30286-013: completion report - adb.org · from 1 january 2014 to 30 june 2014 satisfactory...

Completion Report Project Number: 30286-013 Loan Number: 2272 July 2015

Viet Nam: Central Region Small and Medium Towns

Development Project This document is being disclosed to the public in accordance with ADB's Public Communications Policy 2011.

CURRENCY EQUIVALENTS

Currency Unit – dong (D)

ABBREVIATIONS

ADB – Asian Development Bank EIRR – economic internal rate of return FIRR – financial internal rate of return km – kilometer m3 – cubic meter O&M – operation and maintenance PCU – project coordination unit PMU – project management unit POE – project operating entity PPC – provincial people’s committee PPMU – provincial project management unit SDR – special drawing rights SWM – solid waste management VWU – Viet Nam Women’s Union WSS – water supply and sanitation

NOTE

In this report, “$” refers to US dollars. Vice-President S. P. Groff, Operations 2 Director General J. A. Nugent, Southeast Asia Department (SERD) Director T. Kimura, Viet Nam Resident Mission, SERD Team leader D.N. Hoang, Senior Urban Sector Officer, SERD Team members N.T. Giang, Social Development Officer, SERD

P.T. Hien, Associate Financial Control Officer, SERD T. B. Dung, Project Analyst, SERD

In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

At Appraisal At Project Completion (25 August 2006) (30 June 2014)

D1.00 = $0.00006475 $0.00004731 $1.00 = D15,445 D21,137.00

CONTENTS

Page BASIC DATA i

I. PROJECT DESCRIPTION 1

II. EVALUATION OF DESIGN AND IMPLEMENTATION 2

A. Relevance of Design and Formulation 2

B. Project Outputs 3

C. Project Costs 5

D. Disbursements 5

E. Project Schedule 6

F. Implementation Arrangements 6

G. Conditions and Covenants 7

H. Related Technical Assistance 7

I. Consultant Recruitment and Procurement 7

J. Performance of Consultants, Contractors, and Suppliers 7

K. Performance of the Borrower and the Executing Agencies 8

L. Performance of the Asian Development Bank 8

III. EVALUATION OF PERFORMANCE 8

A. Relevance 8

B. Effectiveness in Achieving Outcome 9

C. Efficiency in Achieving Outcome and Outputs 9

D. Preliminary Assessment of Sustainability 9

E. Impact 10

IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 11

A. Overall Assessment 11

B. Lessons 11

C. Recommendations 11

APPENDIXES

1. Design and Monitoring Framework 13

2. Project Outputs 17

3. Appraisal And Actual Project Cost 19

4. Currency Equivalents 20

5. Cumulative Projected And Actual Disbursements 21

6. Chronology Of Main Events 22

7. Project Implementation Schedule 24

8. Project Organization Chart 25

9. Status of Compliance with Loan Covenants 26

10. Summary of ADB-Financed Contracts 32

11. Summary of Gender Equality Results and Achievements 35

12. Economic and Financial Reevaluation 46

13. Quantitative Assessment of Performance 61

BASIC DATA A. Loan Identification 1. Country 2. Loan Number 3. Project Title 4. Borrower 5. Executing Agencies 6. Amount of Loan 7. Project Completion Report Number

Viet Nam 2272-VIE (SF) Central Region Small and Medium Towns Development Project Socialist Republic of Viet Nam Provincial people’s committees in each province covered by the project SDR 36,031,000 ($53.2 million equivalent) PCR:VIE 1517

B. Loan Data 1. Appraisal – Date Started – Date Completed 2. Loan Negotiations – Date Started – Date Completed 3. Date of Board Approval 4. Date of Loan Agreement 5. Date of Loan Effectiveness – In Loan Agreement – Actual – Number of Extensions 6. Closing Date – In Loan Agreement – Actual – Number of Extensions 7. Terms of Loan – Interest Rate – Maturity (number of years) – Grace Period (number of years) 8. Terms of Relending (if any) – Interest Rate – Maturity (number of years) – Grace Period (number of years) – Second-Step Borrower

8 August 2006 25 August 2006 11 October 2006 13 October 2006 17 November 2006 24 May 2007 22 August 2007 (90 days after signing) 27 August 2007 None 30 June 2012 30 June 2014 1 1.0% per annum during grace period 1.5% per annum thereafter 32 8 6.7% (including 0.2% relending charge) 20 5 Project operating entities

9. Disbursements (by ADB)

a. Dates Initial Disbursement

2 May 2008

Final Disbursement

1 April 2015

Time Interval

83 months

Effective Date

27 August 2007

Original Closing Date

30 June 2012

Time Interval

58 months

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b1. Amount (US$ million)

Category Original

Allocation

Last Revised

Allocation Amount

Disbursed Undisbursed

Balance 1. Civil Works

1A Water Supply 7.933 6.592 6.392 0.200

1B Drainage and Wastewater 28.152 18.769 19.693 (0.924)

1C Solid Waste 1.156 1.587 1.556 0.031

2. Equipment

2A Water Supply 0.586 3.380 3.605 (0.225)

2B Drainage and Wastewater 1.265 11.208 10.585 0.623

2C Solid Waste 0.285 1.487 1.433 0.054

3. Project Management

3A Project coordination unit 0.525 0.639 0.487 0.152

3B Project management unit 1.369 1.718 1.430 0.288

4. Training and Surveys

4A Public Awareness 0.386 0.406 0.355 0.051

4B Capacity Building 0.278 0.274 0.160 0.114

4C Surveys 0.642 0.360 0.291 0.069

5. Consulting Services 3.746 5.509 5.324 0.185

6. Interest Charge 0.891 0.885 0.580 0.305

7. Unallocated 6.478 0.000 0.000 0.000

Total 53.692 52.814 51.891 0.923

b2. Amount (SDR million)

Category Original

Allocation

Last Revised

Allocation Amount

Disbursed Undisbursed

Balance 1. Civil Works

1A Water supply 5.330 4.338 4.193 0.145

1B Drainage and wastewater 18.915 12.300 12.970 (0.670)

1C Solid waste 0.777 1.043 1.021 0.022

2. Equipment

2A Water supply 0.394 2.198 2.361 (0.163)

2B Drainage and wastewater 0.850 7.411 6.959 0.452

2C Solid waste 0.192 0.981 0.942 0.039

3. Project Management

3A Project coordination unit 0.351 0.423 0.313 0.110

3B Project management unit 0.918 1.143 0.933 0.210

4. Training and Surveys

4A Public awareness 0.259 0.267 0.230 0.037

4B Capacity building 0.186 0.186 0.103 0.083

4C Surveys 0.430 0.241 0.191 0.050

5. Consulting Services 2.479 3.601 3.467 0.134

6. Interest Charge 0.598 0.598 0.377 0.221

7. Unallocated 4.352 0.000 0.000 0.000

Total 36.031 34.730 34.060 0.670

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C. Project Data

1. Financing Plan ($ million)

Cost Appraisal Estimate Actual

Implementation Costs Borrower financed 13.50 17.02 ADB financed 52.34 51.31

Total 65.84 68.33

Interest during Construction Borrower financed 0.00 0.00 ADB financed 0.88 0.58

Total 0.88 0.58

ADB = Asian Development Bank.

2. Cost Breakdown by Project Component ($ million)

Component Appraisal Estimate Actual

A. Base Cost

Part A: Water Supply Development and Expansion 10.43 12.88

Part B: Drainage and Wastewater Management 37.60 42.49

Part C: Solid Waste Management 1.76 4.30

Part D: Community Environmental Sanitation and Awareness 0.38 0.42

Part E: Project Management and Institutional Strengthening 7.08 8.23

Total base cost 57.25 68.33

B. Contingencies

Physical 5.73 0.00

Price 2.86 0.00

Total contingencies 8.59 0.00

C. Service Charge 0.88 0.58

Total 66.72 68.91

3. Project Schedule

Item Appraisal Estimate Actual

Date of contract with consultants Q1 2007 Q1 2009

Completion of engineering designs Q2 2008 Q2 2010

Civil works contracts

Date of first contract award Q3 2008 Q3 2011

Date of last contract award Q4 2008 Q4 2011

Completion of works Q4 2010 Q2 2014

Equipment and supplies contracts

Date of first procurement Q4 2008 Q3 2011

Date of last procurement Q3 2009 Q4 2011

Completion of equipment installation 2009a Q3 2014

Other milestones

Extension of loan closing date 30 June 2012 30 June 2014 a No quarterly schedule available.

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4. Project Performance Report Ratings

Implementation Period

Ratings

Development Objectives

Implementation Progress

From 1 January 2007 to 31 December 2007 Satisfactory Satisfactory

From 1 January 2008 to 31 December 2008 Satisfactory Less Satisfactory






From 1 January 2014 to 30 June 2014 Satisfactory Satisfactory

D. Data on Asian Development Bank Missions

Name of Missiona Date

No. of Persons

No. of Person-Days

Specialization of Members

b

Fact-finding 3–19 May 2006 5 60 a, c, e, f, g

Appraisal 8–25 Aug 2006 5 70 b, d, g, h, n

Loan inception 10–14 Sep 2007 3 12 g, i, j

Loan review 12–15 May 2008 2 6 e, i

Loan review 5–7 Jan 2009 1 2 I

Loan review 7–8 Apr 2009 2 4 i, k

Loan review 28–30 Sep 2009 1 2 I

Loan review 11–13 Jan 2010 1 2 I

Loan review 27–29 Apr 2010 1 2 I

Loan review 30 Aug–1 Sep 2010 1 2 I

Special project administration 1 27–29 Dec 2010 3 6 f, i, m

Loan review 27–30 Jun 2011 1 3 i

Special project administration 2 5–7 Oct 2011 1 2 i

Loan review 14–16 Feb 2012 1 2 i

Loan review 11–16 Jun 2012 1 5 i

Midterm review 16–17 Aug 2012 3 9 g, i, m

Loan review 23–26 Apr 2013 1 3 I

Loan review 21–25 Oct 2013 1 4 I

Loan review 23–30 Apr 2014 2 12 i, m

Project completion reviewc 30 Jun–8 Jul 2014 4 24 b, g, i, o

a Some missions were undertaken concurrently with other ADB missions.

b a = project economist, b = control officer, c = consultant, d = counsel, e = project officer, f = resettlement specialist,

g = assistant project analyst, h = office of the special projects facilitator, i = project implementation officer, j = portfolio and project financial management officer, k = Head, Portfolio Management and Harmonization, l = project implementation officer, m = social sector specialist, n = project coordinator, o = staff consultant.

c The project completion review mission comprised D. N. Hoang (Senior Urban Development Officer), T. Bich Dung

(Project Analyst), and a financial analyst (staff consultant). The project completion report was prepared by D. N. Hoang, Senior Urban Development Officer, SERD.

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I. PROJECT DESCRIPTION

1. Project objectives and scope. The project aimed to contribute to sustainable economic growth and improve the quality of urban life in 8 towns within 5 provinces in Central Viet Nam The project objective was to improve environmental conditions in the towns of Phan Thiet (Binh Thuan Province), Gia Nghia (Dak Nong Province), Cam Ranh and Ninh Hoa (Khanh Hoa Province), Thap Cham and Ca Na (Ninh Thuan Province), and Tuy Hoa and Song Cau (Phu Yen Province). The project’s design and monitoring framework is presented as Appendix 1. 2. The project consisted of five components: (A) water supply development and expansion, (B) drainage and wastewater management, (C) solid waste management, (D) community environmental sanitation and awareness, and (E) project management and institutional strengthening. Table 1 summarizes key features of the project towns.

Table 1: Key Features of Project Towns at Appraisal

Province Project Town Population

(‘000)a Poverty

(% population)

Project Cost

$ million $ per capita

Binh Thuan Phan Thiet 183 3.0 16.0 87

Dak Nong Gia Nghia 25 18.3 14.1 568

Khanh Hoa Cam Ranh 91 18.0 8.4 92

Ninh Hoa 22 18.0 4.0 180

Ninh Thuan Thap Cham 37 10.0 5.7 151

Ca Na 18 10.4 3.0 162

Phu Yen Tuy Hoa 135 9.1 13.7 101

Song Cau 19 11.2 2.0 105

All towns 531 9.5 66.7 126 a Urban population in 2004.

Source: GHK International, Halcrow, Weli and CRP. 2006. Central Region Small and Medium Towns Development Project. Technical Assistance Consultant’s Report. Hanoi.

3. Part A: Water Supply Development and Expansion. Component A aimed to develop and expand piped water supply systems in the project towns of Ca Na, Gia Nghia, and Ninh Hoa. At the time of appraisal, it was envisaged that the project would finance water treatment plants, raw water mains, distribution networks, and the rehabilitation and construction of piped water connections. These investments would benefit about 13,300 households. 4. Part B: Drainage and Wastewater Management. This component would provide physical investments in drainage networks and wastewater treatment systems in the project towns of Cam Ranh, Gia Nghia, Phan Thiet, Song Cau, Thap Cham, and Tuy Hoa. Proposed improvements to drainage included the rehabilitation and construction of primary, secondary, and tertiary drains. Wastewater infrastructure work consisted in constructing interceptor sewers, pressure mains, pumping stations, and wastewater treatment plants. About 105,000 households were expected to benefit from investments under this component. 5. Part C: Solid Waste Management. This component was aimed at improving the collection, transport, and storage of municipal solid waste in the project towns of Cam Ranh, Gia Nghia, and Song Cau, thereby benefiting approximately 30,700 households. At appraisal, it was

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envisaged the project would support (i) development of three sanitary landfills with a combined area of 15 hectares; (ii) procurement of equipment for collection, transport, and disposal of solid waste; and (iii) establishment of functioning systems for solid waste management. 6. Part D: Community Environmental Sanitation and Awareness. This component was designed to (i) promote public awareness of the importance of environmental hygiene and links between good sanitary practices and health, and (ii) support community activities to enable the poor to access water and particularly sanitation services in all project towns. This component was expected to benefit about 4,700 households. 7. Part E: Project Management and Institutional Strengthening. This component consisted of project management and institutional strengthening. Project management was comprised of (i) consulting services for design and construction supervision of urban infrastructure, social, gender, environmental, and resettlement aspects; (ii) engineering and environmental surveys; (iii) training and support for the project coordination unit (PCU) and each provincial project management unit (PPMU); and (iv) incremental administration support for allowances, vehicles, computers, and office equipment for the PCU, PPMUs, and town-level women’s unions. The institutional strengthening program aimed at improving water supply and sanitation services in the project towns and tariff policies for these services at the national level through the Management Board for Urban Technical Infrastructure Projects under the Ministry of Construction, water supply and sanitation service providers (also known as project operating entities, or POEs), and town-level branches of the Viet Nam Women’s Union.

II. EVALUATION OF DESIGN AND IMPLEMENTATION

A. Relevance of Design and Formulation

8. Project design. Since the early 1990s, the Government of Viet Nam has taken major steps to promote urban development and improve efficiency in the urban sector. The government’s Comprehensive Poverty Reduction and Growth Strategy for 2001–2010 stated a series of policy objectives highly relevant to the urban sector, notably to (i) develop urban areas to create employment and improve living standards; (ii) strengthen environmental protection to ensure a healthy living environment; (iii) promote gender equity and enhance the participation of women at all levels of leadership; and (iv) strengthen accountability at all levels, especially at the local government level, by improving the transparency and accessibility of local budgets. In addition to promoting urban development, the government also aimed to encourage balanced and sustainable economic growth across the country as a means of counteracting the high and rising migration from the center of Viet Nam to the megacities of Hanoi and Ho Chi Minh City. 9. The project impact and outcome were consistent with the government’s development objectives and with ADB’s country strategy. The project directly addressed the goals stated in the government’s Socioeconomic Development Plan (2006–2010) to achieve a balance between growth, social equity, and improved environmental management, combined with actions to strengthen governance and improve the effectiveness of public institutions and public service delivery.1 The project contributed to achieving priorities in ADB’s Country Strategy and Program (2007–2010) for Viet Nam: (i) develop physical infrastructure, (ii) improve the business-enabling environment through regulatory reforms, and (iii) develop human resources.2

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Government of Viet Nam, Prime Minister. 2004. Directive No. 33/2004/CT-TTg on the Preparation of the 5-Year Socioeconomic Development Plan, 2006–2010. Hanoi.

2 ADB. 2006. Country Strategy and Program: Viet Nam, 2007–2010. Manila.

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ADB’s assessment, strategy, and roadmap for the urban sector (2010) also proposes the development of secondary cities and towns as regional economic hubs to foster balanced regional development and strengthen rural–urban linkages, including through the upgrading and expansion of such priority urban infrastructure as water supply, sanitation, wastewater treatment, and solid waste management, supported by clearly defined institutional arrangements and the building of necessary local capacity. 10. At completion, the project remains relevant. The government’s Socioeconomic Development Plan for 2011–2015 and ADB’s Country Strategy and Program for 2012–2015 placed high priority on sustainable urban development and balanced regional development. Project activities supported two core areas of operations, namely infrastructure development and the creation of livable cities. 11. Project formulation. In July 2006, the feasibility study prepared under project preparatory technical assistance had constituted an adequate basis for project appraisal.3 This feasibility study was prepared in close consultation with central government officials, representatives of the people’s committees of the provinces and towns in which the project would be implemented, POEs, and local communities. The lessons learned from previous, related projects financed by ADB and other donors were sufficiently incorporated into the project design, and particularly in formulating covenants. The project design anticipated the new legislation on water supply, sanitation, and solid waste management, as well as the national reform from the government to equitize the publicly owned entities arising after the project was approved.

12. Project implementation. The project has been implemented as approved at appraisal without any major change in the scope of works and implementation arrangements, except the shortcoming as mentioned in para. 13. The project was delayed by 18 months in starting up due to a prolonged process for recruiting the project implementation assistance consultants.

B. Project Outputs

13. The project outputs anticipated during appraisal were achieved satisfactorily, except that the number of household connections under water supply and wastewater components was underachieved. This section summarizes the outputs realized by all towns (see Appendix 2 for details). 14. Part A: Water Supply Development and Expansion. This component provided 6 kilometers (km) of raw water pipelines, 3 water treatment plants with a combined capacity of 18,640 cubic meters (m3) daily, 108 km of water distribution pipes, and 4,200 piped water connections in Ca Na, Gia Nghia, and Ninh Hoa. The total treatment capacity achieved is more than envisaged (16,000 m3/day at appraisal). The total length of the distribution network was also longer than envisaged (108 km compared to 98 km). These increased outputs are aimed to meet growing water demand in the near future. The length of the raw water pipes and treated water pipes were shorter than envisaged because pipeline alignments were changed to reduce costs. The component achieved targeted outputs, with the exception of the number of household connections (4,200 compared to 7,000). This shortfall occurred because the water supply companies strategically focused on network expansion within the project timeframe. The

3 GHK International, Halcrow, Weli and CRP. 2006. Central Region Small and Medium Towns Development Project

– Technical Assistance Consultant’s Report. Hanoi.

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remaining 2,800 connections will be installed by the water supply companies in 2015 using their own financial resources. 15. Part B: Drainage and Wastewater Management. The component provided wastewater treatment systems in Cam Rang, Gia Nghia, Phan Thiet, and Tuy Hoa. In each of the four towns, the project also delivered equipment for operation and maintenance (O&M) of the drainage and wastewater systems. With the exception of Cam Ranh, the outputs anticipated at appraisal were achieved.4 Specific completed outputs include 78 km of primary and secondary drains and rehabilitation of approximately 54 km of existing tertiary drains, 13 km of pressure mains, 16 sewage pumping stations, 8 km of interceptor sewers, and 4 wastewater treatment plants with a combined capacity of 16,000 m3/day. In total, the length of the primary/secondary drains and tertiary drains was shorter than envisaged (78 km of primary and secondary drains compared to 112 km and 54.4 km of tertiary drains compared to 92 km). The reason for this shortfall is that during the preparation of bidding documents in 2009 the updated estimated costs for subprojects were higher than estimated in the feasibility study approved by the provincial people’s committees (PPCs). All project towns used contingencies of the loan to cover the deficit, the exception being Cam Ranh, where the project management unit and project management assistance consultants reduced the scope of tertiary drains in the bidding documents in order to keep the estimated costs below the level approved in the feasibility study to avoid additional approval procedures at the PPC. This resulted in a shortfall of tertiary drains and associated household connections in Cam Ranh. 16. Part C: Solid Waste Management. The component achieved outputs as envisaged, including three sanitary landfills in three towns, namely Cam Ranh, Gia Nghia, and Song Cau, with a combined area of 18.2 ha (compared to 15.5 ha envisaged at appraisal). For future operation and maintenance of the landfills, solid waste collection and transportation equipment (5 compactor trucks, 1 bulldozer, and 7 other vehicles) was provided. 17. Part D: Community Environmental Sanitation and Awareness. The community awareness and participation program was implemented by the local Viet Nam Women’s Union in each of the eight project towns. This program included training town authorities in health education, mobilizing a motivator network, carrying out public health awareness campaigns, and organizing public events. The component has achieved intended outputs while 80% of teams that provide information about the project are female and 70% of the motivators recruited by the project are female (compared to 30% and 50%, respectively, in the design and monitoring framework). By the end of the project, 60% of poor households had access to septic tanks and drainage connections. The site visits found clean living environments in project areas. 18. Part E: Project Management and Institutional Strengthening. The project implementation assistance consultants under the supervision of the PCU and PPMUs provided (i) project management, (ii) consulting services for institutional strengthening, (iii) surveys and investigations, and (iv) training. Key activities are summarized below: Project Management

(i) supervising design and construction of infrastructure works in the eight project towns;

(ii) reporting on progress and technical issues;

(iii) providing technical and management support to PPMUs and the PCU;

4 The wastewater treatment facility in Tuy Hoa town (Phu Yen Province) did not operate at full capacity at the time

of the project completion review mission because it takes time for wastewater to fill the stabilization ponds. This facility is expected to achieve full design capacity by the end of December 2015.

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(iv) preparing project administration procedures, manuals, software, and reporting formats; and

(v) assisting PPMUs with preparing, implementing, and monitoring resettlement plans, environmental management plans, and gender plans.

Institutional Strengthening

(i) institutional support to POEs (for asset management, financial management, customer relations, tariff setting, billing services, and equitization). 5

(ii) institutional support to women’s unions (to help in implementing the awareness and pro-poor sanitation component); and

(iii) institutional support to the Ministry of Construction at national level through the Management Board for Urban Technical Infrastructure Projects.6

C. Project Costs

19. At appraisal, the project’s total costs were estimated at $66.72 million, with $53.22 million to come from ADB (including the financing charges during construction) and $13.5 million from the government (including the full cost of taxes and duties, land acquisition, and resettlement). Of this amount, $33.22 million was estimated to be foreign exchange cost and $33.5 million local currency cost. Proceeds of the loans were to finance the entire foreign exchange cost and a part of the local currency costs. Appraisal estimates included physical contingencies, price escalation, and an estimate of service charges during construction. 20. At project completion, the actual project cost was $68.91 million, with $51.89 million from ADB and $17.02 million from the government. That increase was due to delay in project implementation which caused implementation to be during a period when prices were rising in excess of the usual price escalation allowance that had been made, and particularly for civil works, resettlement, and land acquisition.7 By 2013, due to appreciation of the special drawing right (SDR) against the US dollar, ADB’s original financing of $53.22 million equivalent had increased to about $55.5 million. Because the project management unit in Cam Ranh had removed some tertiary drains and associated household connections from the scope of bidding documents, however, as discussed in para. 15, it was too late to begin a new bidding process to use the uncommitted loan proceeds. Thus, loan proceeds equivalent to SDR 1.3 million were cancelled. Appendix 3 provides a comparison of project costs at appraisal and completion. Appendix 4 summarizes exchange rate developments over the project period.

D. Disbursements

21. The proceeds of the loan were disbursed in accordance with ADB’s Loan Disbursement Handbook (as amended from time to time) by direct payment procedure for the procurement of consulting services, civil works, and goods and other services. The statement of expenditure

5 By June 2014, all POEs had been corporatized and equitized except that Phu Yen Water Supply & Drainage

Company is expected to be corporatized and equitized during 2015 6 In 2007, when the project was being designed, three key legal degrees had been enacted in relation to water

supply (Decree 117/ND-CP), sanitation (Decree 88/ND-CP), and solid waste (Decree 59/ND-CP). The Ministry of Construction later used lessons learned from the project’s institutional strengthening program in drafting the government’s new laws (to supersede Decree 117/2007/ND-CP by Decree 124/2011/ND-CP on water supply and Decree 88/2007 by Decree 80/2014/ND-CP for wastewater management).

7 The cost for civil works increased by 23% for the water supply and 13% for the drainage components, mainly due

to price escalation. Costs increased by 144% for the solid waste management component and corresponded to the increased outputs (landfill increased from 15 ha to 18.2 ha).

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procedure was used for incremental project administration and some project activities. Appendix 5 details projected and actual disbursements. 22. Project funds were disbursed to 6 imprest accounts, 1 of which was opened by the PCU and 1 by each of the 5 PPMUs. From 2007 to 2009, disbursement was low because of delays in implementing works and procurement of goods. The disbursement rate accelerated from 2010 in step with improved implementation progress. E. Project Schedule

23. The project was approved by ADB’s Board of Directors on 17 November 2006, signed with the borrower on 24 May 2007, and declared effective on 27 August 2007. Implementation was 2 years behind the original schedule. This was due to (i) slow project implementation caused by start-up delays of 18 months in recruiting consultants by the Ministry of Construction, and (ii) 6 months of delay in completing the detailed design by the consultants. On 10 September 2010, the original loan closing date of 30 June 2012 was extended to 30 June 2014. The extension was granted by ADB to allow the implementing agencies in the eight project towns to complete their subprojects. Appendixes 6 and 7 show the chronology of main events and the planned and actual implementation schedule, respectively. F. Implementation Arrangements

24. Decentralized structure. The implementing arrangements were based on the government’s decentralization policy and can be summarized as follows (Appendix 8: Project Organization Chart):

(i) Executing agencies. In each province covered by the project, the PPC was the executing agency. Each PPC established a project steering committee comprised of senior officials from the PPC, the relevant town people’s committee, women’s unions, and other relevant stakeholders. Each PPC then assigned the responsibility for project implementation to the project steering committee.

(ii) Implementing agencies. Each project steering committee established at least one PPMU with full-time professional staff to support the project steering committee in project implementation on a day-to-day basis. An exception to this was that implementation of activities under Part D was delegated to the women’s union in each town. Four of the five participating provinces established a PPMU within a single designated POE. The province of Khanh Hoa established a PPMU in two POEs (the Cam Ranh Urban Joint Stock Company and the Ninh Hoa Urban Company).

(iv) Coordinating agency. The Ministry of Construction established a PCU within the Management Board for Urban Technical Infrastructure Projects. The responsibilities of the PCU included to (i) provide technical support for project implementation through the project implementation assistance consultant, (ii) monitor compliance with loan covenants, (iii) monitor withdrawal applications, (iv) consolidate reports for submission to ADB, (v) monitor and evaluate project performance, (vi) prepare and implement training programs for PPMUs, (vii) ensure that project audits were carried out in a timely and proper manner, and (viii) act as liaison with ADB.

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G. Conditions and Covenants

25. The loan covenants were relevant and generally complied with as set out in the loan agreement. The loan agreement contained a total of 17 covenants, subdivided into 9 categories. At the loan closing date, the borrower had fully complied with all loan covenants except those relating to tariff increase for wastewater and solid waste management reforms. The PCU and the five PMUs submitted audited project financial statements for six accounting periods. Appendix 9 provides a detailed overview as to the status of compliance with loan covenants. H. Related Technical Assistance

26. There was no additional technical assistance. I. Consultant Recruitment and Procurement

27. Consultant recruitment. Recruitment of the consultants was undertaken in accordance with ADB’s Guidelines on the Use of Consultants (as amended from time to time). The PCU recruited a consulting firm to support the unit with project management and institutional strengthening, using quality- and cost-based selection. Originally, recruitment of this project implementation assistance consultant was planned to be completed by Q2 2007. In fact, the consultant was mobilized only by Q1 2009. The recruitment was delayed about 18 months due to a prolonged period for the Ministry of Construction’s evaluation of submissions 2 and 3. The consultants’ qualifications selection method was used to recruit a local firm for independent auditing and single source selection for engagement of local women’s unions to implement Part D. Taxes and duties on consultant contracts were fully financed by the government. 28. Procurement. Procurement of all goods and works was carried out in accordance with ADB’s Procurement Guidelines (as amended from time to time). The packaging arrangement from appraisal was followed without change. The procurement methods used were international competitive bidding, national competitive bidding, and force account (for cleaning of tertiary drains and rehabilitation of piped water connections). International competitive bidding thresholds for works and goods were $2 million and $500,000, respectively. Appendix 10 provides a complete list of packages procured from the ADB loan. J. Performance of Consultants, Contractors, and Suppliers

29. Performance of consultants. The contract for project implementation assistance consultant was awarded to an international firm (Black and Veatch UK) which provided the services in association with two Vietnamese firms. The international firm provided project management services and overall quality control while the local firms provided detailed design and construction supervision. The performance of the international consultant is rated less than satisfactory, because (i) the firm did not provide overall quality control on the final design products prepared by its local associates (which led to design flaws) and the consultants were slow in responding to client requests for corrections, and (ii) there was a high rate of staff turnover in the key personnel (six replacements in the position of consultant team leader). The performance of the local consultants is rated less than satisfactory, because (i) the detailed design was completed 6 months behind schedule, and (ii) there were numerous errors in detailed designs which required modifications and thus caused construction delays.8 The PCU

8 In Cam Ranh and Tuy Hoa subprojects, design errors resulted in delays in the construction of tertiary drains

(incorrect size and locations of drains thus required modifications).

8

sent several reminders requesting the consulting firm to strengthen its performance, but it took no action against the consultants for contractual noncompliance. 30. Performance of contractors. The quality of works was generally satisfactory. Under the supervision of the respective PMUs, all facilities were constructed satisfactorily and with good quality. The completion of some drainage works was delayed as a result of inclement weather and design changes. These factors were outside of the contactors’ control, however. Some delays were caused by weak financial capacity of the contractors at the beginning of contract execution, in particular the wastewater stabilization ponds in Tuy Hoa city. 31. Performance of suppliers. The equipment was delivered satisfactorily. However, the O&M manual for some minor items arrived so late as to cause handover delays. K. Performance of the Borrower and the Executing Agencies

32. The performance of the borrower and the executing agencies is rated satisfactory. The PPCs provided counterpart funds as specified in the loan agreement, complied with most loan covenants (except those related to institutional reforms), and ensured that procurement plans were implemented properly. Although at the beginning of the project the PCU was the main bottleneck delaying start-up in recruiting the consultant, its performance improved with project implementation. The PCU provided clear guidance to the PPCs and their PPMUs on project management and loan disbursement procedure, thus helping to expedite project implementation. Throughout the project, the PCU and PPCs were responsive to ADB requests. L. Performance of the Asian Development Bank

33. The project was originally administered and supervised from ADB headquarters, but with effect from 1 February 2008 it was delegated to the Viet Nam Resident Mission to allow closer supervision of civil works and resettlement. ADB conducted regular loan review missions, a midterm review, several special administration missions, and a project completion review mission together with the PCU and PPMUs. ADB was responsive to requests of the borrower, the PPCs, and the PPMUs. No notable delays were reported regarding ADB’s approval of withdrawal applications or issuance of no objection to work plans. The resident mission staff spent adequate time training PCU staff on project implementation procedures and provided all relevant guidelines in a satisfactory and timely manner. Advice on technical and implementation issues, preparation and evaluation of bid documents, and matters of loan administration were appreciated by the government officials involved in the project, as well as by consultants, contractors, and suppliers. ADB ensured that gender aspects were properly addressed. Appendix 11 summaries the achievements of the Gender Action Plan. For these reasons, the project completion review mission rates ADB’s performance as satisfactory.

III. EVALUATION OF PERFORMANCE

A. Relevance

34. The project is rated relevant. It was designed under a previous government’s Socioeconomic Development Plan (2006–2010) and ADB’s Country Strategy and Program for 2007–2010, but it remains consistent with the government’s Socioeconomic Development Plan for 2011–2015 and ADB’s Country Strategy and Program for 2012–2015. The latter continues to give high priority to sustainable urban development and balanced regional development. Project

9

activities supported two core areas of operations, namely infrastructure development and the creation of livable cities. B. Effectiveness in Achieving Outcome

35. The project is rated effective. By its end, the project had substantially achieved the intended outcomes of (i) improved access to safe and sustainable water supply, (ii) improved drainage and less flooding, (iii) improved solid waste management systems, and (iv) changed attitudes toward environmental hygiene and sanitation.

36. Regarding water supply, the project achieved water treatment capacity and additions to distribution networks greater than expected at appraisal, thereby enabling water supply companies to increase household connections at low cost in the short and medium terms. This will ensure improved access to safe and sustainable water supply. Concerning drainage, the project achieved the targeted wastewater treatment capacity but the length of additional drainage system is less than expected at appraisal. For reasons explained in para. 15, this shortfall was due mainly to smaller outputs of primary, secondary, and tertiary drains in Cam Ranh town. Five of six project towns (excluding Cam Ranh) have achieved improved drainage and less flooding. As to solid waste management, the project achieved the expected coverage via three sanitary landfills, thus improving solid waste management in the project towns.

C. Efficiency in Achieving Outcome and Outputs

37. The project’s efficiency in achieving its outcome and outputs is rated less efficient, primarily because implementation delays resulted in higher costs. At appraisal, the estimated economic internal rates of return (EIRRs) for water supply and drainage and wastewater subprojects ranged from 12.1% to 26.8% (no EIRRs were estimated for solid waste management). At completion, for the water supply component, two recalculated EIRRs range from 12.9% to 14.9% (efficient) while one recalculated EIRR stands at 7.0% (less than efficient). For the drainage and wastewater component, four recalculated EIRRs range from 13.7% to 26% (efficient), while two recalculated EIRRs range from 9.1% to 9.2% (less than efficient). Lower EIRRs in some components occur because actual costs were mostly higher than expected and the number of project beneficiaries is lower. Financial reevaluation indicates that full cost-recovery tariffs for water supply and full O&M cost-recovery tariffs for solid waste collection were estimated correctly at appraisal. At the loan closing date, actual tariffs for water supply were at least 100% of recommended tariffs for August 2008 in all three project towns with water supply components. For domestic solid waste collection, actual collection tariffs in 2014 were at least 65% of tariffs estimated in 2006 for August 2008. In contrast, the wastewater surcharges for drainage and wastewater management were set at 10% of the water tariff without reference to the O&M cost of the infrastructure. The surcharges recommended by the preparation consultant were therefore unrelated to those that were actually adopted by the PPCs (which were issued with the explicit aim of recovering the full O&M cost of assets financed by the project, either upon commissioning of the assets or in the medium term). Appendix 12 provides a detailed economic and financial reevaluation of the project. D. Preliminary Assessment of Sustainability

38. Sustainability of infrastructure and the institutional strengthening program are considered likely in as much as (i) all major project-financed assets are operated and maintained by POEs with substantial experience in operating and managing water supply, drainage, and solid waste

10

collection systems; (ii) the contractors provided as-built drawings and O&M manuals and provided on-the-job training to POE staff before handing over the completed works (which was especially relevant for wastewater treatment plants); (iii) all O&M equipment necessary for the infrastructures has been delivered to the sites and is in operation; and (iv) regulatory reforms for the water supply and wastewater sectors are being implemented by the government with positive progress. As more customers are connected to water supply and wastewater systems, revenues to properly operate and maintain the facilities will increase significantly. 39. At the loan closing date, PPCs had raised water supply tariffs to (or close to) full cost-recovery levels, thereby enabling the POEs in these towns to operate and maintain the project-financed assets in a financially sustainable manner. The financial sustainability of other assets under wastewater and solid waste management components is less obvious. The PPCs only managed to raise wastewater and solid waste fees to about 40% of actual O&M costs. Although all project towns provide substantial subsidies to POEs, it remains unclear if the subsidies are sufficiently high to cover the full cost of O&M, especially for drainage and wastewater infrastructure. In most project towns, moreover, the annual subsidies were based on negotiation rather than the POEs’ performance against objectively verifiable criteria. E. Impact

40. The project has provided (i) improved access to urban environmental infrastructure for the populations in the project areas, (ii) increased community participation, (iii) enhanced public health awareness, and (iv) an enhanced role for women in urban management and institutions. For example, the coverage for improved water supply has been increased from 51% to at least 75%. Moreover, the wastewater treatment capacity in each project town grew from 0 m3/d to at least 4,000 m3/d, together with expanded drainage and wastewater networks. These will lead to substantial reduction in major water-related diseases in all project towns. 41. All project towns acquired land for major infrastructure projects, notably landfills and stabilization ponds. PPMUs prepared resettlement plans in accordance with the project’s resettlement framework and implemented these plans once approved by ADB. The project authorities acquired land and compensated affected people in accordance with ADB guidelines and approved resettlement plans. In total, 507 affected households were resettled and land acquisition came to 495,529 m2. The affected people were satisfied with the market rate compensation provided, which included timely provision of serviced residential plots. Resettlement committee compensation payments were timely and made in a manner convenient for the affected households. Resettlement sites were provided with basic infrastructure, including roads, water supply connections, drainage systems, and electricity. According to the impacts assessment, the living standards of affected people in resettlement sites are equal to or exceed the pre-project standards.9

42. The primary environmental benefits of the project consist in reduced surface and groundwater pollution, achieved through substantially increased coverage of wastewater management and solid waste collection. Review missions jointly conducted by ADB and the Ministry of Construction observed that environmental mitigation measures were adequately implemented during civil works construction, and the project brought no significant adverse environmental impacts. Wastewater treatment, drainage improvements, and more efficient garbage collection and storage have greatly improved sanitary conditions in urban areas.

9 InvestConsult Group. April 2014. Final Resettlement Monitoring Report. Hanoi.

11

43. Each subproject implemented gender action plans to ensure that males and females would benefit equally from the project (or be compensated equally by the project) and the overall intended gender benefits were delivered. At loan closing, all agreed actions had been achieved. Appendix 11 provides details.

IV. OVERALL ASSESSMENT AND RECOMMENDATIONS

A. Overall Assessment

44. The project is rated successful according to its relevance, effectiveness, efficiency, and sustainability. It was relevant at the time of appraisal in addressing the policy objectives of the government and ADB, and it remained relevant at the loan closing date. The project was also rated effective, given that it achieved its intended outcome. It was deemed less efficient, primarily because of the lengthy delays in project implementation. Sustainability of the project’s benefits and impacts is rated likely. Appendix 13 details the quantitative assessment. B. Lessons

45. Executing agencies’ recruitment of consultants remains time-consuming and was the main reason for start-up delays. This problem is not specific to the project but is common in all ADB-financed projects in Viet Nam. Delays in recruiting consultants result in delay of such project activities as detailed design, resettlement planning, environmental management planning, and preparing bidding documents. The delays in bidding and contract awards caused total project costs to rise and held back delivery of the facilities to the final recipients. 46. The project substantially achieved the targeted outputs despite the start-up delays caused by the prolonged process of recruiting consultants. This demonstrated that the executing agencies at provincial level have the capacity for project implementation and the decentralized approach to project preparation and implementation is appropriate. 47. The result of efforts to increase tariffs varies among project provinces. Some provinces showed strong commitments in implementing the reform agenda set by the project (for example, Binh Thuan, Dak Lak, and Khanh Hoa provinces). Meanwhile, other provinces were reluctant to raise the wastewater tariff and solid waste collection fee to the required levels (Ninh Thuan and Phu Yen provinces).

C. Recommendations

48. Advance actions should be included in the project design, and project readiness filters should be applied to minimize start-up delays. In cases where an executing agency has no prior experience in implementing projects financed by ADB, a start-up specialist should be built into project preparatory assistance. 49. For projects to be implemented at provincial level, capacity-building programs and annual training should be designed to improve the executing agencies’ implementation capacity.

50. PPCs should be allowed to achieve full O&M cost recovery for drainage and wastewater infrastructure within a pre-agreed period (e.g., 5 years) instead of upon commissioning of project assets. The project processing team needs to initiate discussions on tariff adjustments at

12

an early stage of project preparatory technical assistance. The executing agencies should endorse a roadmap for tariff increases as a condition for loan effectiveness.

Appendix 1 13

DESIGN AND MONITORING FRAMEWORK

Design Summary Performance

Targets/Indicators Achievements Comments

Impact By 2015 By June 2014

Improved quality of life, sustained economic growth, and reduced poverty in project towns

100% coverage for improved WSS, reduced waterborne and water-related diseases, poverty reduced to less than 10% in all project towns

� Coverage for improved WSS at least 75% in all project towns except Cam Ranh and Gia Nghia

� Substantial reduction in major water-related diseases in all project towns from 2007 to 2013

� Poverty reduced to less than 10% in all project towns except Song Cau (27%)

Outcome By end of project (2011) By June 2014

Improved access to safe and sustainable water supply

95% water supply coverage, uninterrupted 24-hour water supply, average unaccounted-for-water of less than 30%. Benefits will accrue to about 13,200 households.

Achieved 90% water supply coverage in project areas, uninterrupted 24-hour water supply, and average unaccounted-for-water of less than 30%. Benefits accrued to about 15,960 households.

Improved drainage and less flooding

85% drainage coverage, reduced flooding and ponding, reduced wastewater discharge to rivers and waterways. Benefits will accrue to about 105,400 households.

85% drainage coverage in project areas, reduced flooding and ponding, reduced wastewater discharge to rivers and waterways. Benefits accrued to about 64,000 households.

Improved solid waste management systems

90% solid waste collection coverage, fully operational SWM management systems. Benefits will accrue to about 30,700 households.

Achieved 90% solid waste collection coverage in project areas, fully operational SWM management systems. Benefits accrued to about 36,050 households.

Changed attitudes toward environmental hygiene and sanitation

Septic tank coverage of 60% in all eight project towns, reduced risks to public health

Achieved septic tank coverage was at least 70% in all eight project towns

Sustainable management and delivery capacities of WSS service providers

Corporatization of all POEs to limited liability companies by 2009; positive cash flows, improved staff ratio, adequate and timely tariff adjustments for water supply; improved collection; improved cost-recovery mechanisms

Corporatization achieved for 5 out of 6 POEs

Tariffs have been increased sufficiently for water tariffs and cost recovery mechanisms in place; collection improved.

The exception is the POE Phu Yen, which will be equitized in 2015.

Appendix 1 14



Outputs

Part A: Water Supply Development and Expansion

Mid-2008 to end of 2010 By June 2014

Construction and rehabilitation of existing headworks

10 km of raw water pipelines from source to WTPs for Gia Nghia and Ninh Hoa

5.9 km of raw water pipelines constructed, which met the local requirements

Actual length of raw water pipelines is less than target anticipated at appraisal because it was overestimated at appraisal.

Construction of water treatment plants and pumping stations

3 WTPs with a combined 16,000 m

3 capacity per

day designed to agreed standards in Ca Na, Gia Nghia, and Ninh Hoa

Achieved installed treatment capacity of 18,400 m

3/day which met

national standards

Actual treatment capacity is greater than target in response to increased water demand.

Construction, rehabilitation, and improvement of water distribution networks

98 km of water supply distribution networks, pipes designed to agreed standards in Ca Na, Gia Nghia, and Ninh Hoa; 18 km treated-water pipes extended to Ca Na

Achieved 108 km of water supply distribution networks; all pipes designed to national standard in Ca Na, Gia Nghia and Ninh Hoa

Length of raw water pipelines was scaled down because the alignment selected is shorter to save costs.

Installation of new piped connections and rehabilitation of existing connections

7,000 new pipe connections and rehabilitation of obsolete connections in Ca Na, Gia Nghia, and Ninh Hoa

Achieved 4,200 connections installed by loan closing date

An additional 2,800 connections will be installed as part of a network expansion program by the water supply company in Gia Nghia town.

Part B: Drainage and wastewater management

Mid-2008 to end of 2011 By June 2014

Construction of drainage networks

112 km primary and secondary drains, 92 km tertiary drains, and 5 km pressure mains in Cam Ranh, Gia Nghia, Phan Thiet, Song Cau, Thap Cham, and Tuy Hoa

Achieved 78 km length of primary and secondary drains, and tertiary drains of about 54 km

Length of raw water pipelines was scaled down as result of a change in detailed design.

Construction of interceptor sewers for the above towns

20 km of interceptor sewers equipped with 14 pumping stations

8 km interceptor sewers and 16 pumping stations constructed

Variance reflects change in detailed design.

Construction of wastewater stabilization ponds for Tuy Hoa, Cam Ranh, and Phan Thiet

4 wastewater stabilization ponds, total treatment capacity of 17,500 m

3/day

4 wastewater stabilization ponds in Cam Ranh, Gia Nghia, and Phan Thiet at total capacity of 17,000 m

3/day

Wastewater treatment system in Tuy Hoa (4,000 m

3/day) is to be in full

operation by end of 2014.

15 Appendix 1



Part C: Solid waste management

Mid-2008 to end of 2009

Construction and rehabilitation of landfill sites for Cam Ranh, Song Cau, and Gia Nghia

New sanitary landfills, including buffer zones, and landfill infrastructure for Gia Nghia, and Cam Ranh, each covering 6 ha; 3.5 landfill site improvement for Song Cau

All waste pickers identified have continued access to

landfill sites.

3 new sanitary landfills, including buffer zones, and landfill infrastructure for Cam Ranh, Gia Nghia, and Song Cau are fully functional

Procurement of solid waste equipment

Compactor trucks, bulldozers, handcarts, and storage bins

Equipment delivered

Establishment of SWM management systems

Functioning SWM systems in Gia Nghia, Song Cau, and Cam Ranh

O&M manuals for landfills handed over to the landfill operators in Cam Ranh, Gia Nghia, and Song Cau

Part D: Community environmental sanitation and awareness

Early 2007 to end of 2008

Public awareness on the importance of good environmental hygiene and sanitation

Evidence of community participation; increased use of septic tanks

At least 30% of teams that provide information about the project are female

At least 50% of motivators recruited are female

Achieved 80% of teams providing information about the project are female; 70% of motivators recruited by the project are female

Improved access to sanitation services for the poor

Number of poor households able to acquire septic tanks and drainage connections

60% of poor households had acquired septic tanks in project towns

Improved environmental conditions in poor communities

Cleanliness verified through visual inspections

Percentage female-headed households that have acquired septic tanks and drainage connections

At least 80% of female-headed households had acquired septic tanks in project towns for which data were available

Site visits to wards where project-financed infrastructure was completed indicate clean living environments.

Appendix 1 16



Part E: Project Management and Institutional Strengthening

Early 2007 to end of 2011 (full duration of the project)

Improved capacity of Management Board for Urban Technical Infrastructure Projects and PPC personnel, as well as POE and WSS personnel in the areas of project management and technical and financial expertise

Number of personnel trained in management, technical and administrative expertise in provincial water supply companies and other POEs

Achieved (166 persons trained), institutional action plans completed

All six POEs successfully completed an action plan to comply with institutional covenants in the loan agreement (albeit later than required in the loan agreement).

Greater managerial autonomy and operational efficiency of POEs and WSS providers

Issuance of PPC operational decree on autonomy and other necessary reform

Achieved An exception is the POE of Phu Yen, where equitization is expected to occur in mid-2015.

Improved tariff structure for WSS services for financial sustainability

Conformity to tariff schedule

Achieved in part

O&M manuals, established accounting systems, corporate plan for POEs

Publication and use of guidelines and manuals

Achieved in 3 of 6 project towns

Inputs

Appraisal (August 2006) Completion (June 2014)

Funding ($ million) ADB Bor-rower

a

Total ADB Bor-rower

a

Total

Part A: Water Supply Development and Expansion 9.60 2.39 11.99

9.99 2.89 12.88

Part B: Drainage and Wastewater Management 33.13 10.19 43.33

30.28 12.22 42.50

Part C: Solid Waste Management 1.62 0.40 2.02 2.99 1.31 4.30

Part D: Community Environmental Sanitation and Awareness 0.43 0.00 0.43

0.36 0.06 0.42

Part E: Project Management and Institutional Strengthening 7.55 0.52 8.07

7.69 0.55 8.24

Service Charges 0.88 0.00 0.88 0.58 0.00 0.58

Total 53.22 13.50 66.72 51.89 17.02 68.91

O&M = operation and maintenance, POE = project operating entity, PPC = provincial people’s committee, SWM = solid waste management, WSS = water supply and sanitation, WTP = water treatment plant. a Including contributions from project beneficiaries.

Source: Asian Development Bank. 2015.

17 Appendix 2

PROJECT OUTPUTS

Table A2.1: Planned and Actual Project Outputs

Component/Output At Loan Appraisal Actual Achievements


Raw water pipelines (km) 10.0 5.9

Water treatment plant capacity (m3/day) 16,000 18,640

Water distribution network (km) 98 108.7

Treated water pipe (km) 18 13.9

Piped water connections (unit) 7,000 4,200

Part B: Drainage and Wastewater Management

Primary and secondary drains (km) 112 78.0

Tertiary drains (km) 92 54.4

Pressure mains (km) 5 13.0

Interceptor sewers (km) 20 8.2

Pumping stations (unit) 14 16

Stabilization ponds (unit) 4 4

Wastewater treatment plant capacity (m3/day) 17,500 17,000

Vacuum trucks (unit) 0 7

Part C: Solid Waste Management

Compactor trucks (unit) 0 5

Other trucks (unit) 0 7

Bulldozers (unit) 0 1

Landfills (ha) 15.5 18.2

ha = hectare, km = kilometer, m3 = cubic meter.

Source: Asian Development Bank.

Appendix 2 18

Table A2.2: Project Outputs by Town

Component/Output Phan Thiet

Gia Nghia

Cam Ranh

Ninh Hoa

Thap Cham

Ca Na

Tuy Hoa

Song Cau

Total

Part A: Water Supply

Development and Expansion

Raw water pipelines (km) 1.6 4.3 5.9

Water treatment plant capacity (m

3/day) 12,000 4,000 2,640 18,640

Water distribution network (km) 22.2 79.8 6.7 108.7

Treated water pipe (km) 13.9 13.9

Piped water connections (unit) 1,500 2,000 700 4,200

Part B: Drainage and Wastewater

Management

Primary and secondary drains (km) 8.2 4.9 10.6 5.5 43.8 4.7 77.6

Tertiary drains (km) 50.5 4.0 54.4

Pressure mains (km) 5.1 3.9 1.1 3.0 13.0

Interceptor sewers (km) 4.6 3.6 8.2

Pumping stations (unit) 5 3 5 3 16

Stabilization ponds (unit) 1 1 1 1 4

Wastewater treatment plant capacity (m

3/day) 5,000 4,000 4,000

4,000

17,000

Vacuum trucks (unit) 2 3 1 1 7


Compactor trucks (unit) 3 1 1 5

Other trucks (unit) 2 2 1 1 6

Bulldozers (unit) 1 1

Landfills (ha) 4.5 10.2 3.5 18.2

Part D: Community

Environmental Sanitation

and Awareness

(no physical outputs)

Part E: Project Management

and Institutional Strengthening

(no physical outputs)

ha = hectare, km = kilometer, m3 = cubic meter.

Source: Asian Development Bank, based on provincial project management units’ data and the government’s project completion report.

Appendix 3 19

APPRAISAL AND ACTUAL PROJECT COST ($ million)

Component

Appraisal Estimate Actual

Foreign Local Total Total

A. Base Cost

Part A: Water Supply Development

and Expansion

1. Civil works 5.82 3.88 9.70 9.10

2. Equipment 0.58 0.04 0.62 3.70

3. Land acquisition and compensation 0.00 0.12 0.12 0.08

Subtotal Part A 6.40 4.03 10.43 12.88

Part B: Drainage and Wastewater

Management

1. Civil works 20.84 13.89 34.73 29.24

2. Equipment 0.06 1.26 1.32 11.73


Subtotal Part B 20.90 16.70 37.60 42.49


1. Civil works 0.00 1.32 1.32 2.23

2. Equipment 0.00 0.30 0.30 1.67


Subtotal Part C 0.00 1.76 1.76 4.30

Part D: Community Environmental

Sanitation and Awareness

1. Community awareness 0.23 0.15 0.38 0.42

Subtotal Part D 0.23 0.15 0.38 0.42

Part E: Project Management and

Institutional Strengthening

1. Project management 0.00 2.05 2.05 2.47

2. Consultancy 3.00 1.00 4.00 4.97

3. Surveys and investigations 0.00 0.70 0.70 0.51

4. Training 0.18 0.12 0.30 0.29

Subtotal Part E 3.18 3.87 7.05 8.23

Total Base Cost 31.90 25.32 57.22 68.33

B. Contingencies

Physical 2.24 1.78 4.02 0.00

Price 2.56 2.03 4.59 0.00

Subtotal Contingencies 4.80 3.81 8.61 0.00

C. Service Charge 0.80 0.08 0.88 0.58

Total 37.51 29.21 66.72 68.91

Note: Totals may not sum precisely due to rounding differences.


20 Appendix 4

CURRENCY EQUIVALENTS

Year D to $1.00 D to SDR1.00

2006 16,061 24,176

2007 16,045 25,075

2008 16,988 26,216

2009 18,475 28,834

2010 19,499 29,822

2011 20,263 31,155

2012 20,932 32,166

2013 20,956 32,273

2014a 21,192 32,744 a

From 1 January until 30 June.


Appendix 5 21

CUMULATIVE PROJECTED AND ACTUAL DISBURSEMENTS ($ million)

Year Projected Actual

2006 0.00 0.00

2007 0.00 0.00

2008 1.30 0.30

2009 1.86 1.77

2010 6.68 3.11

2011 9.56 6.93

2012 30.42 20.23

2013 44.15 36.84

2014 53.22 52.08

2015 – 51.89

Total 53.22 51.89

Source: ADB Loan Financial Information System.

Figure A6.1: Cumulative Disbursement of the Project Loan, 2006–2015

($ million)

Source: ADB Loans Financial Information System.

22 Appendix 6

CHRONOLOGY OF MAIN EVENTS

Date Event

2006

3–19 May Fact-finding mission

8–25 August Appraisal mission

11–13 October Loan negotiations

17 November Loan approval

2007

10–14 September Inception mission

24 May Loan signing

27 August Loan effectiveness

2008

2 May Initial loan disbursement

12–15 May Loan review mission #1

9 December Consulting services contract signed with project implementation assistance consultant firm

2009

5 January Mobilization of project implementation assistance consultant

5–7 January Loan review mission #2

7–8 April Loan review mission #3

28–30 September Loan review mission #4

30 September Approval of change in scope of works by provincial people’s committees

2010

11–13 January Loan review mission #5


30 August–1 September Loan review mission #7

1 September Request for loan extension to 30 June 2014 by the Government of Viet Nam

10 September Approval of loan extension to 30 June 2014 by Asian Development Bank (ADB)

27–29 December Special project administration mission #1

2011

27–30 June Loan review mission #8

29 June Contract BT5B/10/NCB signed for improvement of tertiary drains in Phan Thiet

8 August Contract BT4B/10/NCB signed for construction of wastewater treatment plant and pumping stations in Phan Thiet

29 August Contract BT3B/10/ICB signed for construction of sewerage and interceptor systems in Phan Thiet

29 August Contract KH5A/10/ICB signed for expansion of water supply system in Ninh Hoa

9 September Contract PY2B/B/10/ICB signed for construction of wastewater treatment plant and pumping stations in Tuy Hoa

Appendix 6 23

CHRONOLOGY OF MAIN EVENTS

Date Event

12 September Contract DN3B/10/ICB signed for expansion of water supply system in Gia Nghia

21 September Contract KH4C/10/NCB signed for civil works of landfill in Cam Ranh

22 September Contract PY2A/B/10/ICB signed for construction of drainage in Tuy Hoa

22 September Contract PY4C/10/NCB signed for civil works of landfill in Song Cau

22 September Contract PY5B/10/NCB signed for construction of drainage in Song Cau

5–7 October Special project administration mission #2

14 October Contract NT3B/10/ICB signed for construction of drainage in Thap Cham

14 October Contract NT4A/10/ICB signed for construction of water supply system in Ca Na

4 November Contract DN3A/10/ICB signed for construction of drainage and wastewater systems in Gia Nghia

7 November Contract DN4C/10/NCB signed for civil works of landfill in Gia Nghia

11 November Contract KH3B/10/ICB signed for construction of drainage and wastewater system in Cam Ranh

12 December Contract DN5C/09/ICB signed for procurement of operation and maintenance equipment

2012

14–16 February Loan review mission #9

11–16 June Loan review mission #10

30 June Original loan closing date

16–17 August Midterm review mission

2013


21–25 October Loan review mission #12

2014

13 April First draft of the borrower’s project completion report submitted to ADB


30 June Closing date of contract of project implementation assistance consultant

30 June Loan closed

30 June Final draft of the borrower’s project completion submitted to ADB

30 June–8 July Project completion review mission fielded

30 November Loan account financially closed and undisbursed amount canceled Note: References to signing and completion of contracts are limited only to contracts under international competitive bidding (ICB) and national competitive bidding (NCB). Source: Asian Development Bank. 2014.

24 Appendix 7

PROJECT IMPLEMENTATION SCHEDULE

Project Start-Up and Implementation

A. Water Supply Development and Expansion

B. Drainage and Wastewater Management

C. Solid Waste Management

D. Community Environmental Sanitation and Awareness

E. Project Management and Institutional Strengthening

4. SW systems development

Extension

1. Incremental project management

2. Training and capacity building

3. Institutional Strengthening

1. Public awareness campaigns

2. Assistance scheme for the poor

1. Detailed engineering design

2. Bidding and award

3. Procure landfill equipment

5. Landfill development

6. Land acquisition/resettlement



3. Pipe layout and refurbishment

4. Public sanitation improvements


1. Establish PCU and PPMUs

2. Consultant recruitment



4. Construction/rehab of WTPs

5. Transmission and district pipes

Q4

2014

<<< Original Loan Period >>>

2007 2008 2009 2010 2011 2012 2013

Q1 Q2

Schedule at appraisal (Aug 2006) Actual schedule (June 2014)

Q2Description Q3 Q4 Q1

3. Development of headworks


Q2Q3 Q4 Q3 Q4Q3 Q3Q1

2006

Q3 Q4 Q1 Q2 Q4Q1 Q2 Q1 Q2Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

PCU = project coordination unit, PPMU = provincial project management unit, SW – solid waste, WTP = wastewater treatment plant. Source: Asian Development Bank. 2006 and 2014.

Appendix 8 25

PROJECT ORGANIZATION CHART


26 Appendix 9

STATUS OF COMPLIANCE WITH LOAN COVENANTS

Loan Covenant Source Required Date of Compliance

Status of Compliance

A. Project Implementation

1. The Borrower shall establish the PCU within MABUTIP within 1 month after the Effective Date

LA, Schedule 5, para. 2(a)

27 September 2007

Complied with.

2. The Borrower shall cause the PPCs to set up a PPMU within each Project province within 2 months after the Effective Date, under either the respective provincial Water Supply and Drainage Company or the Urban Works Company, as may be applicable

LA, Schedule 5, para. 3

27 October 2007

Complied with.

3. The PPMUs shall establish resettlement working groups (RWGs) and environmental monitoring units (EMUs) which shall monitor and update information in their relevant areas of expertise.


(not stated) Complied with.

4. The Borrower shall also cause the PPCs to ensure that the PPMUs work with the respective VWU offices at the provincial level to design and implement Part D of the Project.



The VWU shall report to the PPMUs and coordinate with other relevant agencies of the Borrower.

Complied with.

At least one person from the PPMU shall be assigned to work with the VWU to ensure timely implementation of Project activities under Part D.

Complied with.

5. The Borrower shall cause the PPCs to establish a PSC in each Project province within 2 months after the Effective Date to assist the PPCs during Project implementation and resolve matters that require interdepartmental coordination at the provincial level.


27 October 2007

Complied with.

The PSC shall be chaired by a vice chairman of the respective PPC and comprise representatives from relevant stakeholders, including but not limited to the VWUs and provincial departments of finance, planning and investment, health, environment and natural resources, construction and public works.

Complied with.

B. Financial and Other Matters

Institutional Reforms

6. The Borrower shall ensure that: LA, Schedule 5, para. 6


(a) implementation regulations for the Unified Enterprise Law (2005) are prepared and adopted by the relevant agencies of

All POEs except Phu Yen were corporatized and equitized,

Appendix 9 27




the Borrower in a timely manner in order to facilitate effective corporatization and equitization of the POEs;

(b) the PPCs adopt promptly the necessary resolutions required to be taken at the provincial level to further facilitate application and enforcement of the Unified Enterprise Law;

(c) corporatization and equitization of the POEs are carried out in accordance with the corporatization and equitization program of the respective Project province as may be approved by the Borrower; and

(d) policy dialogue is maintained between the Borrower and ADB with respect to performance and operation of the POEs throughout the Project implementation period.

thereby complying with (a), (b), and (c), by February 2012. Phu Yen Water Supply & Drainage Company is expected to be corporatized and equitized during 2015.

POE Cam Ranh: 47.57% state owned, 52.43% privately owned

POE Ninh Hoa: 45.12% state owned, 54.88% privately owned

POE Ninh Thuan: 91% state owned, 9% privately owned

POE Binh Thuan: 90% state owned, 10% privately owned

POE Dak Nong: 52% state owned, 48% privately owned

7. The Borrower, through the PPCs, shall ensure that the POEs, within 3 years after the Effective Date and in a manner satisfactory to the Borrower and ADB, develop, adopt and implement a time-bound action plan, which shall include (a) new employment policies, strategies and guidelines on hiring practices, including performance based remuneration systems, enhanced transparency in hiring practices and staff incentives, in accordance with the relevant laws and regulations of the Borrower; (b) training programs to improve staff capabilities; (c) improved accounting procedures; and (d) O&M plans and procedures.


27 August 2010 Complied with by the end of 2013. The delay was due to delay in project start-up.

All POEs except Dak Nong have performance-based remuneration systems, as well as transparent hiring practices and staff incentives.

8. The Borrower shall ensure that the PPCs adopt tariffs, immediately upon commissioning of the Project facilities that provide full cost recovery in the case of water supply, and recover sufficient costs to


Upon commissioning of project

Fully complied with for water supply and partly complied with for wastewater and solid waste.

28 Appendix 9




cover full O&M costs in the case of drainage, wastewater and solid waste management services.

facilities

Water supply tariffs were increased to (or close to) full cost-recovery levels in all water supply subprojects.

Wastewater surcharges were set at full O&M cost-recovery levels in Binh Thuan, and waste collection fees were set at close to full O&M cost-recovery levels in Gia Nghia. Tariffs in other project towns were set below the level of full O&M cost recovery (around 40%).

Counterpart Funds

9. The Borrower shall cause the PPCs to allocate the counterpart funds, at the provincial level, required for the Project from the respective PPCs’ annual budget in a timely manner and in accordance with the Borrower’s Budget Law (2002).

10. The Borrower shall cause PPCs or the POEs to:

(i) maintain separate accounts for the Project (ii) have such accounts and related financial statements audited

annually, in accordance with appropriate auditing standards consistently applied, by independent auditors whose qualifications, experience and terms of reference are acceptable to ADB;

(iii) furnish to ADB not later than 6 months after the end of each related fiscal year, certified copies of such audited accounts and financial statements and the report of the auditors relating thereto (including the auditor's opinion on the use of the Loan proceeds and compliance with the financial covenants of this Loan Agreement as well as on the use of the procedures for imprest account/statement of expenditures), in the English language.


LA, Article IV, Section 4.02(a)

(not stated)

6 months after the end of each fiscal year

Complied with (except that PPMUs of Cam Ranh and Ninh Thuan reported delays in provision of counterpart funds).

The PCU and five PMUs submitted audited project financial statements for six accounting periods, all of which were issued with unqualified opinions, except those of the PMU of Khanh Hoa for 2007–2009, the PMU of Dak Nong for 2011, the PCU for 2012 (because it incorrectly used about $8,000 of ADB loan funds to pay VAT on loan-financed contracts, which was also an ineligible expenditure), and the PMU of Ninh Thuan for 2013 (because the PMU had not reconciled funds at

Appendix 9 29




the end of the accounting period) and 2014 (allocating about $9,000 of ADB loan funds for VAT). ADB had recovered all ineligible expenditures in December 2014, through the final withdrawal application.

Resettlement Plans

10. The Borrower shall cause the PPCs to LA, Schedule 5, para. 10

Complied with by all five PPCs.

(a) carry out the Resettlement Plans prepared for the Project provinces in an effective and timely manner;

(b) update the Resettlement Plans based on the final technical design, in accordance with the Resettlement Framework prepared for the Project and with prior approval of ADB; and

(c) prepare, revise, implement and monitor the Resettlement Plans in accordance with the related regulations of the Borrower and ADB’s Policy on Involuntary Resettlement (1995).

Gender Action Plan

11. The Borrower shall cause the PPCs to ensure that the Gender Action Plan prepared for the Project is fully implemented and monitored in accordance with its terms, related Borrower regula-tions and ADB’s Policy on Gender and Development (1998) in a timely manner, and adequate resources are allocated for this purpose.


(not stated) Complied with by all five PPCs.

Ethnic Minorities

12. The Borrower shall cause the PPCs to ensure that (a) ethnic mino-rities have equal access to project benefits, have culturally appro-priate awareness and education materials, and are safeguarded against adverse impacts; (b) the specific actions indicated in the Resettlement Plans for ethnic minorities, including their customary rights to forest products, are fully implemented in accordance with the relevant terms of the respective Resettlement Plans, related Borrower regulations and ADB’s Policy on Indigenous Peoples (1998) in a timely manner, and that adequate resources are alloca-



30 Appendix 9




ted for this purpose; and (c) where relevant, the PSC concerned includes a representative from the provincial department of Community for Ethnic Minorities in Mountainous Areas (CEMMA).

Public Awareness Campaigns

13. The Borrower shall cause the PPCs to ensure timely flow of funds from the PPMUs to the VWUs allocated for the Project activities under Part D. The Borrower shall also ensure that (a) the VWUs work effectively with the respective PPMUs to implement the community environmental sanitation and public awareness campaigns under Part D, (b) at least 50 percent of the motivators selected for the public awareness campaign are female, and (c) at least 30 percent of the teams formed to discuss the Project with communities are composed of female members.



Environment

14. The Borrower shall ensure that adverse environmental impacts of the Project are minimized. In particular, the Borrower shall, through the PPCs, cause (a) the PPMUs and the relevant authorities to monitor and supervise the construction activities to minimize short-term adverse impacts by adopting appropriate mitigation measures and good engineering and construction practices, including replanting of trees, ensuring working safety, sanitation and health care of workers; (b) the existing O&M manual and emergency/ inspection plans to be reviewed and revised, as needed, to improve the operation performance for delivery of safe drinking water and minimize a potential risk overflow and flooding of raw sewage; (c) surface and ground water quality testing to be conduc-ted regularly to ensure compliance with drinking water quality and wastewater standards, and detect any sign of ground water conta-mination; (d) periodic monitoring and inspection to be conducted to maintain daily soil cover of landfill sites; (e) waste pickers to be employed to recover recyclable wastes at the separation area adjacent to the landfill sites and to provide income generation opportunities; and (f) an EMU to be set up within each PPMU to be responsible for implementation of environmental mitigation measu-res and monitoring, as referred to in paragraph 3 hereabove.



Appendix 9 31




Anticorruption Measures

15. The Borrower shall comply with, and shall cause the PPCs and the POEs, as applicable, to comply with ADB’s Anticorruption Policy.



16. The Borrower shall (a) ensure that the PPCs and POEs conduct periodic inspections on the contractors’ activities related to fund withdrawals and settlements and (b) ensure and cause the PPCs and POEs, as applicable, to ensure that all contracts financed by ADB in connection with the Project include provisions specifying the right of ADB to audit and examine the records and accounts held by the PPMUs on behalf of the PPCs and POEs, and all contractors, suppliers, consultants and other service providers as they relate to the Project.



17. The Borrower shall maintain the procurement website to disclose information about public procurements, including those related to the Project.



ADB = Asian Development Bank, EMU = environmental monitoring unit, LA = loan agreement, MABUTIP = Management Board for Urban Technical Infrastructure Projects, O&M = operation and maintenance, PCU = project coordination unit, POE = project operating entity, PPC = provincial people’s committee, PPMU = provincial project management unit, PSC = project steering committee, VWU = Viet Nam Women’s Union. Source: ADB.

32 Appendix 10

SUMMARY OF ADB-FINANCED CONTRACTS

Cost Item

Procure-ment Mode Contract Number Contract Description

Contractor or Supplier

Contract Value

($ ‘000) Contracts signed with project coordination unit

CS QCBS CONSULTING SERVICE-BVI

Project Implementation Support Consultant

BVI 5,823.00

CS CQS POE & PMUS AUDITS_22APR10

POE and PMUs audit Auditing and Accounting Financial Consultancy

108.65

Contracts signed with Binh Thuan PPMU

CS SSS 03/DAPTNT Component D: Community environmental sanitation awareness program, Binh Thuan

Women’s Union of Phan Thiet City, Binh Thuan

64.79

CW NCB BT5/B/10/NCB_9JUL11 Tertiary pipelines, public toilets, small drains for household connections

Hop Luc Civil & Industry Construction Co. Ltd

2,206.02

CW NCB BT4/B/10/NCB Civil work for wastewater treatment plant and pumping stations in Phan Thiet city

Constrexim Meco JSC

2,245.37

CW ICB BT3/B/10/ICB Civil works for sewerage, interceptor systems and O&M equipment in Phan Thiet city

Vietnam Investment Construction and Trading JSC

8,992.33

Contracts signed with Dak Nong PPMU CS SSS COMPONENT

D_1APR10 Component D: Community environmental sanitation awareness program, Dak Nong

Women’s Union of Dak Nong Province

38.49

CW ICB DN3B/A/10/ICB Civil works and equipment for water supply system in Gia Nghia town

Vinaconex 5,712.43

CW ICB DN3A/B/10/ICB Civil works and equipment for water supply system in Gia Nghia town

JV Constrexim Meco and Constrexim Dong Do

4,224.37

CW NCB DN4/C/10/NCB Civil works for solid waste landfill in Gia Nghia town

Constrexim Dong Do Jsc

1,443.24

EQP ICB DN5/C/09/ICB_LOT 2 O&M equipment for Gia Nghia town, lot no. 2

Truong Vinh Hino Limited Company

397.53

EQP ICB DN5/C/09/ICB_LOT 1 O&M equipment for Gia Nghia town, lot no. 1

Truong Vinh Hino Company Ltd.

505.41

Appendix 10 33

Cost Item



Contract Value

($ ‘000) CW FA 28/2012/HD-XD Water supply pipelines

and connections to households

Dak Nong Water Supply & Urban Development Jsc

286.91

Contracts signed with Khanh Hoa PPMU CS SSS 02/HDKT

(KH7/D/09/SSS)_2MAY10

Component D: Community environmental sanitation awareness program, in Ninh Hoa and Cam Ranh towns,

Women’s Union of Khanh Hoa Province

94.11

CW NCB KH4/C/10/NCB Civil works and equipment for solid waste landfill in Cam Ranh town, Khanh Hoa

Constrexim Dong Do JSC

1,133.55

CW ICB KH5/A/10/ICB Civil works and equipment for water supply system in Ninh Hoa town

Vinaconex 4,510.84

CW ICB KH3/B/10/ICB Civil works and equipment for drainage and wastewater systems in Cam Ranh town

JV Constrexim Dong Do Jsc & One Member

6,837.67

CW FA 01/2012/HDXD Water supply pipelines and household connections

Ninh Hoa Urban Jsc 199.55

Contracts signed with Ninh Thuan PPMU CW ICB NT3/B/10/ICB Civil works and O&M

equipment for drainage system in Thap Cham

JV of Constrexim Meco and Constrexim Dong Do

3,967.04

CW ICB NT4/A/10/ICB Civil works and equipment for water supply system in Ca Na town

JV Meco & Vinaconex 12

2,190.64

CS SSS 01/HD2010-ADB4_19MAY10

Sanitation improvement and public awareness program in Ninh Thuan

Women’s Union of Ninh Thuan Province

50.59

Contracts signed with Phu Yen PPMU CW FA PY3/B/10/FA Water supply pipelines

and household connections

Phu Yen Water Supply & Drainage 1 Member Ltd

269.50

CS SSS Various Public awareness program on environmental sanitation

Vietnam Women’s Union of Phu Yen Province

111.84

34 Appendix 10

Cost Item



Contract Value

($ ‘000) CW ICB PY2B/B/10/ICB Civil work for wastewater

system in Tuy Hoa city, Phu Yen Province

One Member Liability Company Limited 508

5,656.48

CW NCB PY5/B/10/NCB Civil works and equipment for drainage system

Hang An Group Joint Stock Company

1,137.88

CW NCB PY4/C/10/NCB Civil works and equipment for solid waste landfill in Song Cau town

Hang An Group Joint Stock Company

593.47

CW ICB PY2A/B/10/ICB Civil works and equipment for drainage system in Tuy Hoa city

Construction Technology Development Jsc

4,592.09

CQS = consultants' qualifications selection, CS = consulting services, CW = civil works, EQP = equipment, FA = force account, ICB = international competitive bidding, JV = joint venture, NCB = national competitive bidding, O&M = operation and maintenance, POE = project operating entity, PPMU = provincial project management unit, QCBS = quality- and cost-based selection, SSS = single source selection. Source: ADB Loan Financial Information System

Appendix 11 35

SUMMARY OF GENDER EQUALITY RESULTS AND ACHIEVEMENTS

I. PROJECT DESCRIPTION

1. The Central Region Small and Medium Towns Development Project covers eight project towns: Phan Thiet (Binh Thuan), Gia Nghia (Dak Nong), Cam Ranh and Ninh Hoa (Khanh Hoa), Ca Na and Thap Cham (Ninh Thuan), and Song Cau and Tuy Hoa (Phu Yen). The project impact is to improve quality of life, sustain urban economic growth, and reduce poverty though sustainable water and sanitation improvement. The project outcomes are (i) improved access to safe and sustainable water supply, (ii) improved drainage and less flooding, (iii) improved solid waste management systems, (iv) changed attitudes toward environmental hygiene and sanitation, and (v) sustainable management and delivery capacities of water supply and sanitation (WSS) service providers. 2. The project has five major outputs: (i) water supply development and expansion in Can Na (Ninh Thuan), Gia Nghia (Dak Nong), and Ninh Hoa (Khanh Hoa); (ii) drainage and wastewater management in Cam Ranh (Khanh Hoa), Gia Nghia (Dak Nong), and Tuy Hoa (Phu Yen); (iii) solid waste management in landfill sites for Cam Ranh (Khanh Hoa), Gia Nghia (Dak Nong), and Song Cau (Phu Yen); (iv) community environmental and sanitation awareness raising and improving environmental conditions in poor communities of all project sites; and (v) project management and institutional support to the Ministry of Construction, provincial people’s committees, project operating entities, and WSS personnel. 3. The project was implemented from August 2007 to June 2014 and was intended to benefit around 114,000 households or approximately 497,000 people10 (about 50% of whom would be women and girls) in 8 project towns (within Binh Thuan, Dak Nong, Khanh Hoa, Ninh Thuan, and Phu Yen provinces). The project gender mainstreaming category is Effective Gender Mainstreaming (EGM). II. GENDER ANALYSIS AND PROJECT DESIGN FEATURES A. Gender Issues and Gender Action Plan Features

4. Women have a central role in utilizing and managing water- and sanitation-related activities both at home and in the community. About one-fourth of households in project towns are headed by women (whose husbands either have died, are sick and dependent on them, or have migrated to urban areas for work). The traditional gender division of labor in households puts women in roles of procuring water, preparing food, bathing children, teaching children hygienic practices, washing the dishes and laundry, and taking care of the sick and elderly family members. Men, meanwhile, attend to building and maintaining the wells and water pumps. Women, and especially those from the lower-income strata, have a hard time coping with their WSS needs and activities. Women and men from lower income households spend more time (20 minutes or more daily) in collecting water compared to those from higher income households. Sometimes they must purchase drinking water from vendors, especially during dry season. The majority of women from the lowest income stratum do not have proper toilets and

10

This figure derives from the project’s assumption that average household size at the project sites is 4.36 people (ADB. 2006. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the Socialist Republic of Viet Nam: Central Region Small and Medium Towns Development Project. Manila; Loan and Project Summary).

36 Appendix 11

bathrooms indoors. Women are increasingly influential in relation to investment decision making on WSS-related activities and programs. 5. The gender action plan (GAP) addressed the needs of women in the subproject areas to (i) participate in the decision making related to the development of WSS environmental infrastructures; as well as to have (ii) access to an uninterrupted water supply, (iii) access to and control over the communication on water supply and sanitation issues, (iv) equal access to employment opportunities arising out of the subprojects, and (v) access to capacity-building opportunities for female project staff equal to that of their male colleagues. 6. The key gender indicators and targets include the following:

(i) Households headed by females are eligible for equal compensation, additional support measures for rehabilitation.

(ii) Men and women will provide inputs on subcomponents before finalizing the details of larger subcomponents (e.g., open drains vs. covered ones).

(iii) Both male and female waste pickers will have the option of (a) being employed by the public works company, or (b) continuing to work at the new landfill sites.

(iv) Promotional materials include the roles of both men and women in improving hygiene.

(v) Women’s participation is encouraged at meetings (e.g., gender-disaggregated focus groups, and meetings are held at times when women can attend).

(vi) Motivators, at least 50% female, will be trained and mass organizations mobilized. (vii) Female and male project staff members will have equal access to information and to

participate in training and other capacity-building programs. (viii) Public utility companies will publicly announce and/or post job openings.

B. Overall Assessment of Gender-Related Results and Achievements 7. The project GAP implementation has been highly satisfactorily, with 21 out of 24 targets (87.5%) achieved, and it has positive impacts on the lives of local women and gender equality. The project provided uninterrupted water from pipes to 4,200 households (around 18,312 beneficiaries, of whom about 50% are women and girls), trained 207 water and sanitation motivators (of whom 93%, or 187, are women), disseminated information and provided outreach directly to 26,635 members of the community (72.5% of whom, or 19,322, are women) regarding water and sanitation as well as promoting good hygiene behaviors, and ensured that all female-headed households (numbering 107) be compensated and supported the same as the 399 male-headed households affected by subprojects. The project also trained female project staff as well as male staff on project management topics and leadership skills (21 of 166 and 17 of 64, respectively, were female participants). Details of the results achieved are presented in the GAP monitoring table (Table A11.1). C. Gender Equality Results 8. The gender equality results are detailed in Table A11.1.

1. Participation, Access to Project Resources and Practical Benefits 9. The GAP implementation promoted access to resources and active participation of women and yielded the following key results:

Appendix 11 37

(i) Around 4,200 households (approximately 18,312 beneficiaries, of which about 50% are women) gained access to uninterrupted water. Women were grateful for uninterrupted and clean water and that the project saves them from needing to buy water from water vendors. In Ninh Hoa town, 2,000 poor households received free or subsidized connections to the public water pipes, and 1,002 of these are female-headed households).

(ii) The new landfill facilities’ operation and maintenance manuals have a provision allowing waste pickers (male and female) either to be employed by the public waste management companies or to continue as independent waste pickers working in the new sites.

(iii) The project trained 207 motivators (93%, or 187, of them being women) to deliver messages promoting the use of safe water and environmental sanitation protection.

(iv) The project produced materials (69,000 leaflets, 28 stand-up posters, 6,000 key holders, 9,000 bars of soap) and disseminated information to community members highlighting the important roles of women and men in using safe water and environmental sanitation protection while encouraging both men and women in their roles.

(v) The project outreach communicated directly with 26,635 members of the community (72.5%, or 19,322, of them being women) in 616 face-to-face meetings, workshops, campaigns, and visits to water supply plants to convey messages. Among those targeted, this contributed to changes in behaviors and practices in using safe water and protecting the collective environment.

(vi) The project organized leadership training for project staff in which all 17 female staff out of 64 project management unit staff members participated. In addition, among 166 project staff trained on project management topics, 21 were female project management unit staff.

2. Strategic Changes in Gender Relations

10. The project achieved the following gender strategic changes:

(i) Both women and men were mobilized to participate in consultation meetings regarding water supply and sanitation infrastructure development design and resettlement. Women at subproject sites reportedly had their voices heard regarding the resettlement and compensation issues, thereby ensuring that affected female-headed households received the same compensation and special support as was provided to the affected male-headed households.

(ii) Households headed by females (totaling 108) were eligible for equal compensation and support measures as were the other 399 households headed by males. The support to the affected households ensured that both male and female residents can restore their livelihoods and maintain living conditions as prior to the project’s land acquisition.

(iii) Women made up 91% of the community motivators (189 out of 207 in total) who

were trained and supported by the project consultant in order to be confident in organizing and leading community meetings and campaigns and in facilitating changes in attitudes and behaviors of target groups on using safe water and environmental sanitation protection. Women’s leading roles in these areas were recognized among members of the community.

38 Appendix 11

3. Contribution of Gender Equality Results to Overall Loan Outcomes and

Effectiveness

(i) The GAP implementation contributed to the loan effectiveness by increasing the access to safe water in two ways: First, project support to poor and female-headed households which includes free connection has led to more households having access to water and paying for water. This increases the effectiveness of the investment. Second, increased awareness among the targeted people (including both men and women) as to the importance of using safe water has led to their decisions to connect to piped water at their own cost and increased their willingness to pay. That increases effectiveness of the investment in the water supply component. Increased effectiveness of the investment in water supply (Output A) certainly is contributing to an improved and sustainable cost-recovery mechanism.

(ii) The GAP’s intervention on ensuring that operation and maintenance manuals for

the new solid waste facilities have provisions to allow all waste pickers continued access to the new landfill sites (through direct employment with the facility’s companies or as independent waste pickers) ensured that this target under Output C was achieved.

(iii) The GAP implementation has provided training opportunities for both male and

female staff members of project operating entities and provincial project management units on leadership and management skills. This contributed to the achievement of Output E on project management and institutional strengthening.

III. LESSONS LEARNED AND RECOMMENDATIONS 11. Several critical factors contributed to the success in achieving GAP targets:

(i) The project’s local community development specialist was supportive and helpful in providing technical inputs to the women’s unions in implementing their activities.

(ii) Ownership and capacity to organize activities by and among provincial women’s unions and those of related cities and towns was crucial. Because these women’s unions considered that GAP implementation contributed to fulfilling their mandates of supporting women community members, they were active and took great initiative in organizing activities.

(iii) Close collaboration between provincial project management units (PPMUs) and provincial women’s unions is a key success factor in achieving GAP targets, especially those related to Part D. A PPMU has a focal point to work with the provincial women’s union and ensure funds for women’s union activities will be available and that bottlenecks are addressed in a timely manner.

A. Constraints Encountered in GAP Implementation

(i) The local community development specialist had terms of reference focusing on Part D: Community Environmental Sanitation and Awareness. The project management unit did not pay great attention to GAP targets not related to Part D until the time of the project’s midterm review. Therefore, some targets were not achieved, such as the female-participation rate. However, the project officer and

Appendix 11 39

consultant gender specialist then followed up closely and regularly thereafter to ensure that GAP targets were achieved.

B. Sustainability

(i) Connected households have shifted to using safe water all year around and regularly pay the water fee.

(ii) Households in subproject sites continue in their efforts to collect garbage and concentrate it on a timely basis at collection points in order to maintain “clean house, clean kitchen, and clean lanes and streets.”

(iii) Provincial and city or town women’s unions have developed capacity and confidence in leading environmental sanitation programs. They can roll out their own program in other wards of the cities or towns.

C. Recommendations for Future Projects in the Sector

(i) The community development/gender specialist should include scope for supporting greater GAP implementation (other than just Part D) so that the person can closely monitor and provide technical inputs to other GAP interventions from the very beginning.

(ii) A number of qualitative targets can be made quantifiable during project design so that their implementation will promote additional gender equality outcomes. For example, the target that female and male project staff members will have equal access to information and to participate in training and other capacity-building programs could be quantified in both the GAP and the design and monitoring framework.

40 Appendix 11

Table A11.1: GENDER ACTION PLAN MONITORING TABLE (As of 30 June 2014)

Project Component (Parts A–E) and Actions Proposed Implementation status and/or issues Part A: Water Supply Development

1. Issues of affordability and access for male- and female-headed households will be considered and addressed (e.g., water supply system tariffs).

2. Households headed by females are eligible for equal compensation, as well as additional support measures for rehabilitation, and asset transfers that help retain the higher status of ethnic women from Ma and Edde groups.

Not achieved. All project operating entities submitted tariff proposals to their provincial people’s committees. The committees of Khanh Hoa issued decisions on application of the proposed tariffs. The water tariffs in other towns are equal to or higher than the minimum required tariffs. The Government of Viet Nam’s regulation does not require that a tariff proposal be consulted with the affected people.

Achieved. This has been completed as part of the resettlement plans. All households, including female-headed households, received compensation and rehabilitation support equally.

a There are no Ma or Edde

groups among the affected people. In Ninh Hoa, 56 female-headed households out of 374 affected households received similar compensation and rehabilitation support. Table A13.2 details support on a per-province basis.


3. Men and women will provide inputs on subcomponents before finalizing the details of larger subcomponents (e.g., open drains vs. covered ones).

4. Households headed by females are eligible for equal compensation, additional support measures for rehabilitation, and asset transfers that help retain the higher status of ethnic women from the Ma and Edde.

Achieved. This has been completed as part of the updated feasibility and detailed design stages.

b The consultation

meetings were conducted. The people participating in meetings had opportunities to discuss the resettlement and land acquisition issues, and they were informed on wastewater fee collection.

c

Achieved. This has been completed as part of the resettlement plans.

d In Tuy Hoa, 16 households are headed

by females among 46 affected households. They received compensation and support measures the same as other households. Specifically, in addition to agricultural land compensated, each household (female- and male-headed) received D581,500/m

2 of land lost for income restoration

and changing jobs. In Phan Thiet, 7 female-headed households among 12 affected households received equal compensation and support measures. In Thap Cham, 1 female-headed household out of 2 affected households received equal compensation and support.


5. Both male and female waste pickers will have the option of (i) being employed by the public works company, or (ii) continuing to work at the new landfill sites.

Achieved. The new landfills have been completed. A consultant had assisted the contractors to prepare operation and maintenance (O&M) manuals for the new facilities. The contractors submitted O&M manuals for all of the new landfills in Cam Ranh, Dak Nong, and Song Cau with a provision allowing the independent waste pickers to choose to work in the new sites if they so wished. The O&M manuals for Gia Nghia Landfill were approved in December 2013, for Cam Ranh Landfill in May 2014, and for Song Cau Landfill in June 2014.

Appendix 11 41

6. Households headed by females are eligible for equal compensation, additional support measures for rehabilitation, and asset transfers that help retain the higher status of women from the Ma and Edde.

Achieved. This has been completed as part of the resettlement plans implementation. The number of affected female-headed households in three subprojects is 28 out of 74 households. The special support provided to households affected by the subproject in Gia Nghia (to both male- and female-headed households) included vocational training for family members of affected households and 30 kg of rice/person in affected households/month for 36 months. In Cam Ranh, the special support include (i) support for relocation (D3,000,000/affected household), (ii) support for house rental during the reconstruction of new houses (D1,000,000 /month), (iii) support for living stabilization (30 kg of rice/person in affected households for 6 months), and (iv) support for moving equipment and machinery (D300,000 /trip/affected household).

Part D: Community Environmental Sanitation and Awareness D.1. Public Awareness Education Campaigns

7. Promotional materials include the roles of both men and women in improving hygiene.

8. Increase awareness of links between water and diseases among men and women.

9. Educational awareness and promotional materials will be gender sensitive and culturally appropriate so that they are able to reach different target groups.

Achieved. The provincial women’s unions have produced many promotional materials such as handouts, leaflets, CDs, TV spots, and news reports. They have organized numerous meetings and festivals with gender and community issues being integrated. These include in total 69,000 leaflets, 28 stand-up posters (large and small), 6,000 key holders, and 9,000 bars of soap which were produced and distributed or otherwise used as promotional materials. A radio broadcasting program highlighted the importance of using safe water and environmental sanitation protection to prevent waterborne diseases and improve health status in the community, thereby contributing to reducing time poverty for women by reducing the time needed for water collection and caring for sick family members.

Achieved. Thanks to environmental protection and raising hygiene awareness, many households have shifted from using well water to using tap water as they are aware of the link between unsafe water and diseases. Many feel the tap water is really well treated.

e Other groups of beneficiaries

are reported to have gathered garbage in a timely manner and conveyed it to collection points and enclosed it in bags in order to protect the living environment and their health.

f

Achieved. Some educational materials focus on both male and female target groups, such as CDs and TV spots showing the active roles of both men and women in environmental protection. Village meetings and communication activities were appropriately timed in accordance with women’s work schedules (e.g., loudspeakers were utilized during 6:00–6:30 a.m. and 5:00–5:30 p.m.).

g Awareness-raising activities have been diverse

and targeted to various groups (men, women, children, students, etc.). Activities included meetings, workshops, campaigning, site visits to water supply plants, and cultural performances which are appealing and relevant to all targets groups.

42 Appendix 11

10. The VWU and project staff will discuss the project with communities and institutions at all levels. At least 30% of the team shall be female.

11. Women’s participation at meetings will be encouraged (e.g., through gender-disaggregated focus groups and scheduling meetings when women can attend).

12. Motivators, at least 50% female, will be trained and mass organizations mobilized.

Achieved. In cooperation with provincial women’s unions, 90% of the teams are female (164 out of 182 people).

Achieved. There were 616 meetings, workshops, and campaigns organized for outreach to 26,635 members of the community (19,322, or 72.5%, of which are women).

Achieved. Overall, 91% of motivators under the project (189 out of 207) are women (Phu Yen: 46/46 female, Ninh Hoa: 18/25 female, Cam Ranh: 25/25 female, Ninh Thuan: 39/50 female, Binh Thuan: 36/36 female, DakNong: 25/25 female).

D.2. WSS Assistance for Poor Households

13. Poor households headed by females will be given priority access funds for payment of connection fees and sanitation facilities, including septic tanks.

14. Written and oral information on schemes will be provided to both women and men. Focus group discussions will be disaggregated by sex to encourage questions and answers.

Achieved. Among 2,000 poor households given subsidies for the water supply connection fee in the Ninh Hoa water supply subproject, 1,002 are poor female-headed households. No connection-fee subsidies for water supply or wastewater were implemented in other subprojects.

Achieved. Information on schemes has been always provided to men and women and their consensus should be obtained in written form before water connection could be made, as this involves fee payment after connection.

Part E: Project Management and Institutional Strengthening

15. The provincial women’s union will be a member of each provincial project steering committee.

16. At least 30% of the PPMU members will be female.

17. At least one person in each PPMU will work with the VWU to implement Part D.

18. Consulting services will include an international community environmental sanitation and gender specialist (6 person-months) and a national community development and gender specialist (30 person-months) to work with the VWU and with project gender issues.

19. Indicators will be disaggregated by sex and ethnicity.

Achieved. Each project steering committee includes as a member a provincial member of the VWU.

Not achieved. Female representation was 17 out of a total 64 (26.5%). PPMU female representation, by town, was as follows: Phu Yen: 5/15 (33%), Ninh Hoa: 2/05 (40%), Cam Ranh: 1/10 (10%), Ninh Thuan: 2/10 (20%), Binh Thuan: 2/10 (20%), and Dak Nong: 5/14 (40%).

Achieved. Each PPMU has a focal point to work with VWU in implementing Part D.

Partly achieved. The consulting services include only a local community development specialist (24 person-months). That person’s terms of reference include providing technical inputs to implement a part of the GAP (mainly Part D: Community Environmental Sanitation and Awareness).

Achieved. A monitoring and evaluation system is in place (albeit one that was added late), and it has most of the base data disaggregated by sex. Most targets in the GAP were

Appendix 11 43

20. Both female and male project staff members will have equal access to information and to participate in training and other capacity-building programs.

21. Public utility companies will publicly announce and/or post job openings.

22. Public utility companies, with the support of the VWU and consultants, will conduct training on leadership and management skills for female staff members.

23. Public utility companies will comply with

the International Labour Organization’s (ILO) core labor standards, as well as national laws on labor protection, safety, and equal pay.

24. There will be implementation of special provisions included in resettlement plans (as outlined in respective resettlement plans for each province).

reported with sex-disaggregated data, where relevant, toward the project’s conclusion.

Achieved. Capacity building is provided as part of internal and project training programs for both male and female staff. Lower representation of female participation in the training reflected the lower representation of women among project staff overall. Basically, all female project staff attended training courses offered by the project.

Achieved. Recruitment and available positions under the project and in water supply plants were announced publicly through the provincial newspaper (Khanh Hoa newspaper) and company websites.

h Among 15 staff recruited through

these channels, 3 were women (2 Urban Environmental Company’s workers and 1 PPMU staff). In addition, 166 community project management unit and PPMU staff were training on project management, procurement, and safeguards (21 of which were female).

Achieved. Training courses on leadership and management skills for female staff members were included in 2014 annual training plans of the public utility companies (to be carried out by project operating entities under the project operating entities’ budgets). All of both male and female staff participated. Seventeen out of 64 participants were female project staff. The main content of the training was as follows:

• Profile of the manager-leader • Human resource management system • Writing job descriptions • Performance management • Planning and time management • Problem solving and decision making • Effective communication skills • Motivating and encouraging staff

Achieved. All ILO labor standards

i and national laws on

labor protection, safety, and equal pay provisions have been met.

j Solid waste workers of the Urban Environmental

Company and public utility companies were provided with helmets and uniformed protective clothing, gloves and hygienic masks. Equal pay for equal work was applied in accordance with the government’s policy.

k

Achieved. Compliance with the provision is detailed in Table A11.2.

PMU = project management unit, PPMU = provincial project management unit, URENCO = urban environmental company, VWU = Viet Nam Women’s Union, WSS = water supply and sanitation. a Interviews with affected households under the Ninh Hoa water supply subproject: Ms. Nguyen Thi Thu Nga, Ms.

Tran Thi Mai, Mr. Tran Dong (Ha Thanh cluster, Ninh Da Ward, Ninh Hoa town, Khanh Hoa Province). Each affected household received a compensation unit of 79,000 D/m

2 of cemented playground for the pipe to be buried

under these areas. The compensation was for buying cement to reconstruct the affected playground.

44 Appendix 11

b Interviews with Ms. Bui Thi Lan Huong and Ms. Phuong (Tuy Hoa town), whose households are near the site of the

water treatment plant (now under construction) that is part of the Tuy Hoa water treatment and drainage subproject. c Interviews with Ms. Bui Thi Le (Ward 4, Tuy Hoa city, women’s union member), Mr. Truong Van Thai (resident in

Ward 4, Tuy Hoa city), Ms. Vu Thi Uyen (women’s union member, member of an affected household, Ward 5, Tuy Hoa city), and Ms. Hoang Thi Thanh (women’s union member and motivator, Ward 5, Tuy Hoa city).

d Source: Tuy Hoa city People’s Committee decision on approval of the list of affected households and compensations made to them, dated 1 September 2011. Sixteen households are headed by females among 46 affected households. They received compensations and support measures equal to those of other households.

e Interviews with Mr. Nguyen Ngoc Minh, Nguyen Hue cluster, Ward 5, Tuy Hoa town, “After I visited the water plant in Tuy Hoa, I decided to shift to using tap water instead of well water, as water from the tap is safer for our health, even though we have to pay a fee”; Ms. Bui Thi Lan Huong, Ward 8, Tuy Hoa city; Ms. Bui Thi Le, member of the women union, resident of Ward 4, Tuy Hoa Town, “ I saw the water plant, I trust that the water quality from the tap is safer, so I use it.” Disaggregated focus group with women and men group in Ninh Hiep ward, Ninh Hoa town, Khanh Hoa.

f Disaggregated focus group with women and men in Ninh Hiep Ward, Ninh Hoa town, Khanh Hoa Province.

g Disaggregated focus group with Phu Yen Provincial Women’s Union and Tuy Hoa City Women’s Union,

Disaggregated focus group with Khanh Hoa Women’s Union. h

Interview with Ms. Van, Ninh Hoa PMU (a PMU recruited staff member); Ms. Binh, Ninh Hoa PMU Vice Director; Ms. Lien, Phu Yen PMU member.

i A ILO core labor standards include four basic rights and principles: (i) eliminating all forms of forced or compulsory

labor, (ii) eliminating discrimination in respect of employment and occupation, (iii) eliminating child labor, and (iv) ensuring freedom of association and the effective recognition of the right to collective bargaining.

j Interviews with Ms. Van, PMU Ninh Hoa (a PMU recruited staff member), Ms. Binh, Ninh Hoa PMU Vice Director, Ms. Lien, Phu Yen PMU, member

k Source: Monthly payroll for March 2014 of Phu Yen PPMU.

Source: Progress Report, June 2014.

Appendix 11 45

Table A11.2. Types of Support and Support Levelsl per Participating Province No. Types

of support Binh Thuan

Khanh Hoa Phu Yen Dak Nong

Phu Yen Dak Nong

1 Support for living stabilization for affected household more than 10% of whose agricultural land is acquired

Agricultural land in residential areas is supported equivalent to 50% of agricultural land value

1. Support for relocation costs: D3,000,000 per affected household (moving into the new area); 2. Support for house renting: D3,000,000 (D1,000,000 per month); 3. Support for living stabilization (1 kg rice per person per day for 6 months); 4. Support for moving equipment and machines: D300,000/trip

Support for agricultural land: D581,500 per m

2

Support in cash for job change equivalent to 2 times the value of the acquired land, 3 times for harvesting 1 crop/year and 4 times for harvesting 2 crops/year

2 Special economic and social support for vulnerable affected households

Support in cash equivalent to 30 kg rice/person/month for at least 3 years (36 months)

3 Job training In Ward 8, Tuy Hoa City, there are vocational training courses to be recommended for workers in households from vulnerable groups affected by the project. They would be provided with a training course free of charge.

In Gia Nghia township, there are vocational training courses to be recommended for workers in households from vulnerable groups affected by the project. They would be provided with a training course free of charge.

l InvestConsult Group. April 2014. Final Resettlement Monitoring Report. Hanoi.

46 Appendix 12

ECONOMIC AND FINANCIAL REEVALUATION

1. Overview. This appendix describes the methodology used to assess the economic and financial feasibility of proposed subprojects at appraisal. It updates the results of the analyses using data that were available at the loan closing date, and it discusses potential causes of differences between the original and updated results. B. Economic Reevaluation

2. Scope of the economic reevaluation. During preparation, an economic cost–benefit analysis was carried out for two types of subprojects: (i) Part A: Water Supply Development and Expansion, and (ii) Part B: Drainage and Wastewater Management (DWM). No economic analysis was prepared for infrastructure subprojects in parts C and D. The project preparation consultant report mentioned that “…solid waste management and community environmental sanitation and awareness were not subjected to a detailed economic analysis, but were examined using the cost-effectiveness criteria.”1 3. Economic evaluation of water supply and DWM subprojects (at appraisal). The economic analysis of water supply subprojects considered three types of economic benefits: (i) cost savings on incremental water consumed due to the switch from alternative sources of water supply, (ii) cost savings on non-incremental water consumption, and (iii) reductions in nonrevenue water. Cost savings on incremental and non-incremental water consumption accounted for over 75% of total economic benefits from Part A projects. The economic benefits of drainage and wastewater subprojects were quantified by estimating the incremental increase in the values of affected land (which were assumed to incorporate potential reductions in health costs). For all subprojects, economic costs consisted of the investment cost and operation and maintenance (O&M) cost (net of taxes and duties, and adjusted for shadow prices). Economic costs and benefits were expressed in constant January 2006 prices and analyzed during the economic lifetime of the proposed subprojects, which was estimated at 14 years (2007–2020). A project was deemed economically feasible if its real economic internal rate of return (EIRR) exceeded a threshold of 12%. At appraisal, this was the case for all nine subprojects in Part A and Part B, with EIRRs ranging from 12.1% to 26.8% (Table A12.1). 4. Economic reevaluation of water supply and DWM subprojects (at completion). The original benefit streams were adjusted in proportion to the assumed reduction in the number of beneficiaries and delayed by 1 year to reflect delays in construction. The assumed economic lifetime was extended from 14 years to a more realistic 25 years. The original economic costs were replaced by the actual costs at loan completion but converted into constant mid-2009 prices. Because the number of beneficiaries was reduced, whereas economic costs remained largely unchanged, the EIRRs were lower at loan completion than at loan appraisal for 6 of the 9 subprojects (the exceptions were the water supply projects in Gia Nghia and Ninh Hoa and the DWM subproject in Song Cau, where the number of beneficiaries was higher than anticipated). In two towns, the EIRRs of the drainage and wastewater management projects ranged from 6% to 12%, and would therefore be classified by ADB’s Internal Evaluation Department as “less than efficient.” The classification would also apply to the water supply subproject in Ca Na, where the cost per beneficiary was relatively high and the average water tariff lower than in Gia

1 GHK et al. (2006). Technical Assistance Consultant’s Report, Central Region Small and Medium Towns

Development Project – Volume 1. Hanoi (Appendix 17, page 1).

Appendix 12 47

Nghia and Ninh Hoa (EIRR: 7.0%). These classifications are consistent with the overall rating of the project’s efficiency, which the project completion review mission puts at “less than efficient.”

Table A12.1: Results of Economic Evaluation of Part A and Part B Subprojects at Appraisal and Completion

Subproject

EIRR (percent) Level of Efficiencya

Appraisal (Aug 2006)

Completion (Jun 2014)




Gia Nghia 13.4 14.9 Efficient Efficient

Ninh Hoa 12.1 12.9 Efficient Efficient

Ca Na 12.4 7.0 Efficient Less than Efficient


Phan Thiet 22.7 17.7 Efficient Efficient

Gia Nghia 26.8 23.1 Efficient Efficient

Cam Ranh 21.1 9.1 Efficient Less than Efficient

Thap Cham 19.7 9.3 Efficient Less than efficient

Tuy Hoa 26.0 13.7 Efficient Efficient

Song Cau 20.0 26.0 Efficient Efficient a

EIRR > 12%: efficient, EIRR < 6%: inefficient, otherwise less than efficient (based on Internal Evaluation Department classification).

Sources: GHK et al. (appraisal, original results), project completion review mission (other results). C. Financial Reevaluation

a. Reevaluation of Financial Internal Rates of Return 5. Scope of the financial reevaluation. During preparation, a financial cost–benefit analysis was carried out for three types of subprojects: (i) Part A: Water Supply Development and Expansion, (ii) Part B: Drainage and Wastewater Management, and (iii) Part C: Solid Waste Management (SWM). A subproject was deemed financially feasible if its financial internal rate of return (FIRR) would exceed the weighted average cost of capital (WACC). At appraisal, the WACC was estimated at 2.0%. At completion, the WACC was estimated at 1.5%. As per prevailing ADB guidelines, both WACCs and FIRRs are expressed in real terms. 6. Financial evaluation of water supply, DWM, and SWM subprojects (at appraisal). The financial analysis of water supply subprojects considered three types of financial benefits: (i) revenue from incremental water sales, (ii) revenue from incremental connection fees, and (iii) revenue from cost savings due to efficiency gains. Revenue from incremental water sales accounted for over 85% of total financial benefits from Part A projects. The financial benefits of DWM subprojects were estimated at 10% of incremental revenue of water utilities operating in the subproject area. The financial benefits of SWM subprojects consisted of incremental revenue from monthly waste collection fees. For all subprojects, financial costs consisted of the investment cost and O&M cost (including taxes and duties, and excluding price contingencies so that the FIRR of the net financial benefits was readily comparable to the WACC). Financial costs and benefits were expressed in constant January 2006 prices and analyzed during the economic lifetime of the proposed subprojects, which was estimated at 14 years. At appraisal, the FIRR exceeded the WACC for one water supply subproject and two SWM subprojects. For

48 Appendix 12

most other subprojects, the FIRR was substantially lower than the WACC, with FIRRs for DWM subprojects ranging from −8.0% to −10.5% (Table A12.2). 7. Financial reevaluation of water supply subprojects. For all three water supply subprojects (Ca Na, Gia Nghia, and Ninh Hoa), FIRRs at completion were substantially lower than anticipated by the preparation consultant. The main reasons for the observed differences were (i) tariffs that were lower than expected (when expressed in real terms), and (ii) O&M costs that were higher than expected. As a result, all three subprojects were reclassified to “inefficient.”2 For the financial reevaluation of water supply subprojects, it was conservatively assumed that water tariffs would be increased only in line with general price inflation (i.e., the tariff is constant in real terms). 8. Financial reevaluation of DWM subprojects. The incremental financial revenue of DWM subprojects consists solely of incremental revenue from the wastewater surcharge on the water bill. At appraisal, the surcharge was estimated at 10% of the total incremental water revenue.3 At completion, PPCs approved tariffs that were based on the estimated O&M costs of DWM subprojects financed by the project, without reference to the prevailing water tariff (except in Thap Cham, where there was no wastewater surcharge in place on the loan closing date). At completion, PPCs had either increased the wastewater surcharges to be able to cover 100% of the O&M cost of the DWM subproject, as required by the loan agreement, or they had increased the surcharges to lesser proportions of the O&M costs. It was assumed that waste collection charges would cover the full O&M costs of all SWM subprojects by 2020. In spite of this assumption, the FIRRs of all DWM subprojects remained far below the WACC and all subprojects were consequently classified as financially “inefficient.”4 9. Financial reevaluation of SWM subprojects. At appraisal, it was assumed that tariffs for SWM subprojects would cover (most or all of) the full cost of these subprojects, even though the Loan Agreement only required participating PPCs to cover the O&M cost of SWM sub-projects. (It is worth noting that, worldwide, it is highly unusual that waste collection fees cover the full cost of a municipal waste service; such services are normally subsidized.) At completion, PPCs had approved tariffs that covered about 70 percent of the O&M cost of the subprojects (see Table A12.3). It was assumed that waste collection charges would cover the full O&M cost of all SWM subprojects by 2020. As a result, FIRRs were substantially lower than anticipated at appraisal, causing all three subprojects to be classified as financially “inefficient”.

2 In this context, the term “inefficient” refers to the classification of projects with an FIRR of less than 80% of the

WACC according to ADB’s Internal Evaluation Department (refer to footnote a of Table A12.2 for details). This does not mean that the project was implemented inefficiently, but that the project owner was unable to finance the full cost of the project from tariffs or charges generated by the project.

3 This method implied that the surcharge is also payable on incremental revenue from connection fees and cost

savings from efficiency improvements, which is not the case. As a result, the method was a priori likely to overstate the financial benefits of DWM subprojects.

4 Except, as noted, in Thap Cham. Because the calculation of the FIRR is based on the full cost of a subproject, and

because financial tariffs of DWM and SWM subprojects attempted only to cover a part of the full cost (namely the O&M cost), it was known a priori that the FIRR of such subprojects would not be financially feasible.

Appendix 12 49

Table A12.2: Results of Financial Evaluation of Part A, B and C Subprojects at Appraisal and Completion

Subproject

FIRR (percent) Level of Efficiencya






Gia Nghia 6.8 −5.6 Highly efficient Inefficient

Ninh Hoa 0.4 -2.4 Inefficient Inefficient

Ca Na 0.6 -5.5 Inefficient Inefficient


Phan Thiet −9.6 −9.8 Inefficient Inefficient

Gia Nghia −8.3 −12.6 Inefficient Inefficient

Cam Ranh −8.0 −9.8 Inefficient Inefficient

Thap Cham −10.5 NAb Inefficient NAb

Tuy Hoa −8.5 } −7.2

Inefficient Inefficient

Song Cau −10.3 Inefficient Inefficient


Gia Nghia 1.8 −8.7 Less than efficient Inefficient

Cam Ranh 3.5 −3.6 Highly efficient Inefficient

Song Cau 2.5 −1.6 Highly efficient Inefficient a FIRR > 120% of WACC: highly efficient, FIRR 100%−120% of WACC: efficient, FIRR 80%–100% of WACC: less

than efficient, FIRR < 80% of WACC: inefficient (based on Internal Evaluation Department classification). WACC was estimated at 2.0% at appraisal and 1.5% at completion.

b No wastewater surcharge in place at loan closing date.

Sources: GHK et al. (appraisal, original results), project completion review mission (other results).

Table A12.3: Domestic Waste Collection Fees at Appraisal and Completion

(D ‘000 per month)

Subproject

Recommended at Appraisal Actual at Completion Real as % of

Recommended in Aug 2008 Aug 2007 Aug 2008 Nominal

Aug 2008 Prices

Gia Nghia 10.8 12.0 15.0 8.4 70

Cam Ranh 10.8 12.0 14.0 7.8 65

Song Cau 10.8 12.0 15.0a 8.4 70 a Approved after the loan closing date.

Sources: GHK et al. (recommended at appraisal), project completion review mission (actual at completion). Annexed to this appendix are detailed forecast and discounted cash flow schedules used in calculating and evaluating EIRR, FIRR, and related values.

b. Reevaluation of Financial Tariffs 10. Scope of the tariff reevaluation. The project completion review mission compared projected tariffs at appraisal with actual tariffs at loan completion to obtain an indication as to the relevance of the financial projections. The project preparation consultant only had prepared estimates of tariffs at loan effectiveness (August 2007) and 12 months after loan effectiveness

50 Appendix 12

(August 2008), so that a direct comparison of estimated and actual tariffs in 2014 was not feasible. To enable comparison, June 2014 tariffs were converted into August 2008 prices. 11. Reevaluation of water tariffs. The preparation consultant had recommended that domestic water tariffs should be set at D4,000/m3 within 12 months from the loan effectiveness date in all three project towns where the project would finance water supply projects. At loan closing, actual water tariffs were at set (or close to) full cost-recovery levels in Ca Na, Gia Nghia, and Ninh Hoa, and ranged from D5,000/m3 to D15,000/m3. In real terms, these tariffs were higher than the tariffs recommended for August 2008, except for the lowest tariff in Ca Na (Table A12.4). It is important to note that tariffs were set to cover the full cost of the entire system, including but not limited to the project-financed part of the system. The full cost was estimated using a methodology described in Inter-Ministerial Circular 75/2012/TTLT-BTC-BXD-BNN.5 Because the circular does not require water utilities to include loan interest into the cost estimate during the grace period on project-financed subloans, the estimated full cost does not fully reflect the total capital cost of system.

Table A12.4: Domestic Water Tariffs at Appraisal and Completion (D ‘000 per m3)

Subproject



Aug 2008 Prices

Gia Nghia 3.6 4.0 9.1 5.1 126

Ninh Hoa 3.6 4.0 7.5–15.0 4.2–8.4 105–210

Ca Na 3.6 4.0 5.0–10.0 2.8–5.6 70–140

Sources: GHK et al. (recommended at appraisal), project completion review mission (actual at completion).

12. Reevaluation of wastewater surcharges. The preparation consultant had recommended that wastewater surcharges would be set at 10% of the water tariff at and after the loan effectiveness date. It appears that this estimate was driven by regulatory constraints (which did not permit an increase of the surcharge beyond the 10% threshold) rather than an estimate of the minimum required surcharge that would be needed for covering the full O&M cost of project-financed investments in drainage and wastewater management. The project implementation assistance consultant estimated full O&M cost-recovery tariffs, which were adopted in Cam Ranh, Gia Nghia, and Phan Thiet but not in Tuy Hoa. The wastewater surcharges that were adopted or proposed in these were substantially lower than full O&M cost-recovery tariffs, even though they were substantially higher than surcharges recommended by the preparation consultant (Table A12.5).

5 This circular was issued in May 2012 and contains guidelines on the principles, methods, and jurisdiction for

determining clean water tariff rates at urban areas, industrial zones, and rural areas.

Appendix 12 51

Table A12.5: Domestic Wastewater Surcharges at Appraisal and Completion (D ‘000 per m3)

Subproject



Aug 2008 Prices

Phan Thiet 360 400 650 363 91

Gia Nghia 360 400 471 263 66

Cam Ranh 315 350 500–1,000 279–559 80–160

Thap Cham 450 500 a NA NA

Tuy Hoa } 225 } 250 } 690b } 386 } 154

Song Cau a No wastewater surcharge in place at loan closing date.

b Revised tariff under discussion at loan closing date.

Sources: GHK et al. (recommended at appraisal), project completion review mission (actual at completion). 13. Reevaluation of solid waste collection tariffs. The preparation consultant had estimated tariffs for solid waste collection that a project operating entity would need to collect to cover the full O&M costs of project-financed assets. Table A12.3 shows projected tariffs for the collection of household waste in August 2007 and August 2008 (domestic waste collection fees comprised the most important source of fee revenue for all three towns where the project would invest into SWM). In June 2014, the actual tariff was about two-thirds of the recommended tariff for August 2008 in Cam Ranh and Gia Nghia (a similar tariff was approved for Song Cau shortly after the loan closing date). This indicates that the two towns were unable to recover the full O&M costs of solid waste management from collection fees at the loan closing date. This observation is also supported by calculations from the project implementation assistance consultant, which estimated full O&M cost-recovery domestic waste collection fee levels at D17,100/month in Gia Nghia, and D36,000/month in Cam Ranh. The full O&M cost-recovery fee level for Song Cau was estimated at about D20,000/month.

52 Appendix 12

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Appendix 13 61

QUANTITATIVE ASSESSMENT OF PERFORMANCE

Table A13.1: Results of Quantitative Performance Assessment

Criteria Assessment

Rating

(0–3)

Weight

(%) Weighted

Rating

Relevancea Highly relevant 3 25 0.75

Effectivenessb Effective 2 25 0.50

Efficiencyc Less than efficient 1 25 0.25

Sustainabilityd Likely 2 25 0.50

Overall Rating Successful 2.00 a Project objectives and outputs were relevant to the strategic objectives of the government and Asian Development

Bank. b Project achieved its outcome.

c Project achieved objectives in a less efficient manner.

d Project benefits and development impacts are sustainable.


Table A13.2: Rating Scale Used for Quantitative Performance Assessment a

Rating Relevance Effectiveness Efficiency Sustainability

3 Highly relevant Highly effective Highly efficient Most likely

2 Relevant Effective Efficient Likely

1 Less than relevant Less than effective Less than efficient Less than likely

0 Irrelevant Ineffective Inefficient Unlikely a Rating scale:

- ≥2.7: highly successful - ≥1.6 but <2.7: successful - >0.8 but <1.6: less than successful - ≤0.8: unsuccessful Source: Asian Development Bank.

30286-013: completion report - adb.org · from 1 january 2014 to 30 june 2014 satisfactory...

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