|Project Rationale and Linkage to Country/Regional Strategy
The northern mountainous provinces of Viet Nam have developed at a much slower pace than the rest of the country. The project area had 30% of the population living in poverty in 2009, which is far above the 11% average for the country. Gross domestic product per capita in the northern mountainous provinces was $400 in 2008, compared to the national average of $1,070. Ethnic minorities typically inhabit the more mountainous and less accessible areas of the provinces, and account for 69% of the project area's population. The income level of ethnic minorities is below average. Women are involved mainly in agricultural activities, and transport their products to sell in local markets. Poor access to markets as well as to health, education, and other government services is a major constraint on socioeconomic development.
The government recognizes that development of the northern region of Viet Nam has lagged behind the rest of the country. The government's socioeconomic development plan identifies lack of rural infrastructure in the region as a constraint on effective poverty reduction. In support of government efforts to meet poverty reduction objectives, the country strategy and program of the Asian Development Bank (ADB) supports initiatives targeted at the northern mountainous region to address the high levels of general and food poverty. Planned improvements along the Greater Mekong Subregion (GMS) corridors are also expected to bring increased economic and employment opportunities to the region. The project areas have strong demographic and economic relations with the cities that will be connected by the GMS Noi Bai Lao Cai Highway and the GMS Ha Noi Lang Son Expressway, and the project will improve the connection between mountainous rural communities and the GMS corridors and major national highways.
Road travel is the dominant transport mode in Viet Nam. The road network comprises more than 256,000 km, of which the vast majority (216,000 km) are provincial and local roads. These are mostly in poor condition about 52% of the network is unpaved, and about 16% of local population does not have access to an all-season road. Unpaved roads often become impassable during the rainy season, and ordinary automobiles cannot pass along the project roads for 140 days in a year. The poor road conditions contribute to accidents as well as pavement damage due to vehicle overloading. The condition of the roads discourages investments in the region, making it difficult for agricultural production to expand beyond subsistence farming, or for other industries to develop.
Road maintenance in Viet Nam is less than optimal, mainly due to insufficient budget and low capacity of operation and maintenance companies. The Ministry of Transport (MOT) defines road maintenance activities as regular maintenance, periodical repair, and emergency repair. The National Assembly approved establishment of a road maintenance fund in November 2008. The fund was expected to provide more stable and sufficient budget for road maintenance but the government is facing difficulties securing sufficient revenue and has not yet formulated implementation details.
There is also a need to reduce the life-cycle cost of roads, including both development and maintenance costs, as funds to cover the large demand for both road rehabilitation and new roads are limited. ADB is providing policy and advisory TA for the MOT, which includes a component to develop design guidelines to allow flexible application of road classification. At present, the same road classification and corresponding design standards are usually applied from the beginning to the end points of a road, regardless of varying traffic demand and conditions of the road sections. Flexible application of road classification is expected to reduce life-cycle costs and improve sustainability of local roads. Some roads under the project will be designed based on guidelines to be developed through the TA.
Most of the project roads are in areas vulnerable to climate impacts, and the mountainous terrain (and, therefore, the local economy) is prone to natural disaster risks. Frequent flash floods and road closures have negative economic and social impacts on road users and residents, and these impacts are expected to increase due to climate change. The government approved the National Target Program to respond to climate change in 2008. The MOT approved its action plan toward the National Target Program for seven subsectors including road transport in 2011. Provincial people's committees (PPCs) are preparing local action plans based on the National Target Program. However, past and current assistance focuses more on coastal areas than the northern mountainous provinces.
The role of local governments in developing and managing local roads is becoming increasingly important as the government decentralized the responsibilities for implementation of official development assistance programs to provincial governments by a decree in 2006. The project will be implemented directly by the PPCs, unlike previous projects where the MOT acted as an executing agency. To efficiently coordinate and monitor implementation by six provincial project management units (PPMUs) under the PPCs, a joint coordination committee (JCC) has been established upon the Prime Minister's authorization. This direct implementation arrangement will enhance project ownership and encourage local government participation in implementation, but it imposes the need for some initial support for procurement, financial management, and other capacity building needs.