technical assistance consultant’s report final report · list of tables table 2.1: ... the vam...

Technical Assistance Consultant’s Report

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

Final Report Project Number: 40255-01 March 2011

Socialist Republic of Viet Nam: Central Mekong Delta Region Connectivity (Financed by the Japan Special Fund)

Prepared by SMEC International Pty Ltd in association with Nippon Engineering Consultants Co Ltd, and Thanh Cong Transport Engineering Consulting Company

ADB TA 7045-VIE: Preparing the Central Mekong Delta Region Connectivity Project

SMEC International Pty Ltd in association with Nippon Engineering Consultants Co Ltd and Thanh Cong Transport Engineering Consulting Company

Project Preparation Technical Assistance

Summary Project Proposal Report

January 2011

For:

ADB PPTA 7045-VIE:

Preparing the Central Mekong Delta Region Connectivity Project

Summary Project Proposal Report

January 2011

Preparing the Central Mekong Delta Region Connectivity Project | Summary Project Proposal Report | January 2011 Page | i

TABLE OF CONTENTS 1 The Proposal ............................................................................................................................ 1

2 The Project ............................................................................................................................... 3

2.1 Rationale ........................................................................................................................................ 3

2.2 Impact and Outcome ....................................................................................................................... 4

2.3 Outputs........................................................................................................................................... 4

2.4 Investment and Financing Plans ...................................................................................................... 4

3 Project Implementation .......................................................................................................... 6

3.1 Staged Implementation ................................................................................................................... 6

3.2 Co-financing of Stage 1 ................................................................................................................... 6

3.3 Components Financed by Korea...................................................................................................... 6

3.4 Components Financed by ADB ........................................................................................................ 6

4 Procurement Plan ................................................................................................................... 7

4.1 Contract Packages .......................................................................................................................... 7

4.2 Procurement of Civil Works ............................................................................................................. 8 4.3 Standard Bidding Documents .......................................................................................................... 8

4.4 Procurement Schedules .................................................................................................................. 9

4.5 Recruitment of Consultants ............................................................................................................. 9

5 Implementation Arrangements ........................................................................................... 11

5.1 Executing Agency and Implementing Agencies .............................................................................. 11

5.2 Consultants................................................................................................................................... 13

5.3 Construction Supervision Consultant – Korean Component ............................................................ 13

5.4 HIV/AIDS and Human Trafficking Prevention Plans ........................................................................ 13 5.5 Independent Monitoring Agencies .................................................................................................. 13

6 Due Diligence ......................................................................................................................... 14

6.1 Technical ...................................................................................................................................... 14 6.2 Access Surveys ............................................................................................................................ 16

6.3 Economic...................................................................................................................................... 19

6.4 Operations and Maintenance ......................................................................................................... 20

6.5 Time and Vehicle Operating Costs................................................................................................. 20

6.6 Capacity and Traffic Forecasting ................................................................................................... 21 6.7 Sensitivity Analysis ....................................................................................................................... 24

6.8 Financial ....................................................................................................................................... 25

6.9 Poverty and Social ........................................................................................................................ 27

6.10 Resettlement Plan ......................................................................................................................... 29

6.11 Environmental Impact Assessment ................................................................................................ 36

7 Recommendation .................................................................................................................. 41

LIST OF LINKED DOCUMENTS ...................................................................................................... 42

Preparing the Central Mekong Delta Region Connectivity Project | Summary Project Proposal Report | January 2011 Page | ii

LIST OF TABLES Table 2.1: Project Investment and Financing Plan ($ millions) ............................................................................... 4

Table 2.2: Tentative Financing Plan ......................................................................................................................... 5

Table 4.1: Stage 1 Contract Packages ..................................................................................................................... 7

Table 4.2: Major Milestones – ADB Financed Components ................................................................................... 9

Table 4.3: Tentative Project Implementation Schedule – KEXIM Financed Components ..................................10Table 6.1: Groups Consulted - Access Surveys November 2010 ........................................................................17

Table 6.2: Key Recommendations from Access Surveys .....................................................................................17

Table 6.3: Financial Costs, USD millions (mid-2010) ............................................................................................19

Table 6.4: Required Ferry Service Growth.............................................................................................................20

Table 6.5: Passage Time ........................................................................................................................................20

Table 6.6: Capacity and Speed Relationship .........................................................................................................22

Table 6.7: Forecast Traffic, Vehicle/Day ................................................................................................................23

Table 6.8: Economic Analysis, Components 1, 2 and 3, USD millions ................................................................24

Table 6.9: Resettlement Budget Estimate Component 1 ......................................................................................30

Table 6.10: Resettlement Budget Estimate Component 2 ....................................................................................32

Table 6.11: Resettlement Budget Estimate Component 3 ....................................................................................34

LIST OF FIGURES Figure 1: Connectivity Project Dong Thap Province and Can Tho City (Province) ............................................... 2

Figure 2: Project Implementation Arrangements ...................................................................................................12Figure 3: Bridge Cross Section ...............................................................................................................................14

Figure 4 Road Cross-Section Proposed for Road with Design Speed 80km/H ...................................................14

Figure 5: Can Tho Province approach to the Vam Cong Bridge showing the comparable profiles ...................15

Figure 6: The Vam Cong approach bridge in Dong Thap Province, left bank of the river Hau showing the comparable profiles for different longitudinal gradients 2.5% and 4 % .......................................................15

Preparing the Central Mekong Delta Region Connectivity Project | Summary Project Proposal Report | January 2011 Page | iii

CURRENCY EQUIVALENTS Currency Unit – Dong (VND) Viet Nam

USD 1.00 = VND 19,000

ABBREVIATIONS AADT – Average Annual Daily Traffic ADB – Asian Development Bank COI – Corridor of Impact DP – Displaced Person DRVN – Directorate for Roads of Viet Nam (formerly VRA) EDCF – Economic Development Cooperation Fund (Korea) GMS – Greater Mekong Subregion EMP – Environmental Management Plan EMOP – Environmental Monitoring Plan GOVN – Government of Viet Nam GVW – Gross Vehicle Weight HATPP – HIV/AIDS and Human Trafficking Prevention Plan MOT – Ministry of Transport (Viet Nam) NH – National Highway p.a. – per annum PDOT – Provincial Department of Transport (Viet Nam) PMU-MT – Project Management Unit – My Thuan PR – Provincial Road QL – Quoc Lo (National Highway Viet Nam) ROW – Right of Way TL – Tinh Lo (Provincial Road Viet Nam) VDR – Viet Nam Directorate of Roads VEC – Viet Nam Expressway Corporation VRA – Viet Nam Road Administration

WEIGHTS AND MEASURES Hectares – ha Metres – m Kilometres – km

NOTES (i) The fiscal year (FY) of the Government of Viet Nam ends on 31 December. FY before a calendar

year denotes the year in which the fiscal year ends, e.g., FY2011 ends on 31 December 2011

(ii) In this report, "$" refers to US dollars

Preparing the Central Mekong Delta Region Connectivity Project | Summary Project Proposal Report | January 2011 Page | iv

Source: ADB

Preparing the Central Mekong Delta Region Connectivity Project | Summary Project Proposal Report | January 2011 Page | 1

1 The Proposal 1. Vietnam is currently experiencing rapid economic growth, based primarily on export processing industries and tourism. Between 2003 and 2009 gross domestic product (GDP) grew by an average of 8% per year, while exports in the same period grew by an average of about 20%. The Mekong Delta region, where the proposed Project is located, is the third-largest industrial centre in the country after Ho Chi Minh City (HCMC) and Hanoi, and is based primarily on agro-industry and other light industries. Industrial production in the Mekong Delta region has accelerated in recent years, from an average annual growth rate of 13% in the period 2000–2004 to a growth rate of 24% in 2004–2005, and 25% to 2010.

2. As a result of this economic growth, road traffic is also growing rapidly and is a key constraint to future development. Between 2000 and 2009, for example, passenger traffic grew at an average rate of about 11% per year and freight traffic at an average rate of about 12%. The Government of Viet Nam is upgrading and expanding Vietnam’s strategic transport infrastructure – including the road network.

3. The ultimate project will improve connectivity in the Mekong Delta Region and provide efficient access from Ho Chi Minh City to the Southern Coastal Region through construction of high cable-stayed bridges across the Mekong River and associated roads:

(i) Component 1 – Cao Lanh Bridge (2.1km) and approach roads (5.7km); (ii) Component 2 – Interconnecting Road (15.7km); (iii) Component 3 – Vam Cong Bridge (2.9 km) and approach roads (2.9km); (iv) Component 4 – Long Xuyen Bypass (17.5km); (v) Component 5 – Long Xuyen Bypass extension (5.7km); (vi) Component 6 – My An – Cao Lanh connecting road (26.9km).

4. The Project comprises the following components as shown on the map in Figure 1 below:

(i) Component 1 – Cao Lanh Bridge (2.1km) and approach roads (5.7km); (ii) Component 2 – Interconnecting Road (15.7km); (iii) Component 3 – Vam Cong Bridge (2.9km) and approach roads (2.9km).

5. The Project sits in the boundaries of Dong Thap, An Giang and Can Tho Provinces. The bridges will be constructed to four-lane carriageway and two-lane motorcycle lane standard with total bridge width of 24.5 meters and the interconnecting road will be constructed initially to four-lane standard with formation width of 20.6 meters to be widened to six-lane standard in future.

6. The Project calls for the construction of two high bridges and a series of smaller ones with a combined length of about 9,469 meters (m) to cross the channels along with the construction of about 20 kilometres (km) of access roads including an interconnector road between the two bridge sites. In addition, the concept is to construct toll plazas to collect bridge tolls, similar to the My Thuan Bridge on National Highway IA. The Government of Viet Nam intends to collect road tolls at the proposed new major bridge crossings to help with the construction and maintenance of the bridges.


Figure 1: Connectivity Project Dong Thap Province and Can Tho City (Province)


2 The Project

2.1 Rationale 7. Viet Nam’s economy grew rapidly in recent years, based primarily on export processing industries and tourism. The Mekong Delta Region (the Delta) is the third-largest industrial centre in the country after Ho Chi Minh City (HCMC) and Hanoi, and its economy relies mainly on agro-industry and other light industries. The Delta is also known as the “rice-basket” of the country and contributes significantly to Viet Nam’s record rice exports making it a top three world’s rice exporter.1

8. The transport network in the Delta is in its early stages of development and is constrained by an insufficient road network, extensive but slow inland waterways

However, poverty remains high and the Delta is often prone to natural disasters. Rapidly growing traffic volumes and poor infrastructure remain key constraints to economic growth and development.

2 and fast growing road traffic volumes amid strong economic growth in recent years. A growing demand for an efficient transport network prompted the Government to set targets in its proposed 5-year Transport Development Plan 2011-20153

9. The Government embarked on the Expressways Development Plan

to transport 796 million tons or 64.2 billion ton-kilometre of goods, 3.15 billion passengers or 106.6 billion passenger-kilometre per year by roads alone. To achieve this, the 5-year plan aims to build, improve and upgrade about 3,000 kilometres (km) of roads and 44,600 meters (m) of road bridges. The National Highway 1A (NH1A), which runs along Viet Nam from north to south, located to the east of the Delta, is currently the only artery that gives uninterrupted road access to the Southern Coastal Region. Reliance on a single artery will not enable balanced development of a reliable primary road network for the Delta that can facilitate efficient land use supported by integrated development of secondary road and other infrastructure. This also constrains broader economic development.

4

10. The proposed Project will remove these bottlenecks by completing the missing infrastructure for uninterrupted road access across the Mekong River Delta along the SSH artery. It will construct (i) two high cable-stayed bridges with a combined length of about 5,000 meters to cross the two branches which form the Mekong River

which identifies the Second Southern Highway (SSH) as a key road network artery for the development of the Delta. The SSH connects HCMC through the central Mekong Delta Region to the Southern Coastal Region and serves as an alternative to NH1A thus providing access to the south-western provinces. It also links to the Greater Mekong Subregion (GMS) Southern Coastal Corridor at Rach Gia. The SSH is currently interrupted by ferry crossings at Cao Lanh and Vam Cong which are slow and of limited capacity.

5

1 Mekong Delta produces about half of rice consumed in Vietnam and 80% of rice export, 40% of seafood and 50–60% of its seafood export.

(ii) about 25 km of access roads and interconnector roads between the two bridge sites, and (iii) toll plazas. The Project is expected to bring inclusive development for areas that are presently not well-connected to major population centres, improve access to basic social and health services, improve global and national food security by stimulating local agro-industry and boosting exports further, provide support for private sector investment, and extend a better regional connectivity to neighbouring Cambodia and the Greater Mekong Subregion, as well as the country’s major inland ports in the Delta. It is expected that the Project will directly benefit an estimated 170,000 road users daily 5 years after Project completion and will help lift living standards in An Giang, Dong Thap and Can Tho provinces, with a total population of 5 million people.

2 Constitutes of two main arms of Mekong River and interlocking network of canals and rivers. 3 It is expected to be approved by the Government as part of the 5-year Development Plan of Viet Nam in early 2011. 4 Decision 1734/QD-TTg Approval of Viet Nam’s Expressways Development Plan up to 2020 and beyond. 5 The Mekong River is an international waterway under international treaty. The treaty specifies that the free headway for passing vessels must be at least 37m over the high water level.


11. ADB’s strategy for Viet Nam6 focuses on helping the Government reduce poverty incidence to 10-11% by 2010. In the transport sector, ADB helps the Government improve the transport investment program and sector efficiency and reduce transport costs. The Project is firmly supported by the Government and included in its 5 year plan, as well as ADB’s Country Operations Business Plan 2009-2011 for Viet Nam.7

12. The Government intends to collect tolls once the Project is completed to ensure that appropriate resources are available for operation and maintenance of the Project roads and bridges.

2.2 Impact and Outcome 13. The expected impact of the Project will be improved road travel across and within the Central Mekong Delta interconnecting HCMC to the Southern Coastal Region and the GMS Southern Coastal Corridor. The expected outcome will be decreased road travel distances and increased average travel speeds across and within the Central Mekong Delta. The Design Monitoring Framework (DMF) is in Annex 2.

2.3 Outputs 14. The proposed Project is expected to (i) build two cable-stayed bridges with a combined length of about 5,000m and associated [expressway standard] access and interconnecting roads with a total length of about 25km, and (ii) build sufficient capacity in the Implementing Agency to efficiently manage the Project after its completion. These outputs will be achieved through construction activities and associated project management, supervision, safeguards monitoring activities and institutional capacity building measures.

2.4 Investment and Financing Plans 15. The Project is estimated to cost USD 751 million (Table 2.1). The Government has requested a loan of USD 220 million from ADB’s ordinary capital resources to help finance the Project. The loan will have a 25-year term, including a grace period of 5 years, an annual interest rate determined in accordance with ADB’s London interbank offered rate (LIBOR)-based lending facility, a commitment charge of 0.15% per year, (the interest and other charges during construction to be capitalised in the loan) and such other terms and conditions set forth in the draft loan agreement.

16. Reflecting the potential impact of climate change on the Project, and the need to mitigate for the effects of this, the Mission advised that it would seek financing from an appropriate source within ADB for offsetting the incremental cost arising from such mitigation measures. The Mission agreed to inform the Government on the outcome of this upon ADB’s Management review meeting in November 2010.

6 ADB 2006 Country Strategy and Program 2007–2010: Viet Nam. Manila. 7 PPTA for the Project was approved in December 2007 and attached in Appendix 5.


Table 2.1: Project Investment and Financing Plan ($ millions) Item ADB AusAID KEXIM Government Total

A. Base Costa

1. Civil Works 176.00 88.00 186.12 53.51 503.63a. Component 1 (Cao Lanh Bridge) 66.00 88.00 22.48 176.48

b. Component 2 (Interconnecting Road) 100.00 20.60 120.60

c. Component 3A (Vam Cong Bridge & Approach Bridges) 186.12 5.20 191.32

d. Component 3B (Vam Cong Bridge Approach Roads) 10.00 5.23 15.23

2. Project Detailed Design & Supervision 21.00 13.41 34.41

3. Land Acquisition and Resettlement 47.92 47.92

6. Project Managementb 2.79 2.79

5. UXO Survey and Clearance 0.73 0.73

6. Taxes and Dutiesc 50.36 50.36

Subtotal 176.00 109.00 199.53 155.31 639.84

B. Contingenciesd 31.15 21.54 0.00 45.79 98.481. Physical 17.60 13.00 35.48 66.08

2. Price 13.55 8.54 10.30 32.39

C. Financing Charges During Implementatione 12.14 0.47 12.61

Total 219.29 130.54 200.00 201.10 750.93 a In mid-2010 prices. b Includes only direct cost of PMU-MT and external monitors for financial audit, environmental and resettlement monitoring, excluding contributions by other government agencies for review, processing and approval of the project documents estimated by the Government at USD 1.7 million. c Value-added tax and import duties. d Physical contingencies are computed at 10% of base costs. Price contingencies are computed at 1% on foreign exchange costs and 8% for 2011 and 6% for 2012-215 on local currency costs; includes provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate. e Includes interest and commitment charges. Interest during construction for ADB loan has been computed at the 5-year forward London interbank offered rate plus a spread of 0.2%. Commitment charges for an ADB loan are 0.15% per year to be charged on the undisbursed loan amount.

Source: TA consultants' estimates.


17. The financing plan is in Table 2. The Government of Australia is considering to provide a jointly co-financed grant of USD 130 million to be administered by ADB and the Government of Korea is considering a tied-parallel loan of USD 200 million. The Government is expected to finance the cost of resettlement and land acquisition, taxes and duties, and part of the civil works in a total amount of USD 201million. PMU-MT advised that the matter of KEXIM financing will be subject to further discussion between the Government of Viet Nam and the Government of Korea.

Table 2.2: Tentative Financing Plan

Source Amount ($ millions)

Share of Total (%)

Asian Development Bank 220.0 29.3

Government of Australia 130.0 17.3

Government of Korea 200.0 26.6

Government of Viet Nam 201.0 26.8

Total 751.0 100.0

Source: Asian Development Bank estimates.

18. A portion of the AusAID grant (about USD 25 million) will be utilised for financing the detailed design and construction supervision (DDCS) for ADB/AusAID-financed components of the Project. This DDCS Grant will be processed by ADB generally in accordance with the procedures for Technical Assistance loans. Similar to a Technical Assistance loan, a stand-alone Report and Recommendation of the President (RRP) will be prepared that describes the rationale, impact and outcome, outputs, financing plan, and implementation arrangements for the DDCS Grant. In order to expedite detailed design, the RRP for the DDCS Grant will be submitted to ADB’s Board of Directors for approval in advance of the RRP for the investment project.


3 Project Implementation

3.1 Staged Implementation 19. The Central Mekong Delta Region Connectivity Project (CMDRCP) will need to be implemented in stages because of the extensive scope of work and high costs involved.

20. Under the proposed staging, Stage 1 comprises full scale construction of the major cable stay bridges, Cao Lanh Bridge and Vam Cong Bridge, and the construction of new expressway sections which are essential to open the corridor between Cao Lanh City and Can Tho Province. Stage 1 will significantly improve connectivity between Dong Thap and Can Tho provinces and replace both the Cao Lanh and Vam Cong ferries with major cable-stayed bridges over the Tien and Hau Rivers thereby eliminating two major transport bottlenecks.

21. Stage 2 comprises the widening of the expressways and other bridges (excluding the two cable-stayed bridges which are constructed to full width in Stage 1) to full expressway standard (6 lanes). This will also involve the upgrading of toll plazas and major intersections.

22. The remaining corridor developments include the construction of a new bypass around Long Xuyen City (Components 4 and 5) and the completion of the expressway development from Cao Lanh City to My An through An Giang Province (Component 6), allowing connection of these three Mekong Delta provinces with the Second Southern Highway (SSH).

3.2 Co-financing of Stage 1 23. ADB and Korea through the Korean Export Import Bank (KEXIM) have agreed to co-finance Stage 1. Korea is providing funding of $200 million and have agreed to fund the Vam Cong Bridge and approach bridges (Component 3A). Although KEXIM have indicated their willingness to fund the Vam Cong Bridge approach roads (Component 3B), current funding availability does not allow inclusion of these works under KEXIM in the current Investment and Financing Plan. The additional funding for the civil works of Component 3B ($15.23 million) is currently shown as being funded by both the ADB and Government of Viet Nam.

24. This funding arrangement allows the Vam Cong Bridge and approach roads, between the NH54 intersection (including the NH54 interchange) and the start of the road from Lo Te to Rach Soi (the Lo Te interchange), to be implemented separately and simultaneously with the works funded by ADB. ADB will finance the remaining Stage 1 works up to the limit of available funding (Components 1, 2 and currently 3B). The proposed co-financing of Stage 1 is summarized below:

3.3 Components Financed by Korea • Component 3A - Construction of Vam Cong Bridge and approach bridges (2.9km)

3.4 Components Financed by ADB • Component 1 - Construction of Cao Lanh Bridge and approach bridges (2.1km) and associated approach

roads (5.7km), commencing at NH30 Interchange (km31+080) to interchange with PR849, including construction of the interchange;

• Component 2 - Construction of Cao Lanh – Vam Cong Interconnecting Road (15.7km), commencing at the end of Component 1 to NH54 interchange (but not including the NH54 interchange); and

• Component 3B - Construction of Vam Cong approach roads (2.9km).


4 Procurement Plan

4.1 Contract Packages 25. The ADB and Korean KEXIM components will be implemented under separate procurement, administration and payment systems and are divided into separate sets of contracts as shown in Table 4.1.

Table 4.1: Stage 1 Contract Packages

Reference Contract Description Estimated Cost $million Procurement Method

A. Civil Works CW1 Cao Lanh Bridge and approach roads 224.93 ADB-ICB

Cao Lanh – Vam Cong Interconnecting Road CW2A km 7+800 to km 11+200 30.06 ADB-ICB or NCB CW2B km 11+200 to km 16+100 44.45 ADB-ICB or NCB CW2C km 16+100 to km 19+100 48.33 ADB-ICB or NCB CW2C km 19+100 to km 23+450 30.84 ADB-ICB or NCB

CW3A Vam Cong Bridge and approach bridges 244.31 KEXIM Guidelines

CW3B Vam Cong Bridge approach roads 19.40 ADB-ICB or NCB Subtotal 642.34 B. Resettlement and Social Mitigation

R1 Payment of resettlement and social allowances, entitlements and compensation

47.62 Government Guidelines / Resettlement Plan

C. Consulting Services

CS1 Detailed Design and Implementation Supervision - ADB

21.00 ADB-QCBS

CS2 Detailed Design and Implementation Supervision - EDCF

13.41 KEXIM Guidelines

CS3 Independent Resettlement Monitor 0.30 Subtotal 34.71 Total 724.67

Civil Works Costs include physical contingency, price escalation and VAT

26. The ADB component comprises one large ICB contract (CW1), and four medium (CW2A – 2D) and one small contract (CW3B) suitable for either ICB or NCB.

27. Contract CW3B was originally intended to be included in the KEXIM component (as part of CW3A) but limitations on available KEXIM funds may mean this contract will be included in the ADB component. KEXIM have indicated they will re-examine the funding situation for CW3B as the works progress.

28. At the time of writing, the KEXIM component is shown comprising only one contract (CW3A) which is the Vam Cong Bridge and approach bridges. As noted above, KEXIM may also take over funding of CW3B in the future and combine this contract with CW3A.


4.2 Procurement of Civil Works 29. For ICB contracts, the procurement method to be used will be single stage one envelope system, with prequalification. For this purpose, the invitation for prequalification and all related documents (including the proposed prequalification factors, methodology, and criteria) must be reviewed and approved by ADB before they are issued. The prequalification invitation is to be advertised in accordance with paragraphs 2.7–2.10 of the Procurement Guidelines. ADB is given a report on the advertising as part of the review requirements.

30. As soon as the prequalification applications have been evaluated, ADB’s approval of the evaluation results, including the recommendation for prequalified and disqualified applicants, must be obtained before they are communicated to the applicants.

31. For each ICB contract, a full set of bid documents should be submitted to ADB for review and approval before issuance to prequalified bidders.

32. For NCB contracts, documents will be modelled on those developed for NCB under previous ADB funded Projects. This model is a single stage, two envelope model. The first draft English language version of the procurement documents should be submitted for ADB review and approval regardless of the estimated contract amount. ADB-approved procurement documents should be used as a model for all succeeding NCB contracts financed by ADB for the project.

33. For all contracts, ADB will review the bid evaluation report (BER) and proposal for award of contract on a prior review basis. The EA must submit copies of the BER in English to ADB for approval.

34. In Viet Nam, the large civil works contractors are mostly State-owned enterprises (SOEs) and Joint Stock Companies (JSCs). ADB Procurement Guidelines, April 2010, paragraph1.8 (c) have established criteria for the eligibility of domestic contractors state: “Government-owned enterprises in the borrower’s country may participate as a bidder only if they can establish that they (i) are legally and financially autonomous, (ii) operate under commercial law, and (iii) are not dependent agencies of the borrow or sub-borrower8

35. The financial capacity of SOEs, JSCs and privately-owned contractors in Viet Nam is limited. There are many instances of infrastructure projects which are encountering serious delays in completion due to the domestic contractor’s lack of financial capacity. MOT advises that there are few privately-owned contractors with a capacity greater than $3 to 4 million. The work is currently sliced into large packages suitable for international contractors for the large cable-stayed bridge components and further consideration will need to be given to several small packages for the Cao Lanh – Vam Cong Interconnecting Road during the detailed design phase to allow bidding by domestic privately-owned contractors.

.”

36. Inclusion of the new expressway between the Cao Lanh and Vam Cong bridges in a single contract carried out by an international contractor provides an opportunity to achieve major economies of scale in construction activities (e.g. bridge components, aggregate sources, materials purchases and transport) and hence achieve lower prices than dividing the works into smaller packages. It is expected that an international contractor will sub-contract portions of the work to domestic contractors so that eligible JSCs and SOEs may still participate in the project.

4.3 Standard Bidding Documents 37. A new set of standard procurement procedures and documents has been recently issued by ADB which will be used for all contracts under this project. These are listed below and are available on the ADB website:

• Guidelines for Procurement Under ADB Loans, April 2010

8 Other than force account units, as permitted under para. 3.8 – ADB Procurement Guidelines April 2010


• Guidelines on the Use of Consultants by ADB and its Borrowers, April 2010

• Standard Prequalification Document, Prequalification of Bidders User’s Guide, ADB, October 2006

• Standard Procurement Document, Prequalification of Bidders, ADB, October 2006

• Standard Bidding Document, Procurement of Works User’s Guide, ADB, October 2006

• Standard Bidding Document, Procurement of Works Following Prequalification , ADB, October 2006

• Standard Bidding Document, Procurement of Works Without Prequalification, ADB, October 2006

• Standard Bidding Document, Procurement of Works (Single-Stage, Two-Envelopes) ADB March 2007

• Conditions of Contract for Construction for Building and Engineering Works Designed by the Employer, Multilateral Development Bank Harmonised Edition March 2006, FIDIC

4.4 Procurement Schedules 38. The schedule for procurement for both the ADB and KEXIM financed components is shown in Table 4.2 and Table 4.3.

Table 4.2: Major Milestones – ADB Financed Components

Processing milestone Implementation milestone

Loan fact-finding mission 14-30 Sep 2010 Bids for Detailed Design Announced* Nov 2010

Peer and interdepartmental review 11-29 Oct 2010 Detailed Design Commenced May 2011

Management review meeting 15 Nov 2010 Prequalification Started Jul 2011

Consultation mission 22-30 Nov 2010 Prequalification Completed Dec 2011

Loan negotiations 7-8 Mar 2011 Bidding Documents Approved Dec 2011

ADB Board approval late May 2011 Bids Invited Jan 2012

Loan effectiveness Sep 2011 Bid Evaluation Completed Sep 2012

Contracts Awarded Oct 2012

Notice to Proceed Issued Dec 2012

Substantial Completion Jun 2016

Loan Closing Dec 2016

* Includes construction supervision

4.5 Recruitment of Consultants 39. ADB will undertake advance recruitment of consultants in consultation with PMU-MT, up to the point of contract signing. Once the Government has signed the TA Letter of Agreement, PMU-MT will be able to negotiate a contract with the first ranked firm, submit the draft negotiated contract for ADB’s no objection, and upon ADB’s no objection, sign the contract and commence implementation of the TA.


Table 4.3: Tentative Project Implementation Schedule – KEXIM Financed Components

Task Month 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 ... 30 ... 51 52 53 54 55 56 57 58 59 60 61

1. Selection of Consultants (Detailed Design, Bid Doc and Construction Supervision)

3

2. Detailed Design 7

3. Construction Supervision 51

4. Preparation of Bid Documents 3

5. Bidding 3

6. Construction 48

Total period 61


5 Implementation Arrangements

5.1 Executing Agency and Implementing Agencies 40. There will be a single Executing Agency with separate consultants and contractors for the ADB- and Korea-financed sections. The Executing Agency will be the Ministry of Transport (MOT) with responsibility of planning and implementation delegated to Project Management Unit – My Thuan (PMU-MT). For this purpose PMU-MT will assign a full-time project manager, supported by an adequate strength of technical, financial, safeguards, and support staff. PMU-MT has sufficient experience in implementing ADB-financed projects and is capable of implementing the proposed Project.

41. The Project’s overall direction and management will be provided through the Project Coordinating [Management] Committee (PCC). The PCC will be responsible for ensuring coordination across all aspects of the Project, for resolving technical and contractual issues as they arise, and for monitoring implementation of the Project’s safeguards programs, in particular programs for involuntary resettlement and for environmental impact mitigation. The PCC will meet quarterly, with at least two meetings per year scheduled to coincide with joint co-financier review missions.

42. The PCC will be chaired by the Vice-Minister for Transport under whose responsibility the Project falls. PPC members will include representatives of the co-financiers, representatives of the provinces within which the Project is located and, representatives of central government ministries and agencies. PMU-MT will act as the PCC secretariat in coordination with relevant departments in MOT. The secretariat will prepare and distribute agenda for the meetings, arrange meeting logistics, prepare and circulate minutes, and monitor agreements and decisions reached at the meetings with the assistance of ADB/AusAID and KEXIM-financed design and supervision consultants who will be invited to the PCC meetings by PMU-MT as required.

43. PMU-MT will direct the work of the Civil Works Preparation Consultant and the Project Implementation Consultant for the ADB component and the consultants for the Korean component. PMU-MT will be responsible for procurement and will be the Employer on all civil works contracts. Refer Figure 2.

44. PMU-MT will ensure that Can Tho City and Dong Thap PPCs will establish Provincial Resettlement Committees as well as District Compensation, Assistance and Resettlement Boards and Commune Resettlement Task Forces to be responsible for the preparation and implementation of the Resettlement Plan.

45. The PPCs will also direct provincial government agencies to implement the HIV/AIDS and Human Trafficking Prevention Plans. The HIV/AIDS and Human Trafficking Prevention Plan will supplement government programs for prevention and complement other donor initiatives. Plan components will include: advocacy actions on HIV/AIDS and trafficking; information and education campaigns on HIV/AIDS and trafficking; provision of comprehensive HIV/AIDS medical packages to clinics and medical centres along the road; and monitoring.

46. PMU-MT will have overall responsibility for implementation of the Environmental Management Plan (EMP) in the design and construction stages. EMP requirements will be incorporated into the construction documents; monitoring and enforcement will be ensured by the Project Implementation Consultant and Korean supervision consultant. EMP requirements during operations will be implemented by the Directorate for Roads of Viet Nam (DRVN – formerly Viet Nam Road Administration (VRA)) with monitoring by the Provincial Departments of Natural Resources and the Environment.

47. Independent Monitoring Agencies will be recruited to monitor the implementation of Resettlement Plans and the HIV/AIDS and Human Trafficking Prevention Plans. These agencies will be domestic companies with experience in resettlement planning and social analysis on similar internationally-funded infrastructure projects.

48. The Project roads will be handed over to the DRVN upon completion. DRVN will assign responsibility for operations and maintenance to its subsidiary operational agency, Regional Road Management Unit No. 7 (RRMU7) which already has responsibility for the major national highways in the Project area.


Figure 2: Project Implementation Arrangements


5.2 Consultants 49. A Detailed Design and Construction Supervision (DDCS) Consultant will be recruited using retroactive financing following the ADB Management Review Meeting for the following activities: (1) conduct field investigations and prepare detailed designs, cost estimates, bid documents for the ADB component sections; (2) update Resettlement Plans for all Stage 1 sections (including those in the Korea component); (3) assist PMU-MT during the bidding process; and (4) act as the Engineer during construction. The international consulting engineering company in association with one or more domestic consulting engineering companies will be based in HCMC.

50. A Detailed Design and Construction Supervision Consultant will be recruited to prepare detailed designs, cost estimates and bid documents for the Korean component sections.

5.3 Construction Supervision Consultant – Korean Component 51. A Construction Supervision Consultant will be recruited for the following activities: (1) assist PMU-MT in the procurement of Stage 1 civil works contracts in the Korean component sections; (2) carry out the Engineer’s duties on all civil works contracts in the Korea component.

5.4 HIV/AIDS and Human Trafficking Prevention Plans 52. A HIV/AIDS and Human Trafficking Prevention Plans will be implemented which will supplement government programs for prevention and complement other donor initiatives. Four Plan components are recommended:

(i) Advocacy actions on HIV/AIDS/STIs and Trafficking (ii) Information and education campaigns (IECs) on HIV/AIDS and STI and trafficking (iii) Provision of comprehensive HIV/AIDS and STI medical packages to clinics and medical

centres along the road (iv) Independent Monitoring

5.5 Independent Monitoring Agencies 53. Independent Monitoring Agency will be recruited by PMU-MT to monitor the implementation of Resettlement Plans and the HIV/AIDS and Human Trafficking Prevention Plans. These agencies will be domestic companies with experience in resettlement planning and social analysis on similar ODA-funded infrastructure projects.


6 Due Diligence

6.1 Technical 54. The project technical review of the Ministry of Transport (MOT) Feasibility Studies (FS’s) is annexed; highlights of this technical review are noted below. On receipt and consideration of the consultant’s technical review the MOT had the draft FS’s updated; the Final MOT FS’s produced are also annexed.

55. The scale of the roads and bridges proposed in the FS are in line with future planning for the Central Mekong Delta Region. The Project will be built to four lanes with a central median and the two major cable stay bridges will be built to six lanes wide to accommodate future expansion.

56. The bridge provides for each direction, two lanes for vehicles and one lane for motorbikes. The lane width for vehicle shall be 3.5m and that for motorbike shall be 3.0m. For future consideration, the motorbike lanes can be transformed to vehicle lanes by removing the barrier between the motorbike land and exterior general traffic lane.

Figure 3: Bridge Cross Section

57. The median, shown as a three metre grass central reserve in the cross section drawing below can be reduced to 0.6m where there is a low density of road frontage activity.

Figure 4 Road Cross-Section Proposed for Road with Design Speed 80km/H

58. The final six lane wide cross section has a 33m pavement, and from the tow of talus now has not ten metres as is shown in this diagram, but three metres along the road section and seven metres at the bridge sections. The batter slope is 1:2 and varies depending on the height of the embankment, thus the width of land acquisition changes along the route as well.

59. The two major cable stay bridges were assessed and it was recommended that Cao Lanh Bridge with a central span of 350 meters was redesigned as a concrete beam and deck arrangement from the proposed composite deck arrangement to reduce costs and increase the scope of contractors able to bid for the implementation of the bridge. The alternative design of a composite steel girder and concrete deck arrangement has a higher cost due to the large quantities of steel required to be imported. The 5% gradient of the Cao Lanh approach bridges is acceptable.

60. It was found the best alternative for the Vam Cong bridge, with a central span of 450 meters, was instead the composite deck structure; concrete beam and deck structures are not used for bridge spans greater than 400 meters, and a concrete box span is a more expensive option requiring a greater amount of concrete, stronger foundations and larger construction equipment. The Vam Cong approach bridges have a 2.5% gradient to provide adequate clearance over the national highways that are close to the north and south banks of the river Hau.

0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5

CableCable

3.0 3.0

24.5m

7.0 7.0

2% 2%

2- Vehicular Lanes 2- Vehicular Lanes MotorcycleLane

MotorcycleLane


61. In Can Tho Province on the right (south) bank a section of approach bridge could be replaced by a section of embankment, however the embankment has a larger footprint and with the extent of industry in the vicinity, and for a smoother ride a gradient of 2.5% (the dotted profile) was proposed. A close up of this can be seen in Figure 5.

Figure 5: Can Tho Province approach to the Vam Cong Bridge showing the comparable profiles

62. In the Dong Thap Province, the left (north) bank of the Hau, there are possible cost savings in reducing the pier height, however SMEC concurs with the more uniform the approach bridge for ease of construction and design and hence it is proposed this remain at 2.5% (the dotted profile) as shown in Figure 6.

Figure 6: The Vam Cong approach bridge in Dong Thap Province, left bank of the river Hau showing the comparable profiles for different longitudinal gradients 2.5% and 4 %

63. With the revised design of the Cao Lanh Bridge, the major bridges were found to be adequate for the feasibility design phase.

64. The soft soil design and consequently in part the embankment and pavement design are based on assumptions about average ground conditions found along the route derived from limited borehole and laboratory test results. The ground condition assumptions also play a role in governing the length of bridges along the route with abutments placed on a height of embankment where soft soil treatment can remain effective. Engineering investigations during the design stage may uncover more difficult ground conditions than anticipated requiring more costly construction methods or conversely better ground conditions than anticipated could reduce the required treatment of soft soil and also reduce the length of the bridges along the route.

65. The FS reports detail the geotechnical investigation results including the interpreted subsurface profile and the laboratory test results. The reported soil parameters based on the test results appear to be consistent with the conditions of the soils described, including results of in-situ vane shear tests. However


there do not appear to be in-situ tests for hydraulic conductivity of the soft clays which is considered critical for the design of ground improvement works. It is recommended that further testing, including piezocone tests with pore pressure dissipation measurements, be undertaken to confirm the soil hydraulic conductivity characteristics and the strength profiles of the soft soils.

66. Limited boreholes and laboratory tests have been undertaken. Additional geotechnical investigations will be required for the detailed design to better identify the material characteristics and subsurface stratigraphy. Further investigations should also focus in the areas of culverts, bridges, retaining walls, and bridge approaches.

67. Technical review of the bridges and drainage along the route included the following aspects: skew angle and possible reduction of the skew, reduction in drainage points via short canal diversions, combining drainage at central points, ensuring drainage is at low points in the topography, span lengths, and an allowance for adequate soft soil treatment was provided in the design cost estimate to provide a smoother ride quality on the approaches to bridges and box culverts.

68. The height of the base of the pavement is designed to be half a meter above the design water level, where the design water level is the higher of H2000 or H1%. H2000 is the height of the flood level in the year 2000 and H1% is the one in 100 year return flood level.

69. Pavement design has been assessed and a number of recommendations have been put forward including:

• Revise design for an improved subgrade value; • Revise the drainage factor – it is unrealistic and would save in pavement depth; • Revise the depths of AC on Phase 1, increasing the thickness dependent on any revised traffic

surveys available; and • Revisit in detailed design the use of local materials with blending, sand/cement treatments

through laboratory testing to ensure the properties of these alternatives for revising the pavement design and saving money.

70. The allowance for removal of UXOs differs between the TEDI estimates and those proposed by SMEC for the inclusion in the MOU, where TEDI allowance is USD 559,000 and SMEC proposed allowance is USD 730,000.

71. Use of temporary construction yards for the construction of the main bridges is essential. The selection of these sites, away from residential and instead utilising where possible locations already allocated to land acquisition will reduce the impact on the local community.

72. As for maintenance requirement, a no-maintenance option is unrealistic, but it is important that a maintenance manual be provided by both the designer and contractor, pricing into the contract provision of the maintenance requirements approved during detailed design.

6.2 Access Surveys 73. A key activity of the Technical Due Diligence under the PPTA was to prepare a review of access for local communities affected by the new road alignment. The Project roads will to some extent pose barriers to lateral movement within the communities through which the road traverses. This has the potential to impact access to social services and sources of livelihoods. The project design will need to incorporate technical solutions to mitigate such impacts. These may include underpasses, wider bridges to incorporate paths adjacent to waterways, or a network of service roads adjacent to the project road.

74. The objective of the access review was to understand the current level of permeability in the road design, the impacts of this design on the local communities and propose technical solutions which can be incorporated into the design.


75. The Provinces, Districts and Communes consulted as part of the Access Surveys are shown in Table 6.1. Follow up meetings with the Provincial People’s Committee’s of Can Tho City and Dong Thap Province to discuss the findings of the Access Surveys were conducted in early December 2010.

Table 6.1: Groups Consulted - Access Surveys November 2010

Province District Commune Date

Can Tho City Thot Not Thot Not 17/11/2010 Thot Not Thoi Thuan 17/11/2010 Thoi Thanh Vinh Trinh 18/11/2010 Dong Thap Province Lap Vo Đinh An 19/11/2010 Binh Thanh 20/11/2010 Binh Thanh Trung 21/11/2010 My An Hung B 22/11/2010 Tan My 23/11/2010 Dong Thap Province Cao Lanh City Tinh Thoi 24/11/2010 Ward No.3 25/11/2010 Dong Thap Province Cao Lanh District An Binh 26/11/2010

76. A complete report on the Access Surveys is contained in the documents “Survey Report: Impacts of the Project on Travelling and Socio-Economics of the Local People” prepared by CHR in December 2010.

77. In general, the provision of access points at Cao Lanh and Vam Cong bridges and the interconnecting road was well-received by the Communes and PPCs. A number of recommendations were made for further study during the detailed design phase of the works, which are summarised below in Table 6.2.

Table 6.2: Key Recommendations from Access Surveys

Province Location Recommendation

Dong Thap Province Tinh Thoi Commune, Cao Lanh City

Review the connection point for Tinh Thoi Commune to the Interconnecting Road, as this location is a key traffic centre for traffic into Cao Lanh City and also integration of the road networks to the north of the Tien River.

Tan My Commune, Lap Vo District

Chua Can Canal (km6+450) will be upgraded by the PPC to allow greater access to Can Pagoda and the newly built school. Construction of an underpass capable of accommodating vehicle of 3.5 – 5t capacity will be necessary following the upgrade. This underpass should be included in the detailed design.

My An Hung B Commune, Lap Vo District

Consider raising the clearance of Thay Lam Bridge to 3.0m from current proposed 2.7m as the District Road passing under the bridge connects two Provincial Roads (PR848 and PR849) and carries a high traffic volume.


My An Hung B Commune, Lap Vo District

The current design shows a bridge constructed at Muong Tieu Lon Canal, whereas the main transportation canal is Muong Lon Canal, which regularly carries barges of 50 ton capacity. Either an additional bridge should be built at Muong Lon Canal or the current proposed bridge shifted from Muong Tieu Lon Canal to Muong Lon Canal. This proposal is discussed further below.

Binh Thanh Commune, Lap Vo District

Consider raising the clearance of Kenh Ranh Bridge (km21+435) to 3.0m from current proposed 2.7m as both the waterway and the local roads on either side of the canal are major transport routes with high traffic volume.

Can Tho City Thoi Thuan Commune, Thot Not District

Consideration to be given to the construction of an additional culvert at Hai Ly canal as it is a main source of water for agricultural production.

Thoi Thuan Commune, Thot Not District Vinh Trinh Commune, Vinh Thanh District

The Thot Not Industrial Park is to be expanded and an increase in agricultural and transport vehicles is anticipated. Consider raising the clearance of Nga Chua Bridge 4.5m from the current proposed 3.2m to accommodate Industrial Park traffic.

78. The proposal for either an additional bridge at Muong Lon Canal or the relocation of the Muong Tieu Lon Bridge to Muong Lon Canal is unclear. The current Feasibility Study shows a proposed large bridge spanning the Muong Lon Canal. However, there is an adjacent canal to Muong Lon (unnamed in the Feasibility Study documents) and there may be some confusion with canal names in the location of Muong Lon Bridge.

79. The Feasibility Study also indicates a proposed connection between Muong Lon canal and the adjacent canal, which may allow larger vessels to navigate the adjacent canal. Whilst it is recognised that sufficient navigational clearance is required for larger vessels as noted, it does appear there may be some confusion with either naming convention in the location, or that future plans to connect the two canals may allow larger vessels to navigate both canals. This issue will need to be investigated further during the detailed design.

80. It is also noted that both Thoi Thuan and Vinh Trinh communes commented on the clearance of the Nga Chua bridge and its impact on future plans for the nearby Industrial Park. An increase in elevation from 3.2m to 4.5m, and the associated impacts on approach embankment heights will have an adverse impact on the cost of the Nga Chua Bridge, therefore other options to achieve the required clearance should also be considered.

81. The comments and recommendations of the various Communes were endorsed by both Can Tho and Dong Thap PPCs at the follow-up meetings in early December 2010 with no additional comment.


6.3 Economic 82. Each of the three Project components exceed the criterion of 12%pa economic internal rate of return (EIRR).

83. The largest benefit accrues to ferry users by eliminating ferry waiting and crossing time. Per user (motorcycle, car, bus, truck) ferry user time savings remain constant over the 20-year period of evaluation because investment in new ferry capacity is assumed to keep pace with growing demand. Increasing demand ensures that total ferry user savings increase year by year.

84. The bridges remove the need to invest in more ferries and ferry landings. Ferry operating and investment cost savings amount to about 40% of the value of ferry users’ time savings.

85. A third source of benefit is faster travel on limited-access median-divided multi-lane roads. For the Cao Lanh Bridge component these road use savings are magnified because the Project shortens travel distance. Relative to ferry user time savings, road use savings rise from about 30% in 2016 to 90% in 2036. This rise is due to the increasing road congestion in that period.

86. For the Vam Cong Bridge component the travel distance is less than the travel distance for Cao Lanh, so the total road use savings are less. Moreover, the Project road lengthens the travel distance because the bridge is at the southern end of Long Xuyen whereas the ferry is more centrally situated. As a result, road use savings are very small for the Vam Cong component.

87. For the Interconnecting Road component, the only savings are road use savings but they are sufficient to make this component economic since it is not burdened by the cost of a major bridge.

88. The costs of the Project investment are tabulated below. These are financial costs. Construction cost includes detailed design and construction supervision. A physical contingency is added. No financial contingency is included because the economic evaluation uses constant 2010 money values. The construction cost and the physical contingency are multiplied by 0.85, the standard conversion factor (SCF), to convert domestic prices to border prices for use in the economic evaluation. The cost of land and resettlement is not subject to the SCF adjustment.

Table 6.3: Financial Costs, USD millions (mid-2010)

No. Component Item $ millions

1 Cao Lanh bridge and approach roads Construction 208.2 Physical contingency 24.4 Land & Resettlement 22.9 255.5 2 Interconnecting road Construction 141.9 Physical contingency 16.6 Land & Resettlement 16.0 174.5 3 Vam Cong bridge and approach roads Construction 241.8 Physical contingency 25.1 Land & Resettlement 9.0 275.9 TOTAL 705.9

Source: SMEC Economic Specialist


6.4 Operations and Maintenance 89. The following amounts are allowed for maintenance of roads and small bridges:

Routine maintenance USD 1,800/km annually Periodic maintenance USD 30,000/km 5 and 10 years after construction/rehabilitation Rehabilitation USD 75,000/km 15 years after construction/rehabilitation

90. Maintenance has an insignificant effect on the economics. Omitting maintenance altogether increases the EIRR by less than 0.1%pa.

91. Maintenance cost estimates for the major bridges are expressed as a percentage of initial construction cost. Cao Lanh costs 0.1% annually plus 2% every 15 years. Vam Cong costs 0.1% annually plus 2% every 5 years and an additional 3% every 15 years (making a total of 5.1% every fifteenth year). Operations (toll collection etc) are 0.15% annually. Annualised at 12%pa the total operations and maintenance (O&M) cost in economic terms is 0.34% for Cao Lanh and 1.16%pa for Vam Cong, after applying the SCF of 0.85 to the financial costs of bridge construction.

6.5 Time and Vehicle Operating Costs 92. For Cao Lanh ferry, annual costs in 2008 were estimated to be VND 22.5 billion, or USD 0.784 per PCU-crossing in 2009 values.9

Table 6.4: Required Ferry Service Growth

This figure includes the cost of extra ferries needed to serve traffic growth but not the cost of additional ferry landings. To meet growing demand the following costs are allowed for new river crossings and pontoons, in economic 2009 dollars.

Cao Lanh $ millions Vam Cong $ millions

2015 5.0 2015 2.8

2028 5.0 2017 5.6

2024 5.0 2023 5.6

2034 5.0 2033 5.6

93. From observations of both ferries on 28-29 September 2010 the following passage time is derived for use in the economic evaluation:

Table 6.5: Passage Time

Minutes per Activity

9.5 waiting to board

3.5 loading time

11.0 crossing time

2.5 unloading time

26.5 Total time

9 PCU = passenger car unit. A motorcycle is rated 0.3, car/jeep 1.0 and other vehicles 2.0.


94. In the with-project case, the travel time over the bridges is tallied in the economic calculations, but the extra time needed to pay tolls is not. Allowing for some queuing, the added time to pay bridge tolls should not exceed 2 or 3 minutes, on average. Relative to using the bridge, the economic evaluation allows an additional 24 minutes for journeys made by ferry.

95. Vehicle operating costs (VOCs) are calculated using the HDM-4 VOC model. The outputs are in 2009 dollars, which are escalated by 6.1% to produce 2010 values. Unit costs in USD/vehicle-kilometre were computed for travel speeds ranging from 20 to 85 km/h. Traffic conditions were characterised by car speed. Buses are assumed to travel at the same speed as cars, but trucks are slower and motorcycles are slower still.

96. The time-related costs in USD/vehicle-hour depend on the split between travel for work/business and travel for other (private) purposes. For working people, time cost is the wage cost plus overhead. The cost of time for a person who is not working is taken to be one-quarter of the time cost when working.

97. This Project and similar projects in the Mekong Delta have carried out interview surveys which measured the proportions of people travelling on work/business or for private purposes. From the amalgam of information it is concluded that work/business trips account for 10% of trips by motorcycle users and 30% for other travellers. Likewise, 10% of motorcycles and 30% of cars are engaged on work/business and, accordingly, 10% and 30% of their depreciation and opportunity costs are tallied in the VOCs.

6.6 Capacity and Traffic Forecasting 98. Road capacities are calculated from figures per lane, in PCU/hour, found in National Highway Standard TCVN4054:2005. Conversion to PCU/day for a two-way road requires application of a peak hour factor (PHF) which from extensive surveys conducted in September 2009 was found to be 6.4% for traffic in one direction. (Mekong Delta traffic flow is unlike flows in Western countries where traffic has strong peaks at the beginning and end of the day.) The results are as follows:

Capacity in both directions, PCU/day

(a) 90,000 2+2 lanesmedian & separate lanes for slow traffic separated by a barrier

(b) 80,000 2+2 lanesmedian barrier

(c) 60,000 2+2 lanesno barriers

(d) 30,000 1+1 lanes.

99. Vehicle speed is determined by road capacity and the amount of traffic the road is carrying at that time. As traffic increases, vehicles interact with each other and there are progressively fewer passing opportunities until a point is reached where passing is impractical. The HDM-4 documentation calls this ‘nominal capacity’. The road can still carry more traffic but all vehicles move together at the same speed until ‘ultimate capacity’ is reached.

100. For four-lane roads, the HDM-4 documentation suggests that the ‘shoulder’ of the speed - flow curve, at which speeds start to diminish due to interaction, is at about 40% of the road’s capacity. For wide two-lane roads it is 20%. The economic analysis uses the figures in Table 6.6. If traffic exceeds capacity the analysis assumes the travel speed does not diminish further. It remains constant at the speed at capacity.


Table 6.6: Capacity and Speed Relationship

Four-lane road Two-lane road

Road capacity PCU/day 80,000 30,000

Speed at capacity km/h 40 20

Flow rate at shoulder PCU/day 30,000 5,000

Car speed at shoulder km/h 85 70

101. Traffic forecasting, in PCUs, was undertaken using the STRADA model. Traffic surveys of origins and destinations provided the data to create 2009 origin-destination (OD) tables for four vehicle types: motorcycle, car, bus and truck. Forecasts of provincial population and GDP were extracted from provincial yearbooks and used to derive growth factors to produce trip tables for future years.

102. As standard of living rises, a gradual shift from motorcycle ownership to car ownership is anticipated and incorporated into the analysis. From 2014 to 2033 the ratio of motorcycles per car diminishes from 6.6 to 3.6.

103. STRADA did not model generated traffic since a fixed trip matrix was used. In other words, by vehicle type, the numbers of trips between each OD pair do not change when the network changes. Network changes between the without-project and with-project cases result in traffic diversion, which stands out in the Cao Lanh traffic forecasts.

104. The ferries keep adding capacity in the without-project case so they never become bottle necks. Hence no traffic diverts to the Can Tho Bridge due to congestion at Vam Cong ferry. Every year, Vam Cong traffic is the same in the with- and without-project cases. This is not so for Cao Lanh. Currently there is a large traffic flow across the My Thuan Bridge and down NH80 to the Vam Cong ferry. Most of that traffic will use the Cao Lanh Bridge once it opens.


Table 6.7: Forecast Traffic, Vehicle/Day

With-project Cao Lanh and Interconnecting Road

Year Motorcycle Car Bus Truck Total

2015 24673 1346 1728 3860 31607

2020 41420 2170 2550 7129 53269

2025 53420 2918 2940 9648 68926

2030 65553 4096 3553 12344 85546

2035 90793 5936 4518 18186 119433

Vam Cong


2015 17612 1042 1186 4743 24583

2020 43573 1850 2418 10593 58434

2025 61864 2807 3122 14633 82426

2030 65660 3552 3469 16525 89206

2035 90399 4747 4405 22243 121795

Without-project Cao Lanh and Interconnecting Road


2015 15147 562 655 1241 17605

2020 27473 948 809 1333 30563

2025 36033 1462 1108 1753 40356

2030 47093 1866 1493 4560 55012

2035 68734 2784 1965 7037 80520

Vam Cong


2015 17612 1042 1186 4743 24583

2020 43573 1850 2418 10593 58434

2025 61864 2807 3122 14633 82426

2030 65660 3552 3469 16525 89206

2035 90399 4747 4405 22243 121795


6.7 Sensitivity Analysis 105. The economic analysis assumes a three year construction period with all three components opening in 2016. The Project evaluation period is 2016 to 2036. A residual value is credited in 2036 calculated as all land and resettlement costs and half the construction cost. The analysis uses the economic costs derived above. Construction costs for the Project and for new ferry landings are converted to economic costs by applying an SCF of 0.85. Where costs were derived in 2009 values the economic analysis inflates them by 6.1% to 2010 values.

106. The Project EIRR is 16.8%pa. NPV at year 2016 is USD 402.9 million, discounted at 12%pa. The details are as follows:

Table 6.8: Economic Analysis, Components 1, 2 and 3, USD millions

Year Project capital

cost

Road/bridge maintenance

Ferry operator savings

Time savings at

ferry

Road use savings

Net savings

2013 -202.4 -202.4 2014 -202.4 -202.4 2015 -202.4 7.8 -194.6 2016 -1.6 13.8 34.1 19.5 65.8 2017 -1.6 21.6 39.1 23.3 82.4 2018 -1.6 23.2 44.1 27.0 92.8 2019 -1.6 20.5 49.2 30.8 98.9 2020 -3.2 22.7 54.2 34.6 108.3 2021 -1.6 24.3 57.5 37.1 117.4 2022 -1.6 25.9 60.8 39.7 124.8 2023 -1.6 33.1 64.1 42.2 137.8 2024 -1.6 34.0 67.4 44.8 144.7 2025 -3.2 30.7 70.8 47.3 145.6 2026 -1.6 31.7 73.2 58.3 161.7 2027 -1.6 32.8 75.7 69.3 176.2 2028 -1.6 33.9 78.2 80.3 190.8 2029 -1.6 35.0 80.7 91.3 205.4 2030 -7.2 36.1 83.2 102.3 214.3 2031 -1.6 38.8 88.9 109.1 235.2 2032 -1.6 41.5 94.7 115.9 250.5 2033 -1.6 49.8 100.4 122.8 271.4 2034 -1.6 51.9 106.2 129.6 286.1 2035 -3.4 49.7 111.9 136.4 294.7 2036 327.6 -1.6 49.5 119.0 142.0 636.4

NPV (2016) 402.9 EIRR 16.8%


107. At the criterion rate of 12% pa the Project is still viable even if the Project capital cost is 52% more than estimated. To fail the 12% pa test the total benefit would need to be at least 35% lower than estimated. If the construction period extends beyond three years, the EIRR and NPV both decrease.

Construction Duration 3 years 4 years 5 years

EIRR, % pa 16.8 16.5 16.2

NPV at 2016, $M 403 368 331

108. The effect of simultaneously varying input values was investigated using @RISK. This program allows input numbers to be given probability distributions. Values are chosen at random, many times, from the probability distributions. A frequency distribution is built up for the output variable of interest, which in this case is EIRR. The EIRR values ranged from 11.9% pa to 21.4% pa. There is a 0% chance of failing to meet the 12% pa rate of return criterion.

109. An input value with considerable uncertainty is oil price. Recent history shows it can rise sharply in response to short term market forces. Long term, oil price could decline in the face of a glut of gas trapped in vast tracts of oil shale (and in coal seams). Exploiting this gas is possible by very recent advances in drilling technology, particularly hydraulic fracturing of in situ rock. North American gas prices have slumped from more than $13 per million British thermal units in mid-2008 to less than $5.

110. Fuel comprises 59% of ferry operating costs and 35% of road user operating costs. A 25% decline in fuel lowers the EIRR from 16.8%pa to 16.0%pa. Going the other way, a 25% increase in fuel raises the EIRR to 17.5%pa.

111. Two other aspects of the analysis are inherently uncertain: (i) the time spent waiting for ferries in the without-project case and (ii) road use savings when comparing the with- and without-project cases.

112. Taking (i) first, the time spent waiting for ferries is dependent on ferry company policy and financial strength. Will the companies keep up with rapidly increasing demand? If not, waiting time could increase markedly. Fortunately, out of the three classes of benefit, EIRR is least sensitive to ferry waiting time.

113. If waiting/crossing/unloading time increases from 24 minutes (as used in the analysis) to 30 minutes, Project EIRR increases from 16.8 to 18.1% pa. On the other hand, if the ferry companies do rather better than assumed, and the average time decreases from 24 to 18 minutes, the EIRR drops to 15.4% pa.

114. Turning to (ii), road use savings are estimated on the assumption that road network capacity does not change during 2016 to 2036. Congestion results, with serious cost consequences. In reality, if the Project does not proceed there will be improvements to the existing network. Otherwise congestion would be intolerable. If the Project does proceed, some or all of such improvements will be avoided, and their cost will be a credit that offsets the cost of the Project.

115. Identifying the needed improvements in the absence of the Project is difficult, which is why a low terminal traffic speed is adopted. To test whether this is too low, suppose that for existing roads raise the speed at capacity is raised from 20 to 30km/h. The EIRR falls by 0.9% pa.

116. In conclusion, the analysis shows that the total Project is economic and that this conclusion is robust in the face of pessimistic outlooks for construction cost and project benefits.

6.8 Financial 117. Financial projections and a financial analysis have been conducted for the Project, which is being co-financed by the ADB, AusAID, KEXIM (Korea) and the Government of Viet Nam. The financial analysis and financial forecast were conducted in accordance with internationally accepted standards and ADB’s Guidelines for the Financial Governance and Management of Investment Projects.


118. The concept is to construct toll plazas to collect bridge tolls, similar to the My Thuan Bridge on National Highway IA. The Government of Viet Nam intends to collect road tolls at the proposed new major bridge crossings to help with the construction and maintenance of the bridges.

119. For purposes of this financial evaluation it has been assumed that both of the major bridges will be operated as either one or two independent companies and that toll revenue will cover Operations and Maintenance (O&M) at the very least. The expected operation period is 20 years, from 2015 to 2035. The domestic inflation rate is assumed to remain steady at 8.0% for 2013 - 2015, 6% in years 2016 – 2020, 4% in 2020 – 2025 and 3% for any remaining years, while international Inflation rates are assumed at 3.0% across the board. The VND/dollar parity is 19,000 VND to 1 USD as of 2010 and is applied for the entire evaluation period. Public Private Investment Screening and Selection (PPRISS), a financial program designed especially for the screening and selection of expressways in Vietnam for potential private sector investment, is employed for the financial analysis and financial projections.

120. Both the financial evaluation and the financial forecasts were based on project traffic forecasts, engineering cost estimates and both existing posted tolls and proposed tolls. Financial Internal Rates of Return (FIRR) have been estimated for the period 2015 to 2035 and pro forma financial statements prepared for the period from 2015 to 2025.

121. Based on existing information provided by both the ADB and the Executing Agency (EA), the planned bridges will be an independent cost centre (or profit centre) operated by or under an organisation such as VEC or the planned Cuu Long Corporation for Investment, Development and Project Management of Transportation Infrastructure (Cuu Long CIPM). However, returns are not considered to be sufficient for full cost recovery but they are sufficient for coverage of debt service payments as well as O&M under the existing toll rate structure, but a private sector concessionaire is still likely to be hesitant to take over the role of operation, management and maintenance. However, with the proposed tolls the situation vastly improves and it is possible a private investor to operate and maintain the Project bridges and roads with a positive return, with the ability to cover interest and O&M assured.

122. Furthermore, based on the financial analysis and financial projections undertaken above, to ensure full accounting transparency, and prepare the operating entity with a sufficient level of detail to attract private sector interest, it is recommended that the planned operating unit (or company) establish accounting and reporting systems based on international accounting guideline procedures and structures, an approach which is approved by the Ministry of Construction. That means the operating company should prepare, on an annual basis, at a minimum, three financial statements including a balance sheet, income statement and cash flow statement which would be presented to an external auditor for inspection. This should be included as a covenant.

123. The base case financial evaluation, using existing posted tolls from other bridges in the Mekong Delta with no toll for motorcycles, indicates that there is a negative rate of return, and that there is no possibility of full cost recovery.

124. If full cost recovery is not the goal then the revenues should at least be able to cover:

(i) the cost of Loan Interest Repayments as well as O&M, or (ii) O&M only.

125. Both are possible with posted tolls, however no private sector interest is likely as the return is very low.

126. Under a scenario of proposed toll rates which are in line with current ferry crossing rates, there is still a negative Net Present Value (NPV), but the FIRR rises to 5.6% so full recovery is a possibility. If the goal is to cover only Interest plus O&M the calculated FIRR rises to 12% which begins to have scope for concessioning. With coverage of Operations and Maintenance only the calculated FIRR rises further to about 18%, where concessioning would actually be profitable for a private company. In both cases, the private company would be able to cover all interest as well as O&M costs.


6.9 Poverty and Social 127. The Project area hosting the infrastructure is located in two provinces of the Mekong Delta region of Vietnam – Dong Thap and Can Tho, though the vast majority of the Project is located within Dong Thap Province alone. The area is located in the centre of the Mekong Delta with Tien Giang to the north, Vinh Long to the east, Ca Mau and Kien Giang to the south and An Giang to the west. Traditionally agriculture and especially rice production has been the mainstay of the Mekong Delta economy though over the past two decades there has been a steady increase in the industrial sector concentrated mainly in Ca Mau, Kien Giang, Can Tho, Tien Giang and An Giang.

128. The incidence of poverty in the Mekong Delta region in 2006 was noted to be 13% - slightly below the national average of 15% and ranks favourably against virtually all other regions in the country. Poverty is not distributed evenly in the Mekong Delta, with significantly higher average poverty rates experienced in Soc Trang, Tra Vinh and Ben Tre Provinces. The Project area in Dong Thap Province approximates the Delta regional average and poverty rates in Can Tho are significantly lower than the regional average.

129. The main income sources in the Project area are farming, casual labour, waged income, and trade. Income sources from agriculture are more likely to be found in My An Hung B Commune (Lap Vo) and Tinh Thoi Commune (Cao Lanh), casual labour more common in Dinh An Commune and My Thanh Ward with waged income and trade least common in My An Hung B Commune (Lap Vo) reflecting limited non-farm livelihood opportunities in that location. Higher income sources were more likely from waged followed by agriculture, casual labour and trade.

130. Poor households were more likely to obtain their income from casual labour and petty trade/service in the non-farm sector with better off groups (near poor and well off) increasingly less likely to be obtaining their income from such sources. In the farming sector poor households overall are as likely to obtain their farm income from the same farm product type as the better off groups. Their poverty tends to be more a factor of limited land resources than to what they produce.

131. The causes of poverty in the Project area are due primarily to lack of assets, be it land, skill (including education) and financial capital.

132. The level of women’s participation in remunerated work is slightly lower (though similar) to that of men in most communes surveyed. There was a higher representation of women as non-working (meaning not actively seeking paid work) reflecting women’s lower retirement age from the formal sector (55 years compared to 60 years for men) and decision by women or households for women to tend to the care of small children or care of aged parents instead of engaging in paid work. The survey areas with disparities between men’s and women’s participation in paid work larger than 3% were Dinh An (6% gap for full time work due mainly to 6% higher non-working status) and My Thanh Ward (13% gap in full-time work, 7% gap in part-time work accounted for by 10% gap in unemployment and 10% gap in non-working status). The situation of lower participation of women in My Thanh Commune Ward has significant implications as the Project is expected to displace livelihoods associated with the Vam Cong Ferry terminal areas –most of whom are expected to be women. The southern Vam Cong Ferry terminal is located in My Thanh Ward.

133. The Cao Lanh and Vam Cong bridges to be constructed under the Project will eliminate much of the need for the existing ferry services. The displacement of the ferry services has implications for the livelihoods of those personnel directly employed. Mitigation will be through Ministry of Transport and Department of Transport re-employment, natural attrition or severance arrangements from their employers.

134. The communities in the vicinity of the existing ferry services are reliant on these for travel across the rivers. For the majority of road users the Project will facilitate improved mobility. However, there are also many people who travel by foot and bicycle or who use improvised vehicles to transport produce. For many of these people the bridges may present a disadvantage for river crossing. The SIA recommends mitigation through either the retention of limited ferry services at Cao Lanh and Vam Cong and/or the provision of responsive public transport.


135. The improved and diverted flow of traffic that the Project will bring will also have a negative impact on livelihoods which are reliant on existing through traffic. Particularly affected will be the businesses and other service providers located in the immediate vicinity of the existing terminals of the Cao Lanh and Vam Cong Ferries. There are around 125 businesses and 520 other livelihoods (hawkers and motorbike taxis) which are expected to be thus affected. The SIA recommends mitigation through livelihood restoration and development assistance. The estimated budget requirement for such a strategy is USD 330,000.

136. The road and bridges to be constructed under the Project will form a closed road system with roads to be built to expressway standards for vehicles travelling up to 80km/h. This has the potential to form barriers to lateral movement of local communities through which the roads traverse –affecting access to services and weakening social capital by disrupting social networks. The Project alignment has a total of 18 lateral crossing points in addition to the interchanges, made possible mostly due to clearance under bridges in the Project design that traverse various canals along the alignment. There are existing communal roads and paths along these canals. The average distance between these points is 1.2km with the maximum distance between crossing points being 2.7km and 14 crossing points where the distance between is greater than 1.0km. Mitigation requires the construction of supplementary crossings for pedestrian and small vehicles (such as bridges and underpasses) as well as improvement of local road networks in the vicinity of the Project where there are long distances between already planned lateral crossing points. The design of such mitigation measures needs to be based on detailed assessment of local community needs.

137. The construction phase of the Project presents increased risks of HIV/AIDS infection to the local communities, construction workers and mobile populations with the main risk mechanism being unsafe sex practices. There will be a number of concentrated locations for construction workers -the vast majority of whom are expected to be unaccompanied men away from their families and communities for extended periods. There is also expected to be an associated increase in the presence of sex workers and other mobile populations during this phase. The risks of human trafficking to women and children are markedly increased by impacts on livelihoods caused by the Project – especially land acquisition and changed traffic flow. The SIA proposes a strategy for a HIV/AIDS Awareness and Prevention Program (HAPP) and a Human Trafficking Awareness and Prevention Program (HTPP). The objectives of the HAPP are to reduce the risk of HIV infection through targeted awareness activities to higher risk groups. The objective of the HTPP is to reduce the risk of human trafficking through implementation and detailed internal monitoring of project livelihood rehabilitation programs as well as awareness raising activities. The strategies propose implementation to be through local government institutions with mandates in these areas with support from an externally contracted service provider. The budget proposed is USD 570,000. Other institutional strengthening and capacity building strategies proposed separately for the Women’s Union to enable their ongoing engagement on various cross-cutting issues affecting women in the Project area (costed separately at USD 130,000) will also provide significant support to these objectives.

138. There are two indigenous ethnic groups in the Mekong Delta region of Vietnam –Khmer and Cham. There are a small number of ethnic Khmer households residing in the Project area in Thot Not District of Can Tho City. These households tend to be land-poor and reliant on casual labour as an income source. No indigenous people in the Project area are affected by land acquisition and resettlement or are included amongst those with affected livelihoods. The SIA recommends measures to promote opportunities for ethnic Khmer households in the Project area to benefit from project-related employment and training.

139. Poor farming households are expected to benefit directly from lower input costs as well as higher prices for farm produce. This would be realised via a combination of improved and more accessible road transportation (cheaper and faster transportation) as well as improved market access via improved modes of selling produce. Indirectly, poor farming households are likely to benefit from diversification of agriculture (with opportunities for more profitable crops) and increase of non-farm income sources. This assessment is based on what is known about time and distance savings expected for this Project and a comparison with longer term impacts observed in Vinh Long Province. The extent to which benefits to the poor can be realised is influenced strongly by land holding sizes as well as the degree of diversification of cultivation away from rice cultivation and participation in non-farm income sources.


140. Both poor and well-off groups markedly changed their modes of transporting their farm produce from water to road over the periods 2000, 2005, and 2009. Half of the poor group that become well-off had the same level of road usage (96%) to those who had not been poor. There was a slightly lower road usage (85%) amongst those that remained poor in 2009 compared to the non-poor groups. However, this may be due more to the type of farm produce. There was no observed correlation between proximity to sealed roads and likelihood of using road transport in the study group.

141. Information gathered on changes in land holdings showed that it was the No Longer Poor households which increased the most area (324m2) compared to either Poor and Well-Off households through purchasing, renting or borrowing land. Conversely, Still Poor households reduced their land holdings by an average of 135m2 by either selling or giving to family members.

142. Diversification of agriculture is a medium term indirect benefit of the Project. The key mechanism for increased diversification of agriculture is improved market access.

143. There are two points that the SIA raises in relation to diversification of agriculture. First, the extent of successful diversification of farming to more profitable crops is a key determining characteristic in improving household incomes amongst farming households in the Vinh Long study. The second point is that poor households are also able to participate in and benefit from diversification of farming.

144. The second most significant characteristic differentiating poverty groups in the Vinh Long study was degree of reliance on rice cultivation versus diversified farm practices and extent of change. All three groups (Still Poor, No Longer Poor and Well Off) significantly reduced their reliance on rice cultivation over the study period. What is interesting is the difference between the Still Poor and No Longer Poor groups and the changes in farm practices over time. The Still Poor group had a greater reliance on rice cultivation than the No Longer Poor group and the latter changed more rapidly in reducing their reliance on rice cultivation. By 2009 53% of the Still Poor group ranked rice amongst the three top ranking farm income sources compared for 36% of the No Longer Poor group and only of the latter 25% ranked rice as the main income source compared to 31% of the Still Poor group.

145. There are nine planned and operating industrial complexes in Dong Thap Province. Seven of these are located on National Highway 30 and two located on National Highway 80. Improved transportation will benefit the industries located here through lower input costs. Improved profitability would facilitate improved capacity to generate new employment opportunities and enhance employment stability.

146. The ADB Safeguard Policy Statement requires the provision of meaningful consultation and information dissemination to those affected by the Project throughout the project planning and implementation cycle. People affected by the Project include authorities, institutions and those in the Project area and especially those who may be adversely affected by the Project. To be effective and meaningful communication needs to be inclusive (women as well as men, old as well as young, the poor and other vulnerable groups), timely and use methods which enable effective dissemination and two-way communication. Poor communication / information dissemination can exacerbate the vulnerability of those already marginalised and constrain their ability to mitigate negative impacts. The SIA proposes the preparation of a communication strategy during the detailed design phase.

6.10 Resettlement Plan 147. A total of 136ha of land will be acquired for Components 1, 2 and 3 of the Project, affecting 1,591 households and businesses. The losses include 131.5ha of productive land and 13ha of residential land, 640 houses and 33 businesses. Approximately 560 households are expected to be required to relocate. Draft Resettlement Plans have been prepared to address the impacts of physical and economic displacement. The Resettlement Plans have been designed to be in compliance with the ADB Safeguards Policy Statement and were prepared in consultation with affected households and relevant government authorities. These impacts are to be addressed through resettlement plans consistent with ADB Safeguards policies and Government legislation on land acquisition and resettlement.


148. The total Resettlement Budget estimate, less contingency, for Components 1, 2 and 3 of the Project is USD 47.92 million. This is made up of USD 16.8 million for Component 1, USD 20.8 million for Component 2, and USD 10.3 million for Component 3. The following tables show the breakdown of the Resettlement Budget Estimates.

Table 6.9: Resettlement Budget Estimate Component 1

Item Description Component 1 (Excluding

Construction Yards)

Cao Lanh Bridge Construction Yards

A Direct Resettlement Costs

A1 Agricultural Land 34,788,332 6,200,000

A2 Residential Land 71,521,637 8,500,000

A3 Public Land 469,402

A4 House and Other Structures

A4(i) Houses 34,067,623 3,889,123

A4(ii) Other Private Structures 7,360

A5 Crops and Trees 15,455,439 3,399,481

A6 Public Facilities/Structures

A6(i) Public Buildings

A6(ii) Other Public Structures 1,699,259

A7 Housing Relocation Assistance

A7(i) Housing Relocation Stabilisation Allowance*

1,777,278 187,110

A7(ii) Housing Transport 771,440 144,000

A7(iii) Lot Development Grant 8,679,600 2,475,000

A7(iv) Rental Assistance (awaiting construction of house)

823,296 231,000

A7(v) Vocational Training for Relocating Households

24,000 228,000

A8 Transitional Assistance for Farming Households

A8(i) Stabilisation Assistance for Farming Households

3,255,179 605,880

A8(ii) Income Restoration Allowance 79,169,376 14,850,000

A8(iii) Vocational Training for Affected Farming Households

3,414,480

A8(iv) Agricultural Extension Support

A9 Affected Businesses


Item Description Component 1 (Excluding

Construction Yards)

Cao Lanh Bridge Construction Yards

A9(i) Compensation and Assistance for Businesses

1,274,480

A9(ii) Compensation and Assistance for Employees

2,031,000

A9(iii) Compensation for Lost Income from Fixed Assets

1,527,000

A10 Special Assistance

A10(i) Special Assistance Allowance 782,320

A10(ii) House Upgrade Assistance 658,738

A10(iii) Additional Vocational Training for Vulnerable and FHH

1,184,160

A10(iv) Land for Landless Households Required to Relocate

360,000

A11 Livelihood Rehabilitation

A11(i) Capital for Micro-Finance Fund& 4,445,652

A11(ii) Agriculture Development Fund 980,272

Sub-Total A 269,167,323 40,709,595

B Indirect Resettlement Costs

Independent Replacement Cost Study 120,000

External Monitor 2,000,000

Demarcation and Detailed Measurement Survey

1,733,600 302,430

Sub-Total B 3,853,600 302,430

C Administration Costs

2% of A

Sub-Total C 5,353,418 814,192

D Contingency Costs

10% of A

Sub-Total D 26,767,092 4,070,959

E Grand Total

E=A+B+C+D 303,645,034 45,897,176

Notes: all costs in VND1,000



Item Description Component 2 Component 3 (Lap Vo portion)

Dinh An Construction

Yard


A1 Agricultural Land 58,947,989 20,435,447 5,317,701

A2 Residential Land 20,513,614 7,805,582 1,951,396

A3 Public Land


A4(i) Houses 13,281,205 3,543,505 1,131,953

A4(ii) Other Private Structures 5,018,761 1,254,690

A5 Crops and Trees 14,567,832 8,840,074 2,823,912


A6(i) Public Buildings 966,000

A6(ii) Other Public Structures 1,191,200 1,191,200


A7(i) Housing Relocation Stabilisation Allowance* 497,802 99,436 31,185

A7(ii) Housing Transport 231,440 69,120 24,000

A7(iii) Lot Development Grant 2,557,800 1,047,600 270,000


238,728 72,576 25,200

A7(v) Vocational Training for Relocating Households

36,000 24,000



4,101,273 885,298 276,210

A8(ii) Income Restoration Allowance 152,615,522 23,670,983 20,449,260


4,155,120 950,400 1,248,000



A9(i) Compensation and Assistance for Businesses

129,000

A9(ii) Compensation and Assistance for Employees

82,500


Item Description Component 2 Component 3 (Lap Vo portion)

Dinh An Construction

Yard



A10(i) Special Assistance Allowance 438,760 115,920



628,000 123,840



A11(i) Capital for Micro-Finance Fund&

A11(ii) Agriculture Development Fund 1,256,362

Sub-Total A 281,291,470 70,341,171 33,548,817





783,250

Sub-Total B 2,903,250


2% of A

Sub-Total C 5,625,829 1,406,823 670,976

D Contingency Costs

10% of A

Sub-Total D 28,129,147 7,034,117 3,354,882

E Grand Total

E=A+B+C+D 317,949,697 78,782,111 37,574,675

* housing relocation stabilisation allowance above is for those households required to relocate, but have no (or less than 10%) agricultural land affected α It is not expected that replacement land will be available for land-for-land compensation. As such agricultural extension support as specified in Decree 69/2009 is not estimated in the budget. However, agricultural extension is included under livelihood rehabilitation for affected farming households under A13. β In addition to other livelihood restoration measures provided for above. & The capital for micro-finance will be funded by unutilised funds allocated in the resettlement budget for vocational training. This will be determined during resettlement plan implementation after APs have had an opportunity to nominate for a vocational training course.



Item Description Thoi Thuan (Component 3)

Thoi Thuan (Construction Yard)


A1 Agricultural Land 18,829,859 5,673,000

A2 Residential Land 60,954,499 4,558,000

A3 Public Land


A4(i) Houses 3,785,250 170,888

A4(ii) Other Private Structures 18,081,513

A5 Crops and Trees 3,136,166 640,034


A6(i) Public Buildings

A6(ii) Other Public Structures 260,100


A7(i) Housing Relocation Stabilisation Allowance* 222,750 13,365

A7(ii) Housing Transport 112,000 8,000

A7(iii) Lot Development Grant 1,125,000 45,000


117,600 4,200

A7(v) Vocational Training for Relocating Households 300,000



739,530 98,010

A8(ii) Income Restoration Allowance 56,489,577 12,969,000


864,000 180,000



A9(i) Compensation and Assistance for Businesses 25,088

A9(ii) Compensation and Assistance for Employees 17,640


Item Description Thoi Thuan (Component 3)

Thoi Thuan (Construction Yard)



A10(i) Special Assistance Allowance 34,300





A11(i) Capital for Micro-Finance Fund&

A11(ii) Agriculture Development Fund

Sub-Total A 165,253,631 24,359,496





454,670

Sub-Total B 2,574,670


2% of A

Sub-Total C 3,305,073 487,190

D Contingency Costs

10% of A

Sub-Total D 16,525,363 2,435,950

E Grand Total

E=A+B+C+D 187,658,737 27,282,636

* housing relocation stabilisation allowance above is for those households required to relocate, but have no (or less than 10%) agricultural land affected β In addition to other livelihood restoration measures provided for above & The amount for the fund will be determined during RP implementation based on the amount of unutilised vocational training funds


6.11 Environmental Impact Assessment 149. The Environmental Impact Assessment (EIA) report complies with the ADB’s Environment Policy (2002) and Environmental Assessment Guidelines (2003), well as the environmental standards of the Government of Viet Nam. The environmental guidelines and regulations applicable to the preparation of EIA for projects in Viet Nam are the Law on Environmental Protection and the various directives and circulars containing the environmental standards. As an ADB supported project, the Central Mekong Delta Region Connectivity Project (CMDRCP) has to comply with the ADB environmental safeguards guidelines. The EIA was carried out in accordance with the 2009 Safeguards Policy Statements. The ADB policy also requires the EIA to subscribe to the World Bank IFC EHS Standards. In addition, since the Project will cross an international waterway, GoV has to comply with existing international agreements with other Mekong River riparian country members of the Mekong River Commission.

150. The CMDRCP will traverse the region of the Mekong Delta where elevation is generally less than one meter above sea level. The general area is transected by a dense network of canals and the main distributaries of the Mekong River, the Tien River and the Hau River.

151. The lower part of the Mekong Basin is in the centre of the Asian tropical monsoon region where wind reversal occurs during the summer and winter. The climate is greatly influenced by the monsoons. The southwest, wet season monsoon sets in, in mid-March to mid-May, and ends around mid-September to mid-October. The northwest dry season monsoon runs from mid-October to March. The ambient temperature throughout the different seasons shows limited variation. The temperature difference between the months during the dry season is only about 1.5°C to 3°C, and only about 1°C during the rainy season. The warmest temperatures are usually experienced during the month of April when temperatures can vary from 36°C to 40°C. On the other hand the lowest temperature usually prevails during the month of January.

152. Air quality indicators were measured in certain sections of the proposed road. Most parameters showed air quality is still within the standards, except for some such as TSP and NO2. The ambient TSP concentrations obtained from the survey stations along Components 1, 2 and 3 showed an exceedance of QCVN 05:2009’s one hour standard. The stations where high TSP concentrations prevailed are mostly those located in commercial areas along main thoroughfares. NO2 also showed an exceedance in stations located in areas with high traffic density.

153. A cursory inspection of the historical air quality data for a section of the Project (PR843 (station A7) and Lap Vo NH80 (station A8)) shows an increasing trend of TSP concentration (one hour averaging time) for the period 2007 to 2009.

154. Noise readings along the Project site ranged from 52.9 to 73.6dBA, lower than the allowable limits set forth in TCVN 5949-1998 (75dBA) for mixed resident commercial service and production areas. In general, ambient noise at the points along roads, in ferry landings or interchanges were higher because of traffic activities during the measurement. The IFC noise standards are more stringent than the TCVN 5949-1998 ambient noise standards for specific types of land uses. The IFC has set the noise limit in industrial and commercial areas to 70 dB, while TCVN 5949-1998 has set mixed maximum noise level in residential, commercial and production area at 75dB during 0600H to 1800H.

155. The vibration along the Project corridor due to vehicular traffic is well below the limit set by TCVN 7210:2002 according to the measurement carried out in June and September 2009 by TEDI.

156. Sedimentation has continued to be the dominant process in the Delta. It is estimated that the Mekong River delivers ~160 million tons of sediment per year to the South China Sea which allowed the Delta to prograde at a quick pace. However, with the construction of dams in the upper reaches of the Mekong Basin, sediment delivery into the Delta and into coast could be interrupted resulting to sediment starvation and possibly coastal erosion.

157. Erosion and sedimentation are part of the processes responsible for landscape evolution of the Delta. The study on bed deformation and bank erosion in the lower reach of the Mekong River has shown bank erosions in a number of areas near the Viet Nam-Cambodia border. However a review of data indicated that


while erosion prevailed in certain sections, deposition is active in other areas as evidenced by the enlargement of the sand bar, shallowing of the river channel and other depositional features.

158. It is anticipated that the operation of the additional planned dams will further affect hydrology and sedimentation of Mekong River.

159. It is reported that the flooding in the Mekong Delta is moderate in comparison to flooding in the upstream region and serious flooding has occurred in the Delta during the years 1961, 1966, 1978, 1991, 1994 1996, 2000 and 2002. Based on records, the historical flood of 2000 is the worst flood within the last 75 years.

160. Apart from its destructive effects, flooding is recognised as part of the natural geomorphologic process that drives the dynamic evolution of the Mekong Delta. Further, the annual flooding event is responsible for replenishing the fertile alluvium that is vital to the agricultural productivity of the Delta region. The floods also play a vital role in the natural treatment of the acidic water produced by the leaching of the acid sulfate soil that permeates much of the lower reaches of the Mekong Delta

161. The description of the soils occurring along the Project corridor as determined by VESDEC during its 2009 site survey varied from light to densely compact heavy loam to clay. Based on the geological information these are interpreted to be of fluvial and marine origin. The corridor is generally water logged as observed in all the stations. The data shows the possible presence of acidic soil along Component 2. Considering the sparse distribution of sampling stations, additional soil pH monitoring is needed to define the extent of ASS.

162. The CMDRCP will require excavation of foundation and the removal of more than 180,000m3 of soft soil. These spoils will have the potential to cause varied negative impacts such as acidic run-off (if acid sulphate soil is encountered), spoil can smother the adjoining farmlands when improperly stockpiled, and the foul odour of soil with high organic content may annoy nearby residents. Mitigation measures for these impacts include direct disposal, proper management of spoil stockpiles, a height limit for stockpiles, and proper handling of acidic soil.

163. Based on the average of the values obtained from samples from the Tien River, most parameters comply with the standards for water usage (QCVN 08-2008) Class A2, except for oil, grease and total suspended solids.

164. The proposed Vam Cong Bridge will be constructed across the Hau River. The result of the analysis of water samples collected from the Hau River in the vicinity of the Vam Cong Bridge crossing indicates pollution, possibly from domestic sources. Indicators are the high concentrations of total coliform and faecal coliform, high COD and BOD levels, and the presence of oil and grease. The high level of suspended sediments (SS) is probably background or natural condition. The values obtained during this study also do not indicate seawater intrusion.

165. Other water bodies sampled in Component 2 are all canals. Most of the canals samples have a neutral pH, with very low organic pollution levels as indicated by the low concentrations of COD and BOD. Suspended sediment concentration is relatively high with concentrations ranging from 46 mg/l to 96 mg/l. All canals, except one, have indications of oil and grease pollution. The concentrations of heavy metals are generally below detection limits in almost all samples. In samples where it is detected, the concentration is very low compared to the limits set by the existing standards.

166. Groundwater resources in the study area consist of a series of aquifers within the thick sedimentary layers that make up the Mekong Delta. The aquifers range in age from Upper Miocene to Holocene in age. The occurrence of four aquifers beneath the Mekong Delta has been determined. The Upper-Middle Pleistocene, coarse to fine sand, aquifer covers large areas in the north and south of the Delta, with total dissolved solids less than 1000 mg/L. Below this aquifer, the Lower Pleistocene, gravel to sand, aquifer is said to have better quality and supplies water to over 60% of the Delta. However, excessive pumping of this aquifer in the Ca Mau Peninsula has resulted in the lowering of the piezometric surface.


167. It is noted that the groundwater quality is affected by the natural presence of deleterious elements in the aquifers. In addition, the water quality obtained from relatively shallow wells failed to comply with the standards for groundwater as set by QCVN 09: 2008. From deeper wells (300m to 350m bgs), all water samples generally complied with the standards for groundwater. Note that the presence of iron in the aquifer is reflected in the quality of the water.

168. The CMDRCP corridor will traverse mostly agricultural lands and urban ecosystems. The region that will be traversed by the CMDRCP is within the most important agricultural areas of Viet Nam. It is the top rice producing region. Other crops cultivated are mixtures of coconut, vegetables and fruit orchards. Aside from agricultural crops, some 40 plant species have been identified in the rice paddies of the Mekong Delta, this includes ruderal weeds and grasses.

169. Site investigation carried out by VESDEC in 2009 indicated that the common natural vegetation present along the Project corridor are several species of grasses and weeds, some of which have been classified as invasive alien species (IAS).

170. According to the Asian Regional Centre for Biodiversity Conservation (ARCBC), the fish life in the freshwater zone of the Mekong Delta are dominated by species of Cyprinidae, Siluridae Clariidae, Schilbeidae, Bagridae, Sisoridae, Akysidae, Chanidae and Ophicephalidae. It reported that over 200 species of fishes contribute to the commercial fishery, along with shellfish, mussels and clams (Mollusca), and prawns and shrimps, notably Macrobrachium rosenbergii and Penaeus monodon (Pantulu, 1986b).

171. The TEDI EIA (2009) reported the presence of 76 species of phytoplankton belonging to 18 families and 52 species of zooplankton, belonging to 16 families. No species are listed in the Viet Nam Red Book.

172. The Mekong Delta is an important source of fish supply in the country. The CMDRCP is situated in the most important region of Viet Nam for freshwater fish culture. Aquaculture industry exists in the Provinces of An Giang, Dong Thap, Can Tho and Vinh Long.

173. For domestic water sources, most communities within the Project corridor rely on groundwater, rainwater and surface water for domestic needs. A social survey in the Project corridor indicates that surface water is the most common source of water in the Project corridor.

174. The Mekong Delta has a dense network of river and canal systems that includes 37 rivers, aggregate length of 1,706km; 137 canals, aggregate length of 2,780km; and 33 canals with a length of 466km. The small canals managed by the Local Authorities have an aggregate length of about 11,404km.

175. The Tien River and the Hau River are International waterways which lead to Cambodia. As such, their use and management are shared by riparian countries. As stipulated in the signed International agreement, the GoV should inform the Government of Cambodia, through the Mekong River Commission (of which Viet Nam is a member), of the proposed construction of the Cao Lanh and Vam Cong bridges.

176. It is estimated that this phase of the CMDRCP will entail the permanent conversion of 218ha of rice land in the three Provinces. This translates to an annual loss of about 1,308 tons of rice using a production capacity of six tons per hectare per year. This loss is very small compared to the combined annual production of the three Provinces of about 3.3 million tons per year. Aside from the clearing and conversion of agricultural and residential lands, the Project will also entail the demolition of structures, removal of graves and relocation of utilities.

177. Relocation of utilities may cause a temporary interruption of services to the affected communities and the removal of the Dinh An Health Centre, if not mitigated, may interrupt the delivery of health services to the Commune. The proposed mitigation for the possible impacts of the transfer of utility lines is to lay out the new lines prior to the transfer so that any interruption of services will be minimal. The same mitigation has been proposed for the replacement of the Dinh An Health Centre, meaning that the replacement structure should be constructed prior to the demolition of the existing building.


178. Noise is one of the potential impacts during the construction stage. Source of noises during construction are construction equipment and construction plant, for example asphalt and cement batching plants. Predicted noise levels generated during construction is expected to exceed existing noise levels, and exceed the maximum noise levels allowed in particular areas. This is of particular concern at the approaches of both Cao Lanh and Vam Cong bridges due to the requirement for larger construction sites, including the casting yards. Mitigation measures for noise impacts include substitution of equipment with a lower noise signature, isolation of sources of noise or the receptor, increasing the distance between source and receptor, and minimise noise at the source.

179. The EIA for Vam Cong and the Interconnecting Road predicted the concentration of dust during construction stage for both the dry season in January and for July. The results show that without mitigation, the predicted concentrations of TSP during construction may exceed standards. With the already high ambient TSP concentration, construction may cause further degradation of ambient air quality. To protect public health, dust suppression and other mitigation measures should be implemented. Additionally, special concerns for noise, dust and wastewater during construction includes the concrete batching plants, casting yards and concrete mixing. Due to noise and dust concerns, concrete batching, crushing and cement mixing plants shall be located at a sufficient distance away from inhabited areas and other sensitive receptors. Also, areas within the Project where there is a regular movement of vehicles shall have an acceptable hard surface and be kept clear of loose surface material. Dust suppression through spraying water shall be applied to unpaved roads, as well as other bare areas within active construction sites. A speed limit shall be imposed on Project vehicles travelling on unpaved roads to minimise the resuspension of dust. Wheel washers shall be provided in active construction sites so that delivery trucks can be cleaned of mud and dirt as they exit the work area.

180. Results of the air quality modelling indicated that gaseous emissions do not pose serious concerns during the construction stage. However, as part of best management practice, mitigations still need to be implemented.

181. The 2009 EIA prepared by TEDI predicted that the vibrations caused by the operation of construction equipment will not exceed the existing TCVN 6962:2001 standard of 75dB beyond 12m from source. However, since vibration can be a nuisance to nearby communities, mitigations should be implemented.

182. The Project will operate approximately six construction yards with an equipment yard, maintenance shop, and an oil and fuel depot. Soil contamination can be caused by the spillage of oil, fuel and lubricants during handling, servicing of equipment, refuelling of equipment and vehicles, and disposal of used oils and oil stained materials. Measures to mitigate this potential impact is proper handling and storage of polluting materials, proper waste disposal of hazardous materials, and restoration of affected areas.

183. Soil compaction will occur in areas that will be used temporarily by the Project. The ground will be purposely compacted in areas like the construction yards and stockpile areas. Movement of vehicles off road will also cause soil compaction. Rehabilitation of temporary sites needs to be carried out by the Contractor prior to returning the land to the owner.

184. At the end of the construction period, the Contractor should restore the temporary sites (for example stockpile areas, construction yard, temporary access, construction camp areas, borrow sites, etc.) prior to abandonment and return the property to the land owner.

185. In compliance with ADB guidelines, a grievance redress mechanism has been prepared and incorporated in the EIA document. While this is based on ADB’s experience in another developing country, it is deemed sufficient as the framework for this Project. Refinement of the mechanism will come in time as this is put to test under the socio-cultural conditions of Viet Nam.

186. As far as can be determined, the Environmental Management Plan (EMP) contains sufficient measures to ameliorate the adverse environmental impacts and its implementation is assured given the manpower that has been lined up, the supporting activities that have been programmed, the availability of the funds and institutional involvements. Finally, refinement and improvement of the EMP is expected as the planning of the CMDRCP progresses to detailed design. One of the improvements that are foreseen is the preparation of the


construction environmental management plan to be prepared by the Contractor. This plan will provide detailed methodologies, procedures, guidelines and standards for environmental management of construction.


7 Recommendation 187. The outcome of this PPTA is that there is sufficient feasibility design completed to date and the required safeguards are in place such that SMEC recommend proceeding to detailed design.


LIST OF LINKED DOCUMENTS

1. Annex 1 - Due Diligence Report

2. Annex 2 – Economic Assessment

3. Annex 3 – Financial Assessment

4. Annex 4 – Social Impact Assessment for the Project

5. Annex 5 – Extended Social Study of My Thuan Bridge

6. Annex 6.1 - Resettlement Plan for Cao Lanh Bridge, Dong Thap Province

7. Annex 6.2 - Resettlement Plan for Lap Vo District, Dong Thap Province

8. Annex 6.3 - Resettlement Plan for Can Tho City (Province)

9. Annex 7- Environmental Impact Analysis

10. Annex 8 – Study on Mobilising Private International Financing for Toll Road Projects in Vietnam