental and social safeguards are in place; (ii) the Department of the Environment is included in the project implementation units and is represented on the steering committee; (iii) including capacity building to address climate change; (iv) attention is given to climate change resilience in infrastructure development; (v) compliance with Sub-Decree No 36 on Solid Waste Management (1999) and Sub-Decree No 27 on the Control of Water Pollution (1999); (vi) awareness is raised and capacity built for solid waste management, including reduce, reuse, recycle practices and provide equipment to facilitate waste separation; (vii) the protection of sea grass and coral during pier constriction; (viii) minimize environmental pollution from boat traffic and pier operation; and (ix) protection of the marine

156 Appendix 2.1 Details of Workshop Helds environment and biodiversity on and around the Kep islands and other coastal areas. MOT and the consultants will consider these comments when finalizing the environmental safeguards documents and subproject designs.

7. In terms of impacts from involuntary resettlement and land acquisition, it was agreed that the consultants and MOT will continue to coordinate closely with the relevant national and local authorities and affected households and businesses to reach early agreement on approach and to prevent possible future difficulties with approval and implementation of the resettlement plan/negotiated settlements.

8. Regarding implementation arrangements and cost estimates, the workshop requested: (i) adequate involvement of MPWT and DPWT in design and execution of civil works to ensure quality and ownership to facilitate future O&M; (ii) the allocation of adequate contingency budget. It was explained that MPTW is represented on the national project steering committee and DPWT staff is seconded to the infrastructure teams in the provincial PIUs.

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B. Lao PDR

1. Agenda

PPTA 9090 REG: Preparing the Second Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project

INTERIM WORKSHOP - LAO PDR

Venue: Muong Thanh Luxury Vientiane, Bourichane Road, Phonsinouan Village, Sisattanak District, Ban Phon Kheng, Vientiane Thursday, 12 October 2017

AGENDA Time Presenter/Topic 08.00-08.30 Registration of participants 08.30-08.50 Welcome address by Ministry of Information, Culture and Tourism ADB Remarks-Steven Schipani, Senior Portfolio Management Specialist, Asian 08.50-09.00 Development Bank Strategic Priorities for Tourism Development in Lao PDR, Ministry of Information, 09:00-09:15 Culture and Tourism Project Overview: Keith Perry PPTA Consultant Team Leader. PM International - Background and rationale - Impact and outcome - Outputs Preliminary Design Process - Field visits and stakeholder consultations - Socio-economic surveys and tourism demand analysis Technical Approach for Infrastructure Subprojects - General approach /principles – lessons from past projects - Landfill, roads and ferry piers 09.15-09.50 - Special design features – models for climate-resilient beachfront development Safeguards Due Diligence - Overview of ADB and Government social and environment safeguards - Social and poverty analysis - Gender action plan - Resettlement - Environment - Indigenous people Economic and Financial Due Diligence - Economic and financial analyses approach - Economic and financial analysis preliminary results 9.50-10.10 Discussion led by Chair, Ministry of Information, Culture and Tourism 10.10-10.30 BREAK Project Outputs: Keith Perry, PM International Output 1: Nakasang Access Road and Port Rehabilitation Don Det/Don Khone Access Improvements Nam Ngum Reservoir Access Improvements 10.30-11.30 Kaeng Yui Waterfall Access Improvements Western Loop Rural Access Road and Bridge Improvements

Vang Vieng Urban Renewal Vang Vieng Solid Waste Management Improvements - Summary rationale, main components and beneficiaries - Cost estimates - Institutional arrangements for O&M 158 Appendix 2.1 Details of Workshop Helds

Output 2: Capacity to implement ASEAN Tourism Standards strengthened - Rationale, scope, and beneficiaries

- Activity summary - Cost estimates Output 3: Institutional capacity for tourism destination management and infrastructure O&M strengthened - Rationale, scope, and beneficiaries - Activity summary - Cost estimates Project Management Support - Activity summary - Cost estimates 11:30-12:00 Discussion led by Chair, Ministry of Information, Culture and Tourism 12.00-13.00 LUNCH Financing, Implementation Arrangements and Development Coordination Keith Perry. PPTA Team Leader, PM International Project Financing - Cost summary by output 13.00-13.30 - Proposed financing plan Implementation Arrangements and Development Coordination - Project supervision and implementation arrangements - Executing and implementing agency roles - Opportunities for private sector participation and public-private partnerships - Synergies with other ADB projects and development partners Project readiness, ADB and Ministry of Information, Culture and Tourism 13.30-14.00 - Key issues - Next steps, ADB and Ministry of Information, Culture and Tourism Open discussion 14.00-14.45 - Issues and priorities: government agencies and other key stakeholders.

Closing remarks by ADB 14.45-15.00 Closing remarks by the Ministry of Information, Culture and Tourism

15.00-16.00 Refreshments

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2. List of Workshop Participants

No. Name Position Organization

1 Mr. Thavipeth OULA Deputy Director TDD, MICT 2 Mr.Thanongsack Thongdala Technical Staff TDD, MICT 3 Mr. Bounsone Secretary TMD, MICT 4 Mr.Bounsert Xayaseng Technical Staff TMD, MICT 5 Mr. Paul ESHOR Technical Staff TMD, MICT 6 Mr. Thongsavanh SISOUVONG Technical Staff EFD, MOF 7 Mr. Parn NIVIXAY Technical Staff MPWT 8 Mr.Boualy Milattanapheng Deputy Director Vientiane Province DICT 9 Mr.Khammy Phouthavong Technical Staff Vientiane Province DICT 10 Mr.Soulichan Sombatduang Chief of Division Tourism Sector, DICT Mr.Phayvan Chanthasouk Chief of Division Tourism Development 11 Division 12 Ms. Hatsady Vice president Vang Vieng District UDAA 13 Mr. Bounmy Head of Office Vang Vieng District OICT Mr. Sysomphou Head of Office Vang Vieng District 14 OPWT Ms. Mala Chanthalam Deputy Director Champasak Province 15 DICT 16 Ms.Soudaphone Khomthavong Deputy Director Luang Prabang DICT Mr. Steven Schipani Senior Portfolio ADB 17 Management Specialist 18 Mr. Anuvanh Khamphilavong Staff ADB 19 Mr. Phoxay XAYYAVONG PO ADB 20 Ms. Soudalai SOUAYYAVONG ASOC.PO ADB 21 Mr. Keith Perry Team Leader PM Group 22 Mr. Rik PONNE Tourism planner PM Group 23 Ms Phongsith Davading Tourism Specialist PM Group 24 Ms. Nguyen Phuong Chi Regional Coordinator SCC 25 Mr. Scott Jackson Managing Director LCG Mr. Kanda Keosopha National Resettlement LCG 26 Specialist 27 Ms. Gingkham Staff LCG 28 Ms. Soudaphone Monesavanh Staff PM Group

ADB = Asian Development Bank; DICT = Department of Information, Culture and Tourism; EFD = External Finance Department; LCG = Laos Consulting Group; MICT = Ministry of Information, Culture and Tourism; MOF = Ministry of Finance; MPWT = Ministry of Public Works and Transport; OICT = Office of Information, Culture and Tourism; OPWT = Office of Public Works and Transport; SCC = Strategic Consulting Company; TDD = Tourism Development Department; TMD = Tourism Management Department; UDAA = Urban Development Administration Authority.

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4. Summary minutes of Interim Workshop in Lao PDR

1. The Interim Workshop in Lao PDR was held at Muong Thanh Hotel, Vientiane, on 12 October 2017. The workshop was chaired by Mr. Thavipheth Oula, Deputy Director General, Tourism Development Department, Ministry of Information, Culture and Tourism (MICT), and co-chaired by Mr. Steven Schipani, ADB Senior Portfolio Management Specialist. About 25 people attended, including representatives from national and provincial government offices and the Lao Association of Travel Agents. The main purpose of the workshop was to present to stakeholders the proposed project’s scope and preliminary design and obtain their feedback and comments.

2. The TA consultants presented the findings of the interim phase and an overview of activities undertaken to date. The workshop provided ample time for discussion. In terms of project scope, Champasak representatives proposed the project to consider including solid waste management improvements in the Nakasang area and on Don Det and Don Khone islands, including landfill developments and solid waste management planning and capacity building. Vientiane Province proposed adding Keo Oudom landfill access road improvement to the Nam Ngum Reservoir Access Improvements subproject. Further, the need to ensure that there is no overlap between the proposed project and other government projects and private investments was emphasized. In response to the requests from Champasak, the meeting noted that including a new landfill development at this point would be beyond the scope of the PPTA, a solid waste management capacity building program can be included. Regarding the Keo Oudom landfill access improvements, adding this 0.5km road can be considered if funds allow.

3. In response to the proposed infrastructure subprojects, participants suggested: (i) that the access road from road 13S to Nakasang have side drains on both sides to prevent flooding and premature road damage; (ii) to ensure that the proposed Vang Vieng infrastructure subprojects are in line with the approved Vang Vieng Urban Master Plan; (iii) that the access road from road 13N to Kaeng Yui waterfall be surfaced with concrete to ensure durability. Participants also emphasized the need to consider durability, sustainability and climate resilience in the design and implementation the subprojects and other project activities. More generally, it was suggested that the selection of infrastructure subprojects be done with inputs from destination management networks and the private sector. The meeting agreed that most of the suggestions are in fact already included in the project design. Regarding changing the Kaeng Yui access road from DBST to concrete, MICT and ADB supported this idea to ensure durability and minimize future O&M costs.

4. In terms of capacity building activities proposed for outputs 2 and 3 of the project, participants suggested: (i) increasing the financing for outputs 2 and 3 in Luang Prabang because the project does not include infrastructure subprojects there; (ii) consider increasing budget for output 2 ASEAN Standards Implementation to ensure adequate funds will be available for the proposed national roll-out; and (iii) that the proposed small grants program included in outputs 2 and 3 may not be appropriate given transaction costs and MICTs role. If it is included, the program must have clear eligibility criteria and transparent application, approval and monitoring procedures. Regarding the small grants program, MICT and the consultants will explore options, as well as alternatives for the delivery of SME support.

5. In terms of impacts from involuntary resettlement and land acquisition, Vientiane Province representatives were informed about the foreseen land acquisition impacts and the need to prepare the required counterpart funds to finance this.

6. Regarding implementation arrangements and cost estimates, MICT requested ADB to also finance the taxes and duties on civil works, as opposed to financing by the Government through exemption, which reportedly is no longer encouraged. ADB agreed to consider the proposal.

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7. The meeting also proposed that external audits of project accounts could be carried out by the State Audit Organization, instead of a private auditing firm. The meeting supported the use of existing PIU staff in Champasak and Luang Prabang provinces for the proposed project, to retain institutional memory and in-house experience.

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