Laos still needs more funding to develop its road network if it is to achieve the targets set in national development plans for 2011-2015 and 2011-2020.
Mr Math Sounmala.
This was the thrust of a report delivered by the Planning and Cooperation Department of the Ministry of Public Works and Transport at its national meeting yesterday. The meeting was attended by over 80 officials from Public Works and Transport offices in Vientiane and the provinces.
According to the report, funding required for national road construction from 2011 to 2015 is estimated to be about 68,679 billion kip. However, the amount expected to be made available in the next five years is about 28,918 billion kip, or just 42 percent of the sum required.
Funding available for the renovation of existing roads is 1,800 billion kip and about 66,800 billion kip will go towards upgrades and the construction of new roads.
Contributions are expected to come from the government's annual budget of about 1,600 billion kip, with the Road Maintenance Fund providing about 2,000 billion kip, the Nam Theun 2 hydropower plant contributing 200 billion kip, and a further 25,118 billion kip expected to come from donors.
Due to the funding constraints, future road building projects are expected to be undertaken on the Build-Operate-Transfer (BOT) model. This model is a form of project financing wherein a private entity receives a concession from the private or public sector to finance, design, construct, and operate a facility as stated in the concession contract.
The meeting also reviewed work undertaken in 2010-2011 and discussed the ministry's planning and cooperation work for 2012-2013. Also presented were reports on plans for road construction from 2011-2020, and an implementation plan for 2011-2015.
Department Director General Mr Math Sounmala said “As our funding needs are massive but sources of financing are limited, it is important to prioritise projects when making future plans.”
“The aim of this meeting is to discuss and agree on the ministry's planning and make plans to drive the development of the ministry, as well as national socio-economic development,” he added.
The meeting also reported on the ministry's achievements.
In 2010-2011, the ministry teamed up with foreign partners on 58 projects worth US$911,586. This amount included about US$413,455 in grants, about US$396,687 in loans, and combined loan and grant projects worth US$101,443.
The ministry's development partners in these projects were mainly China, Thailand, Japan, Republic of Korea, Asian Development Bank and the World Bank.
