Regions and Countries

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p. 3 of 4 BACK | NEXT I. Current Development Trends and Issues II. Implementation of the Country Strategy and Program III. Portfolio Management Issues IV. Country Performance and Assistance Levels

Country Strategy and Program 2004-2006: Socialist Republic of Viet Nam

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III. Portfolio Management Issues

A. Portfolio Performance

16. From the resumption of operations in 1993 until the end of 2002, ADB provided 39 loans, amounting to $2.5 billion, and 132 TA grants totaling $92.1 million. During 2002, implementation performance improved substantially. The contract-award ratio rose to 20.7%³ (ADB average is 22.5%), from a record low of 7.8% in 2001. The disbursement ratio rose to 20.8% (ADB average is 22.2%) from 17.0%% in 2001. The percentage of loans considered “at risk” declined to 9.4% (ADB average is 16.0%) from 20.7% in 2001. Actual contract awards and disbursements for 2002 were close to the projections—96% and 92% respectively—also representing significant improvements from 2001. Despite the overall improvement, implementation delays persist. Factors impairing project implementation include (i) lengthy decision-making processes, involving many layers of the Government; (ii) insufficient stakeholder consultation and participation; (iii) delays in recruitment of consultants and procurement of goods; (iv) weak project management capacity and inadequate staffing; (v) a weak contracting industry, still dominated by SOEs; and (vi) problems with land acquisition, compensation, and resettlement.

17. ADB is providing three TAs to address these and other common issues: (i) Improving Project Financial Management through Decentralization, (ii) Enhancing Resettlement Legal Framework and Institutional Capacity, and (iii) Eligibility of SOEs for ADB-Financed Projects. ADB plays a lead role in coordinating ODA partners on involuntary resettlement issues, and revisions to the Government’s decree on resettlement proposed under the TA aim to address current discrepancies between national and international practices. A manual on how to process ADB-financed projects was completed in December 2002. It identifies harmonized processing procedures, which have been applied on a pilot basis since 2002 with encouraging results. The average time from loan approval to signing fell from 34 weeks for 2000 loans to a projected 16.6 weeks for 2002 loans, while the lag from TA approval to signing fell from 5.7 months for 2001 TAs to 4.4 for 2002 TAs. A similar manual is now under preparation on project implementation. The third joint portfolio review held in May 2003 by ADB, World Bank, and JBIC was joined for the first time by AFD and KfW, thus allowing for comprehensive review of issues affecting the most significant development banks operating in Viet Nam.

B. Performance Monitoring and Evaluation

18. So far, 10 post-1993 loans have been closed. Of these, project completion reports are available for five projects. All five projects were classified as generally successful. Only one project performance audit has been completed, covering the agricultural sector program loan which was rated satisfactory. Project performance audits for three loans—the Saigon Port project, a road improvement project and a financial sector program—are ongoing. Five ADTAs were postevaluated in 2003 as successful, including one rated highly successful. Efforts are under way to apply the project performance management system to projects in Viet Nam to ensure timely monitoring during implementation.

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