Countries and Regions

	Table of Contents
p. 6 of 20 BACK | NEXT I. Country Performance Assessment A. Economic Performance Assessment B. Poverty Assessment C. Assessment of Socio-Environmental Performance D. Governance: Sound Development Management E. Implementation Assessment II. Country Operational Strategy III. Sector Strategies IV. Regional Cooperation V. Donor Activities and Aid Coordination VI. Cofinancing and Catalyzing External Resources VII. ADB’s Operational Program VIII. Economic and Sector Work Program IX. Local Cost Financing

Country Assistance Plans - Viet Nam : I. Country Performance Assessment

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E. Implementation Assessment

1. The Portfolio

25. Since resumption of Bank operations in 1993 and until the end of 1999, 27 loans totaling $1.8 billion have been approved. All of these were from concessional funds, with the exception of a $40 million share of the SOE Reform and Corporate Governance Program Loan which was approved in December 1999 as the first OCR operation since Viet Nam was reclassified to B1 status in December 1998. During the same period, ADB has approved 96 TAs, amounting to about $72 million.

26. Twenty-two loans had been declared effective at end 1999, amounting to $1.58 billion. As of end 1999, cumulative disbursements amounted to $574 million and contracts for $837 million had been awarded. Good progress has been made in recent years in project implementation. The disbursement ratio, while still below the Bank-wide average of 22 percent, has improved further to 16.0 percent in 1999, up from 14.2 percent in 1998, and single-digit levels in the previous years. The ratio without program loans, however, declined from 14.9 percent in 1998 to 12.9 in 1999. Government efforts, supported by ADB technical assistance to familiarize the executing agencies (EAs) with implementation procedures and requirements and by monthly implementation review meetings held by ADB’s Viet Nam Resident Mission (VRM) with the concerned line ministries and EAs, have contributed to the improvement.

2. Issues in Project Implementation

27. The nature of portfolio performance issues has shifted with the maturing of the portfolio. In the last few years, counterpart funds have been made promptly available and delays in loan signing and effectiveness have been acute only for a few projects, notably in the education sector. The issue, however, is not completely solved, since loans approved in 1999 have again encountered delays of six months or more to achieve signing or effectiveness. On the project implementation front, delays in selection and fielding of consultants, awarding of contracts, and disbursement have become the main issues. These difficulties are due to centralized decision-making procedures, delays in issuance of regulations and establishment of project implementation units, and lack of familiarity with contract awarding and disbursement procedures.

28. To address these issues in a concerted manner, a Joint Portfolio Performance Review was held in July 1999, involving the World Bank and Japan Bank for International Cooperation (JBIC), in addition to the annual ADB portfolio review. To further detail concrete follow-up measures, a Project Management Conference was organized on 12-13 April 2000. The conference, co-sponsored by ADB, the World Bank, and JBIC, was attended by 165 representatives of Vietnamese ministries, agencies, and provinces; Project Management Unit (PMU) directors; and representatives of external aid agencies. The conference analyzed the investment planning and approval processes; procurement and financial management issues; land acquisition and resettlement policies and practices; monitoring and evaluation systems and quality control; and the scope for further delegation and decentralization.

29. The conference produced a time-bound Framework Action Plan, covering the following areas: (i) review of the legal framework for management and utilization of Official Development Assistance (ODA) funds; (ii) harmonization of procedures between the Government and donors; (iii) establishment of standard operational procedures for PMUs; (iv) development of a project monitoring and evaluation system; and (v) development of human resources for the management and implementation of ODA projects. The Government has signaled strong commitment to the process, and action has already started on items (i) - (iv), with target completion dates before the end of 2000. ADB is supporting the Government’s review of the legal framework for ODA including Decree 87 CP on Management and Utilization of ODA and its implementing circular. It will directly assist – through ADB-funded TA – in the preparation of the Resettlement Ordinance and will identify, together with the Government, areas for harmonization of procedures, and pilot test possible approaches.

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