Although Laos is essentially a rural country, the small towns are playing an increasingly important role in the country’s economy. These towns serve as centres for marketing and agricultural processing in their largely rural districts, as economic links between rural, national and international markets, and as places offering non-farm employment to the rural poor. Inadequate water supply and poor environmental conditions in these small towns deter socio-economic development and restrict the ability of these towns to serve as centres for support to the surrounding rural areas. In 2007 it was estimated that piped water supply coverage in the small towns was only 21% compared to combined coverage of 70% in the five largest towns.

There have been some achievements towards safe water supply and improved sanitation over the years. This is thanks to the national efforts focusing on tariff reform, capacity development of provincial water supply enterprises and strengthening of sector policy making, planning, management and regulation.

The Lao Water Supply Law was promulgated in 2010, however there is no existing mechanism as to how the law can be implemented. The National Water Supply Sector Strategy was approved in August 2013. In order to put the strategy into action, it is necessary for the government to have easily accessible data to enable sound decision making and consequently meet the government target of 80 percent of the total population with access to potable water. An expanded database will enable the Government to clearly establish targets and enable development partners and other stakeholders to provide strategic and coordinated support.

There is a need to mobilize new management and financing mechanisms to attain access to sustainably operated and maintained water supply services. Establishing a database of cost-effective design of water supply treatment plants of various capacities for smaller towns, ready for implementation, was the first concrete step of the GoAL WaSH Programme. It is envisaged that such a database will reduce project preparation and design costs substantially, paving the way for increased central and local government investments in water supply for small town communities.

In order to facilitate the continued expansion of water supply coverage, there is a need to expand the database to include all relevant information including strategies, regulations, laws, coverage data and operational and performance data. The database will facilitate the flow of information, thereby making data accessible to decision makers.

The on-going decentralization initiatives present increasing responsibilities to the provincial and district authorities. The water utilities need to ensure that they are functioning at the levels of optimal efficiency. Effective monitoring of Key Performance Indicators (KPI) and Performance Indicators (PI) will thus enable local management to initiate appropriate corrective and preventive measures. Training will be conducted for water utilities in six pilot provinces in partnership with the Water Supply Regulatory Office (WaSRO). WaSRO will be responsible for annual monitoring of the KPI and PI to ensure sustainability of this initiative.

The project will build upon the existing UN-Habitat’s Water for Asian Cities (WAC) Programme and the Mekong Region Water and Sanitation Initiative (MEK-WATSAN) in which on-the-ground pilot and demonstration water and sanitation projects focusing on pro-poor water and sanitation delivery are implemented.