Countries and Regions

	Table of Contents
p. 6 of 10 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 Update 2006-2008: Viet Nam, Socialist Republic of

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III. Portfolio Management Issues

A. Portfolio Performance

13. From 1993 to end-2004, ADB provided 49 public sector loans (total of $2.941 billion), and 162 TAs ($108 million). As of end April 2005, 32 loans ($1.944 billion) were ongoing (Tables A1.6 - A1.9).

14. Portfolio performance in 2004 is less encouraging than in 2003. The 2004 disbursement ratio of 15.68% is considerably lower than the 21.3% of 2003 and slightly lower than the ADB-wide ratio of 17.65%. Similarly, the 2004 contract awards ratio is 9.72 % compared with the ADB ratio of 17.41% and Viet Nam's 2003 ratio of 14.26%. As of end 2004, five projects were rated “at risk,” accounting for 15.2% of the ongoing portfolio, while the ADB ratio is 14.1%. Implementation delays, especially project start-up delays, continued to be an apparent aspect of portfolio performance. As of end 2004, nine projects, i.e., 28% of the ongoing portfolio faced delays of 20% or more. Activities are already in place to improve portfolio performance.

15. In 2004, ADB continued to work closely with AFD, JBIC, KfW, and World Bank in addressing generic portfolio issues. Generic issues not yet fully addressed include:

1. centralized and lengthy decision-making processes
2. delays in consultant recruitment
3. delays in the approval of procurement plans by the executing agencies
4. weak capacity in project management and insufficient number of experienced staff in project management units
5. weak contracting industry still dominated by SOEs
6. inadequate and delayed application of social safeguards (e.g., resettlement)

The proposed revision of the Government's Decree No. 17 for ODA management together with development partner-Government harmonization efforts will go a long way in addressing generic issues affecting portfolio performance. Many ADB-funded projects involve numerous but small contracts. To reduce transaction costs and improve portfolio performance, ADB’s new CSP will examine the possibility of sector- and program-based approaches to lending.

B. Performance Monitoring and Evaluation

16. In 2004, five project completion reports were circulated with three projects rated successful and two partly successful. One project performance audit report was completed (for the Road Improvement Project) the project was rated successful. Five advisory TAs were postevaluated in 2004, including four rated partly successful and one with no rating.

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