Document of The World Bank FOR OFFICIAL USE ONLY Report No: 34507-VN PROJECT APPRAISAL DOCUMENT ON A PROPOSED CREDIT IN THE AMOUNT OF SDR 83.9 MILLION (US$124.7 MILLION EQUIVALENT) TO THE SOCIALIST REPUBLIC OF VIETNAM FOR A COASTAL CITIES ENVIRONMENTAL SANITATION PROJECT November 14, 2006 Urban Development Sector Unit East Asia and Pacific Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized
Transcript
Document of The World Bank
FOR OFFICIAL USE ONLY
Report No: 34507-VN
PROJECT APPRAISAL DOCUMENT
ON A
PROPOSED CREDIT
IN THE AMOUNT OF SDR 83.9 MILLION (US$124.7 MILLION EQUIVALENT)
TO THE
SOCIALIST REPUBLIC OF VIETNAM
FOR A
COASTAL CITIES ENVIRONMENTAL SANITATION PROJECT
November 14, 2006
Urban Development Sector Unit East Asia and Pacific Region
This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.
AAA Analytical and Advisory Activities CAS Country Assistance Strategy CEPT Chemically Enhanced Primary Treatment CMC Construction Management Consultant CSO Combined Sewer Overflow CSO Central Statistical Office DARD Department of Agriculture and Rural Development DCA Development Credit Agreement DoC Department of Construction DoE Department of Education DONRE Department of Natural Resources and Environment (in Provinces) DP Displaced People EMPF Ethnic Minority Policy Framework FM Financial Management FMR Financial Monitoring Report FRR Financial Rate of Return FS Feasibility Study GoV Government of Vietnam HCP Healthy City Partnership HH Households IA Implementing Agencies ICB International Competitive Bidding IDA International Development Association IEC Information, Education and Communication ISM Independent Safeguards Monitoring MDG Millennium Development Goals MoC Ministry of Construction MONRE Ministry of Natural Resources and Environment MTR Mid Term Review NCB National Competitive Bidding NGO Non Government Organization NPL Non Performing Loan ODA Overseas Development Assistance PAP Project Affected People PFS Pre Feasibility Study PIP Project Implementation Plan PMU Project Management Unit
POM Project Operations Manual PPC Provincial People’s Committee PPIAF Private Participation in Infrastructure Advisory Facility PMU Project Management Unit PPU Project Preparation Unit PSC Project Steering Committee PSP Private Sector Participation PWC Provincial Water Company RPA Regional Procurement Advisor SBD Standard Bid Document SDC Swiss Agency for Development and Cooperation SIL Specific Investment Loan SoE Statement of Expenditures SWM Solid Waste Management ToR Terms of Reference UAFW Unaccounted for Water URENCO Urban Environment Company VDG Vietnam Development Goals VDIC Vietnam Development Information Center VLSS Vietnam Living Standards Survey WHO World Health Organization WR Working Ratio WSC Water Supply Company (Provincial Water Company) WSDC Water Supply and Drainage Company WSS Water and Sanitation Sector WW Waste Water
Vice President: Mr James Adams (EAPVP) Country Director: Mr. Klaus Rohland, EACVF
Sector Director: Mr. Keshav Varma, EASUR Task Team Leader: Mr. William Kingdom, EASUR
Date: Novembere 14, 2006 Team Leader: William D. Kingdom Country Director: Klaus Rohland Sector Manager/Director: Keshav Varma
Sectors: Sanitation (90%); Sub-national government administration (10%) Themes: Access to urban services and housing (P);Municipal governance and institution building (S)
Project ID: P082295 Environmental screening category: Full Assessment
Lending Instrument: Specific Investment Loan Safeguard screening category: A
Project Financing Data [ ] Loan [X] Credit [ ] Grant [ ] Guarantee [ ] Other: For Loans/Credits/Others: Total Bank financing (US$m.): 124.7 Proposed terms: Standard IDA Terms
Financing Plan (US$m) Source Local Foreign Total
BORROWER/RECIPIENT 21.8 16.0 37.8 INTERNATIONAL DEVELOPMENT ASSOCIATION
72.1 52.6 124.7
GLOBAL ENVIRONMENT FACILITY 3.0 2.0 5.0 JAPAN: MINISTRY OF FINANCE - PHRD GRANTS
2.6 2.0 4.6
Total: 99.5 72.6 172.1 Borrower: SOCIALIST REPUBLIC OF VIETNAM Responsible Agency: Project Management Unit in Dong Hoi 59 Ly Thuong Kiet, Dong Hoi, Quang Binh Province Tel: (84) 52841215 Fax: (84) 52840734 Email: [email protected]
Project Management Unit in Quy Nhon 68B Nguyen Du, Quy Nhon city, Binh Dinh Province Tel: (84) 56822859 Fax: (84) 56817249 Email: [email protected]
Project Management Unit in Nha Trang 58 Yersin, Nha Trang City, Khanh Hoa Province Tel: (84) 58810858 Fax: (84) 58810740 Email: [email protected]
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Estimated disbursements (Bank FY/US$m) FY 2007 2008 2009 2010 2011 2012 2013 2014 Annual 0.00 1.00 9.00 22.00 26.00 26.00 24.00 16.70 Cumulative 0.00 1.00 10.00 32.00 58.00 84.00 108.00 124.70 Project implementation period: Start December 31, 2006 End: May 31, 2014 Expected effectiveness date: May 31, 2007 Expected closing date: November 30, 2014 Does the project depart from the CAS in content or other significant respects? Ref. PAD A.3
[]Yes [X] No
Does the project require any exceptions from Bank policies? Ref. PAD D.7 Have these been approved by Bank management? Is approval for any policy exception sought from the Board?
[ ]Yes [X] No [ ]Yes [ ] No [ ]Yes [ ] No
Does the project include any critical risks rated “substantial” or “high”? Ref. PAD C.5
[X]Yes [ ] No
Does the project meet the Regional criteria for readiness for implementation? Ref. PAD D.7
[X]Yes [ ] No
Project development objective Ref. PAD B.2, Technical Annex 3 The objective is to improve the environmental sanitation in the project cities in a sustainable manner and thereby enhancing the quality of life for city residents. Project description [one-sentence summary of each component] Ref. PAD B.3.a, Technical Annex 4 Component 1: Investment in flood control, drainage and wastewater collection Component 2: Investment in wastewater treatment plant Component 3: Investment in sanitary landfills and provision of solid waste management equipment Component 4: Investment in infrastructure for resettlement sites in two project cities Component 5: Establishment of revolving fund to provide financing for household sanitation improvements, and to build water and sanitation facilities in schools Component 6: Technical assistance for project implementation and capacity building of service providers and other stakeholders Which safeguard policies are triggered, if any? Ref. PAD D.6, Technical Annex 10 Environmental Assessment (OP/OB/GP 4.01) Involuntary Resettlement (OP/OB 4.12) Cultural Resources (OP 4.11) Significant, non-standard conditions, if any, for: Ref. PAD C.7 Board presentation: None Loan/credit conditions and covenants Conditions for Effectiveness: 1. Execution of PHRD capacity building grant agreement 2. Key PMU staff recruited with qualifications acceptable to IDA; 3. Financial management (FM) and procurement systems in place and key PMU staff trained in
procurement, FM and project management; 4. People’s Council resolution approving the cost recovery profile agreed at negotiations; and 5. Adoption of the Project Implementation Plan by the PPC Conditions of Disbursement: 1. Adoption of a Healthy City Partnership (HCP) operations manual prior to disbursement of HCP
grants;
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2. Adoption of a Sanitation Fund Manual and execution of implementation arrangement between Province and Women’s Union prior to disbursement of loans under household sanitation revolving fund;
Implementation Covenants: 1. Adoption of a sewer connection policy, and the formal transfer of wastewater and septage functions,
staff, assets and budget to the water company; 2. Execution of service contracts between the Dong Hoi City Hospital and relevant service providers for
disposal of hospital waste and operation of the hospital wastewater treatment plant; 3. Engagement of a Construction Management Consultant prior to the award of any construction
contract; 4. Implementation of actions, as necessary, to achieve cost recovery levels for service providers agreed
at negotiations; 5. Bidding, by mid term review through a competitive process, solid waste management operations in
three wards and septage cleaning in one ward.
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A. STRATEGIC CONTEXT AND RATIONALE 1. Country and sector issues 1. Sanitation in Vietnam is predominantly a private good with households investing in septic tanks or latrines, depending on location. Access to hygienic latrines has been estimated at 68% in urban areas in 2003, but service efficacy is low. There are a limited number of wastewater treatment plants in the country, all in the major cities. In addition, solid waste is disposed to dumps, but of 91 landfills only 17 are sanitary. Meanwhile urban solid waste collection rates vary considerably with an average 70% but amongst the urban poor the levels of collection are only 10-20%. As a result, watercourses, especially in the big cities, are severely polluted by both liquid and solid wastes. 2. This situation will be exacerbated by urban growth. The proportion of people living in urban areas in Vietnam is one of the lowest in East Asia, comprising around 23% of the total population, or 19 million people. This is anticipated to increase to 33% by 2010. 3. The country’s urban sewerage policy is presented in Decision #35/1999/QD-TTG. The policy is to: a) rehabilitate existing networks and facilities, expand coverage and introduce wastewater treatment as resources permit, with priority to major cities and tourist centers; b) promote market oriented approaches to service provision; c) develop a better awareness of the impact of sanitation on public health, environmental sustainability and economic development; and, d) gradually replace subsidies with user charges. 4. Solid waste management (SWM) policy is set by a) Management of Solid Waste in Vietnamese Cities and Industrial Parks - Strategy to 2020 (1999) and b) National Strategy for Environmental Protection – Strategy to 2020 (2003). Together the documents focus on: i) legal reform ii) increased awareness and training iii)increased privatization and cost recovery iv) use of appropriate and modern technologies v) promotion of economic approaches to environmental protection and vi) public and civil society involvement. 5. There are significant investment needs for both sectors to cover the rehabilitation of existing systems and the expansion of new systems. The Government of Vietnam (GOV) has estimated these at $3.8 billion for urban sanitation and $700 million for urban SWM over the period 2000 – 2010. 6. Combined investment in urban water supply and sanitation has totaled $1billion over the last decade, mostly for water supplies, whilst $200million has been invested over the last four years in SWM. There is a large shortfall in investment funding in both sectors. 7. The Urban Environmental Companies (URENCOs), normally responsible for drainage, sewerage, solid waste management and other urban activities, are institutionally and financially relatively weak, especially compared with water supply companies. Wastewater fees, typically between VND 250-500/m3, and rising, are charged in cities where sanitation facilities are being developed. SWM fees are typically between 4,600 to 6,600 VND per HH per month. 8. This project will address many of the above issues and support articulated government policies. It will invest in three coastal cities which are the next priorities for government being relatively large and, importantly, growing tourist destinations.
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2. Rationale for Bank involvement 9. The urban sanitation sector remains in its infancy. The Bank can work with the Borrower to bring regional and international best practice into the project design and thus further develop/consolidate the urban environmental policy agenda technically (sewerage, waste water treatment and solid waste management), financially (cost recovering charges) and institutionally (efficient and effective service providers) 10. This project builds on the relationship and experiences gained in Quang Ninh, Haiphong, Da Nang and Ho Chi Minh City. Taken as a package this experience will allow the Government to scale up using approaches based on a “tried and tested” model. 11. IDA has also mobilized resources to further advance the sanitation agenda in Vietnam. The Global Environment Fund (GEF) is supporting the demonstration of a new, and appropriate, treatment technology in Quy Nhon, whilst a PHRD co-financing grant will build the capacity of service providers and raise public awareness of the project. 3. Higher level objectives to which the project contributes 12. The last CAS, which links to the GoV’s Comprehensive Poverty Reduction and Growth Strategy (CPRGS), was completed in September 2002. It lists three key objectives:
(a) High growth through a transition to a market economy; (b) An equitable, socially inclusive, and sustainable pattern of growth; and (c) Modern public administration, legal and governance systems.
13. The CAS describes the Bank’s support for each objective and the project supports the following parts of the CAS:
• Enhancing environmental sustainability (Sub-theme 2.6) through improved sewerage, drainage and solid waste services
• Public administration reform (Sub-theme 3.3) through improved institutional arrangements and increased financial sustainability of service providers
• Reducing deficiencies in basic urban services (Key sectoral issue) through provision of access to sanitation services
14. Finally, the CAS Progress Report considered by the Board on February 19, 2004 identified the need for increased investment in infrastructure to help attain the twin objectives of poverty alleviation and growth. B. PROJECT DESCRIPTION 1. Lending instrument
15. The lending instrument will be a Specific Investment Loan (SIL). 2. Project development objective and key indicators 16. The objective is to improve the environmental sanitation in the project cities in a sustainable manner and thereby enhancing the quality of life for city residents. 17. The following indicators will measure progress towards achievement of the objective:
• Number of people benefiting from reduced incidence of flooding;
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• Number of people whose solid waste will be regularly collected and disposed to sanitary landfills;
• Number of people gaining access to improved sanitation; • Number of poor people who access and repay loans to improve household sanitation
facilities; and
• Proportion of service providers’ costs recovered from user fees. 3. Project components
Project Location 18. The project will be carried out in three cities along the coast of central Vietnam.
• Nha Trang is the project’s southernmost city and is the capital of Khanh Hoa Province, with a total population of 350,000 in 2002.
• Quy Nhon is located in the south-central region of Vietnam and is the capital city of Binh Dinh Province with a total population of 252,000 in 2003.
• Dong Hoi is the northernmost city of the project and is the capital of Quang Binh Province with a total population of 98,000 in 2003.
Component 1 - Flood control, drainage and wastewater collection ($79 million) 19. The project will improve the collection of sewage by building new sewers, interceptors, rehabilitating existing sewers, and transporting the wastes to new treatment plants. Drainage will be provided by rehabilitating existing drains, constructing new drains where regular flooding occurs and enhancing the capacity of flood retention ponds. 20. Existing combined sewer system will be utilized to the greatest extent possible in the central urban core areas with high population densities. Interceptor sewers will be constructed to pick up flows that currently discharge at a number of locations along the sea front or into rivers. In newly developing areas separate or combined systems will be constructed, depending on assessments of cost effectiveness. Component 2 - Wastewater treatment plant ($40 million) 21. New wastewater treatment plant will be built during Phase 2 of the project to meet Vietnamese national effluent standards. In Nha Trang two plants will be constructed, one to serve the urban core and a second will serve the southern residential area. In Quy Nhon two wastewater plants will serve the old city area and a third will serve the south-western area some 15 km form the city core. In Dong Hoi a single new treatment plant serving the city will be constructed and the existing plant at the city hospital will be rehabilitated. Component 3 - Solid waste management ($15 million) 22. The collection of solid wastes will be improved and they will be transported to new or existing sanitary landfills for final disposal. In Nha Trang a new sanitary landfill will be constructed at Luong Hoa and the existing Ru Ri dump will be safely closed. In Quy Nhon the existing landfill at Long My will be rehabilitated and expanded. In Dong Hoi a sanitary landfill is under development with bi lateral funding and the project will provide additional equipment or functionality as determined during implementation.
23. Solid waste management (SWM) collection equipment will be financed for all cities and transfer stations/collection points are planned for Nha Trang and Quy Nhon. The amount and phasing of the SWM equipment will follow demand over the project life, and will take account of possible PPP activities.
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In Dong Hoi the facilities for safe disposal of medical waste will be constructed. These will be operated by the Urban Works Company (UWC) under contract with the hospital.
Component 4 – Resettlement ($12 million) 24. Construction of services (roads and utilities) to new housing plots for relocation of project affected people in Quy Nhon and Nha Trang. Component 5 - Household Revolving Fund and School Sanitation Program ($2 million) 25. Revolving funds will be established in each city to provide small loans for construction of household sanitation facilities. The funds will be managed by the Women’s Union according to the procedures set out in the household revolving fund manual. Eligibility criteria and loan terms and conditions are designed to ensure that low income households are able to access and to pay back the loans. 26. Water supply and sanitation facilities will be built at city schools in response to demand from those schools. Demand assessment and proposed investment for different types of schools will follow the design standards set by the Ministry of Education (MoE). Component 6 - Capacity Building and Project Implementation ($24 million) 27. Support to Project Management Units (PMU) in project implementation including a) overall project management support b) preparation of Phase 2 feasibility studies, detailed engineering designs and bid documents c) construction management supervision for Phases 1 and 2 d) independent safeguards monitoring and e) financial auditing. Equipment to support the PMUs will also be financed. 28. Capacity building for the service providers and city departments including a) institutional study to establish long term structure and staffing for service providers b) purchase, installation and commissioning of financial management, management information, and billing/collection software for the service providers, and training in its use c) joint development, with other city departments, of procedures and plans to support operation and management of new or rehabilitated project facilities d) technical and managerial training to the service providers, including operation and maintenance of the facilities and in financial planning e) workshops and study tours and f) miscellaneous other capacity building activities. 29. Capacity building for design and implementation of a Healthy City Partnership (HCP) including a) development of the framework for design and implementation of the HCP b) implementation of the HCP including training and public awareness, small investments in goods and works, and small grants and c) preparation and delivery of public awareness campaigns to support sanitation behavior change, and explain benefits from the project and its costs. 4. Lessons learned and reflected in the project design 30. The project draws on lessons learnt both nationally and internationally. These include: 31. Enhancing technical and managerial capacity of service providers: The service providers will significantly increase the scope and extent of their activities as a result of project investments. Efficient and effective service providers are essential for long term sustainability. The project therefore includes extensive capacity building to transform the service providers to meet these new demands. 32. Financial sustainability is strongly linked to user fees: Service providers need reliable sources of revenue to pay for operations and maintenance costs, and replace short lived assets. The most reliable source of such revenue is user fees. The project will gradually introduce
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affordable user fees over the project life to achieve the required levels of cost recovery. This approach was successfully applied in the Three Cities Sanitation Project. 33. Physical investments only deliver part of the benefits: The benefits from sanitation infrastructure are significantly increased when beneficiaries are exposed to IEC on household sanitation practices. Such IEC also generates demand for household sanitation facilities. The project includes activities for improving sanitation behavior (component 6) and facilitating construction of household facilities (component 5). 34. Laying sewer networks doesn’t guarantee connections to households: House owners have often invested in septic tanks and may not want to connect to the new system. The project addresses this issues through i) public awareness campaigns about system benefits; ii) house connections financed under the project; and iii) wastewater fees applied to all households with water connections – thus reducing disincentives to connect to the system once available. 35. Project management capacity at the sub national level is weak: Capacity building of the PMUs is included as part of the PHRD funded preparation activities, and will be further expanded during implementation. Practical learning is reinforced by regular meetings of the PMUs, and from visits to the Three Cities Sanitation Project PMUs. 36. Competition can be introduced in municipal services: Opportunities will be introduced for the local private sector to compete for collection of solid waste and septage. 37. Septic tank cleaning provides tangible evidence of project benefits: Routine septic cleaning will be provided during project implementation, paid from the user fees. 5. Alternatives considered and reasons for rejection 38. Wastewater services are often seen as part of public works departments, alongside roads or lighting. This institutional arrangement, with limited clarity on resource utilization and financial sustainability, was rejected in favor of combining the wastewater services with the operations of the water companies. The combined water/wastewater model will lead to improved technical and financial management and enhance the quality and sustainability of wastewater services. Consideration was given to establishing separate SWM companies but it was concluded these would not be viable. 39. Centralized project management was considered as a route to speed up project preparation and implementation. This was rejected because it lessened ownership, and would not build capacity, at the municipal level. 40. The immediate introduction of higher tariffs would improve the financial health of the service providers. However consumer resistance was likely and a phased approach has been adopted which will meet the needs of both the service providers and the customers. C. IMPLEMENTATION 1. Partnership arrangements 41. A PHRD co financing grant has been secured to build the capacity of the service providers, city agencies and community organizations associated with the project.
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42. GEF financing is being sought to construct a wastewater plant in Quy Nhon to demonstrate the applicability of the chemically enhanced primary treatment (CEPT) technology in Vietnam. A grant has been secured from GEF to prepare the project and investment grant financing is likely. 2. Institutional and implementation arrangements 43. Implementation Agencies: At the national level the Ministry of Planning and Investment (MPI) which provides overall guidance on investment policy will supervise and monitor progress. For sector-specific and technical issues, MPI will consult the Ministry of Construction (MoC), which is responsible for urban sector sanitation policy and technical standards, and with Ministry of Natural Resources and Environment (MONRE) which is responsible for environmental standards and policy. 44. At the provincial level the project will be implemented by a Project Management Unit (PMU). The PMUs report to the Province People’s Committee (PPC), and is supported by consultants, by provincial and city level departments, and by a Project Steering Committee (PSC) which will include representatives from all relevant departments. The PMU directors, or their deputies, are experienced staff from the service providers. 45. During project implemention, the PMU will coordinate and work directly with the related provincial and city departments. However, if there are matters which cannot be resolved then the PMU will seek direction from the PSC. 46. The Women’s Union (WU) will implement the sanitation fund on behalf of the PMUs, based on its successful track record in administering saving and credit schemes of this nature in Vietnam. 47. Financing and Fund Flow: Funds, in Vietnamese Dong, will be on-lent or on-granted to the Provinces and service providers from the MoF as follows:
Component On-lending arrangements 1. Flood control, drainage and wastewater collection Grant to Province 2. Wastewater treatment plant Grant to Province 3. Solid waste management – landfill Grant to Province 3. Solid waste management – collection equipment Loan to URENCO/UWC at 6.6% interest
over 20 years, with 5 years grace period 4. Resettlement Loan to Province at 0% interest over 20
years, with 3 years grace period 5. Household and Public Sanitation program Grant to Province 6. Institutional strengthening and capacity building Grant to Province
48. On-lending of the sanitation fund by the WU will be on terms consistent with micro-finance operations in Vietnam: interest rates of 0.5% per month, and terms of two years. 49. A total of three special accounts will be established - one for each PMU. 50. To monitor the financial performance of the service providers, and to ensure project assets enter into the balance sheets of the service providers, a separate audit will be conducted for each service provider. 51. Financial reporting and auditing: In each city, the project accounts will be kept using accounting principles and practices acceptable to IDA. Each PMU will prepare their own project
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accounts and have them audited annually in accordance with international standards on auditing and in compliance with the independent auditing regulations of Vietnam. The auditor’s reports will be made available to IDA within six months of the close of the fiscal year. For each PMU, the audit will provide a single opinion covering project account, SOEs and Special Account. A management letter addressing internal control weaknesses of implementing agencies will also be provided by the auditor together with the audit report. 52. Phasing of implementation: The project will be implemented over a period of seven years in two phases. Phase 1 will focus primarily on drainage and combined sewer systems in the old urban centers, provide serviced resettlement sites in Nha Trang and Quy Nhon, and the new landfill in Nha Trang. Phase 2 will continue with drainage and sewerage investments, including all the wastewater treatment plant, and the bulk of the solid waste management investments, including the expanded landfill at Quy Nhon. 3. Monitoring and evaluation of outcomes/results 53. Each PMU will compile data and monitor the performance of its sub-project. The results indicators are straightforward and no capacity constraints are foreseen. 54. A comprehensive assessment of performance will be made at the mid-term review of the project. Based on this assessment, the IDA and the borrowers will, if necessary, adjust the investment allocation between the various components. 4. Sustainability 55. Borrower’s Commitment. At the national level the Government has demonstrated commitment to sector sustainability with its policy of cost recovering tariffs. Participating cities have demonstrated strong commitment by financing their own Pre-Feasibility Studies, establishing PPU with experienced staff, and borrowing project funds to purchase SWM equipment. 56. The borrowers understand that extensive capacity building of the service providers, the PMU, and the communities is essential for long term sustainability. The borrower has committed, through component 6, to achieve this. 57. On the critical area of tariff reform each city has agreed to phased increases so that operating costs and depreciation of short lived assets is fully funded from user fees by the end of the project. This is included as a project covenant. 58. Beneficiary’ support. Improved drainage, wastewater and solid waste management services will improve the urban environment in each city and the quality of life of residents. This has been confirmed by household surveys. However the provision of such services is relatively new in Vietnam and further support will be built through public awareness campaigns during project implementation. 59. Managing the implementation process. In each city the PMU will be a continuation of the PPU that prepared the project. Some capacity has therefore already been built in the PPU/PMU and this will be further enhanced as part of component 6.
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5. Critical risks and possible controversial aspects Risk Risk
Rating Risk Mitigation Measure
From Outputs to Objective Improved sanitation behavior by beneficiaries
S IEC program to promote changed behaviors
Customers unwilling to pay for services
S Public awareness campaign. Collection of waste-water fees through the water bill.
Province authorities unwilling to charge for services
S Extensive discussion with authorities during preparation and covenant on cost recovery levels.
Inadequate operation of the new facilities
M Training of operators included in the TA component
From Components to Outputs
Limited willingness to connect to the new systems
M Public education, access to credit, universal charging to all customers with water connection.
Collusive and corrupt practices during project implementation
M Low prior review thresholds, enhanced PMU procurement and FM training by IDA prior to effectiveness and hiring of consultants to assist in the procurement process, enforcing procurement complaint-handling and disclosure requirements, enhanced supervision by IDA during early implementation, and the preparation and implementation of a fairness and transparency plan.
Capacity of the PMUs in project management
S Extensive training of PMU as part of TA component
Overall Risk Rating S Risk Rating – H (High), S (Substantial), M (Modest), N (Negligible or Low) 6 Loan/credit conditions and covenants Conditions for Effectiveness: 1. Execution of PHRD capacity building grant agreement 2. Key PMU staff recruited with qualifications acceptable to IDA; 3. Financial management (FM) and procurement systems in place and key PMU staff trained in
procurement, FM and project management; 4. People’s Council resolution approving the cost recovery profile agreed at negotiations; and 5. Adoption of the Project Implementation Plan by the PPC Conditions of Disbursement: 1. Adoption of a Healthy City Partnership (HCP) operations manual prior to disbursement of
HCP grants; 2. Adoption of a Sanitation Fund Manual and execution of implementation arrangement
between Province and Women’s Union prior to disbursement of loans under household sanitation revolving fund;
Implementation Covenants: 1. Adoption of a sewer connection policy, and the formal transfer of wastewater and septage
functions, staff, assets and budget to the water company;
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2. Execution of service contracts between the Dong Hoi City Hospital and relevant service providers for disposal of hospital waste and operation of the hospital wastewater treatment plant;
3. Engagement of a Construction Management Consultant prior to the award of any construction contract;
4. Implementation of actions, as necessary, to achieve cost recovery levels for service providers agreed at negotiations;
5. Bidding, by mid term review through a competitive process, solid waste management operations in three wards and septage cleaning in one ward.
D. APPRAISAL SUMMARY 1. Economic and financial analyses Financial Analysis (See Annex 9): Financing Arrangement and Fiscal Impacts: 60. The total counterpart fund requirement of the project is estimated at USD 38 million representing 22% of the total project cost. The counterpart financing will be provided by the Provincial budget with the exception of Dong Hoi which will receive support from Central Government. Assessment of the provincial budgets showed that each city has the necessary counterpart funds for their respective sub-projects. Cost Recovery for Environmental Sanitation Services 61. The project, in line with government policy, will recover from user charges the O&M costs of the wastewater, drainage and solid waste facilities, depreciation of short lived assets, such as vehicles and equipment, and any loan interest charges. This allows for affordable tariffs and gives sufficient revenue to the service provider to operate the system and finance replacement of short lived assets. This level of cost recovery by the service providers will be achieved by the end of project implementation by gradually increasing tariffs each year coupled with expansions in service coverage and improvements in tariff collection efficiency. 62. The cost recovery schedules for the service providers have been agreed with local governments and their implementation is a project covenant. Financial Internal Rates of Return (FIRR): 63. The FIRR for each sub project vary between 18.6% and 28.2% (wastewater) and between 25.9% and 32.6% (solid waste) and are higher than the weighted average cost of capital of between 10-12%. 64. Affordability: The assessment of affordability is based on the combined costs of water supply, wastewater and solid waste charges. The monthly water and sanitation cost to households, including for low income families, remain below the affordability level of 5% of household income. 65. Willingness to pay monthly sanitation charges: Most households are willing to pay for wastewater and solid waste services. Customers will, however, need to better understand the reason for, and basis of, payments for wastewater services. A public awareness activity is therefore included in Component 6 to improve beneficiaries’ understanding about the benefits of improved sanitation and the costs of service provision. 66. Willingness and affordability to pay for a connection to the new system: Nearly all (98%) households expressed their willingness to connect their existing gray water outlets to the new
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wastewater system. Results from the social assessment survey showed that householders were more reluctant to connect their existing black water systems (primarily septic tanks) to the new networks with only about 43 % of people in Nha Trang, 34 % in Quy Nhon and 30 % in Dong Hoi expressing an interest. The project design therefore minimizes the obstacles to making black water connections by a) having no connection fee b) making the house connections under the project. 67. Collection of user fees: Wastewater fees will be collected by the new water/ wastewater companies formed under the project. The local governments have allowed the new companies to retain the wastewater revenues for operation and maintenance of the combined drainage/wastewater systems. SWM fees will continue to be collected by the URENCOs in Nha Trang and Quy Nhon and the Urban Works Company (UWC) in Dong Hoi. Economic Analysis 68. The benefits of the project include: (a) reduced flood damage, (b) health benefits, (c) savings in installation and desludging of septic tanks, (d) savings in drainage maintenance (e) increased tourism due to an improved environment for tourists and potential investors, (f) improved financial positions of the service providers as tariffs are increased resulting in better management of service provision and the elimination of subsidies from the provincial governments, (g) enhancement of the development potential of the cities especially the areas along canals and previously flooded areas, (h) creation of new business opportunities such as restaurants, retail stores, and other entertainment activities, and (i) land value appreciation in the area, the extent of which will largely depend on the new economic activities created by the proposed investments. 69. It is not feasible to quantify all the above benefits, or to evaluate accurately those that are quantifiable. In this analysis, only the first five benefits were assessed. The economic rate of return of the project was estimated at 18.5 percent, which is higher than the assumed 12 percent discount rate, and highlights the robustness of the project in terms of its contribution to economic growth in the participating cities.
2. Technical 70. Designs for the project follow current Vietnamese standards for the urban sector. 71. In the older urban areas lack of construction space requires the use, or continued use, of combined systems whilst in newer areas there is the option to build separate systems. The costs and benefits of combined versus separate systems will be presented to local authorities during the Phase 2 design activities to allow an informed decision to be made. 72. Interceptor sewers will capture flows from the combined sewers. It is not economic to design these interceptors to carry the full drainage and sewerage flows. Instead they will be designed according to carry peak flows according to government standards, with excess flows spilled to the rivers or coasts, at combined sewer overflows (CSO). At times of high rainfall the first flush of wastewaters is carried forward in the interceptor, and the follow on flows, which are primarily rainwater, are spilt. 73. Wastewater treatment technologies will be selected in Phase 2 based on costs and also on their robustness and ease of operation. Currently oxidation ditches are the preferred method. The planned GEF funded project in Quy Nhon is piloting the use of CEPT as a cost effective alternative. Septage will be disposed to wastewater plant or to landfill as assessed during Phase 2.
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74. The cities are low lying and high tides, coupled with major storms, can adversely impact the capacity of pipes and channels to discharge flood waters into the rivers and sea. The project has emphasized the need to maintain the buffering capacity of existing lakes and rivers through investments and capacity building activities. 75. Solid waste management equipment will be procured in both phases to match demands from the service providers. The design of the sanitary landfill to be constructed in Nha Trang in Phase 1 follows standard international practice. 76. Institutionally the provision of wastewater services (including drainage, sewerage, septage collection and disposal) will be the responsibility of an expanded water service company. This joint water and wastewater company approach will provide economies of scale and scope. The accounts and assets of the wastewater services will be separated from those of water services to ensure transparency of operation. 3. Fiduciary Procurement capacity 77. A procurement capacity assessment found that the project implementing agencies do not currently have sufficient capacity to carry out the Project procurement. As a result, the procurement risk of the Project is rated as high and review thresholds have been set accordingly. To build up their procurement capacity specific actions, including enhanced training and supervision by IDA, have been agreed with the Borrower and are summarized in Annex 8.
Procurement Arrangements
78. Procurement for the proposed project would be carried out in accordance with the World Bank’s “Guidelines: Procurement Under IBRD Loans and IDA Credits” dated May 2004; and “Guidelines: Selection and Employment of Consultants by World Bank Borrowers” dated May 2004, and the provisions stipulated in the Credit Agreement. The project procurement arrangements and Phase 1 Procurement Plan are held in Annex 8. Overall 95% of contracts, by value, will be subject to prior review. Financial management 79. A financial management assessment identified the following weaknesses: (i) lack of financial staff with adequate skills and experience; (ii) lack of suitable accounting systems; and (iii) lack of detailed FM manual. The Financial Management Action Plan agreed with the Borrower (see Annex 7) will address these weaknesses, supplemented by enhanced supervision by IDA, particularly early in project implementation. 80. Project accounts in each Province, including the household revolving fund managed by the Women’s Union, will be audited annually according to international standards and in compliance with the country’s independent auditing regulations. The auditors’ reports will be available to IDA within six months of the end of the fiscal year. To date there is no audit report overdue from the implementing agencies to be involved in the project. 4. Social
81. The project will bring substantial social benefits to the residents of the participating cities. An estimated 700,000 residents of the three cities will benefit from improved environmental services (wastewater collection and treatment, solid waste management, and protection from flooding). Of these beneficiaries, the government classifies about 1.8% (Nha Trang), 4.3% (Quy Nhon) and 7.6% (Dong Hoi) as poor. The socio-economic survey shows no
15
ethnic minority groups living in the project areas. Adverse social impacts involve permanent and temporary land acquisition for the construction of WWTPs, landfills, drains and pipelines. 82. The Borrower prepared RAPs for Phase 1 activities that are acceptable to IDA. The phase I investments would affect 161 households, of which 77 would be relocated and 78 would be severely affected by losing income sources. Land acquisition for the whole project would affect 912 households, of which 356 households would be relocated and 172 households would be severely affected by the loss of income sources. 83. A Resettlement Policy Framework (RPF) acceptable to IDA has been prepared by the Borrower. This has been approved by the Prime Minister and adopted by the participating Provinces. The RAPs for Phase 2 investments will be prepared in accordance with the RPF. 84. Stakeholder participation and NGO collaboration. Household surveys confirmed that the project responds to beneficiary demand. The two most serious problems identified by residents in the three cities were flooding and the lack of a proper drainage and sewer system. Improving sanitation outcomes requires continued interaction with a range of stakeholders during implementation. A PHRD grant will support capacity building of mass organizations to improve stakeholder understanding of the issues. Implementation of Component 5 will require working with the Women’s Union (for the sanitation fund) and the Department of Education (for school sanitation). The sanitation fund will be implemented on behalf of the PMUs by the city/provincial Women’s Unions (WU), which have significant experience working with communities in micro-finance. Implementing the Healthy City Partnership (component 6) will require collaboration with other NGOs, the public and private sectors. 85. Monitoring social impacts. The PMUs, supported by independent monitoring consultants, will be responsible for monitoring social outcomes and managing the RAPs. 5. Environment 86. The Borrower prepared Environmental Assessments (EAs) and Environmental Management Plans (EMPs) acceptable to IDA for the Phase 1 investments in each city. Approximately 70% of the project investments are planned for Phase 2 activities. Environmental Guidelines have been developed to be used in preparation of Phase 2 sub-projects, and will be used by the Borrower to ensure compliance with the Bank’s safeguards requirements. These guidelines have been adopted by the participating Provinces. 87. The project is expected to have significant positive benefits for the environment, public health and the tourism-based economy due to reduced frequency and level of flooding in the cities, improved collection and handling of liquid and solid wastes, and improvements in sanitation service and capacity. 88. Wastewater treatment (WWT) is new for these cities, but appropriate WWT technology has been chosen to meet the national environmental standards at acceptable costs. In order to better understand the issues associated with making connections to the new sewers, a limited house connection program will be implemented prior to completion of wastewater treatment plants. This will result in the temporary discharge of some household liquid wastes (from gray water and septic tank outlets) into rivers and lakes, until the wastewater treatment plant are built. These house connections will only be made where studies have shown that the impact of the temporary discharges is within national standards. Specific mitigation measures will be adopted to reduce pollution discharge at each of the outlets, and water quality of the receiving waters will be carefully monitored.
16
89. Cultural Property (OP4.11). Cultural property exists in the project cities but identified impacts are limited. A new temple in Quy Nhon will be relocated as decided by the city’s People Committee. The Citadel in Dong Hoi is 150 meters away from the drainage works and thus careful construction methods are required. Proper construction supervision will be needed during project implementation to check for possible buried artifacts. Safeguard screening will be made during implementation to determine whether this policy is triggered in Phase 2 subprojects. 6. Safeguard policies 90. The project environmental screening category is “A” (full assessment); and the policies triggered for Phase 1 investments are listed below.
Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP/GP 4.01) [ X] [ ] Natural Habitats (OP/BP 4.04) [ ] [X ] Pest Management (OP 4.09) [ ] [ X] Cultural Resources (OP 4.11) [X] [] Involuntary Resettlement (OP/BP 4.12) [ X] [] Indigenous Peoples (OD 4.20, being revised as OP 4.10) [ ] [X] Forests (OP/BP 4.36) [ ] [X] Safety of Dams (OP/BP 4.37) [ ] [X] Projects in Disputed Areas (OP/BP/GP 7.60) [ ] [X] Projects on International Waterways (OP/BP/GP 7.50) [ ] [X]
91. Public consultation. The Borrower held initial consultations with local government agencies and communities about route alternatives, landfill sites, transfer stations, public toilets, WWTP locations, and potential project impacts. The second public consultations with DPs and local NGO representatives discussed the main findings of the EAs. Additional public consultation with the DPs living around the drainage outlets was conducted on the possible impacts of temporary discharge of liquid wastes. There were no objections to the project, and all environmental and social concerns raised during this process were addressed in the EAs and RAPs. 92. Public disclosure (BP 17.50). The Bank’s disclosure requirements have been followed. The documents were disclosed in Washington DC, and the VDIC in Hanoi. Locally the documents were disclosed in Vietnamese in the city Peoples’ Committees, the DONREs, the Project Preparation Units, and the affected wards where they were accessible to local NGOs and DPs. 93. Due Diligence Reviews. An environmental due diligence review was undertaken by the Borrower for investments by the Swiss Agency for Development and Cooperation at the Ly Trach landfill in Dong Hoi, and the associated closure of Loc Ninh dump site. Ly Trach will receive waste delivered by trucks financed under the IDA project. The reviews showed that there was either no risk to the Bank arising from the linked activities, or the risks can be mitigated by designing appropriate activities under Phase 2 of the IDA project. Due diligence reviews will be undertaken during project implementation to confirm that any DPs from linked activities have been able to restore their living and income sources. 7. Policy Exceptions and Readiness 94. Policy exceptions. The project has not required any exceptions from Bank policies and none are being sought from the Board. Readiness criteria:
17
1. Fiduciary (financial management and procurement) arrangements in place – yes; 2. Project staff and consultants mobilized – yes; 3. Counterpart funds budgeted – yes; 4. Tender documents for first year procurement have been prepared - yes; 5. Disclosure requirements met – yes; 6. Results assessment arrangements completed: monitoring and evaluation (M&E)
institutional obligations spelled out, M&E capacity in place; indicators specified; baseline data collected – yes;
7. Co-financing agreements signed – to be signed on equal date with DCA; and 8. Land acquisition plans ready – yes.
18
Annex 1: Country and Sector or Program Background
VIETNAM: Coastal Cities Environmental Sanitation Project Country Assistance Strategy (CAS) The last full CAS, which was discussed by the Board in September 2002, supports the country’s Comprehensive Poverty Reduction and Growth Strategy (CPRGS). CPRGS provide the basis for the Government’s 10-year Socio-Economic Development Strategy (2001-2010). The CPRGS has three overall objectives:
• High growth through a transition to a market economy; • An equitable, socially inclusive and sustainable pattern of growth; and • Adoption of modern public administration, legal and governance systems.
The CAS describes the Bank’s support for each objective and the project supports the following parts of the CAS:
• Enhancing environmental sustainability (Sub-theme 2.6) through improved sewerage, drainage and solid waste services
• Public administration reform (Sub-theme 3.3) through improved institutional arrangements and increased financial sustainability
• Reducing deficiencies in basic urban services (Key sectoral issue) through provision of access to sanitation services
The CAS Progress Report considered by the Board on February 19, 2004 identified the need for increased investment in infrastructure to help attain the twin objectives of poverty alleviation and growth. Background a) General Sanitation in Vietnam is predominantly a private good with the majority of households investing in septic tanks or latrines, depending on location. There are currently a limited number of wastewater treatment plants in the country, all of them in the major cities. Solid waste is disposed of mainly to dumps, with few sanitary landfills, and solid waste collection is estimated at serving some 70% of the urban population, although the poor see levels of service between 10 and 20%. As a result, the watercourses, especially in the big cities, are severely polluted by both liquid and solid wastes. This situation will be further exacerbated by urban growth in the country. The proportion of people living in urban areas in Vietnam is one of the lowest in East Asia, comprising around 23% of the total population, or 19 million people. This is anticipated to increase to 33% by 2010 due to migration from rural areas and the higher incomes available in urban areas. b) Sanitation – Current Situation The country’s urban sewerage policy is presented in Decision #35/1999/QD-TTG, approved in March 1999. The policy is to: a) rehabilitate existing networks and facilities, expand coverage and introduce wastewater treatment as resources permit, with priority given to the major cities and tourist centers; b) promote market oriented approaches to service provision; c) develop, through public education, a better awareness of the impact of sanitation on public health, environmental sustainability and economic development; and, d) gradually replace subsidies with user charges. The policy aims to ensure that all urban areas should have suitable water drainage systems and wastewater treatment facilities that guarantee environmental hygiene and address flooding issues. Wastewater should be treated before entering the sewerage system, mostly through the use of septic tanks. The application of these policy elements is in its very early stage.
19
Various targets for wastewater treatment have been promulgated by the Government, including through the Vietnam Development Goals and the 2010 environmental strategy, issued in December 2003. Whilst not always consistent in their target values, they do indicate a keen awareness in Government about the importance of improved sanitation. Based on the Vietnam Living Standards Survey (VLSS) the Central Statistical Office (CSO)
estimated the following levels of urban sanitation coverage:
Access to hygienic latrines
Year 1993 Year 2002 Growth rate
p.a. Year 2010
Urban coverage 44.9 68.3 4.8 99.2
Environmentally acceptable sanitation facilities in urban areas are generally unavailable. Under existing regulations, human waste should be treated in septic tanks before being discharged to the sewer. While around 40% of households in provincial towns have septic tanks, only a small portion of these septic tanks is connected to sewers or drains. In many urban areas, septic tank effluent or seepage contaminates the groundwater. For example, less than 65% of the HCMC population has septic tanks and “gray” domestic water is not treated. Only 50% of the existing septic tanks in HCMC are reportedly designed and constructed properly and most of them have not been regularly subjected to solids removal. This situation is likely to be replicated in other cities. Whilst the provision of latrines and sanitation infrastructure brings improved outcomes, these are significantly increased when beneficiaries are exposed to IEC on household sanitation practices. Such IEC also generates demand for household sanitation facilities and should be considered as complementary to any physical sanitation investments. Urban wastewater and storm waters are typically discharged through combined systems to nearby watercourses, without treatment. Large sections of these combined networks, constructed decades ago, need rehabilitation due to lack of maintenance and flooding is common in urban centers. Many drains were constructed without adequate grades for self-cleansing and there are often no design provisions for odor control or dry weather flow. The untreated sewage and industrial wastewater is discharged directly into water bodies and streams in the surrounding areas and pose high risks to aquatic ecosystems. Most of the government attention is being given to sewerage and drainage investments. Consequently, the coverage of wastewater treatment is virtually zero. However, the government is taking action and the biggest cities Hanoi, HCMC, Haiphong, Danang, and Halong will all have sewerage and sewage treatment facilities in place in the next few years. The project cities comprise the next tier of government focused activity being relatively large and, importantly, they are all tourist destinations for both national and, increasingly, international visitors. c) Solid Waste Management – Current Situation Solid waste management policy is set by two documents a) Management of Solid Waste in Vietnamese Cities and Industrial Parks – Strategy to 2020 (1999) and b) National Strategy for Environmental Protection 2003 – Strategy to 2020. Both documents are similar with the latter building on the former. Together the documents focus on a range of issues including i) Legal reform ii) Increased awareness and training iii)Increased privatization and cost recovery iv) Use
20
of appropriate and modern technologies v)Promotion of economic approaches to environmental protection and vi) Promotion of public and civil society involvement. The 2003 document sets a target of 90% for collection of municipal waste, adequate disposal of over 60% of hazardous waste and 100% of healthcare waste. These targets are very ambitious given weak capacity and financial constraints. The country produces around 15million tons of solid waste per year of which 12 million is from municipal sources, with most of the rest being industrial. Only 160,000 t/y or 1 percent of waste is hazardous. Around 50% of the waste is generated in urban areas although less than 25% of population is urban. On average 70% of urban waste is collected but amongst the urban poor the levels of collection are much lower at 10-20%. There are 91 solid waste disposal facilities in Vietnam but only 17 (19%) are sanitary landfills. By 2010, due to rapid urbanization, and increasing consumption, the volumes of municipal waste are projected to grow by 60%. d) Institutions The Urban Environmental Companies (URENCO), or Urban Works Companies (UWC) who are typically responsible for drainage, sewerage, solid waste management and other urban activities, are institutionally and financially much weaker than WSCs. Given the size of the project cities, the combination of the water and sewerage functions into a single entity is preferred, leaving solid waste management with the URENCO. e) Cost recovery and investment Local governments understand the need to recover costs through user fees. For example Hanoi and Haiphong levy a drainage and wastewater surcharge of 15% of the water bill which results in fees ranging from VND 450 to VND 1,275 per cubic meter for domestic and commercial consumers respectively. Da Nang charges between VND 300 per cubic meter (domestic) and 500 VND per cubic meter (commercial/tourism) and Ha Long and Cam Pha have a tariff based on customer category ranging from VND250 to VND500 per cubic meter. HCMC has wastewater tariffs of between VND250 and VND400 per cubic meter depending on consumption level and customer category. All these cities plan to increase wastewater charges gradually to achieve recovery of O&M costs, and depreciation of short lived assets, by 2006 – 2009. A recent GoV Decree (67/2003) introduced some confusion into the sector as it proposes the application of a uniform environmental protection charge for wastewater consumers (both industrial and domestic) which must not exceed 10% of the clean water tariff. The Provinces believe this is the wastewater fee, whereas, in fact, MONRE’s purpose was to establish this as a separate environmental charge, in addition to any wastewater fees. Revenues from solid waste management user fees cover on average only 58% of O&M costs and this resulted in the URENCOs/UWC receiving a total of VND 404 BN in government subsidies in 2003. Whilst user fees are generally affordable (according to Vietnam Household Living Standards Survey 2003 the amount paid in SWM fees ranges from 4,600 to 6,600 per HH per month and range between 0.2 and 0.5% of HH expenditures), collection rates are low, typically only 50% of the amount billed. This compares unfavorably with the water fee where collection rates are usually around 95%. There are significant investment needs for the sector to cover both the rehabilitation of existing systems and the expansion of new systems whether for sanitation or solid waste management. The government has estimated these needs as follows:
21
Sector Government Investment Estimates (US $)
2000- 2010 Urban sanitation 3,800,000,000
Urban Solid Waste Management 700,000,000
Combined investment in the urban water supply and sanitation sector has totaled some $1billion over the last 10 years, most of which has been used for water supplies. In addition, some $200million has been invested over the last four years in SWM. It is clear, therefore, that there is a massive shortfall in investment funding in both sectors. Implications for Project Design Based on the above the project design must aim to:
• Maximize the efficiency of investment in order to capture all the benefits that can accrue from each dollar spent
• Improve the institutional arrangements, and the technical and financial management of the service providers, to ensure efficient and effective service delivery, thus minimizing customer charges and maximizing service quality
• Introduce tariffs for both wastewater services and solid waste management services that will reliably recover at least O&M costs and depreciation of short lived assets through user fees
• Encourage IEC activities that will maximize the benefits that accrue to the beneficiaries from the physical investments
22
Annex 2: Major Related Projects Financed by the Bank and/or other Agencies
Deterioration of water supply systems and institutional weakness (completed)
Water Supply Project (Cr. N0260 ) S S
Deterioration of sanitation systems and institutional weakness (ongoing)
Three Cities Sanitation Project (Cr. 32110 )
U S
Deterioration of sanitation systems and institutional weakness (ongoing)
Ho Chi Minh City Environmental Sanitation Project (Cr. 34750)
U MS
Lack of access to infrastructure and tenure insecurity in urban poor areas
Urban Upgrading Project (Cr.38870) S S
Lack of access to water supplies, deterioration of water supply systems and institutional weakness (ongoing)
Urban Water Supply Development Project (Cr.4028)
MS S
Red River Delta Rural Water Supply and Sanitation Project (Cr. 4115)
MS S
Other development agencies
Deterioration of infrastructure and institutional weakness
ADB: Credit to improve water supply in seven medium cities (ongoing) and eight towns and medium cities (planned).
SDC: Grant to enhance development of Dong Hoi City, including SWM and drainage activities (ongoing)
GTZ/KfW: Financial assistance for wastewater collection and treatment in six cities, including TA for institutional strengthening (ongoing)
AusAID: Grant to improve water supply in three small towns (ongoing); Grant for five Mekong Delta provinces rural water supply and sanitation
Danida: Grant for sanitation in two provincial towns (ongoing). Co-financing with World Bank on water and sanitation projects in Quang Ninh (ongoing)
Finnida: Co-financing for sanitation project in HaiPhong (on-going); Grant
23
for small town water supply and sanitation program in four provinces (on-going)
JBIC: Soft loans for drainage and sewerage in Hanoi and HCMC (ongoing)
French Government: small rehab projects in several cities and provinces (mostly completed)
GTZ: Grants for sanitation in Viet Tri town (on going)
IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory) Though many of these projects are grants to the GoV, the Government then lends to the water
companies at near commercial rates.
24
Annex 3: Results Framework and Monitoring
Results Framework
PDO Project Outcome Indicators
Use of Project Outcome Information
To improve environmental sanitation in project cities in a sustainable manner and thereby enhancing the quality of life for city residents
1. The number of people benefiting from reduced incidence and severity of flooding
2. The additional number of people whose solid waste will be regularly collected
3. The number of people gaining access to improved sanitation
4. The proportion of service providers’ costs, including loan repayments, recovered from user fees1.
1. The number of people gaining access to piped sewers
To confirm service is being expanded
Component 2: Wastewater treatment capacity is being provided and is operating
1. The BOD removed by treatment plant
To confirm that treatment is being provided
Component 3: Solid waste is being collected and disposed to sanitary landfills
1. The additional amount of solid waste that will be disposed of to sanitary landfills
To confirm waste is being collected and disposed to sanitary landfills
Component 4: Resettlement PAPs compensated at replacement cost, resettled to agreed sites, and incomes restored
1. PAP HHs have received a)compensation as stipulated in the RAP before the assets are taken from them; b) relocation, transition, and subsistence allowances; and c) incomes restored to pre-project levels.
Assess implementation of RAP measures for the project affected population at three key stages of the RAP implementation process
Component 5: Household sanitation loans are being made on sustainable basis and school water supplies and sanitation facilities are being implemented
1. The number of poor people that access and repay loans to improve household sanitation
2. The number of pupils gaining access to improved sanitation facilities in their schools
To confirm that the household fund is functioning effectively and school sanitation is being built
Component 6: Capacity building is taking place in PMU and service providers
1. Value of capacity building contracts awarded in accordance with the agreed procurement plan
To confirm that capacity building is taking place in a timely manner.
1 In addition a pilot Balanced Scorecard will be considered under Component 6 to assess the performance of the service providers.
25
Arrangements for results monitoring – Project Outcomes Phase 1 The following table presents the project outcome indictors for the sub projects in Phase 1. Responsibility for data collection lies with the PMU in each Province and the data will be collected annually. Sources of data will include the following:
1. Audited accounts of the service provider for financial data 2. Annual reports of the service providers for non financial indicators (e.g. volumes of
treated effluents, amounts of solid waste collected) 3. Department of Education (for school sanitation) 4. The Provincial Women’s Union for data related to the sanitation funds 5. Hydraulic models for assessment of reduced flooding
26
P
ha
se 1
Mo
nit
ori
ng
an
d E
va
lua
tio
n I
nd
ica
tors
Ta
rget
Va
lues
P
roje
ct O
utc
om
e In
dic
ato
rs
Ba
seli
ne
FY
08
F
Y0
9
FY
10
F
Y1
1
FY
12
F
Y1
3
FY
14
N
ha T
ran
g C
ity
1.
The
num
ber
of
peo
ple
ben
efit
ing f
rom
red
uce
d i
nci
den
ce
and s
ever
ity o
f fl
oodin
g (
Phas
e 1)
0
U.C
. U
.C.
U.C
8
,00
0
8,2
00
8
,40
0
TB
D.
2.
The
num
ber
of
peo
ple
wit
h w
aste
wat
er c
oll
ecte
d a
nd
dis
pose
d o
f th
rough p
iped
net
work
s (*
)
P
H
A
S
E
2
3.
Am
ount
of
BO
D (
tons)
rem
oved
by t
reat
men
t pla
nt
P
H
A
S
E
2
4.
Tota
l num
ber
of
peo
ple
whose
soli
d w
aste
wil
l be
coll
ecte
d (
Phas
e 1 a
nd 2
) 2
42
,00
0
28
0,0
00
3
00
,00
0
32
0,0
00
3
40
,00
0
36
0,0
00
3
85
,00
0
41
0,0
00
5.
Am
ounts
(kil
oto
ns)
of
was
te d
ispose
d t
o s
anit
ary l
andfi
ll
(Phas
e 1 a
nd 2
) 0
U
.C.
U.C
. 8
0
11
0
13
0
13
6
14
0
6.
The
num
ber
of
poor
peo
ple
that
acc
ess
loan
s to
im
pro
ve
house
hold
s sa
nit
atio
n (
Phas
e 1)
0
600
1200
1200
1200
600
7.
The
num
ber
of
pupil
s gai
nin
g a
cces
s to
im
pro
ved
sa
nit
atio
n f
acil
itie
s in
thei
r sc
hools
(P
has
e 1)
0
U.C
. 8
,00
0
12
,00
0
12
,00
0
12
,00
0
TB
D.
TB
D.
8.
Per
centa
ge
of
was
te w
ater
pro
vid
er’s
co
sts,
incl
ud
ing
loan
rep
aym
ents
, re
cover
ed f
rom
use
rs (
Phas
e 1 a
nd 2
) (B
y D
ec 3
1 i
n r
elev
ant
FY
)
68
74
76
87
92
96
99
100
9.
Per
centa
ge
of
soli
d w
aste
pro
vid
er’s
cost
s, i
ncl
udin
g l
oan
re
pay
men
ts,
reco
ver
ed f
rom
use
rs (
Phas
e 1 a
nd 2
) (B
y
Dec
31 i
n r
elev
ant
FY
)
59
66
71
75
81
94
98
100
Qu
y N
hon
Cit
y
1.
The
num
ber
of
peo
ple
ben
efit
ing f
rom
red
uce
d i
nci
den
ce
and s
ever
ity o
f fl
oodin
g (
Phas
e 1)
U
.C.
U.C
. U
.C.
13
,50
0
13
,70
0
13
,90
0
TB
D.
2.
The
num
ber
of
peo
ple
wit
h w
aste
wat
er c
oll
ecte
d a
nd
dis
pose
d o
f th
rough p
iped
net
work
s (*
)
P
H
A
S
E
2
3.
Am
ount
of
BO
D (
tons)
rem
oved
by t
reat
men
t pla
nt
P
H
A
S
E
2
4.
Tota
l num
ber
of
peo
ple
whose
soli
d w
aste
wil
l be
coll
ecte
d (
Phas
e 1 &
2)
18
0,0
00
1
84
,60
0
18
7,4
00
1
90
,00
0
19
4,3
00
1
98
,20
0
20
1,4
00
2
04
,60
0
5.
Am
ounts
(kil
oto
ns)
of
was
te d
ispose
d t
o s
anit
ary l
andfi
ll
(Phas
e 1 &
2)
P
H
A
S
E
2
27
6.
The
num
ber
of
poor
peo
ple
that
acc
ess
loan
s to
im
pro
ve
house
hold
san
itat
ion (
Phas
e 1)
0
275
550
550
550
275
7.
The
num
ber
of
pupil
s gai
nin
g a
cces
s to
im
pro
ved
sa
nit
atio
n f
acil
itie
s in
thei
r sc
hools
(P
has
e 1)
U
.C.
8,0
00
1
0,0
00
1
0,0
00
1
0,0
00
T
BD
. T
BD
.
8.
Per
centa
ge
of
was
te w
ater
pro
vid
er’s
co
sts,
incl
ud
ing
loan
rep
aym
ents
, re
cover
ed f
rom
use
rs (
Phas
e 1 &
2)
(By
Dec
31 i
n r
elev
ant
FY
)
32
41
45
59
71
81
92
100
9.
Per
centa
ge
of
soli
d w
aste
pro
vid
er’s
cost
s, i
ncl
udin
g l
oan
re
pay
men
ts,
reco
ver
ed f
rom
use
rs (
Phas
e 1 &
2)
(By D
ec
31 i
n r
elev
ant
FY
)
42
52
62
73
79
83
94
100
Don
g H
oi
Cit
y
1.
The
num
ber
of
peo
ple
ben
efit
ing f
rom
red
uce
d i
nci
den
ce
and s
ever
ity o
f fl
oodin
g
0
U.C
. U
.C.
U.C
. 1
8,5
00
1
9,0
00
1
9,5
00
T
BD
2.
The
num
ber
of
peo
ple
wit
h w
aste
wat
er c
oll
ecte
d a
nd
dis
pose
d o
f th
rough p
iped
net
work
s (*
)
P
H
A
S
E
2
3.
Am
ount
of
BO
D (
tons)
rem
oved
by t
reat
men
t pla
nt
P
H
A
S
E
2
4.
Tota
l num
ber
of
peo
ple
whose
soli
d w
aste
wil
l be
coll
ecte
d
51
,00
0
53
,40
0
54
,60
0
57
,40
0
59
,00
0
60
,80
0
62
,50
0
64
,30
0
5.
Am
ounts
(kil
oto
ns)
of
was
te d
ispose
d t
o s
anit
ary l
andfi
ll
0
U.C
. 20
21
21.5
22
23
24
6.
The
num
ber
of
poor
peo
ple
that
acc
ess
loan
s to
im
pro
ve
house
hold
san
itat
ion (
Phas
e 1)
0
275
550
550
550
275
7.
The
num
ber
of
pupil
s gai
nin
g a
cces
s to
im
pro
ved
sa
nit
atio
n f
acil
itie
s in
thei
r sc
hools
0
U
.C.
8,0
00
1
0,0
00
1
0,0
00
1
0,0
00
T
BD
. T
BD
.
8.
Per
centa
ge
of
was
te w
ater
pro
vid
er’s
co
sts,
incl
ud
ing
loan
rep
aym
ents
, re
cover
ed f
rom
use
rs (
By D
ec 3
1 i
n
rele
van
t F
Y)
29
33
44
56
66
75
88
100
9.
Per
centa
ge
of
soli
d w
aste
pro
vid
er’s
cost
s, i
ncl
udin
g l
oan
re
pay
men
ts,
reco
ver
ed f
rom
use
rs (
By D
ec 3
1 i
n r
elev
ant
FY
)
48
56
60
71
77
83
94
100
No
te:
U.C
= U
nd
er c
on
stru
ctio
n
(*)
= A
ny
ho
use
ho
lds
con
nec
ted i
n P
has
e 1
wo
uld
on
ly b
e o
n a
pil
ot
bas
is
TB
D =
To
be
det
erm
ined
, to
in
corp
ora
te b
oth
Ph
ase
1 a
nd
Ph
ase
2 o
utc
om
es
28
Annex 4: Detailed Project Description
VIETNAM: Coastal Cities Environmental Sanitation Project Existing Situation: Each city faces the similar challenges with regard to liquid and solid urban wastes, and drainage. Urban drainage master plans pay inadequate attention to flood control, allowing uncontrolled development to encroach on the natural routes required for effective discharge and storage of flood waters. Drainage network are in poor condition with inadequately sized pipes. In Nha Trang and Quy Nhon surrounding mountains cause rapid run off into the low lying central areas. Black water facilities consist mainly of septic tanks with discharge to the existing drainage network or to the ground. In Dong Hoi there are many pit latrines. Grey water infiltrates into the ground or is discharged to the drainage network. Since no centralized treatment facility exists this causes pollution of the open channels, lakes and rivers. Septage sludge removal is performed when the system gets clogged, long after it has ceased to function properly. URENCOs and the private sector operate septage collection services with disposal at the solid waste dumpsite. Industries and hospitals are required to have their own wastewater treatment facilities; however industrial waste water is often disposed of with insufficient treatment whilst hospital and health centre waste is generally treated by septic tank. Household solid waste is collected by handcarts and taken to informal transfer sites, loaded onto compacting trucks, or older open trucks, and transported to the existing landfills for disposal. In Nha Trang the existing landfill can be considered a dump, whilst in Quy Nhon the existing landfill is reasonably well designed and operated but needs to be upgraded and rehabilitated. In Dong Hoi the landfill is a sanitary landfill developed with the support of SDC. The project will make investments to tackle these challenges and are described below. Component 1 - Flood control, drainage and wastewater collection
In Nha Trang the following activities are proposed.
Flood mitigation to include i) rehabilitation of the Dong Bo/Quan Truong river to preserve buffering and increase capacity; ii) construction of cut off drains at the bases of the San and Hon Kho Mountains; and iii) construction of tidal gates to reduce backflow during high tides. Drainage works to include i) rehabilitation and extension of piped systems and flood channels and ii) the dredging/cleaning of existing lagoons. Phase 1 will provide bigger capacity drains in the City center, and a new system in north Nha Trang. Phase 2 will concentrate on new drainage facilities in south Nha Trang.
Wastewater collection to include i) interceptors and storm water overflows along the Cai River, the Quan Trung channel and Tran Phu Street, ii) combined or separate sewerage systems in north and part of south Nha Trang, iii) tertiary pipes including house connections, and iv) about thirteen pumping stations. In Quy Nhon the following drainage and sewerage activities will be undertaken:
29
Flood mitigation to include i) the rehabilitation of Bau Sen and Bong Hong lakes to improve their buffer function, ii) cut off drains at the bases of Ba Hoa and Vung Chua Mountains and iii) construction of tidal gates to reduce backflow during high tides. Drainage works to include i) rehabilitation and extension of piped systems and flood channels and ii) dredging/cleaning of lagoons. Phase 1 will provide bigger capacity drains in the City center, including around Bau Lac Lake. Phase 2 activities will continue the Phase 1 works and will include improvement to the drainage system around Bong Hong Lake. Wastewater collection to include i) interceptors and storm water overflows along the Bau Sen, Bong Hong and Dong Da lakes, and the municipal beach, ii) combined or separate systems in west Quy Nhon and parts of Bui Thi Xuan/Phu Tai wards, iii) expansion of sewers to the other wards such as Nhon Binh/Nhon Phu, iv) tertiary pipes including house connections, and v) about nine pumping stations.
In Dong Hoi the following drainage and sewerage activities will be undertaken:
Flood mitigation to include i) improvement of the buffer function of the Cau Rao river through dredging and embankment improvement, ii) rehabilitation of the Phong Thuy channel, iii) rehabilitation of the Nam Ly lake, and iv) tidal gates to reduce backflow during high tides. Drainage works to include i) rehabilitation and extension of piped systems and flood channels and ii) the dredging/cleaning of lagoons. Phase 1 will provide bigger capacity drains in the City center, including the Bac Ly, Hai Dinh, Dong My, Nam Ly and Dong Phu areas. Phase 2 will include improvement to the drainage system around Doc Ninh, Phu Hai and Dong Son. Wastewater collection to include i) interceptors and storm water overflows along the Nhat Le river, the Phong Thuy channel and the city moat, ii) a combined or separate sewerage system in Dong Phu, Hai Thanh, Nam Ly and part of the Bac Ly and Duc Ninh wards, iii) tertiary pipes including house connections, and iv) about nine pumping stations. Component 2 - Wastewater treatment plant In Nha Trang the central urban core and the southern residential area will be served by a new wastewater treatment plant located east of the Tac River whilst the North Nha Trang residential area will be served by a new wastewater plant located adjacent to Nghe Mountain. The capacities of the treatment plant are estimated as follows:
Population Served Plant Flows (m3/day) Areas
Yr 2010 Yr 2020 Yr 2010 Yr 2020 Northern Plant 23,431 94,351 3,749 18,870 Central and Southern Plant 119,654 292,327 19,145 58,465
In Quy Nhon two new wastewater plant will serve the old city area at the Ha Thanh River estuary and adjacent to Phu Hoa Lake at the base of Ba Hoa Mountain. The south-western area of the city is 15 km form the city core, requiring a third WWTP adjacent to Bau Lac Lake. The
capacities of the treatment plant are estimated as follows:
30
Population Served Plant Flows (m3/day) Areas Yr 2010 Yr 2020 Yr 2010 Yr 2020
Ha Thanh Plant 54,525 134,280 5,234 21,485 Phu Hoa Plant 44,600 92,970 4,282 14,875 Western Plant 9,900 51,300 950 8,202
In Dong Hoi a new treatment plant serving the city will be constructed in Duc Ninh, in the south of the city adjacent to the le Ky river. The capacities of the treatment plant are estimated as follows:
Population Served Plant Flows (m3/day) Areas Yr 2010 Yr 2020 Yr 2010 Yr 2020
Duc Ninh Plant 35,766 56,543 4,335 8,570 The WWTP of the city hospital will rehabilitated under the project, and will be operated under contract by the wastewater service provider. In all cities the proposed treatment process will be oxidation ditch except for Ha Thanh in Quy Nhon where GEF funding is being sought to construct a pilot Chemically Enhanced Primary Treatment (CEPT) plant. Component 3 – Solid Waste Management The scope of works for solid waste management is similar in each city and comprises improvements to solid waste collection and transfer, and to solid waste disposal. Waste Collection and Transfer: Investments will be made for collection and transfer equipment in all cities; and constructing transfer stations or collection points in Nha Trang and Quy Nhon. The collection/transfer equipment will comprise: collection bins; hand carts; pedi-carts; compactor trucks (5 – 15m3); and hook-lift trucks with containers. The transfer stations and collection points will enable waste collected by hand carts and pedi-carts to be transferred into containers for disposal to the landfills. Special equipment will be procured to collect and dispose of medical waste in Dong Hoi. Waste Disposal Facilities: In Nha Trang a new sanitary landfill will be constructed at Luong Hoa comprising lined waste disposal cells, cut-off drains, leachate treatment facilities, administration buildings, access roads and fencing. Equipment will be procured to weigh the waste, spread and compact the waste, and excavate materials. The existing Ru Ri dumpsite, which is almost full, has been identified by Government as an environmental “hot-spot”. It will be safely closed to minimize the risk of future environmental impacts by adding an impermeable capping to prevent rainwater penetration; and installing cut-off drains, gas vents and leachate handling facilities as necessary. In Quy Nhon the existing engineered landfill at Long My will be extended and cut off drains, and leachate collection and treatment facilities will be constructed. In Dong Hoi a second waste cell will be constructed for the new sanitary landfill financed with Swiss Development Cooperation support and the existing dump site will be safely closed. The UWC will also procure specialized collection equipment and a new incinerator to dispose of medical waste, under contract to the provincial Department of Health.
31
The following table lists the approximate amount of equipment to be procured for each city:
Waste Disposal Compactor 0 0 0 Bulldozer 0 0 1 Tracked loader 1 1 0 Excavator 1 1 0 Weighbridge 0 0 0 Medical waste bins 90 0 30 Frozen storage for medical 1 0 0 Med waste pick up truck 1 0 1 Incinerator 0 0 1 Boat for island waste 1 0 0 Boat for shipping waste 1 0 0
Component 4 - Resettlement Investments will be made to provide serviced housing plots for resettlement of project affected people in Quy Nhon and Nha Trang. This will comprise the provision of graded sites, accessed by surfaced roads, with drainage, power, telecommunications, and water supplies. The total areas of the sites will be approximately 5 ha in each city. Component 5 - Household Revolving Fund and School Sanitation Program a) Household Revolving Fund
Revolving funds will be established in each City to provide loans to households that have difficulties in financing the construction of sanitation facilities. The revolving fund will be managed by the Women’s Union in accordance with procedures presented in the agreed household revolving fund manual. The City Women’s Union will have a monitoring/ coordinating role and the Ward and Commune Women’s Union will organize community meetings and administer the account. Groups of interested households will be formed who will elect their own leader/coordinator to administer the fund and collect the payments. Payments are cycled back to a special revolving fund account of the Women Union, from where it becomes available for subsequent loans.
32
Eligibility criteria and loan terms and conditions are designed to ensure that low income households are able to access and to pay back the loans. Maximum loan size will be 4 million VND with a 24 month term and an interest rate of 0.5% per month, consistent with terms of other micro finance operations in Vietnam. An IEC campaign will be funded as part of this activity. b) School Sanitation
The project will fund water supply and sanitation facilities at city schools in response to demand from those schools. Provision of proper water and sanitation facilities in schools has been shown to be an effective way to improve hygiene practices and encourage attendance at schools. Demand assessment and proposed investment for different types of schools will follow the design standards set by the Ministry of Education (MoE). Component 6 - Capacity Building and Project Implementation This component will finance project implementation activities and capacity building of stakeholders. This will comprise: Support to Project Management Units (PMU) in project implementation including a) overall project management support b) preparation of Phase 2 feasibility studies, detailed engineering designs and bid documents c) construction management supervision for Phases 1 and 2 d) independent safeguards and M&E monitoring and e) financial auditing. Equipment to support the PMUs will also be financed including office equipment and vehicles where required. Capacity building for the service providers and city departments including a) institutional study to set out long term organizational structure and staffing for service providers, b)purchase, installation and commissioning of financial management, management information, and billing/collection software for the service providers, and training in its use c) joint development, with other city departments, of procedures and plans to support operation and management of new or rehabilitated facilities constructed under the project (e.g. medical and hazardous waste management, flood control, industrial pollution control, emission credits) d) development of standard PPP contracts for septage, and solid waste collection e) technical and managerial training to the service providers, including operation and maintenance of the networks, the treatment plant, collection equipment and landfill sites, and in financial planning f) workshops and study tours and g) miscellaneous other capacity building activities. Capacity building for design and implementation of a Healthy City Partnership (HCP) including a) preparation and delivery of public awareness campaigns to support household sanitation behavior change, and general material to explain benefits from the project, its costs, and the need to introduce user fees b) development of the framework for design and implementation of the HCP c) implementation of the HCP including training and public awareness, small investments in goods and works, and small grants. The partnership will build on work previously undertaken in Vietnam by the Ministry of Health in partnership with the World Health Organization (WHO) and will work through a range of stakeholders to establish, for each city, a vision for their Healthy City. An action plan, with monitoring indicators, will be developed to operationalize the vision, which will be implemented by a range of means including capacity building activities, public awareness programs, the purchase of goods (e.g. water quality monitoring equipment), works (e.g. additional disposal facilities) and grants (whereby local NGOs and community groups can implement the vision). The framework for implementation of the HCP will be prepared by
33
consultants who will produce an HCP Operations Manual. Delivery of a manual, acceptable to IDA, will be a condition for disbursement of the implementation funds. Component 6 will be co-financed with a PHRD capacity building grant of US$4.6 million.
Grant Programs: PHRD & GEF Nha Trang Quy Nhon Dong Hoi Total
PHRD (Component 6) Consulting Service 1,834,200 1,415,100 1,367,100 4,616,400PHRD Total 1,834,200 1,415,100 1,367,100 4,616,400GEF (Component 2) Civil Works - 4,950,000 - 4,950,000GEF Total 0 4,950,000 0 4,950,000
37
Proj
ect F
inan
cing
Pla
n by
Com
pone
nt (U
S$)
Fore
ign
Loca
lTo
tal
IDA
%PH
RD
%G
EF%
Cnt
prt
%C
om
po
nen
t 1 :
Flo
od
co
ntr
ol,
dra
ina
ge a
nd
wast
ew
ate
r co
llect
ion
27,0
93,1
7137
,899
,743
64,9
92,9
1458
,648
,309
90.2
4%0
0.00
%0
0.00
%6,
344,
605
9.76
%C
om
po
nen
t 2:
Wast
ew
ate
r tr
eatm
en
t pla
nt
13,2
36,9
1519
,855
,373
33,0
92,2
8825
,283
,059
76.4
0%0
0.00
%4,
500,
000
13.6
0%3,
309,
229
10.0
0%C
om
po
nen
t 3:
So
lid W
ast
e M
an
ag
em
ent
7,05
4,84
95,
788,
650
12,8
43,4
9911
,980
,814
93.2
8%0
0.00
%0
0.00
%86
2,68
56.
72%
Com
po
nen
t 4:
Re
sett
lem
en
t a
nd S
ite C
lea
ran
ce0
10,7
81,5
1410
,781
,514
2,33
5,06
021
.66%
00.
00%
00.
00%
8,44
6,45
478
.34%
Com
po
nen
t 5:
Ho
use
ho
ld r
evo
lvin
g f
un
d a
nd
sch
oo
l sanita
tion p
rog
ram
01,
828,
604
1,82
8,60
41,
734,
994
94.8
8%0
0.00
%0
0.00
%93
,610
5.12
%C
om
po
nen
t 6:
Ca
pa
city
bu
ildin
g a
nd p
roje
ct im
ple
men
tatio
n14
,446
,580
8,26
1,82
022
,708
,400
14,8
18,5
0065
.26%
4,61
6,40
020
.33%
00.
00%
3,27
3,50
014
.42%
Base C
ost
61,8
31,5
1584
,415
,704
146,
247,
219
114,
800,
736
78.5
0%4,
616,
400
3.16
%4,
500,
000
3.08
%22
,330
,083
15.2
7%C
on
ting
ency
4,
738,
494
6,70
7,43
811
,445
,932
9,90
8,97
486
.57%
00.
00%
450,
000
3.93
%1,
086,
958
9.50
%T
axe
s 6,
103,
264
8,29
6,46
014
,399
,725
14,3
99,7
25T
ota
l C
os
t72
,673
,273
99,4
19,6
0217
2,09
2,87
512
4,70
9,70
94,
616,
400
4,95
0,00
037
,816
,766
Item
Cos
t ( C
ities
)Fu
ndin
g
38
Phase 1 Phase 2 Total % WB WB PHRD Counterpart
FundingComponent 1: Flood control, drainage and Wastewater collection
I Flood control, drainage 4,872,665 5,644,149 10,516,814 90% 9,516,633 1,000,1811 Primary combined sewers 4,384,727 1,037,985 5,422,712 90% 4,880,441 542,271a North of Cai river
b City center areaYersin sewer pipeline 1,051,255 415,194 1,466,449 90% 1,319,804 146,645Line from Nga 5 to Quan Truong River 1,064,289 622,791 1,687,080 90% 1,518,372 168,708Hoang Van Thu sewer pipe line 251,568 0 251,568 90% 226,411 25,157Thong Nhat sewer pipeline 381,691 0 381,691 90% 343,522 38,169Tran Quy Cap sewer pipeline 309,586 0 309,586 90% 278,627 30,959
Component 6: Capacity building and project implementationI Capacity building of Service Provider 803,000 540,000 1,343,000 16% 216,000 1,127,000 01 Training and workshops 66,000 28,000 94,000 100% 94,000 0 02 GIS & MIS system design 70,000 0 70,000 0% 0 70,000 03 GIS & MIS system and implementation 70,000 0 70,000 100% 70,000 0 04 TA for Institutional Analysis of Service provider 55,000 0 55,000 0% 0 55,000 05 TA for landfill operation 0 220,000 220,000 0% 0 220,000 06 TA for private sector participation 37,000 0 37,000 0% 0 37,000 07 Oversea Study Tour for Landfill operation 0 22,000 22,000 100% 22,000 0 08 Oversea Study Tour for WWTP Operation 0 30,000 30,000 100% 30,0009 Capacity building 505,000 0 505,000 0% 0 505,000 0
10 WWTP Operation Assistance 0 240,000 240,000 0% 0 240,000 0II Capacity building of Related Department 45,000 45,000 90,000 0% 0 90,000 01 Capacity building for Khanh Hoa Department 45,000 45,000 90,000 0% 0 90,000 0
III Healthy City Partnership 57,200 300,000 357,200 56% 201,000 152,200 4,0001 TA to develop framework, monitoring, evaluation 42,200 0 42,200 0% 0 42,200 02 TA for Implementation 0 110,000 110,000 0% 0 110,000 03 Training / Public Awareness 0 40,000 40,000 100% 40,000 0 04 IEC (information, HC, and hygience education etc.) 15,000 30,000 45,000 100% 45,000 0 05 Works 0 40,000 40,000 90% 36,000 0 4,0006 Goods 0 40,000 40,000 100% 40,000 0 07 Grants 0 40,000 40,000 100% 40,000 0 0
IV Capacity Building of PMU 504,000 18,000 522,000 11% 57,000 465,000 01 TA for project management support 267,000 0 267,000 0% 0 267,000 02 TA for support to PMU for drafting TORs, RFPs 68,000 0 68,000 0% 0 68,000 03 TA for development and Management of Training 65,000 0 65,000 0% 0 65,000 04 TA for carbon finance proposal 65,000 0 65,000 0% 0 65,000 05 Training and workshops 39,000 18,000 57,000 100% 57,000 0 0V Implementation support 3,152,000 3,457,000 6,609,000 83% 5,459,000 0 1,150,0001 Preparation of FS/DD/BD Phase 2 1,900,000 0 1,900,000 100% 1,900,000 0 02 Construction supervision for comp. 1-3 Phase 1 551,000 0 551,000 100% 551,000 0 03 Construction supervision for comp. 1-3 Phase 2 0 2,420,000 2,420,000 100% 2,420,000 0 04 Construction Supervision Compoonent 4-5 49,000 59,000 108,000 100% 108,000 0 05 Vehicles and equipment for PMU 180,000 0 180,000 100% 180,000 0 06 Equipment for quality control 55,000 0 55,000 100% 55,000 0 07 Administratin and Operation Cost 300,000 850,000 1,150,000 0% 0 0 1,150,0008 Independent Auditing 50,000 50,000 100,000 100% 100,000 0 09 Safeguards Monitoring (Env.) 25,000 30,000 55,000 100% 55,000 0 0
Component 6: Capacity building and project implementation
I Capacity building of Service Provider 690,000 404,000 1,094,000 18% 193,000 901,000 0
1 Training and workshops 52,000 23,000 75,000 100% 75,000 0 02 GIS & MIS design & training 60,000 0 60,000 0% 0 60,000 03 GIS & MIS system and implementation 70,000 0 70,000 100% 70,000 0 04 TA for Institutional Analysis of Service provider 35,000 0 35,000 0% 0 35,000 05 TA for Landfill operation assistance 0 154,000 154,000 0% 0 154,000 06 TA for private sector participation 27,000 0 27,000 0% 0 27,000 07 Oversea Study Tour for Landfill operation 0 20,000 20,000 100% 20,000 0 08 Oversea Study Tour for WWTP Operation 0 28,000 28,000 100% 28,000 0 09 Capacity building 446,000 0 446,000 0% 0 446,000 09 WWTP Operation Assistance 0 179,000 179,000 0% 0 179,000 0II Capacity building of Related Department 40,000 40,000 80,000 0% 0 80,000 0
1 Capacity building for Binh Dinh Department 40,000 40,000 80,000 0% 0 80,000 0III Healthy City Partnership 56,100 230,000 286,100 53% 152,000 131,100 3,000
1 TA for program preparation and M&E design 41,100 0 41,100 0% 0 41,100 02 TA for Implementation and M&E 0 90,000 90,000 0% 0 90,000 03 Training / Public Awareness 0 20,000 20,000 100% 20,000 0 04 IEC (information, HC, and hygience education etc.) 15,000 30,000 45,000 100% 45,000 0 05 Works 0 30,000 30,000 90% 27,000 0 3,0006 Goods 0 30,000 30,000 100% 30,000 0 07 Grants 0 30,000 30,000 100% 30,000 0 0
IV Capacity Building of PMU 336,000 16,000 352,000 14% 49,000 303,000 0
1 TA for project management support 209,000 0 209,000 0% 0 209,000 02 TA for support to PMU for drafting TORs, RFPs 41,000 0 41,000 0% 0 41,000 03 TA for needs assessment 53,000 0 53,000 0% 0 53,000 04 Training and workshops 33,000 16,000 49,000 100% 49,000 0 0V Implementation support 2,631,000 2,743,000 5,374,000 80% 4,274,000 0 1,100,000
Component 4: Resettlement and Site Clearance1 Land compensation 679,700 75,140 754,840 0% 754,8402 Structures, property compensation and support 98,200 308,960 407,160 0% 407,1603 Mine clearance 343,400 132,911 476,311 0% 476,311
Subtotal (Component 4) 1,121,300 517,011 1,638,311 0 0 1,638,311Component 5: Household revolving fund and school sanitation program
1 Revolving fund loan 70,000 160,000 230,000 100% 230,000 0Incremental cost for operating RF 3,500 8,000 11,500 100% 11,500 0
2 School sanitation 90,000 210,000 300,000 90% 270,000 30,000
Subtotal (Component 5) 163,500 378,000 541,500 511,500 0 30,000Component 6: Capacity building and project implementation
I Capacity building of Service Providers 682,000 385,000 1,067,000 17% 181,000 886,000 01 Training and workshops 50,000 21,000 71,000 100% 71,000 0 02 GIS & MIS design & training 60,000 0 60,000 0% 0 60,000 03 GIS & MIS system and implementation 70,000 0 70,000 100% 70,000 0 04 TA for Institutional Analysis of Service provider 33,000 0 33,000 0% 0 33,000 05 TA for Landfill operation assistance 0 151,000 151,000 0% 0 151,000 06 TA for private sector participation 27,000 0 27,000 0% 0 27,000 07 Oversea Study Tour for Landfill operation 0 18,000 18,000 100% 18,000 0 08 Oversea Study Tour for WWTP Operation 0 22,000 22,000 100% 22,000 0 09 Capacity building 442,000 0 442,000 0% 0 442,000 0
10 WWTP Operation Assistance 0 173,000 173,000 0% 0 173,000 0II Capacity Building for Related Departments 35,000 35,000 70,000 0% 0 70,000 0
Capacity Building for Quang Binh Departments 35,000 35,000 70,000 0% 0 70,000 0III Healthy City Partnership 55,100 220,000 275,100 57% 156,500 115,100 3,500
1 TA for program preparation and M&E design 40,100 0 40,100 0% 0 40,100 02 TA for Implementation and M&E 0 75,000 75,000 0% 0 75,000 03 Training / Public Awareness 0 20,000 20,000 100% 20,000 0 04 IEC (information, HC, and hygience education etc.) 15,000 30,000 45,000 100% 45,000 0 05 Works 0 35,000 35,000 90% 31,500 0 3,5006 Goods 0 30,000 30,000 100% 30,000 0 07 Grants 0 30,000 30,000 100% 30,000 0 0
IV Capacity building of PMU 326,000 14,000 340,000 13% 44,000 296,000 0
1 TA for project management support 204,000 0 204,000 0% 0 204,000 02 TA for support to PMU for drafting TORs, RFPs 40,000 0 40,000 0% 0 40,000 03 TA for needs assessment 52,000 0 52,000 0% 0 52,000 04 Training and workshops 30,000 14,000 44,000 100% 44,000 0 0V Implementation support 2,428,500 2,420,500 4,849,000 79% 3,836,000 0 1,013,0001 Preparation of FS/DD/BD Phase 2 780,000 0 780,000 100% 780,000 0 02 Construction supervision for comp. 1-3 Phase 1 781,000 0 781,000 100% 781,000 0 03 Construction supervision for comp. 1-3 Phase 2 0 1,755,000 1,755,000 100% 1,755,000 0 04 Construction Supervision Compoonent 4-5 49,000 59,000 108,000 100% 108,000 0 05 Vehicles and equipment for PMU 180,000 0 180,000 100% 180,000 0 06 Equipment for quality control 50,000 0 50,000 100% 50,000 0 07 Administratin and Operation Cost 500,000 513,000 1,013,000 0% 0 0 1,013,0008 Independent Auditing 47,500 47,500 95,000 100% 95,000 0 09 Safeguards Monitoring (Env.) 15,000 17,000 32,000 100% 32,000 0 0
GRAND TOTAL COST 13,870,458 24,005,860 37,876,318 28,176,390 1,367,100 8,332,828
Financing (US$) Cost (US$)
Project Costs: DONG HOI CITY
TT Items
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Annex 6: Implementation Arrangements
VIETNAM: Coastal Cities Environmental Sanitation Project Pre Feasibility Studies have been prepared for each City and approved by the Prime Minster, including delegation of authority for approval of the sub project FS, and bidding plan, to the participating PPC. The following implementation arrangements result.
Overall Implementation Arrangements: At the national level the Ministry of Planning and Investment (MPI) which provides overall guidance on investment policy will supervise and monitor progress. For sector-specific and technical issues, MPI will consult the Ministry of Construction (MoC), which is responsible for urban sector sanitation policy and technical standards, and with Ministry of Natural Resources and Environment (MONRE) which is responsible for environmental standards and policy. At the provincial level the project will be implemented by a Project Management Unit (PMU). The PMUs report to the PPC, and are supported by consultants, by provincial and city level departments, and by a Project Steering Committee (PSC). The PMU structure typically includes one director, three deputy directors and four divisions. The directors, or their deputies, are experienced representatives from the service providers. During project implemention, the PMU should coordinate and work directly with the related departments. However, if there are matters which cannot be resolved then the PMU will seek direction from the PSC. The PSC is led by the Chairman (being the Chairman or Vice Chairman of the Provincial PC) with assistance from the related departments: DPI, DoF, DoNRE, DoC, DoE and the City PC. The service providers will have representatives in the PSC to help the PMU implement the project components relating to their technical expertise. PSC is generally in charge of solving problems in project implementation.
The more specific roles of the various agencies are summarized as follows:
Provincial People’s Committee (PPC) approves the project documents after consulting relevant departments including the investment project, resettlement plan, technical design file and total estimate, bidding plan, bidding documents and bid results.
Department of Planning and Investment (DPI) cooperates with the departments concerned to advise the PPC on the implementation plan, project funding structure, and plan for annual funding requirements according to project progress. It also supports the PMU in assessing technical reports, bidding documents, bid results and submissions to PPC for approval.
Department of Construction (DoC) supports the PMU and evaluates the technical design file, construction estimate and total estimate to be submitted to PPC. It also supports the PMU in managing the construction quality.
Department of Finance (DoF) cooperates with DPI to balance and allocate annual budget to the project for PPC approval. It also assesses the compensation price for site clearance and submits to PPC for approval.
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Department of Natural Resources and Environment (DoNRE) support the PMU on legal procedures and the processes of evaluating and approving environmental impact assessment, and managing environmental impacts. They also advise PPC on granting land and clearing site for the project.
Department of Education (DoE) supports the PMU in the implementation of the school sanitation activities to ensure demand from the schools, and that the proposed facilities meet with DoE standards.
Municipal People’s Committee (MPC) advises PPC on allocating land, clearing site and resettlement for the project and directs the compensation, site clearance and resettlement activities of the project. Women’s Unions (WU) at the Province, City and Ward level will be active in the implementation of the household sanitation revolving fund. This is described below. Service providers provide information to the PMU on current technical and financial arrangements, and coordinate with the PMU and its consultants on all issues related to planning and implementation of the project. Project Management Unit (PMU): will manage all issues related to project implementation for activities for which they are responsible. Their activities will include, but not be limited to, the following:
• Financial management of the sub projects • Dealing with issues related to sub project planning and implementation • Preparation for land acquisition • Reporting on progress on all aspects of project implementation – physical progress, financial,
environmental, social, and institutional • Co-ordination with other sectors and departments of the Province or City • Management of the bidding process and selection of contractors or consultants, including bid
invitation, bid evaluation and contract d rafting • Organizing annual financial audits of the special accounts and service providers, as appropriate • Organizing the monitoring of implementation of EMPs and RAPs
These overall implementation arrangements are illustrated below:
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Service Providers:
a) Water Supply and Sanitation Companies (WSSC)
In Dong Hoi and Quy Nhon the URENCO/UWC currently have responsibility for drainage and septage management. In Nha Trang the URENCO is responsible for septage management, but drainage is the responsibility of the Water Supply and Drainage Company.
Under the project it has been agreed that all wastewater, drainage and septage functions in each city will be consolidated with the existing water services company to form an integrated water supply and sanitation company (WSSC).
The water supply activities in each city are commercially sound and each company has revenues which are at least 50% higher than operating costs. They are reasonably well run entities.
The expansion of drainage services and the construction of piped sewer networks and wastewater treatment plants will result in a significant increase in the activities of the new, combined, WSSC companies. To support this transition a major program of capacity building is being funded under component 6 of the project, with the support of the PHRD capacity building grant.
b) City Urban Environment Companies (URENCO) or Urban Works Company (UWC)
National Agencies - MPI - MoF - State Bank - MoFA - MoJ - MoC
Project Steering Committee - Chairman/VC of Provincial PC - DPI representative - DoC representative - DoF representative - DoNRE representative - WU representative - DoT representative - Municipal PC representative - WSSC representative - URENCO representative - Dept. of Tax representative - Provincial development &
exploitation Center Land Fund
Project Owner
Provincial PC
World Bank (WB)
Note: Direct relationship
Indirect relationship
Project Support - Key departments at municipal and
provincial level - Women’s Union
PMU - Director - Deputy Directors - Technical Officers - Support Staff
External Consultants
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Like the WSSC the URENCOs (Quy Nhon and Nha Trang) and the UWC (Dong Hoi) will see a significant increase in their responsibilities as a result of the project. These companies are not as well developed, commercially or technically, as the existing water supply companies. Building their capacity is an important part of the project. The URENCOs and UWC will therefore be subject to the capacity building activities under component 6 of the project. c) Collection of user fees Wastewater charges are presently incorporated into the water bill in a separate line. Each water supply and drainage company will manage billing and collection of wastewater charges directly. This arrangement has advantages since the water companies already have effective collection systems and adequate administrative mechanisms. At present the wastewater fee collected by the WSDC is transferred to the provincial budget. The WSDCs subsequently receives budget funding for its drainage operations. With the project, the WSDC will retain the wastewater revenue, similarly as for the water revenue. The wastewater revenue will be used for scheduled septic tank emptying and to finance the O&M of the combined drainage/sewerage system including the new wastewater facilities. Solid waste charges will be collected by URENCO/UWC and retained by URENCO to fund operations and maintenance of the solid waste facilities. Subsidies from the City will be properly identified and recorded and the URENCO/UWC will maintain a separate book of accounts for solid waste management activities.
Implementation of Physical Investments:
a) Overall project preparation The physical investments will be implemented in two Phases. Phase 1 comprises those investments for which FS have been prepared during preparation for World Bank appraisal. Phase 2 comprise the remainder of the investments. The amounts of investment for each Phase are approximately 30% in Phase 1 and 70% in Phase 2. b) Phase 2 Preparation Preparation of Phase 2 sub projects will be by international and national consultants hired by PMU. National consultants will be selected by each PMU individually. Selection of international consultants will be managed by one of the PMUs on behalf of, and in consultation with, all the PMUs. Once selected, the international consultant will enter into individual contracts with each PMU.
The main work items will be allocated between the national and international firms. National firms will undertake engineering aspects of drainage, sewerage and flood control activities. The international firm will undertake engineering aspects of solid waste management and wastewater treatment activities, all financial and economic analyses, and safeguards issues.
c) Supervision of Construction Each PMU will hire a Construction Management Consultant (CMC) for supervision of construction of the facilities in each City. The CMC will be an international firm in association with a national company. The CMCs will provide overall quality assurance related to construction activities.
Implementation of Household Sanitation Program Implementation of the sanitation fund will be managed by each PMU. The money for establishing the sanitation fund, and set up costs for its management, will be passed to the Province as a grant from MoF. The PMU will delegate operation of the sanitation fund to the Women’s Union (at either the City level (Quy Nhon and Dong Hoi) or the Province level (Nha Trang)) whose incremental operating costs will be included in the grant and the spread on interest rates.
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A management board chaired by the chairwomen of city/province WU and comprising representatives of city authorities and PMU will oversee management of the household sanitation revolving funds. In each ward (Phuong), the saving and credit groups will be formed. The saving and credit groups are a fundamental part of this component. A household revolving fund manual has been developed setting out clearly the target beneficiaries, responsibilities of all parties especially between PMU and WU, monitoring and evaluation activities, financial management and reporting system. The Women's Union was selected based on their experience in administering credit facilities of this nature, and their presence on the ground at the National, Province, City and Ward level. Under the on-going Three Cities Sanitation Project the WU have made approximately 20,000 small loans for household sanitation, with a repayment rate of just less than 100%. The new project will follow the experience gained under the Three Cities project and a similar level of performance is expected. The final borrowers are individual households and no collateral is required. However, borrowers from the fund must also be participants in ward level savings and credit groups (see above). These savings and credit groups not only provide lending for income generating activities but importantly also provide a source of repayment to the sanitation fund in case a householder is unable to make repayments due to illness or unemployment. Being ward level scheme individual householders are subject to peer pressure and can't abuse this "safety net" feature of the scheme. Implementation of the Healthy City Partnerships (HCP). The HCPs, including their detailed implementation arrangements, will be designed in Phase 1 of the project. In Phase 1 the Cities will prepare and put into effect a Healthy City Partnership Manual, satisfactory to the Association. The Manual will set out the principles and procedures for mobilizing stakeholders in the Cities to build the Health City Partnership and formulate the common vision, the criteria for actions and programs to improve the environmental and hygiene conditions of the respective Project City, the procedures for review and approval of small grants for innovative proposals, procurement arrangements, and monitoring and evaluation mechanisms. The Phase 1 activities will be undertaken by a single consultant that will work across all cities. The HCP will be implemented in Phase 2 using the arrangements agreed in Phase 1. Capacity Building, Technical Assistance and Project Implementation – Component 6 Component 6 comprises a number of activities, all of which will be contracted separately by each PMU. A number of Component 6 activities will provide support to all three cities and for each of these one PMU will take responsibility for consultant selection on behalf of, and in consultation with, all PMUs. For the remaining Component 6 activities, each PMU will be responsible for their own consultant selection. Implementation Schedule The total implementation period for the project is seven years. This is divided into two phases. Phase 1 comprises investments for which FS have been prepared for project appraisal by the World Bank. This amounts to approximately 30% of the project cost and will take place over the first four years of the project. Phase 2 comprises the remaining 70% of the investments and will take place over a five year period leading up to the end of the project. There will be a two year implementation overlap between the two phases. The overall implementation schedule for the project is provided below.
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PR
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EC
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MP
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SC
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Fin
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Flo
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Phase
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Wast
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Ph
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1
Flo
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Phase
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Wast
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Ph
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2
Co
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Was
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Wast
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Co
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S
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Waste
Man
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Solid
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Phase
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Solid
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Phase
2
Co
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Re
sett
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Phase
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ch
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san
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Sch
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Phase
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Sch
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Phase
2
Co
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Ca
pac
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din
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men
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Su
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Capaci
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Phase
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Capaci
ty b
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Phase
2
Pro
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Phase
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Pro
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Phase
2
LE
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ND
S
Pre
para
tion
Bid
din
gIm
ple
menta
tion
AC
TIV
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2010
2011
FY
2008
FY
2009
FY
2010
FY
2011
2006
2007
2008
FY
2007
FY
2014
2014
Cale
ndar
Year
2009
2012
2013
FY
2012
FY
2013
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Annex 7: Financial Management and Disbursement Arrangements
Country Issues Since the 2001 Country Financial Accountability Assessment (CFAA) was undertaken a large number of its recommendations have been implemented, or are in the process of being implemented. The most recent changes include: (i) The new audit law on State Audit passed by the National Assembly in May 2005; (ii) The new decree on independent audit issued March 2004; and (iii) The accounting law approved by National Assembly in 2003 establishing legal framework for setting Vietnamese Accounting Standards. The recent PER-IFA recognized the recent changes to improve transparency and accountability in the country and identified further challenges including: (i) Implementation of the legislative frameworks which are largely in place after recent changes; (ii) Strengthening the effectiveness of the State Audit of Vietnam; (iii) Streamlining the internal control framework; (iv) building capacity on financial management, particularly at the sub-national level; and (v) adopting international public sector accounting standards. The implementation of the PER-IFA recommendations is being supported by the PRSC program and grant funds. Considering the actions that have been taken and the progress being made in furthering government's PFM program, the level of fiduciary risk for financial management is considered manageable. Implementation Arrangement. The project would be implemented by Project Management Units (PMUs) established in each of the three participating Provinces with financial staff having qualifications acceptable to IDA. Training of these staff and establishment of financial management systems acceptable to IDA are conditions of effectiveness. Each PMU has its own project implementation plan and would maintain its own Special Account for making payments under the project. The PMUs will handle the procurement, construction oversight and acceptance of all goods, works and services under the project. Works, goods and services, once accepted by the PMU, will be transferred to the relevant service providers. Strengths, weaknesses and risks. All PMUs are established under the Provincial People’s Committee so that they have a strong voice to influence related authorities during project implementation especially when dealing with Treasury and commercial banks in their areas. There is an inherent risk because each PMU will implement the project independently and all are new with limited experiences in project management, project accounting and especially in IDA requirements in FM and disbursement. Control risk also exists whilst the staff becomes more experienced and the financial system becomes established. However the PMUs are being assisted by consultants on all these issues and the agreed Action Plan on Financial Management (below) significantly mitigates these weaknesses and risk. In addition, in advance of project effectiveness, IDA will enhance its own training provided to the PMUs to cover in more depth issues of project documentation, integration of financial accounting & procurement activities, and clarification of PMU staff roles & responsibilities. During early supervision missions IDA, in coordination with the PMUs, will build on this training paying particular attention to the effective implementation and integration of the FM systems. Overall, the financial management risk from this project is considered as medium.
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Action Responsibility To be completed
before 1- Financial staffs PMU to appoint officially financial staffs with adequate skills and experiences acceptable to IDA.
PMUs
Effectiveness
2-Comprehensive guidance on financial management PMUs to adopt a project FM manual acceptable to IDA.
PMUs Effectiveness
3- General training on project accounting PMUs to obtain practical trainings on financial management and disbursement to strengthen the capacity of accounting people.
PMUs/Consult
ants
Effectiveness
4- Elements of accounting system PMUs to establish all relevant accounting books, including voucher system, financial filing mechanism, clear TORs for accounting units and division of responsibilities for each PMU and each accountant acceptable to IDA.
PMUs
Effectiveness
5- Accounting software PMUs to establish appropriate accounting software acceptable to IDA.
PMUs
Effectiveness
Accounting Policies and Procedures. PMUs will use the accounting system promulgated under Decision #214 allowing sub-accounts to flexibly record project expenditures by expenditure category or by project component. The chart of accounts will be developed to accommodate the functions of the selected accounting software in order to capture the expenditure data classified by project components and expenditure categories. Project funds spent by the Women’s Union will be included in the PMU’s financial statements. Reporting and Monitoring. For periodic project monitoring purposes, the project will use the Financial Monitoring Reports (FMRs) developed by the World Bank and will be tailored to meet practical monitoring requirement of the project. A set of FMRs formats were agreed upon during negotiations. Each PMU will submit to the World Bank the FMRs on a quarterly basis within 45 days after quarter end. The FMRs will comprise of the following reports:
• Sources and Uses of Funds by expenditure categories; • Uses of Funds by Project by project activities/components; • Special Account Statement; • Implementation Progress by contract (combined for Implementation Progress & Contract
Monitoring) • Procurement Process Monitoring.
Disbursement Arrangements. The project will use traditional disbursement method. Allocation of Credit Proceeds (Table C)
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Nha Trang city (Khanh Hoa)
Expenditure Category Amount In USD millions Financing Percentage Works 48.844 90% of expenditures Goods 3.095 100% of foreign
expenditures, 100% of local expenditures (ex-factory cost); 75% of local expenditures
Consulting Services 5.224 100 % of expenditures Others (e.g. revolving fund) 0.622 100 % of expenditures Total Costs 57.785
Quy Nhon city (Binh Dinh)
Expenditure Category Amount In USD millions Financing Percentage Works 31.109 90% of expenditures Goods 2.977 100% of foreign
expenditures, 100% of local expenditures (ex-factory cost); 75% of local expenditures
Consulting Services 4.039 100% of expenditures Others (e.g. revolving fund) 0.624 100% of expenditures Total Costs 38.749
Dong Hoi city (Quang Binh) Expenditure Category Amount In USD millions Financing Percentage Works 22.801 90% of expenditures Goods 1.278 100% of foreign
expenditures, 100% of local expenditures (ex-factory cost); 75% of local expenditures
Consulting Services 3.606 100% of expenditures Others (e.g. revolving fund) 0.491 100% of expenditures Total Costs 28.176 Use of statements of expenditures (SOEs) For works costing less than US$300,000 equivalent per contract; goods costing less than US$100,000 equivalent per contract; services provided by consulting firms costing less than US$100,000 equivalent per contract; services provided by individual consultants costing less than US$50,000 equivalent per contract; withdrawals from the Credit Agreement would be made on the basis of statements of expenditures. These documents will be made available for the required audits, as well as to the Bank supervision missions upon request. All other expenditures above the SOE thresholds will be submitted on the basis of full documentation. Special Accounts Three Special Accounts will be opened, one for each PMU. Each of these Special Accounts will be held in US dollar currency at commercial bank specified by the Government in terms and conditions acceptable to IDA. Payments out of the Special Accounts are to be made for eligible expenditures in
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accordance with the Credit Agreement and Bank guidelines. The authorized allocations for Special Accounts would be: (i) US$1,350,000 for SA in Nha Trang (ii) US$900,000for SA in Quy Nhon; and (iii) US$650,000for SA in Dong Hoi. Replenishment applications from each PMU would be submitted monthly or when amounts withdrawn equal 50% of the initial deposit, or when the account is drawn by 30% of the authorized allocation, whichever comes first. Retroactive financing in the aggregate amount of US$600,000 would be provided for expenditures made prior to the date of the Credit Agreement but after appraisal date, for urgently required training, goods and consulting services. The procurement procedures shall be in accordance with IDA Procurement Guidelines.
External Audit. Each PMU will appoint independent auditors acceptable to IDA. Project accounts of each PMU, including the revolving fund activities of the Women’s Union, will be audited on an annual basis in accordance with international auditing standards and in compliance with the independent auditing regulations of Vietnam. The three auditor’s reports will be made available to IDA within six months from the close of the fiscal year. The audits will include a single opinion covering project account, the SOEs and the Special Accounts. A management letter addressing internal control weaknesses of implementing agencies will also be provided by the auditor together with the audit report.
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Annex 8: Procurement Arrangements
VIETNAM: Coastal Cities Environmental Sanitation Project A) General
Procurement for the proposed project would be carried out in accordance with the World Bank’s “Guidelines: Procurement Under IBRD Loans and IDA Credits” dated May 2004; and “Guidelines: Selection and Employment of Consultants by World Bank Borrowers” dated May 2004, and the provisions stipulated in the Development Credit Agreement. The general description of various items under different expenditure category is described below. For each contract to be financed by the Credit and the co-financing PHRD Grant, the different procurement methods or consultant selection methods, the need for prequalification, estimated costs, prior review requirements, and time frame are agreed between the Borrower and the Bank project team in the Procurement Plan. The Procurement Plan will be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity.
Procurement of Works: Works procured under this project include construction and rehabilitation of sewage and drainage systems, pumping stations, public toilets, wastewater treatment plants, solid waste management systems, resettlement site’s infrastructure, etc. Works estimated to cost US$2 million equivalent or more per contract shall be procured through International Competitive Bidding (ICB) procedures. These ICB contracts shall use the Bank’s Standard Bidding Documents (SBD) for Procurement of Works dated May 2005 and/or SBD for Procurement of Works – Smaller Contract dated May 2004. ICB contracts for wastewater treatment plants or similar complex works may use the SBD for Supply and Installation of Plant and Equipment dated May 2005. Works estimated to cost less than US$2 million per contract may be procured using National Competitive Bidding (NCB). The procedures to be followed for National Competitive Bidding shall be those set forth in the Decree 88/99, as modified by Decree 14/2000 and Decree 66/2003 and subject further to the provisions stipulated in the Annex to the Development Credit Agreement. A sample of the NCB Annex to be included in the DCA is provided in Attachment 2. Bidding documents for these NCB contracts shall follow the Model NCB Documents prepared by the World Bank Vietnam Office which are also being used on other World Bank financed projects in Vietnam. Simple works of small value of less than $50,000 per contract may be procured following shopping procedures.
Procurement of Goods: Goods to be procured under this project would include solid waste collection equipment, heavy equipment for landfill, equipment for hazardous health care waste collection and treatment, goods/equipment for capacity building and project implementation. Goods estimated to cost equivalent or more than US$150,000 per contract shall be procured through International Competitive Bidding (ICB) using the Bank's Standard Bidding Documents for Procurement of Goods dated May 2004. Contracts for goods estimated to cost less than US$150,000 each may be procured through National Competitive Bidding (NCB). The NCB procedures to be followed shall be those stated in Decree 88/99, as modified by Decree 14/2000 and Decree 66/2003 and subject further to the provisions stipulated in the Annex to the Development Credit Agreement (see the sample NCB Annex in Attachment 2). Bidding documents for these NCB contracts will use the Model NCB documents for procurement of goods prepared by the WB Vietnam Office which are also being used on other World Bank financed projects in Vietnam. Small goods items (other than office cars) estimated to cost less than US$30,000 per contract and office cars for the PMU’s operation startup estimated to cost less than US$50,000 per contract (but in aggregate not more than US$100,000 for each PMU) may be procured using Shopping procedures.
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Procurement of non-consulting services: Training, study tours (both national and international) if self-organized by the PMUs would be carried out on the basis of actual reasonable expenses following the Government’s procedures and cost norms.
Selection of Consultants: Consulting services to be procured under the proposed project would include preparation of feasibility studies and engineering designs, contract management and supervision, financial management, procurement support and other technical assistance for capacity building and project implementation, resettlement/environmental monitoring, financial audit, etc. These consulting services shall be mainly procured through Quality and Cost Based Selection (QCBS) procedures. Other selection methods such as Quality Based Selection (QBS), Least Cost Selection (LCS), Fixed Budget Selection (FBS), Selection Based on Consultants' Qualifications (CQ), Individual Consultants (IC) may also be used depending on value, nature and complexity of each assignment. However, CQ procedures shall only be allowed for consulting assignments estimated to cost less than $100,000 per contract. Services for preparation of engineering designs for Phase 2 may be procured through Single Source Selection (SSS) method on the grounds that they are a natural continuation of the previous Phase I design preparation assignments which were already competitively procured through QCBS with due consideration to this continuation. Short lists of consultants for services estimated to cost less than US$200,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines.
Operational Costs: Incremental operating costs for the Provincial/City Women’s Union (Component 5), to be financed by the project, will be carried out using the Government's administrative procedures (based on cost norms of the Ministry of Finance and supporting documentation).
Others: Procurement under small sub-loans (which have a ceiling about US$850,000) to low income households under household sanitation programs (Component 5) and sub-grants for implementation of the Healthy City Partnership (Component 6) would be procured by the sub-loan or sub- grant beneficiaries using established commercial practices acceptable to the Bank. These practices shall be reflected in the Operational Manuals for these components.
B. Assessment of the agency’s capacity to implement procurement
An assessment of the procurement capacity was carried out during project preparation. This revealed that the PMU will only be established, and procurement staff will be assigned just before negotiations, so their qualifications are not yet known. Some of the PPU staff who are currently working on Project preparation may continue in the implementation phase of the Project, but these staff also do not have adequate knowledge and experience of the Bank’s procurement procedures. Consequently the PMU and procurement staff will not have sufficient capacity to carry out the Project procurement. As a result, the procurement risk of the Project is rated as high.
To mitigate this high procurement risk and to build up the project procurement implementation capacity, a detailed capacity strengthening plan has been developed and agreed with the Borrower and will be followed up by the Bank team throughout project implementation. Key measures include:
(i) Assigning at least two procurement staff, with qualifications acceptable to the Bank, in each PMU.
(ii) training PMU procurement staff and procurement review/clearance staff on Bank procurement and on using UNDB and Client Connection webs.
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(iii) Raising PMU awareness on the priority of the GOV and Bank to improved transparency and fairness, enforcing expanded disclosure of project information and enhanced transparency of procurement information, establishing proper procurement filing systems;
(iv) hiring consultants to assist PMUs in handling procurement and contract management.
(v) adding an Annex to the Development Credit Agreement clarifying NCB procedures applicable to the Project;
(vi) setting up a project-specific mechanism to receive and handle bidder’s complaints;
(vii) preparing the Project’s overall Procurement Plan including a detailed plan for Phase I;
(viii) preparing and enforcing a Project Implementation Plan including detailed procurement guidance; and
(ix) carrying out enhanced project implementation supervision, particularly during early implementation, to ensure that the procurement filing system is functioning as required, and that procedures are being correctly followed.
C. Procurement Plan
The Borrower developed a Procurement Plan for project implementation which provides the basis for the procurement methods. This plan (Attachment 3) was agreed between the borrower and IDA during negotiations. The Procurement Plan will be made available in the Project’s database and in the Bank’s external website. It will be updated in agreement with the Project Team at least annually or sooner if required to reflect the actual project implementation needs and improvements in institutional capacity.
D. Bank Prior-Review and Frequency of Procurement Supervision
The following prior-review thresholds will be adopted:
(i) first two NCB contracts for works and goods in each PMU regardless of value;
(ii) each contract for works estimated to cost US$300,000 equivalent or more;
(iii) each contract for goods estimated to cost US$100,000 or more and the first two shopping contract for goods in each PMU;
(iv) each contract with consulting firms estimated to cost $100,000 equivalent or more;
(v) each contract with individual consultants estimated to cost $50,000 equivalent or more; and
(vi) each consultant’s contract procured through Single Source Selection method.
These actions lead to prior review of some 96% of contracts (by value).
In addition, procurement supervision to be carried out every six (6) months including a procurement post-review of at least 20% of the post-reviewed contracts.
Attachment 1
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Details of the procurement arrangements involving international competition.
1. Goods and Works and non consulting services.
(a) List of contract Packages which will be procured following ICB method and direct contracting:
QN-6.2 Construction Supervision Phase 1 (Component 1-3)
0.603 QCBS Prior Aug 07 Phase 1
QN-6.10
Construction Supervision Phase 2
2.034
QCBS/SSS
Prior
TBD Phase 2
DONG HOI
DH-6.2 Construction Supervision Phase 1 (Component 1-3)
0.682 QCBS Prior Aug 07 Phase 1
DH-6.10
Construction Supervision Phase 2 1.755 QCBS/SSS Prior TBD Phase 2
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Attachment 2:
NCB ANNEX FOR DCA
National Competitive Bidding Procedures
The Borrower represents that the procedures to be followed for National Competitive Bidding shall be those set forth in the Decree 88/99, as modified by Decree 14/2000 and Decree 66/2003 and, in order to ensure economy, efficiency and transparency and broad consistency with the provision of Section I of the Guidelines (as required by Para 3.3 of the Guidelines), goods and works for which this Schedule allows procurement shall be procured in accordance with paragraphs 3.3 and 3.4 of the Guidelines and the following paragraphs.
Participation in bidding and preferences
(i) For clarification purposes, it is understood that the last sentence of the amended Paragraph (c), Section 2, Article 2 of Decree 88/ND-CP which states that "All the procedures for submission, appraisal and approval of bidding results and bidder selection results shall follow the Procurement Regulation" means "Approvals of draft bidding documents, bid evaluation reports and proposals for award shall be obtained in accordance with the relevant rules and procedures of the Procurement Regulation”.
(ii) Government-owned enterprises in Vietnam shall be eligible to participate in bidding only if they can establish that they are legally and financially autonomous, operate under commercial law, and are not a dependent agency of the Borrower or the procuring entity. Military or security units or, enterprises which belong to the Ministry of Defense or the Ministry of Public Security shall not be permitted to bid.
(iii) Foreign bidders shall be eligible to participate in bidding under the same conditions as local bidders, and local bidders shall be given no preference (either in the bidding process or in bid evaluation) over foreign bidders, nor shall bidders located in the same province or city as the procuring entity be given any such preference over bidders located outside that city or province.
(iv) Bidders shall be allowed to participate in bidding without being listed in the Government Database on Bidder Information or in any other registration system.
(v) Prospective bidders shall be permitted to request bidding documents either in person or through the mail upon submission of a written application. Bidding documents shall be sold to anyone who is willing to pay the required fee of the bidding documents, and no other conditions shall be imposed on the sale of the bidding documents. The fee for the bidding documents should be reasonable and consist only of the cost of printing (or photocopying) the documents and their delivery to the purchaser. The bidding documents shall be delivered, at the prospective bidders' preference, either by hand or by mail/courier provided that the bidder is willing to pay the mail/courier delivery charges which should be specified in the Invitation for Bids. Each bidder shall be allowed to purchase only one set of the bidding documents.
(vi) Foreign bidders shall not be required, in order to participate in bidding or as a condition of award of the contract or during execution of the contract, to enter into a joint venture with a local bidder, or to subcontract part of their contract to a local bidder.
(vii) If there is prequalification, all pre-qualified bidders shall be invited to bid.
(viii) If there is limited bidding because there are only a limited number of bidders who can meet the requirements of the bidding documents, all of these bidders shall be invited to bid.
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(ix) Bidders shall not be required, as a condition of participation in the bidding, to provide suppliers’ credits.
Advertising; time for bid preparation
(x) Invitations to bid shall be advertised in at least one widely circulated national newspaper. In addition, the Borrower is encouraged to advertise in the Government Public Procurement Bulletin when established and on a free and open access website. A minimum of 30 days for the preparation and submission of bids shall be provided, and potential bidders shall be allowed to purchase bidding documents up to 24 hours prior to the deadline for the submission of bids.
Standard Bidding Documents
(xi) The Borrower’s standard bidding documents, acceptable to IDA, shall be used. The bidding documents shall provide clear instructions on how bids should be submitted, how prices should be offered, and the place and time for submission and opening of bids. Bidders shall be allowed to submit bids by hand or by mail.
Qualification criteria and evaluation criteria
(xii) Qualification criteria shall be clearly specified in the bidding documents, and all criteria so specified, and only criteria so specified, shall be used to determine whether a bidder is qualified. The evaluation of the bidder’s qualifications should be conducted separately from the technical and commercial evaluation of the bid. When post qualification is applied, the assessment of bidders' qualifications shall be carried out only after the preliminary and detailed evaluation of bids has been completed by the Purchaser/Employer and, in doing so, the qualifications of the bidder who has submitted the lowest evaluated substantially responsive bid shall be assessed first. In carrying out the post-qualification assessment, the Employer/Purchaser shall exercise reasonable judgment in requesting, in writing, from a bidder only missing factual or historical supporting information related to the bidder's qualifications and shall provide a reasonable time period (that is, a minimum of 7 days) to the bidder to provide his response.
(xiii) Evaluation criteria shall be clearly specified in the bidding documents, and evaluation criteria other than price shall be quantified in monetary terms. All evaluation criteria so specified, and only evaluation criteria so specified, shall be taken into account in bid evaluation. Merit points shall not be used in bid evaluation.
Bid opening, evaluation and award of contract
(xiv) Bids shall be opened in public, immediately after the stipulated deadline for submission of bids. Bidders or their representatives shall be allowed to be present. The name of the bidder and total amount of each bid, including discounts, shall be read aloud and recorded. Immediately after completion of the bid opening proceedings, a copy of the bid opening record shall be posted at a prominent location, accessible to the public, outside the office of the concerned procuring entity and shall be retained at the same location until the award of contract has been notified. A copy of the bid opening record shall be promptly provided to all bidders who submitted bids.
(xv) Bids received after the deadline for bid submission shall be returned to the bidders unopened.
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(xvi) All bids shall not be rejected or new bids solicited without IDA’s prior concurrence.
(xvii) No bidder shall be rejected merely on the basis of a comparison with the owner’s estimate and budget ceiling without IDA’s prior concurrence.
(xviii) A bid containing material deviations from, or reservations to, the terms, conditions or specifications of the bidding documents shall be rejected as not substantially responsive. A bidder shall not be permitted to withdraw material deviations or reservations once bids have been opened. Bidders shall not be eliminated from detailed evaluation on the basis of non-material, minor deviations or reservations.
(xix) Evaluation of bids shall be made in strict adherence to the criteria specified in the bidding documents, and contracts shall be awarded to the qualified bidder offering the lowest evaluated and responsive bid.
(xx) A bidder shall not be required, as a condition for award, to undertake obligations not specified in the bidding documents or otherwise to modify the bid as originally submitted.
(xxi) There shall be no post-bidding negotiations with the lowest or any other bidder.
(xxii) The Borrower shall declare a firm ineligible, either indefinitely or for a stated period, to be awarded a contract financed by the Bank and the Government, if it at any time determines that the firm has, directly or through an agent, engaged in corrupt, fraudulent, collusive, or coercive practices in competing for , or in executing, a Bank-financed contract.
Suppliers and Contractors
(xxiii) Bidding documents and contracts under national competitive bidding procedures financed by the Association shall include a provision requiring suppliers and contractors to permit the Association to inspect their accounts and records relating to the bid submission and the performance of the supplier and/or contractor, as the case may be, and to have them audited by auditors appointed by the Association, if so required by the Association.
(xiv) License for foreign contractors operation in Vietnam would be provided in a timely manner and will not be arbitrarily withheld.
Publication of the Award of Contract
(xxv) The Borrower shall publish the following information on contract award in Government Public Procurement Bulletin when established or on a free and open access website or on another means of publication acceptable to the IDA: (a) name of each bidder who submitted a bid; (b) bid prices as read out at bid opening; (c) name and evaluated price of each bid that was evaluated; (d) name of bidders whose bids were rejected and the reasons for their rejection; and (e) name of the winning bidder, price it offered as well as the duration and summary scope of the contract awarded. This publication shall be updated quarterly.
Complaints by Bidders and Handling of Complaints
(xxvi) The national competitive bidding procedures for contracts financed by the Association shall include provisions, acceptable to the Association, for bidders to protest.
Financial Analysis: The financial analysis assumes that wastewater and solid waste tariffs will recover operating and maintenance costs, depreciation of short lived assets, such as vehicles and equipment, and any loan interest charges, by the end of the project. Currently tariffs do not cover these costs and they will therefore be increased gradually, starting from 2007, to allow the service providers to achieve the required levels of cost recovery before project implementation completion in 2014. The cost recovery schedules for the service providers have been agreed with local governments and their implementation is a project covenant. Financing Arrangement and Fiscal Impacts: The total counterpart funding requirements for the project is estimated at USD 38 million representing 22% of the total project cost. The counterpart funding requirements for Donghoi, Nhatrang and Quynhon subprojects are USD 8 million, USD 18 million , and USD 12 million respectively. The counterpart financing will be provided by the Provincial budget although Donghoi will receive significant support from the Central Government. Assessment of the financial performance of the provincial budgets showed that they have the necessary counterpart funds for their respective sub-projects. The average annual counterpart fund required will be about VND 40 billion for Nhatrang and VND 30 billion for Quynhon or about 5-6% of the current provincial total annual capital expenditure. During peak implementation periods counterpart funds will not exceed a manageable level 9% of the provincial capital expenditure budget. The credit will be on-lent or on-granted to the relevant service providers with the exception for investment in resettlement sites which will be on-lent to the provinces. The terms of the financing are as follows: Component On-lending arrangements 1. Flood control, drainage and wastewater collection Grant to Province 2. Wastewater treatment plant Grant to Province 3. Solid waste management – landfill Grant to Province 3. Solid waste management – collection equipment Loan to URENCO/UWC at 6.6% interest
over 20 years, with 5 years grace period 4. Resettlement Loan to Province at 0% interest over 20
years, with 3 years grace period 5. Household and Public Sanitation program Grant to Province 6. Institutional strengthening and capacity building Grant to Province
During the grace period the borrower will be exempt from making interest payments or repayments on the principal. No interest will be accrued on the loan amounts during the grace period.
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Cost Recovery and Tariffs The project, in line with government policy, will recover from user charges the O&M costs of the wastewater, drainage and solid waste facilities, depreciation of short lived assets, such as vehicles and equipment, and any loan interest charges. This allows for affordable tariffs and gives sufficient revenue to the service provider to operate the system and finance replacement of short lived assets. The wastewater tariffs will be levied as an amount for each cubic meter of water consumed. The wastewater and solid waste tariffs will be increased annually during the implementation period so that subsidies to the WSDCs and URENCOs can be eliminated before the project completion. In addition the service coverage and tariff collection efficiency will be gradually improved to increase revenues to the service providers. The sanitation charges are set higher for commercial and industrial consumers to help ensuring affordability for domestic users, especially for low-income households. The detailed financial projections demonstrate the possibility of eliminating subsidies during the project implementation period while keeping the charges affordable to households including poor families. The following table shows the proposed cost recovery tariffs for sanitation services for the three cities. Wastewater Cost Recovery and Tariffs
Calendar Year 2006 2007 2008 2009 2010 2011 2012 2013 Nhatrang: average ww tariff
VND/m3 196 325 512 762 975 1347 1737 1916
Nhatrang cost recovery (%) NA 74 76 87 92 96 99 100 Quynhon: average ww tariff
VND/m3 126 258 462 776 1128 1514 1966 2260
Quynhon cost recovery (%) NA 41 45 59 71 81 92 100 Donghoi: average ww tariff
Affordability The assessment of affordability is based on the combined costs of water supply, wastewater and solid waste charges using the above cost recovering tariffs. The monthly water and sanitation cost to households, including for low income families, still remain around the affordability level of 5% of household income. The table below shows the affordability assessment (for combined water supply and sanitation services) for low income households.
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Affordability Analysis
Water and Sanitation cost as % monthly income of low-income households
2006 2007 2008 2009 2010 2011 2012 2013
Nhatrang 1.8 1.9 1.9 2.1 2.1 2.6 2.6 2.5
Quynhon 2.3 2.4 2.4 2.5 3.1 3.2 3.2 3.1
Donghoi 2.1 2.1 2.2 2.4 3.0 3.1 3.2 3.2
Financial Internal Rates of Return (FIRR) The FIRR for each sub project is summarized below. The rates of return vary between 18.6% and 28.2% (wastewater) and between 25.9% and 32.6% (solid waste) and are higher than the weighted average cost of capital of between 10-12%. Financial Internal Rates of Return
Financial Internal Rate of Return (%) City Wastewater Solid Waste
FIRR Sensitivity Analysis The sensitivity analysis shows the FIRR of the participating cities are sensitive to an increase in both O&M and capital costs and decrease in water demand. The impact of an increase in both O&M and capital costs for the solid waste management sub projects, and for the wastewater subprojects, reduces the FIRR to a value close to the weighted-average cost of capital (WACC). The service providers need to strictly monitor construction and keep tight control of operating expenses during project implementation. The Table below shows the results of the sensitivity analysis.
Economic Analysis: The economic analysis of the project is based both on cost-benefit analysis (CBA) and least-cost analysis (LCA). A combination of these two approaches is necessary because of the uncertainties with CBA, particularly the difficulties with quantifying accurately some of the environmental benefits and local economic development benefits. These uncertainties arise either because of a lack of empirical data or because of immature methodologies. As is the case in many environmental projects, it is very difficult, if not impossible, to place a monetary value on environmental improvement, the general improvement in public amenity and the impact on local development. LCA has therefore been conducted throughout component selection and preliminary design, to ensure that the selected investments are the most economical interventions. Least Cost Analysis: The proposed investments are the least cost solutions to achieve the project development objectives, whilst keeping tariffs affordable. Flood control, drainage and wastewater collection network. To mitigate flooding, priority was given to (a) the rehabilitation of the rivers and lakes that have a buffer function for the floodplains and serve as the main drainage channels for the city core area and new development areas, (b) the construction of drains at the base of the mountains to capture run-off, and (c) the construction of tide gates to prevent backflow in the drainage system during high tides and salt intrusion from the rivers. This approach addresses the major sources of flooding in the cities which arise from the mountain run-off during heavy rainfall and ocean or sea backflow into the drainage systems during periods of high tide. In the drainage network, existing combined sewers will be rehabilitated and expanded to ensure sufficient capacities to service the catchment areas and design rainfall values, while utilizing ponds and lakes wherever possible to buffer the flow. Using combined sewers in the city core and in the highly dense areas, maximizes efficiency of investments and addresses constraints on land availability. In less dense areas, and where a drainage system is not yet in place, separate storm water drains and wastewater sewers will be considered. Priority catchment areas are the city core and major flooding areas of the cities. In line with good engineering practice the combined sewers will include the installation of combined sewer overflows to spill excess storm flows to nearby water courses. This ensures that the interceptor pipes and pump stations, which transfer sewage to the wastewater plants, can be designed for cost effective operations. Wastewater treatment plants (WWTPs). The number, location and size of the WWTPs were based on considerations of (a) proximity and convenience of effluent discharge points to a sea or river outfall, (b) the absence of any planned settlement in the future, including minimal resettlement, and (c) land availability including provision of land for possible expansion in the future. WWTPs were designed to meet government standards on effluent discharge. Of five treatment technologies that were initially considered as appropriate for Vietnam, oxidation ditches is the preferred technology given its low cost, simplicity of operation, and limited land requirements. Chemically enhanced primary treatment (CEPT) is being piloted in Quy Nhon and is expected to use GEF grant financing. Solid Waste Management (SWM): Project interventions in solid waste management considered a) synergies with other SWM projects planned or underway in Dong Hoi and Quy Nhon, b) the status of the existing dumpsite in Quy Nhon and the lack of a sanitary landfill in Nha Trang, and c) maximizing cost efficiency of investments and operations. These interventions were based on a Solid Waste Management Study and an assessment of options for private sector participation in the participating cities. The studies included assessments of options for resource recovery, waste collection, solid waste transfer stations, landfill sites, and service delivery models involving both public and private service providers.
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Cost-Benefit Analysis The project is expected to benefit about 840,000 people by 2013. The benefits of the project include: (a) reduced flood damage, (b) health benefits, (c) savings in installation and desludging of septic tanks, (d) savings in drainage maintenance, (e) increased tourism due to an improved environment for tourists and potential investors, (f) improved financial positions of the Water Supply and Drainage Company (WSDC) and URENCO as tariffs are increased resulting in better management in the provision of services. This will eventually eliminate subsidies from the provincial governments; (g) enhancement of the development potential of the cities especially the areas along canals and previously flooded areas; (h) creation of new business opportunities such as restaurants, retail stores, and other entertainment activities; and (i) land value appreciation in the area, the extent of which will largely depend on the new economic activities that will be created arising from the proposed investments. It is not feasible to quantify all the above benefits, or to evaluate accurately those that are quantifiable. In this analysis, only the first five benefits were assessed. Reduced flood damages. Damages due to floods include direct and indirect damages. Direct damages result when houses, buildings and other structures, household goods, shop merchandise, roads and vehicles get in contact with floodwaters. Indirect damages are the consequential losses including loss of trade, loss of income for employers and employees, restrictions on traveling, costs of evacuation and reinstatement and costs of cleaning-up operations. Flood control and drainage improvement projects primarily stabilize land and infrastructure, which otherwise are at risk of destruction and loss from floods. Benefits have been measured as the avoided costs of damaged structures and the additional maintenance costs that would have been incurred on inundated major roads. Although in principle the costs of delays in economic activities and disruption to traffic should be included among the benefits, these costs are difficult to estimate and therefore were not accounted for. Reduced flood damages have been estimated at VND 193 billion annually. Health benefits. An improved hygienic environment will directly benefit the populace of each of the cities. It is anticipated that the construction of new wastewater treatment plants will improve the quality of receiving waters by reducing the pollution load to rivers, beaches and seashores. Drainage improvement will also significantly reduce stagnant water, thereby reducing the breeding grounds of mosquitoes and other disease-bearing insect vectors. Construction of new sewers will decrease the amount of wastewater discharged into open drainage channels, thereby reducing the risk of water related health problems. The solid waste subprojects will promote safe and hygienic disposal of solid waste, reduce blockages of sewers and drains and also reduce air-borne particulate concentration arising from burning garbage and wind-blown dust. Also, garbage piles will be reduced and hence improve the environmental condition of the cities. All these are expected to translate into a reduction in risks of diseases and illnesses associated with an unhygienic environment as well as water related diseases such as diarrhea, dysentery, cholera, typhoid, etc. Health benefits were measured from expected savings in medical care and loss in income due to illness and death, estimated at VND 32 billion annually. Savings in installation and desludging of septic tanks. All new construction in the participating cities are required to have a septic tank to avoid direct discharge of wastewater into the drainage system and for these tanks to be desludged at least once a year. Constructing interceptor sewers means that the septic tanks will no longer be necessary resulting in savings in construction of septic tanks and desludging costs, estimated at VND 36 billion annually. Savings in drainage maintenance. The drainage operating costs are expected to be reduced with the improvement of the solid waste management system, due to a reduction in need to clean waste from open drains. The benefits from savings in drainage maintenance are estimated at VND 3 billion annually.
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Increase in Tourism Income. Tourism is an emerging industry in the participating cities. The project will play an important role in accelerating the development of tourism in these cities. For the analysis, the benefits are measured by the increase in tourist arrivals due to an improved environment for the tourists and an increase in expenditures per tourist primarily because of longer duration of visits. The current annual growth rate of 5% in tourism arrival for the participating cities was adopted in the “without” project case. Implementation of the project is assumed to increase the growth rate to 5.5%. It is projected that with the implementation of the project about 26,821 additional tourists would arrive in the area annually. Income from tourism of the participating cities amounted to VND 503 billion in 2005, of which VND 315 billion is for Nhatrang, VND 175 billion for Quynhon and VND 13 billion for Donghoi. Average expenditure per tourist for the participating cities would be expected to increase from VND 0.70 million to VND 0.74 million primarily because of the longer duration of visits. This is estimated at VND 59 billion annually. For the whole project, the benefits mainly arise from economic growth through reduced flood damage (60% of total annual benefits) and increases in tourism income (18%). Savings from installation costs of septic tanks and desludging account for 11% and health benefits, 10%. The health benefit is underestimated as it excludes benefits from the likely reduction in mortality and morbidity, especially for infants and the elderly, a reduction in the probability of a major outbreak of epidemic disease, and individual willingness to pay more than the medical expense to avoid being sick. Further benefits that could not be readily quantified include: the financial sustainability of the service providers, enhancement of the development potential of the cities in general, creation of new economic opportunities, and land value appreciation in the area. Summary of the CBA: The project has an economic rate of return of 18.5 percent, which is higher than the 12 percent discount rate that was assumed. This is notwithstanding the fact that other benefits relating to health, environment and local economic development could not be realistically quantified and therefore have not been accounted for. The analysis highlights the robustness of the project in terms of its contribution to economic growth in the participating cities.
Summary of Project Cost-Benefit Analysis
(in VND millions) Nha Trang Quy Nhon Dong Hoi Overall Annual Benefits: Reduced flood damage 90,300 53,745 49,041 193,086 Health benefits 17,144 10,398 4,094 31,636 Savings in installation and desludging of septic tanks 16,822 14,754 4,602 36,179 Savings in drainage maintenance 1,020 976 810 2,806 Increase in Income from Tourism 36,767 20,426 1,574 58,767 Total Benefits 1,006,206 643,393 482,978 2,233,343 Total Costs 696,059 535,999 343,566 1,575,625 Net Present Value 320,294 94,587 41,461 456,243 EIRR (%) 22.7 16.0 14.6 18.5
Sensitivity Analysis: The sensitivity analysis shows the EIRR of the three cities to be more sensitive to a decrease in benefits rather than to an increase in costs, noting however that not all benefits have been fully accounted for. The economic rate of return is most sensitive to a combined scenario of an increase in costs and a decrease in benefits.
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Results of Sensitivity Analysis
Scenario Nha Trang Quy Nhon Dong Hoi Overall Net Present
Value (VND mil)
EIRR (%)
Net Present Value
(VND mil)
EIRR (%)
Net Present Value
(VND mil)
EIRR (%)
Net Present Value
(VND mil)
EIRR (%)
Scenario 1: 10% Increase in Costs
224,078
18.8 26,204 13.0
7,104 12.4 298,787 15.8
Scenario 2: 10% Decrease in Benefits
194,710 18.4 18,224 12.8 2,958 12.2 253,146 15.5
Scenario 3: Combination of Scenarios 1 and 2
125,104
15.6 (35,376) 10.7 (31,398) 10.3 95,583 13.2
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Annex 10: Safeguard Policy Issues
VIETNAM: Coastal Cities Environmental Sanitation Project Social Issues The project will improve environmental services (wastewater, solid waste management, and protection from flooding), which will bring substantial social benefits to the residents of the participating cities. Adverse social impacts involve permanent and temporary land acquisition for the construction of WWTPs, landfills, drains and pipelines. A Resettlement Policy Framework (RPF) has been approved by the Prime Minister and adopted by the participating Provinces. RAPs have been prepared for Phase 1 activities, which would affect about 161 HHs, of which 77 HHs would be relocated and 78 would be severely affected by losing income sources. Land acquisition for the whole project would affect 912 households, of which 356 households would be relocated and 172 households would be severely affected by the loss of income sources as in the table below: Nha Trang Quy Nhon Dong Hoi Land acquisition (ha) 76.9 57.3 14.5 DPs number (HHs) 418 225 269 Relocated DPs (HHs) 200 137 19 DPs severely affected by income sources losses (HHs)
37 40 95
Estimated resettlement cost (USD mil.)
4.54 2.94 1.7
Proposed resettlement site (ha)
5 5 From existing City site
For Phase 2 investments, RAPs will be prepared during project implementation. Benefits and target population: An estimated 700,000 residents of the three cities will benefit from reduced flooding, removal of liquid and solid wastes for safe disposal and provision of on-site sanitation. Of these beneficiaries, the government classifies about 1.8% (Nha Trang), 4.3% (Quy Nhon) and 7.6% (Dong Hoi) as poor. Stakeholder participation. Household surveys confirmed that the project responds to beneficiary demand. The two most serious problems identified by residents in the three cities was flooding and the lack of a proper drainage and sewer system. Improving sanitation outcomes requires continued interaction with a range of stakeholders during implementation. A PHRD grant will support capacity building of mass organizations to improve stakeholder understanding of the issues. Implementation of Component 5 will require working with the Women’s Union (for the sanitation fund) and the Department of Education (for school sanitation). Ethnic minorities. The socio-economic survey shows no ethnic minority groups living in the project areas. Collaboration with NGOs. The sanitation fund will be implemented on behalf of the PMUs by the city/provincial Women’s Unions (WU), which have significant experience working with communities in
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micro-finance. Implementing the Healthy City Partnership (component 6) will require collaboration with other NGOs, the public and private sectors. Monitoring social impacts. The PMUs, supported by independent monitoring consultants, will be responsible for monitoring social outcomes and managing the RAPs. Environmental Issues The Borrower prepared Environmental Assessments (EAs) and Environmental Management Plans (EMPs) acceptable to IDA for the Phase 1 investments in each city. Approximately 70% of the project investments are planned for Phase 2 activities. Environmental Guidelines have been developed to be used in preparation of Phase 2 sub-projects, and will be used by the Borrower to ensure compliance with the Bank’s safeguards requirements. These guidelines have been adopted by the participating Provinces. The project is expected to have significant positive benefits for the environment, public health and the tourism-based economy due to reduced frequency and level of flooding in the cities, improved collection and handling of liquid and solid wastes, and improvements in sanitation service and capacity. Wastewater treatment (WWT) is new for these cities, but appropriate WWT technology has been chosen to meet the national environmental standards at acceptable costs. In order to better understand the issues associated with making connections to the new sewers, a limited house connection program will be implemented prior to completion of wastewater treatment plants. This will result in the temporary discharge of some household liquid wastes (from gray water and septic tank outlets) into rivers and lakes, until the wastewater treatment plant are built. These house connections will only be made where studies have shown that the impact of the temporary discharges is within national standards. Specific mitigation measures will be adopted to reduce pollution discharge at each of the outlets, and water quality of the receiving waters will be carefully monitored. Poorly designed or operated septic tanks limits their effectiveness in reducing pollution loads on groundwater. The project will connect septic tanks to the new sewers, and then to the WWTPs, thus reducing pollution in the receiving waters or groundwater. Septage from the tanks will be disposed to landfills or WWTPs, based on detailed assessments to be made in Phase 2. Cultural property exists in the project cities but identified impacts are limited. A new temple in Quy Nhon will be relocated as decided by the city’s People Committee. The Citadel in Dong Hoi is 150 meters away from the drainage works and thus careful construction methods are required. Proper construction supervision will be needed during project implementation to check for possible buried artifacts. Safeguard screening will be made during the implementation to determine whether this policy is triggered in Phase 2 subprojects. The environmental impacts from Phase 1 activities are summarized below: City Project activities Potential impacts
Construction and rehabilitation of 14 km of the existing combined sewer systems
Temporary pollution and traffic congestion during construction. Discovery of cultural and historic remains
Nha Trang
Temporary discharge of combined storm overflows and wastewater drains to 4 outlets at Cai river, the Nha Trang Bay, the Quan Truong and the Tac
Increased pollution load. BOD and COD pollution would, however, be diluted by receiving waters to an acceptable level. At the outlets to Cai river, where the baseline
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rivers. Connection of new 2000 households to the sewers.
pollution is already heavy, level of Coliforms and suspended solid (SS) would be higher than the national standards.
Transportation and disposal of 12000 m3 dredged sediment.
Spillover and odor, dust and noise pollution. Contaminated mainly by organic pollutants so can be used for agriculture land.
The closure of Ru Ri dump site and the construction and operation of the first cell at the new Luong Hoa landfill. Rehabilitation of an access road near a temple and cemetery.
Dust and noise pollution from construction work, leachate and landfill gas release Land has no biodiversity value and far from residential areas. Households within the buffer zone will be relocated.
The construction of the 5 ha resettlement site at Dat lanh.
Dust and noise pollution from construction and land-filling work. Wastewater and solid waste generation from resettled households. Only agriculture land and no natural habitats involved
Construction of 30 km of drains, channels and sewers.
Temporary pollution and traffic congestion during construction. Discovery of cultural and historic remains.
Discharge from 3 temporary outlets at (1) Phu Hoa lake, (2) the canal connecting the Bau Sen lake to the Ha Thanh river, and (3) Dong Da lake connecting with Thi Nai lagoon. Connection of 3000 new households to the sewers.
Increased pollution load. BOD and COD pollution would, however, be diluted by receiving waters to an acceptable level. Pollution from Coliforms and suspended solid (SS) would slightly increase but the baseline level at outlets 1 and 3 is already higher than the national standards.
Transportation and disposal of 22,500 m3 dredged sediment.
Spillover and odor, dust and noise pollution Contaminated mainly by organic pollutants so that can be used for agriculture land.
The construction and operation of transfer stations.
Odor, noise and garbage littering within the neighborhoods
The construction of the 3.5 ha resettlement site at Nhon Binh.
Dust and noise pollution from construction and land-filling work. Wastewater and solid waste generation from resettled households Only aquaculture land and no natural habitats involved.
Quy Nhon
Construction of sewer close to a small temple in Nhon Binh ward which was constructed in 2002.
No impacts as the CPC agreed to move the temple.
Rehabilitation and replacement of 3 km of the existing drainage and combined sewer system in 3 wards of the city center. Dredging and building of embankment for main water courses including the Cau Rao River, Phong Thuy Canal, and Nam Ly Lake.
Temporary pollution and traffic congestion during construction. Discovery of cultural and historic remains. Change to find un-explosive mines.
Dong Hoi
Temporary discharge of combined storm overflows and wastewater drains to Nhat Le river and Phong Thuy canal.
Increased pollution load. BOD, COD, Coliform and Suspended solids pollution would, however, be diluted by receiving waters to an
82
Connection of 1343 new households to the sewers.
acceptable level, except for the outlets discharging to Phong Thuy canal, in which the pollution level is already higher than the national standards.
Transportation and disposal of 210,000 m3 dredged sediment from the Cau Rao river, the Phong Thuy canal, the Nam Ly lake, and from the existing sewers and canals.
Spillover and odor, dust and noise pollution Contaminated mainly by organic pollutants so that can be used for agriculture land.
The collection and disposal of septage at the Loc Ninh dump site
Odor and other nuisances.
Environmental Management Plan (EMP): The potential negative impacts of the sub-projects will be mitigated and monitored through the implementation of environmental management plans (EMPs) prepared under the project in compliance with OP 4.01. The EMPs include mitigation measures both during construction and operation, monitoring plan with institutional responsibilities for the implementation, capacity building program for environmental management for PMU staff and other related stakeholders and the public, and identification of adequate funding for its implementation. Pilot house connections made prior to completion of the wastewater treatment plant will only be allowed where the impact of the temporary discharge is within national standards. This will be determined on a case by case basis during project implementation and subject to no objection by DONRE. Where the pilot house connection policy is implemented the affected outlets will be subject to generic mitigation measures including placement of coarse screens on the outlets, dredging and maintenance of open channels to improve water flows, and signage of potential health risk. In addition specific mitigation measures will be provided as required and careful monitoring of the receiving waters will be introduced. Institutional capacity assessment: Each PMU will arrange for EMP implementation and will report compliance as part of the semi-annual progress reports submitted to IDA, copied to DONRE. Construction management consultants (CMC) will supervise environmental compliance by the construction contractors. An independent environmental monitoring consultant (IEMC) will be hired for each city to provide guidance to CMC, monitoring of the overall project impacts, training of PMU staff, and to assist PMUs in implementing the EMPs. Ensuring environmental certificate: Environmental approval for the EA summary of whole project and for each city EIA of Phase 1 activities has been received from the provincial DONRE. Public consultation. The Borrower held initial consultations with local government agencies and communities about route alternatives, landfill sites, transfer stations, public toilets, WWTP locations and potential project impacts. The second public consultations with DPs and local NGO representatives discussed the main findings of the EAs. Additional public consultation with the DPs living around the drainage outlets was conducted on the possible impacts of temporary discharge of liquid wastes. No objections to the project or environmental and social concerns other than those addressed in the EAs and RAPs were raised during this process. Public disclosure (BP 17.50). The Bank’s disclosure requirements have been followed. The documents were disclosed in Washington DC, and the VDIC in Hanoi. Locally the documents were disclosed in Vietnamese in the city Peoples’ Committees, the DONREs, the Project Preparation Units, and the affected wards to be accessible to local NGOs and DPs.
83
Due Diligence Reviews. A due diligence review was undertaken by the Borrower for investments that were identified as linked with the Phase 1 activities. In Dong Hoi, two projects were identified as being linked to the Bank's investments: construction of Ly Trach landfill and closure of Loc Ninh dump site. Ly Trach landfill. This is a 7-hectare sanitary landfill financed by the Swiss Agency for Development and Cooperation to serve solid waste disposal needs for Dong Hoi and the surrounding area. The linkage to the IDA-financed investments arises from the financing of solid waste collection vehicles which will transfer waste to the landfill. With regard to social issues, clearance of the landfill site in April 2006 resulted in 10 DPs losing access to agricultural and forest land. One of these DPs will also lose a temporary house that was used for agricultural purposes. The due diligence review found that all compensation payments were made to the DPs in accordance with GoV regulations. The independent resettlement monitor that will be hired for the IDA project will check whether GoV’s assistance in restoring the livelihoods of these 10 DPs is sufficient. The reviews showed that there was either no risk to the Bank arising from the linked activities, or the risks can be mitigated by designing activities in Phase 2. With regard to environmental issues, an EA was prepared for the SDC project and approved by the Quang Binh DONRE. The due diligence review of the EA for the landfill found that the sanitary landfill is not designed to separate hazardous waste, even though disposal of hazardous waste is a serious issue in this area. To mitigate this risk, the IDA investment in Phase 2 is proposed to include construction of a hazardous cell with a primary treatment facility as part of the Ly Trach landfill. Loc Ninh landfill. This is an existing 3-5 hectare landfill that will be closed once Ly Trach is functioning, and which lacks a leachate treatment system. The EA prepared for the closure of Loc Ninh landfill (together with the new Ly Trach landfill) recommended that a leachate treatment system be put in place to protect downstream communities from pollution runoff from the closed landfill. The due diligence review raised concern that funds have not been secured to implement the monitoring and mitigation measures recommended by the EA to address the potential impacts of pollution from the leachate. The IDA investment in Phase 2 is planned to include safe closure of the landfill, including leachate collection and treatment as necessary. Due diligence reviews will be undertaken during project implementation to confirm that any DPs from linked activities have been able to restore their living and income sources.
Planned Actual PCN review May 7, 2004 Initial PID to PIC June 3, 2004 Initial ISDS to PIC June 3, 2004 Appraisal January 20, 2006 Negotiations June 16, 2006 Board/RVP approval December 19, 2006 Planned date of effectiveness May 31, 2007 Planned date of mid-term review December 31, 2010 Planned closing date November 30, 2014
Key institutions responsible for preparation of the project: 1. Quy Nhon City, Project Preparation Unit of the Provincial People's Committee, Tel: (84-5) 682-5254, Fax: (84-
5) 682-6076, Contact: Mr. Thai Ngoc Bich, Vice Chairman; 2. Nha Trang City, Project Preparation Unit of the Provincial People's Committee, Tel: (84-5) 882-1129, Fax (84-
5) 882-9308, Contact: Mr. Nguyen Ngoc Minh, Chairman; 3. Dong Hoi, Project Preparation Unit of the Provincial People's Committee, Tel: (84-5) 282-2505, Contact: Mr.
Dang DucDuc, Acting Director
Bank staff and consultants who worked on the project included:
Name Title Unit William Kingdom Lead Water and Sanitation Specialist EASUR Alan Coulthart Infrastructure Coordinator EASIN Hung Duy Le Operations Officer EASUR Cuong Duc Dang Senior Operations Officer EASUR Hoa Thi Hoang Senior Operations Officer EASUR Hoa Thi Mong Pham Social Safeguard Specialist EASSD Phuong Tran Thi Thanh Environment Specialist EASEN Hung Viet Le Financial Management Specialist EACVF Kien Trung Tran Procurement Specialist EAPCO Hoi-Chan Nguyen Senior Counsel LEGEA John Morton Environmental Specialist EASEN Chaohua Zhang Senior Social Sector Specialist EASSD Chris Banes Municipal Engineer Consultant Vellet Fernandes Program Assistant & Document Processing EASUR Giang Thi Huong Nguyen Program Assistant EACVF Peer Reviewers: David Hanrahan Lead Environment Specialist SASES Jonathan Kamkwalala Lead Financial Analyst ECSIE Daniel Hoornweg Sr. Environmental Engineer LCSFW
Bank funds expended to date on project preparation: 1. Bank resources: $425,545 2. Trust funds: PHRD grant $1,210,300 3. Total: $1,635,845
Estimated Approval and Supervision costs: 1. Remaining costs to approval: $10,000 2. Estimated annual supervision cost: $65,000
85
Annex 12: Documents in the Project File
VIETNAM: Coastal Cities Environmental Sanitation Project 1. Project Implementation Plan (PIP) Draft PIPs prepared by Louis Berger Group (LBG),
Vietnam P acif ic inco me2003Population, mid-year (millions) 81.3 1,855 2,310GNI per capita (Atlas method, US$) 480 1,080 450GNI (Atlas method, US$ billions) 38.8 2,011 1,038
A verage annual gro wth, 1997-03
Population (%) 1.2 1.0 1.9Labor force (%) 1.6 1.1 2.3
M o st recent est imate ( latest year available, 1997-03)
Poverty (% of population below national poverty line) 29 .. ..Urban population (% of to tal population) 26 40 30Life expectancy at birth (years) 70 69 58Infant mortality (per 1,000 live births) 20 32 82Child malnutrition (% of children under 5) 30 15 44Access to an improved water source (% of population) 77 76 75Illiteracy (% of population age 15+) 4.6 10 39Gross primary enro llment (% of school-age population) 115 111 92 M ale 117 112 99 Female 113 111 85
KEY EC ON OM IC R A T IOS and LON G-T ER M T R EN D S
1983 1993 2002 2003
GDP (US$ billions) .. 13.2 35.1 39.2
Gross domestic investment/GDP .. 24.3 32.1 35.1Exports o f goods and services/GDP .. 28.7 55.5 59.6Gross domestic savings/GDP .. 15.5 28.1 27.1Gross national savings/GDP .. 12.2 33.5 32.6
Current account balance/GDP .. -7.0 -1.0 -4.7Interest payments/GDP .. 0.4 0.8 0.9Total debt/GDP .. 183.4 38.1 37.8Total debt service/exports .. 11.0 5.5 5.1Present value of debt/GDP .. .. .. ..Present value of debt/exports .. .. .. ..
1983-93 1993-03 2002 2003 2003-07(average annual growth)GDP 5.6 7.2 7.0 7.2 7.5GDP per capita 3.2 5.7 5.8 6.1 6.4E t f d d i 18 8 110 20 8 15 4
Private consumption .. 5.1 7.6 7.4General government consumption .. 3.6 5.4 6.2Gross domestic investment .. 11.7 10.6 16.2Imports o f goods and services .. 20.6 22.2 27.8
0
5
10
15
20
98 99 00 01 02 03
GDI GDP
Gro wth o f investment and GD P (%)
Vietnam
Low-income group
D evelo pment diamo nd*
Life expectancy
Access to improved water source
GNIpercapita
Grossprimary
enro llment
0
10
20
30
40
98 99 00 01 02 03
Exports Imports
Gro wth o f expo rts and impo rts (%)
Vietnam
Low-income group
Eco no mic rat io s*
Trade
Domesticsavings
Investment
Indebtedness
Vietnam
P R IC ES and GOVER N M EN T F IN A N C E1983 1993 2002 2003
D o mest ic prices(% change)Consumer prices .. 8.4 4.0 3.0Implicit GDP deflator .. 17.4 4.0 5.4
Go vernment f inance(% of GDP, includes current grants)Current revenue .. 21.7 22.0 22.9Current budget balance .. 2.2 6.2 6.2Overall surplus/deficit .. .. -1.9 -2.2
Export price index (1995=100) .. .. .. ..Import price index (1995=100) .. .. .. ..Terms of trade (1995=100) .. .. .. ..
B A LA N C E o f P A YM EN T S1983 1993 2002 2003
(US$ millions)Exports o f goods and services .. 3,757 19,656 23,360Imports o f goods and services .. 4,199 21,179 26,490Resource balance -682 -442 -1,523 -3,130
Net income -73 -556 -741 -880Net current transfers 25 70 1,896 2,157
Current account balance -730 -928 -368 -1,853
Financing items (net) 556 524 832 3,753Changes in net reserves 174 404 -464 -1,900
M emo :Reserves including gold (US$ millions) .. .. .. ..Conversion rate (DEC, local/US$) 1.0 10,641.0 15,279.5 15,463.0
EXT ER N A L D EB T and R ESOUR C E F LOWS1983 1993 2002 2003
(US$ millions)Total debt outstanding and disbursed 53 24,168 13,349 14,794 IBRD 0 0 0 0 IDA 44 57 1,715 2,142
Total debt service 1 417 1,097 1,205 IBRD 0 0 0 0 IDA 0 1 13 10
Composition of net resource flows Official grants 44 145 242 245 Official creditors 10 -140 680 1,798 Private creditors 0 -37 -649 -638 Foreign direct investment 0 926 1,100 1,200 Portfo lio equity 0 0 0 0
World Bank program Commitments 0 229 463 518 Disbursements 9 0 261 574 Principal repayments 0 1 2 2
This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, o r any endo r s emen t o r a c c e p t a n c e o f s u c h boundaries.
PROJECT CITIES
PhuxaLake
Khe DuyenLake
Benh VienLake
Bautuan Lake
Bautro Lake
NamlyLake
Dong SonLake
Mout
Irrigation Canal
My Cuong River
Leky River
Nhat Le River
Phong Thuy Canal
Phong Thuy Canal
Caurao River
My Cuong River
Lytrach Landfill(new landfill)
Loc Ninh Landfill(old landfill)
LOC NINHCOMMUNE
Loc NinhLow Field
BAC LY WARD
HAI THANH WARD
DONG MYWARD
PHU HAIWARD
Bao NinhPeninsula
DUC NINHCOMMUNE
DONG PHUWARDTran Quang
Khair.a
NAMLYWARD
HAI DINHWARD
Fishing Village(Planned Tanks Phase 2)
Duc NinhWWTPNGHLA NINH
COMMUNE
DONG SONWARD
Railway
Railway
Benh VienBridge
Hau ThanhBridge
RaoBridge
Dai Bridge
Cong MuoiBridge
Nhat Le
Bridge
20°
10°10°
15°
20°
105°
CHINA
LAOP.D.R.
VIETNAM
CAMBODIA
THAILAND
HANOI
G u l f o f
T o n k i n
Gu l f o f
Tha i land
Dông Hói
Quy Nhon
Nha Trang
For detail, seeIBRD 34646
For detail, seeIBRD 34647
VIETNAM
COASTAL CITIES ENVIRONMENTALSANITATION PROJECT
DONG HOI
MAIN DRAIN/SEWERS IN PHASE 1
MAIN DRAIN/SEWERS IN PHASE 2
FLOW DIRECTION
WASTEWATER PUMPING STATIONS
OUTLETS
WASTEWATER TREATMENT PLANT(PLANNED PHASE 2)
LANDFILLS (PLANNED PHASE 2)
RESETTLEMENT SITE (UNDER CITY)
This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, o r any endo r s emen t o r a c c e p t a n c e o f s u c h boundaries.
IBRD 34645
APRIL 2006
HON KHOMOUNTAIN
HON NGHEMOUNTAIN
MOT MOUNTAIN
NHA THO MOUNTAIN
CHÔTMOUNTAIN
HON SANMOUNTAIN
EAST SEA
Qua
n Tr
uong
Riv
er
Quan Truong River
Quan Truong River
Ki
m Bång
Riv
er
Ha Ra Bridge
Tran Phu Bridge
Xom Bong Bridge
Luong Hoa/RuriLandfill
Dat Lanh
Bac Hon OngWWTP
Vinh NgocWWTP
Railw
ay
DA TUONG
SON THUY RESIDENTIALCLUSTER
LE HONG PHONG RESIDENTIALPROJECT 1
OLD AIRPORT
TRUONG PHUCRESIDENTIAL CLUSTER
VINH THAI RESIDENTIALAREA PROJECT
Park
Wes
t Le H
ong P
hong
road
RESIDENTIAL AREA PROJECT
Nhat Tri Bank
IN WEST OF LE HONG PHONG PARK
LE HONG PHONG RESIDENTIALPROJECT 2
SONG TACRESIDENTIAL
AREA PROJECT
DAT LANH RESIDENTIALAREA PROJECT
VINH HAI WARD
NGOC HIEP WARD
VAN THANGWARD XUONG HUAN
WARD
PHUONG SAIWARD
LOC THOWARD
PHUOC HAIWARD
TAN LAPWARD
PHUOC HOAWARD
PHUOC LONGWARD
VINH NGUYENWARD
20°
10°10°
15°
20°
105°
CHINA
LAOP.D.R.
VIETNAM
CAMBODIA
THAILAND
HANOI
G u l f o f
T o n k i n
Gu l f o f
Tha i land
Dông Hói
Quy Nhon
Nha Trang
For detail, seeIBRD 34646
For detail, seeIBRD 34645
VIETNAM
COASTAL CITIES ENVIRONMENTALSANITATION PROJECT
NHA TRANG
MAIN DRAIN/SEWERS IN PHASE 1
MAIN DRAIN/SEWERS IN PHASE 2
FLOW DIRECTION
WASTEWATER PUMPING STATIONS
OUTLETS
WASTEWATER TREATMENT PLANT(PLANNED PHASE 2)
LANDFILLS (PHASE 1)
RESETTLEMENT SITE (PHASE 1)
This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, o r any endo r s emen t o r a c c e p t a n c e o f s u c h boundaries.
IBRD 34646
APRIL 2006
0 1 2
KILOMETERS
Dong Da road
An Duong Vuong street
Quy N
hon-
Nhon
Hoi
Dien
Bien
Phu
road
Tran Hung Dao road
1A hi
ghtw
ay
Hoang V
an Thu
street
To 1a highway
Quy N
hon S
ong C
au
Dong Da street
Future Bridge To Phuong Mai Peninsula
Bau LacLake
Phu Tai River
Bong HongLake
Phu HoaLake
Quy NhonBay
Bau SenLake
Dong DaLake
Thi Nai Lagoon
Ha Thanh River
VUNG CHUAMOUNTAIN
BA HOA
MOUNTAIN
Luong MyLandfill
To Ho ChiMinh City
QUANG TRUNGWARD
Phuong MaiNhon HoiPeninsula
CHENH RANGWARD
NGUYENVAN CUWARD
TRAN PHUWARD
LELOIWARD
HAI CANGWARD
TRAN HUNGDAO WARD
LEHONG PHONGWARD
TRAN QUANGDIEU WARD
NHON PHUWARD
BUI THI XUANWARD
PHU TAIINDUSTRIAL LY THUONG
KIET WARD
Nhon BinhResettlement Area
Bau LacWWTP
Phu HoaWWTP
Ha ThanhWWTP
Railway
20°
10°10°
15°
20°
105°
CHINA
LAOP.D.R.
VIETNAM
CAMBODIA
THAILAND
HANOI
G u l f o f
T o n k i n
Gu l f o f
Tha i land
Dông Hói
Quy Nhon
Nha Trang
For detail, seeIBRD 34646
For detail, seeIBRD 34645
VIETNAM
COASTAL CITIES ENVIRONMENTALSANITATION PROJECT
QUY NHON
MAIN DRAIN/SEWERS IN PHASE 1
MAIN DRAIN/SEWERS IN PHASE 2
FLOW DIRECTION
WASTEWATER PUMPING STATIONS
OUTLETS
WASTEWATER TREATMENT PLANT(PLANNED PHASE 2)
LANDFILLS (PLANNED PHASE 2)
RESETTLEMENT SITE
This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, o r any endo r s emen t o r a c c e p t a n c e o f s u c h boundaries.
