Fi 1OCUmfENTS

ABP GRANT NUMBER TF013061

AusAid- World Bank Strategic Partnershipin Vietnam Trust Fund

Grant Agreement(AusAid Technical Assistance for

Results-Based Rural Water Supply and Sanitation Programunder National Target Program)

between

SOCIALIST REPUBLIC OF VIETNAM

and

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT /INTERNATIONAL DEVELOPMENT ASSOCIATION

(acting as administrator ofthe AusAid-World Bank Strategic Partnership in Vietnam Trust Fund)

Dated , 2011

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ABP GRANT NUMBER TF013061

AUSAID-WORLD BANK STRATEGIC PARTNERSHIP IN VIETNAM TRUSTFUND

GRANT AGREEMENT

AGREEMENT dated AFY2 , 201 , entered into between:

SOCIALIST REPUBLIC OF VIETNAM ("Recipient"); and

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT /INTERNATIONAL DEVELOPMENT ASSOCIATION ("World Bank"), acting asadministrator of the AusAid-World Bank Strategic Partnership in Vietnam Trust Fund.

WHEREAS

(A) under an agreement dated rAng LL (as the same may beamended from time to time, the "Financing Agreemdit"), the International DevelopmentAssociation agreed to provide the Recipient with a credit in an amount equivalent to onehundred thirty one million five hundred thousand Special Drawing Rights(SDR131,500,000) to assist in financing the Results-Based Rural Water Supply andSanitation under National Target Program described in Schedule I to the FinancingAgreement;

(B) the Recipient has requested the World Bank to provide additionalfinancial assistance in support of the Results-Based Rural Water Supply and Sanitationunder National Target Program for purposes of providing technical assistance tostrengthen the Recipient's capacity to implement the Program;

(C) AusAID has agreed to provide co-financing for the Project through theAusAid-World Bank Strategic Partnership in Vietnam Trust Fund administered by theWorld Bank; and

(D) WHEREAS AusAID and the World Bank have agreed on the basis of theAusAid-World Bank Strategic Partnership in Vietnam Trust Fund to extend suchadditional assistance to the Recipient upon the terms and subject to the conditions setforth in this Grant Agreement;

The Recipient and the World Bank hereby agree as follows:

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Article IStandard Conditions; Definitions

1.01. The Standard Conditions for Grants Made by the World Bank Out of VariousFunds, dated February 15, 2012 ("Standard Conditions"), with the modificationsset forth in Section II of the Appendix to this Agreement, constitute an integralpart of this Agreement.

1.02. Unless the context requires otherwise, the capitalized terms used in thisAgreement have the meanings ascribed to them in the Standard Conditions or inthis Agreement.

Article IIThe Project

2.01. The Recipient declares its commitment to the objectives of the project describedin Schedule 1 to this Agreement ("Project"). To this end, the Recipient shallcarry out Parts A, B, D, and F of the Project through the Ministry of Agricultureand Rural Development; Part C of the Project through the Vietnam HealthEnvironment Management Agency; and Part E of the Project through the StateAudit of Vietnam, all in accordance with the provisions of Article II of theStandard Conditions.

2.02. Without limitation upon the provisions of Section 2.01 of this Agreement, andexcept as the Recipient and the World Bank shall otherwise agree, the Recipientshall ensure that the Project is carried out in accordance with the provisions ofSchedule 2 to this Agreement.

Article IIIThe Grant

3.01. The World Bank agrees to extend to the Recipient, on the terms and conditionsset forth or referred to in this Agreement, a grant in an amount equal to eightmillion Australian Dollars (AUD8,000,000) ("Grant") to assist in financing theProject.

3.02. The Recipient may withdraw the proceeds of the Grant in accordance withSection IV of Schedule 2 to this Agreement.

3.03. The Grant is funded out of the abovementioned trust fund for which the World Bankreceives periodic contributions from the donor to the trust fund. In accordance withSection 3.02 of the Standard Conditions, the World Bank's payment obligations in

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connection with this Agreement are limited to the amount of funds made availableto it by the donor under the abovementioned trust fund, and the Recipient's right towithdraw the Grant proceeds is subject to the availability of such funds.

Article IVRecipient's Representative; Addresses

4.01. The Recipient's Representative referred to in Section 7.02 of the StandardConditions is the Governor, or a Deputy Governor, of State Bank of Vietnam.

4.02. The Recipient's Address referred to in Section 7.01 of the Standard Conditionsis:

State Bank of Vietnam49 Ly Thai ToHanoi, Vietnam

Cable address: Telex: Facsimile:

VIETBANK 412248 (84-4) 3825 0612Hanoi NHTWVT

4.03. The World Bank's Address referred to in Section 7.01 of the Standard Conditionsis:

International Development Association1818 H Street, N.W.Washington, D.C. 20433United States of America

Cable: Telex: Facsimile:

INDEVAS 248423 (MCI) 1-202-477-6391Washington, D.C.

AGREED at Hanoi, Socialist Republic of Vietnam, as of the day and year firstabove written.

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SOCIALIST REPUBLIC OF VIETNAM

By

Authorized Representative

Name: IQL mm -LinTitle: c- / ?,nD

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT /INTERNATIONAL DEVELOPMENT ASSOCIATIONacting as administrator of grant funds provided under theAUSAID-WORLD BANK STRATEGIC PARTNERSHIP IN VIETNAMTRUST FUND

By

Authorized Representative

Name: (V-- ) 600c5

Title: Co,,,Ay-,

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SCHEDULE 1

Project Description

The objective of the Project is to support the implementing and related agenciesof the Results-Based Rural Water Supply and Sanitation Program under National TargetProgram in order to strengthen their capacity.

The Project consists of the following:

Part A: Planning, Monitorin2 and Evaluation

1. Support to the National Center for Rural Water Supply and EnvironmentalSanitation

Provision of technical assistance to NCERWASS for the collection, verification, andreporting of DLIs, including the improvement of data collection, processing, andinterpretation.

2. Capacity Building in Monitoring and Evaluation

Carrying out of training in the collection and reporting of information using theGeographic Information System platform for the Provincial Center for Rural WaterSupply and Environmental Sanitation and Department of Health of each of theParticipating Provinces.

3. Development of a Transparency Information Technology Platform

Provision of support for the establishment and operation of a transparency informationtechnology platform as an open-source resource for the public to track plans and progressof rural water supply and sanitation under the Program.

Part B: Improvement of the Sustainability of Water Supply Systems and Services

1. Carrying out of a review of the current technical norms and standards for watersupply systems and services, including a review of existing and proposed schemes, and ofthe national standards which are routinely applied.

2. Provision of technical assistance to the PCERWASS of each of the ParticipatingProvinces in the planning, design, and procurement of water supply systems and services.

3. Carrying out of training in the implementation of efficient water operations,development of suitable on-going maintenance protocols and strategies, development ofappropriate strategies and collection of tariffs, and monitoring of water quality andservice delivery.

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4. Improving the water quality data, upgrading the monitoring network andequipment, strengthening the capacity to monitor water quality of local laboratories andstaff in the relevant departments of the Participating Provinces.

Part C: Capacity Building to Promote and Provide Sustainable Sanitation Services

1. Carrying out of training and on-the-job support for Participating Provinces toeffectively create demand for sanitation among rural households and institutions,including training and on-the-job support for the institutions and staff in the planning,implementation, and monitoring of sanitation activities.

2. Strengthening of the capacity of the Participating Provinces to link the demandcreated through promotional activities with more consumer responsive sanitation options.

3. Identification of safe and low cost septage treatment options, including carryingout of the assessment of current septage collection and disposal services, and theprovision of recommendations for improved septage management in the ParticipatingProvinces.

Part D: Improvement of Governance

1. Provision of support for the improvement of social management practices,including: (a) provision of support for the development of operational manuals andguidelines to improve social participation and information disclosure; (b) carrying out oftraining to build capacity to improve social oversight through social accountabilitymechanisms; (c) provision of support for the finalization and implementation of theproposed guidelines to work with ethnic minorities; and (d) provision of support for thefinalization and implementation of the proposed guidelines to ensure using efficientmethods to assess the value of land and assets losses, including hiring an independentproperty valuator.

2. Provision of support for the improvement of environmental managementpractices, including: (a) provision of support for the implementation of the Recipient'sregulations and procedures for environmental management and processes; and (b)provision of support for the development of expertise for the monitoring and inspectionagencies to enforce statutory responsibilities of the investment owners under theProgram.

3. Provision of support for the improvement of procurement and general fiduciarypractices, including: (a) establishment of a procurement filing and record keeping system;(b) improvement of the reporting and monitoring systems, and carrying out of training;(c) improvement of the procurement oversight at the national and provincial levels; (d)carrying out of training in procurement at the provincial level; and (e) capacity buildingfor contract management.

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4. Provision of support for the improvement of financial management practices,including: (a) establishment and implementation of an effective internal audit function forthe Program; (b) provision of support for the independent audit of the Program annualFinancial Statements; and (c) strengthening of accounting and financial reporting systemsand practices.

5. Development of Provincial Plans

Provision of support for the development of provincial plans, which constitutes acomponent of the DLIs, including updating of provincial plans, and carrying out ofannual training.

Part E: Verification of Program Results and External Audit of the Program

1. Provision of support for the verification of the Program results to trigger thecorresponding disbursements.

2. Provision of support to the State Audit of Vietnam for performing the audit of theProgram Financial Statements.

Part F: Information Sharing and Communication

Provision of support for the RWSSP to organize workshops and working sessions toshare the lessons learnt from the Program with the RWSSP members, and to analyze theimplementation of best practices.

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SCHEDULE 2

Project Execution

Section I. Institutional and Other Arrangements

A. Institutional Arrangements.

1. Without limitations to the provisions of Section 2.01 of this Agreement, the

Recipient, through MARD, shall cause:

(a) the NTP Technical Assistance Coordination Committee under the NTP

Standing Office to be responsible for coordinating the overall implementation of

the Project;

(b) the NCERWASS to be responsible for carrying out Parts A, B, and F of

the Project; and

(c) the NTP Standing Office to be responsible for carrying out Part D of the

Project.

2. The Recipient shall:

(a) by no later than one (1) month after the Effective Date of this

Agreement, cause each of the NTP SO, the NCERWASS, the VIHEMA, and the

SAV to adopt the Project Implementation Manual, setting forth guidelines and

procedures for the implementation of the Project, acceptable to the World Bank,

including: (i) policies, procedures and requirements under the Project in regard to

financial management, flow of funds, definition of roles and responsibilities,

internal control and reconciliation, record keeping, reporting and auditing; and

(ii) guidelines and procedures for procurement consistent with the provisions of

Section III of this Schedule 2, as well as the allocation of roles and

responsibilities for procurement review and approval; and

(b) not amend, revise or waive, nor allow to be amended, revised or waived,

the provisions of said PIM or any part thereof, without the prior written

agreement of the World Bank.

B. Anti-Corruption

The Recipient shall ensure that the Project is carried out in accordance with the

provisions of the "Guidelines on Preventing and Combating Fraud and

Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants",

dated October 15, 2006 and revised in January 2011 ("Anti-Corruption

Guidelines").

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C. Donor Visibility and Visit

1. The Recipient shall take or cause to be taken all such measures as the WorldBank may reasonably request to identify publicly the Donor's support for theProject.

2. For the purposes of Section 2.09 of the Standard Conditions, the Recipient shall,upon the World Bank's request, enable the representatives of the Donor to visitany part of the Recipient's territory for purposes related to the Project.

Section II. Project Monitorin2, Reporting and Evaluation

A. Project Reports; Completion Report

1 . The Recipient shall monitor and evaluate the progress of the Project and prepareProject Reports in accordance with the provisions of Section 2.06 of the StandardConditions and on the basis of the results set forth in paragraph 2 of this SectionII.A. Each Project Report shall cover the period of one (1) calendar semester,and shall be fumished to the World Bank not later than forty-five (45) days afterthe end of the period covered by such report.

2. The results referred to in paragraph I above consist of the following, which shallbe achieved by the Closing Date of the Project:

(a) For Part A:

(i) Training to PCERWASS and DoHs in the Participating Provinces toimprove data collection and processing carried out; and

(ii) Open-source information technology platform developed.

(b) For Part B:

(i) Sensitivity analysis of current designs and assessment of design standardcompleted;

(ii) Training to prepare technical specifications and operation of water andsanitation systems carried out; and

(iii) Preparation of operational manuals completed.

(c) For Part C:

(i) Training for DoHs to plan for and monitor sanitation activitiescompleted;

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(ii) A market study on cost-efficient options completed;

(iii) Identification of safe and low cost septage management options

completed; and

(iv) Training on sanitation promotion activities to stimulate demand for

sanitation services carried out.

(d) For Part D:

(i) Internal audit reports produced every six (6) months;

(ii) Interim financial reports produced not later than one (1) month after the

respective semester-end;

(iii) Annual Financial Statements produced not later than three (3) months

after respective year-end;

(iv) Training in fiduciary practices carried out;

(v) Environmental and social staff trained in implementation of

environmental and social regulations; and

(vi) Eight (8) provincial plans annually updated.

(e) For Part E:

(i) Verification reports which accurately measure the Project results

produced in a timely manner; and

(ii) Audit reports on the Financial Statements and efficiency of internal

control and compliance issued in a timely manner.

(f) For Part F:

Dissemination activities carried out.

3. The Recipient shall prepare the Completion Report in accordance with the

provisions of Section 2.06 of the Standard Conditions. The Completion Report

shall be furnished to the World Bank not later than six (6) months after the

Closing Date.

B. Financial Management; Financial Reports; Audits

1 . The Recipient shall ensure that a financial management system is maintained in

accordance with the provisions of Section 2.07 of the Standard Conditions.

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2. The Recipient shall ensure that interim unaudited financial reports for the Projectare prepared and furnished to the World Bank as part of the Project Report notlater than forty-five (45) days after the end of each calendar semester, coveringthe semester, in form and substance satisfactory to the World Bank.

3. The Recipient shall have its Financial Statements for the Project audited inaccordance with the provisions of Section 2.07 (b) of the Standard Conditions.Each such audit of the Financial Statements shall cover the period of one (1)fiscal year of the Recipient. The audited Financial Statements for each suchperiod shall be furnished to the World Bank not later than six (6) months after theend of such period.

4. The Recipient shall, by no later than one (1) month after the effectiveness ofthis Agreement, cause each of the NTP SO, the NCERWASS, the VIHEMA,and the SAV to have in place a qualified financial management officer to beresponsible for the financial management aspect of Project implementation at therespective entities, under terms of reference acceptable to the World Bank.

Section III. Procurement

A. General

1 . Procurement and Consultant Guidelines. All goods, non-consulting-services,and consultants' services required for the Project and to be financed out of theproceeds of the Grant shall be procured in accordance with the requirements setforth or referred to in:

(a) Section I of the "Guidelines: Procurement of Goods, Works and Non-consulting Services under IBRD Loans and IDA Credits and Grants byWorld Bank Borrowers" dated January 2011 ("Procurement Guidelines")in the case of goods and non-consulting services, and Sections I and IVof the "Guidelines: Selection and Employment of Consultants underIBRD Loans and IDA Credits and Grants by World Bank Borrowers"dated January 2011 ("Consultant Guidelines") in the case of consultants'services; and

(b) the provisions of this Section III, as the same shall be elaborated in theprocurement plan prepared and updated from time to time by theRecipient for the Project in accordance with paragraph 1.18 of theProcurement Guidelines and paragraph 1.25 of the Consultant Guidelines("Procurement Plan").

2. Definitions. The capitalized terms used below in this Section to describeparticular procurement methods or methods of review by the World Bank ofparticular contracts, refer to the corresponding method described in Sections II

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and III of the Procurement Guidelines, or Sections II, III, IV and V of theConsultant Guidelines, as the case may be.

B. Particular Methods of Procurement of Goods and Non-consulting Services

1 . International Competitive Bidding. Except as otherwise provided in paragraph2 below, goods and non-consulting services shall be procured under contractsawarded on the basis of International Competitive Bidding.

2. Other Methods of Procurement of Goods and Non-consulting Services. Thefollowing table specifies the methods of procurement, other than InternationalCompetitive Bidding, which may be used for goods and non-consulting services.The Procurement Plan shall specify the circumstances under which such methodsmay be used:

Procurement Method(a) National Competitive Bidding, subject to the additional provisions set forthin the Annex to this Schedule 2(b) Shopping(c) Direct Contracting

C. Particular Methods of Procurement of Consultants' Services

1. Quality- and Cost-based Selection. Except as otherwise provided in paragraph2 below, consultants' services shall be procured under contracts awarded on thebasis of Quality- and Cost-based Selection.

2. Other Methods of Procurement of Consultants' Services. The following tablespecifies methods of procurement, other than Quality and Cost-based Selection,which may be used for consultants' services. The Procurement Plan shall specifythe circumstances under which such methods may be used:

Procurement Method(a) Quality Based Selection(b) Fixed Budget Selection(c) Least Cost Selection(d) Selection Based on Consultants' Qualification(e) Single Source Selection of Consulting Firms(f) Procedures set forth in Paragraphs 5.2 and 5.3 of the Consultant Guidelinesfor the Selection of Individual Consultants(g) Sole-Source Procedures for the Selection of Individual Consultants

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D. Review by the World Bank of Procurement Decisions

The Procurement Plan shall set forth those contracts which shall be subject to the

World Bank's Prior Review. All other contracts shall be subject to Post Review

by the World Bank.

Section IV. Withdrawal of Grant Proceeds

A. General

1. The Recipient may withdraw the proceeds of the Grant in accordance with the

provisions of: (a) Article III of the Standard Conditions; (b) this Section; and (c)

such additional instructions as the World Bank may specify by notice to the

Recipient (including the "World Bank Disbursement Guidelines for Projects"

dated May 2006, as revised from time to time by the World Bank and as made

applicable to this Agreement pursuant to such instructions), to finance Eligible

Expenditures as set forth in the table in paragraph 2 below.

2. The following table specifies the categories of Eligible Expenditures that may befinanced out of the proceeds of the Grant ("Category"), the allocations of the

amounts of the Grant to each Category, and the percentage of expenditures to be

financed for Eligible Expenditures in each Category:

Category Amount of the Grant Percentage ofAllocated (expressed in Expenditures to be

AUD) Financed(inclusive of Taxes)

(1) Eligible Expenditures 1,050,000 100%under Part A of the Project

(2) Eligible Expenditures 1,325,000 100%under Part B of the Project

(3) Eligible Expenditures 1,000,000 100%

under Part C of the Project

(4) Eligible Expenditures 1,575,000 100%

under Part D of the Project

(5) Eligible Expenditures 2,950,000 100%

under Part E of the Project

(6) Eligible Expenditures 100,000 100%under Part F of the Project

TOTAL AMOUNT 8,000,000

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B. Withdrawal Conditions; Withdrawal Period

1. Notwithstanding the provisions of Part A of this Section no withdrawal shall bemade for payments made prior to the date of this Agreement, except thatwithdrawals up to an aggregate amount not to exceed AUD 100,000 may bemade for payments made prior to this date but on or after December 1, 2012, forEligible Expenditures.

2. The Closing Date referred to in Section 3.06 (c) of the Standard Conditions isJune 30, 2016.

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ANNEX to Schedule 2

National Competitive Bidding: Additional Procedures

The procedures to be followed for the procurement of goods, non-consulting services,and works under contracts awarded on the basis of National Competitive Bidding shall be

those set forth in: (a) Article 18 on Open Bidding of the Recipient's Law on Procurement

No. 61/2005/QHI I dated November 29, 2005; (b) the Recipient's Law

No. 38/2009/QH12 Amending and Supplementing a Number of Articles of Laws

Concerning Capital Construction Investment dated June 19, 2009; and (c) the Recipient's

Decree No. 85/2009/ND-CP Guiding Implementation of the Law on the Procurement and

Selection of Construction Contractors under the Construction Law dated

October 15, 2009 (collectively, "National Procurement Laws"), subject to the provisions

of Section I and Paragraphs 3.3 and 3.4 of the Procurement Guidelines and the following

provisions:

Conflict of Interest

1. A bidder shall not have a conflict of interest. Any bidder found to have a conflict

of interest shall be ineligible for award of a contract. The provisions on conflict of

interest as stated under Section I of the Procurement Guidelines shall apply.

Eligibility

2. The eligibility of bidders shall be as defined under Section I of the Procurement

Guidelines; accordingly, no bidder or potential bidder shall be declared ineligible for

contracts financed by the World Bank for reasons other than those provided in Section I

of the Guidelines. Foreign bidders shall be eligible to participate in bidding under the

same conditions as national bidders. In particular, no domestic preference over foreign

bidders shall be granted to national bidders in bid evaluation, nor shall foreign bidders be

asked or required to form joint ventures with or be subcontractors to national bidders in

order to submit a bid.

3. Government-owned enterprises or institutions of the Borrower's country are

eligible to bid in the Recipient's country 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 Borrower or Sub-Borrower. Military or security units or

enterprises established under, reporting directly or indirectly to, or owned wholly or

partly by, the Ministry of Defense or the Ministry of Public Security shall not be

permitted to bid.

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Registration

4. Registration shall not be used to assess bidders' qualifications. A foreign biddershall not be required to register as a condition for submitting its bid and, if determined tobe the lowest evaluated responsive bidder, shall be given reasonable opportunity ofregistering, without any let or hindrance. Bidding shall not be restricted to any particularclass of contractors, and non-classified contractors shall also be eligible to bid.

Advertising; Time for Bid Preparation

5. The complete text of advertisement shall be published in a national newspaper ofwide circulation or in the official gazette provided that it is of wide circulation, or on awidely used website or electronic portal with free national and international access. TheRecipient may publish a shorter version of the advertisement text, including the minimumrelevant information, in the national press provided that the full text is simultaneouslypublished in the official gazette or on a widely used website or electronic portal with freenational and international access. Notification shall be given to prospective bidders insufficient time to enable them to obtain relevant documents.

6. The time allowed for the preparation and submission of bids shall not be less thanthirty (30) days from the date of the invitation to bid or the date of availability of thebidding documents, whichever is later.

Standard Bidding Documents

7. Standard bidding documents acceptable to the World Bank shall be used.

Qualification Criteria

8. Qualification criteria shall be clearly specified in the bidding documents, and allcriteria so specified, and only such specified criteria, shall be used to determine whether abidder is qualified. Qualification shall be assessed on a pass or fail basis and merit pointsshall not be used. Such assessment shall only take into account the bidder's capacity andresources to perform the contract, specifically its experience and past performance onsimilar contracts, capabilities with respect to personnel, equipment, and construction andmanufacturing facilities, and financial capacity. The evaluation of the bidder'squalifications shall be conducted separately subsequent to the technical and commercialevaluation of the bid.

Bid Submission. Bid Opening, and Bid Evaluation

9. Bidders may submit bids, at their option, either in person or by courier service orby mail, as required in the bidding documents. Bids shall be opened in public,immediately after the deadline for submission of bids, regardless of the number of bidsreceived. Bids received after the deadline for bid submission shall be rejected andreturned to the bidders unopened. A copy of the bid opening minutes shall be promptly

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provided to all bidders who submitted bids, and to the World Bank with respect tocontracts subject to the World Bank's prior review.

(a) Bidding documents shall be sold to anyone who is willing to pay therequired fee of the bidding documents which shall not exceed the costs ofprinting, reproduction, and delivery at any time prior to the deadline forbid submission, and no other conditions shall be imposed on the sale ofthe bidding documents.

(b) Evaluation of bids shall be made in strict adherence to the criteria thatshall be clearly specified in the bidding documents and quantified inmonetary terms for evaluation criteria other than price; merit points shallnot be used in bid evaluation.

(c) A contract shall be awarded, within the period of the validity of bids, tothe bidder who meets the appropriate standards of capability andresources and whose bid has been determined (i) to be substantiallyresponsive to the bidding documents and (ii) to offer the lowestevaluated cost. No negotiations shall be permitted. A bidder shall neitherbe required nor permitted, as a condition for award, to undertakeobligations not specified in the bidding documents or otherwise tomodify the bid as originally submitted.

(d) No bid shall be eliminated from detailed evaluation on the basis ofminor, non-substantive deviations.

(e) The comparison of all bids and the award of contract may be based onthe total cost at destination including all taxes and duties.

(f) No bid shall be rejected on the basis of a comparison with the employer'sestimate and budget ceiling without the World Bank's prior writtenagreement.

Reiection of All Bids and Re-bidding

10. Rejection of all bids is justified when there is lack of effective competition, or allbids are not substantially responsive, or no bidder meets the specified qualificationcriteria, or the bid price of the lowest evaluated winning bid is substantially higher thanthe Recipient's updated estimated cost or available budget. Lack of competition shall notbe determined solely on the basis of the number of bidders. Even when only one bid issubmitted, the bidding process may be considered valid, if the bid was satisfactorilyadvertised, the qualification criteria were not unduly restrictive, and prices are reasonablein comparison to market values. All bids shall not be rejected or new bids solicitedwithout the World Bank's prior written agreement.

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Complaints by Bidders and Handling of Complaints

11. The Recipient shall implement an effective and independent protest mechanismallowing bidders to protest and have their protests handled in a timely manner. Anindependent protest mechanism shall provide for the review of complaints by anindependent entity that is not involved in any aspect of the underlying procurementprocess (e.g., bid evaluation, contract approval, etc.).

Fraud and Corruption

12. The provisions on fraud and corruption as stated under Section I of theProcurement Guidelines shall apply. Each bidding document and contract financed outof the proceeds of the Financing shall include provisions on matters pertaining to fraudand corruption as defined in the Guidelines. The World Bank will sanction a firm orindividual, at any time, in accordance with prevailing World Bank sanctions procedures,including by publicly declaring such firm or individual ineligible, either indefinitely orfor a stated period of time: (i) to be awarded a World Bank-financed contract; and (ii) tobe a nominated sub-contractor, consultant, supplier, or service provider of an otherwiseeligible firm being awarded an World Bank-financed contract.

Right to Inspect / Audit

13. Each bidding document and contract financed from the proceeds of the Financingshall include a provision requiring bidders, suppliers, contractors, and subcontractors topermit the World Bank, to inspect their accounts and records relating to the bidsubmission and performance of the contract and to have said accounts and recordsaudited by auditors appointed by the World Bank. Acts intended to materially impedethe exercise of the Bank's inspection and audit rights provided for in the Guidelinesconstitute an obstructive practice as defined in the Guidelines.

License

14. Foreign contractors shall be given a reasonable opportunity to apply for andobtain a work license, which shall not be arbitrarily withheld.

Publication of the Award of Contract

15. Within two weeks of receiving the World Bank's no objection to the awardrecommendation for contracts subject to the World Bank's prior review, and within twoweeks of the Recipient's award decision for contracts subject to the World Bank's postreview, the Recipient shall publish the following information on contract award in anational newspaper of wide circulation and/or in the official gazette provided that it is ofwide circulation, or on a widely used website or electronic portal with free national and

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international access: (a) the name of each bidder which submitted a bid; (b) bid prices asread out at bid opening; (c) evaluated prices of each bid that was evaluated; (d) the namesof bidders whose bids were either rejected as non-responsive or not meeting qualificationcriteria, or not evaluated, with the reasons thereof; and (e) the name of the winningbidder, the final total contract price, as well as the duration and summary scope of thecontract.

Contract Modifications

16. With respect to contracts subject to the World Bank's prior review, the Recipientshall obtain the World Bank's no objection before agreeing to: (a) a material extensionof the stipulated time for performance of a contract; (b) any substantial modification ofthe scope of services or other significant changes to the terms and conditions of thecontract; (c) any variation order or amendment (except in cases of extreme urgency)which, singly or combined with all variation orders or amendments previously issued,increases the original contract amount by more than 15 percent; or (d) the proposedtermination of the contract. A copy of all contract amendments shall be provided to theWorld Bank.

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APPENDIX

Section I. Definitions

1. "Department of Agriculture and Rural Development" or "DARD" means theRecipient's Department of Agriculture and Rural Development as the sectorgoverning authority at the provincial level, or any successor thereto.

2. "Department of Health" or "DoH" means the Recipient's provincial departmentof health, or any successor thereto.

3. "Vietnam Health Environment Management Agency" or "VIHEMA" means thedepartment under MoH which is responsible for assisting the MoH minister tomanage the sector of preventive health medicine and environment in theRecipient's territory.

4. "Disbursement Linked Indicator" or "DLI" means an indicator set forth for theProgram, on the basis of which a respective Program result is to be measured andthe amount allocated for such result may be withdrawn from the financing underthe Financing Agreement.

5. "Donor" means the Australian Agency for International Development (AusAid),which is the single donor for the AusAid-World Bank Strategic Partnership inVietnam Trust Fund (Trust Fund Number TFO71834).

6. "Effective Date" means the date on which this Agreement enters into effectpursuant to Section 6.01 of the Standard Conditions.

7. "Financing Agreement" means the agreement dated <cit,2i 18 betweenthe Socialist Republic of Vietnam and the Internaflonal DevelopmentAssociation, for financing the Program, and any amendments thereto.

8. "Geographic Information System" or "GIS" means a system of software andhardware designed to capture, store, manipulate, analyze, manage, and present alltypes of geographical data.

9. "Incremental Operating Costs" means the reasonable costs incurred by theRecipient based on annual budgets acceptable to the World Bank on account ofProject implementation, monitoring and evaluation, which expenditures wouldnot have been incurred absent the Project, including costs for office supplies,repairs of equipment and vehicles, staff travel, rental of office space, fuel costs,communication costs, costs of contractual staff, and information andcommunication campaigns; but excluding the salary and salary supplements ofthe Recipient's civil servants ('c6ng ch(rc' and 'vi6n chirc').

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10. "Ministry of Agriculture and Rural Development" or "MARD" means theRecipient's Ministry of Agriculture and Rural Development, or any successorthereto.

11. "Ministry of Health" or "MoH" means the Recipient's Ministry of Health, or anysuccessor thereto.

12. "National Center for Rural Water Supply and Environmental Sanitation" or"NCERWASS" means the center established within MARD pursuant to DecisionNo. 45/2008/QD-BNN dated March 11, 2008, to be responsible for assistingMARD in managing the sector of rural water supply and environmentalsanitation at the national level.

13. "NTP Standing Office" or "NTP SO" means the office established within MARDpursuant to Decision Number 340/QD-BNN-TCCB dated February 5, 2007, to beresponsible for assisting the management board of the Program in implementingthe Program.

14. "NTP Technical Assistance Coordination Committee" means the committeeestablished within the NTP Standing Office to coordinate the technical assistancefor the NTP.

15. "Participating Provinces" means the Recipient's provinces of Phu Tho, QuangNinh, Ha Noi, Hung Yen, Bac Ninh, Ha Nam, Vinh Phuc and Thanh Hoa, or anysuccessor to any such provinces, and such other additional provinces as may bemutually agreed to in writing by the Recipient and the World Bank at any timeand from time to time, and a "Participating Province" means any one of suchProvinces.

16. "Project Implementation Manual" or "PIM" means the document, to be adoptedby each of the implementing agencies as referred to in paragraph 3 of Section L.Aof Schedule 2 to this Agreement, which sets forth guidelines, policies andprocedures for the implementation of the Project, as the same may be amendedfrom time to time with the prior written agreement of the World Bank, and suchterm includes any annexes or schedules to such document.

17. "Provincial Center for Rural Water Supply and Environmental Sanitation" or"PCERWASS" means the center established within the Department ofAgriculture and Rural Development of each of the Participating Provinces, to beresponsible for assisting DARD in managing the sector of rural water supply andenvironmental sanitation at the provincial level.

18. "Program" means the Recipient's National Target Program for Rural WaterSupply and Sanitation (2012 to 2015) approved by the Prime Minister's DecisionNumber 366/QD/TTCP dated March 31, 2012, whose objective is to implementthe Recipient's National Strategy on Rural Water Supply and Sanitation (2010 to

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2020) and to improve the living conditions of the Recipient's rural population by

increasing access to water supply and sanitation, awareness raising, changing

sanitation behavior and mitigation of environmental pollution.

19. "Rural Water Supply and Sanitation Partnership" or "RWSSP" means a unit

established under MARD, of which role is a central stakeholder for consultation,

policy dialogue, information, bridge between donors, and coordination in the

sector of rural water supply and sanitation.

20. "Standard Conditions" means the "Standard Conditions for Grants Made by the

World Bank Out of Various Funds", dated February 15, 2012 with the

modifications set forth in Section II of this Appendix.

21. "State Audit of Vietnam" or "SAV" means the government entity established by

the Recipient's National Assembly pursuant to Law Number 37/2005/QH II on

State Audit, dated June 14, 2005, or any successor thereto.

22. "Training and Workshops" means the reasonable expenditures incurred by the

Recipient for the carrying out of training and workshop activities as approved by

the World Bank, including expenditures for facilities rental, materials printing

and photocopying, supplies, course fees, study tours, trainers, and travel and

subsistence of trainees; but excluding salary and salary supplements of the

Recipient's civil servants ('c6ng ch(rc' and 'vi8n chtc').

Section II. Modifications to the Standard Conditions

The modification to the Standard Conditions is as follows, namely paragraph (a) of

Section 3.06 is modified to read as follows:

"(a) the payment is for the reasonable cost of goods, works, services, Incremental

Operating Costs, or Training and Workshops, required for the Project, to be financed out

of the proceeds of the Grant and procured, all in accordance with the provisions of the

Grant Agreement;"

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