Viet Nam: Greater Mekong Subregion Southern Coastal Corridor Project - Additional Financing

Sovereign Project | 41496-014

Summary

The Greater Mekong Subregion Southern Coastal Corridor (GMS-SCC) Project is part of the Southern Economic Corridor involving Thailand, Cambodia, and Viet Nam. In Viet Nam, the GMS-SCC runs from the Cambodia border south through Kien Giang and Ca Mau provinces to Ca Mau city on sections of national highway (QL) 80, QL61, and QL63. The project area in Vietnam includes the provinces Kien Giang (population 1.63 million) and Ca Mau (population 1.20 million). Implementation of the Viet Nam component will be undertaken under two or more stages because of funding constraints. Funding is currently available for stage 1 of the GMS-SCC Project, which includes improvement of a short section of QL80 between the border at Xa Xia and Ha Tien, and completion of the transport corridor to Ca Mau on the Minh Luong Ca Mau city section. Improvements to be funded under future stages will include improvements to the Ha Tien Rach Gia section of QL80 and a bypass to Rach Gia.

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Procurement Documents


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Project Name Greater Mekong Subregion Southern Coastal Corridor Project - Additional Financing
Project Number 41496-014
Country Viet Nam
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Grant 0337-VIE: Greater Mekong Subregion Southern Coastal Corridor Project - Additional Financing
Australian Grant US$ 12.43 million
Loan 2988-VIE: Greater Mekong Subregion Southern Coastal Corridor Project - Additional Financing
Asian Development Fund US$ 25.00 million
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change
Sector / Subsector

Transport - Road transport (non-urban)

Gender Equity and Mainstreaming No gender elements
Description The Greater Mekong Subregion Southern Coastal Corridor (GMS-SCC) Project is part of the Southern Economic Corridor involving Thailand, Cambodia, and Viet Nam. In Viet Nam, the GMS-SCC runs from the Cambodia border south through Kien Giang and Ca Mau provinces to Ca Mau city on sections of national highway (QL) 80, QL61, and QL63. The project area in Vietnam includes the provinces Kien Giang (population 1.63 million) and Ca Mau (population 1.20 million). Implementation of the Viet Nam component will be undertaken under two or more stages because of funding constraints. Funding is currently available for stage 1 of the GMS-SCC Project, which includes improvement of a short section of QL80 between the border at Xa Xia and Ha Tien, and completion of the transport corridor to Ca Mau on the Minh Luong Ca Mau city section. Improvements to be funded under future stages will include improvements to the Ha Tien Rach Gia section of QL80 and a bypass to Rach Gia.
Project Rationale and Linkage to Country/Regional Strategy

The current project was approved in November 2007 to construct sections of the GMS road corridor in the southern coastal areas of Cambodia and Viet Nam. The project preparatory technical assistance to prepare the project identified 51.5 kilometers (km) of roads in Cambodia and 218 km of roads in Viet Nam to be improved along the southern coastal corridor. As part of the Viet Nam portion of the project, the Asian Development Bank (ADB) approved a loan in the amount of SDR48,300,000 from its Special Funds resources and the administration of a $25.5 million grant from the Government of Australia through the Australian Agency for International Development (AusAID) to the Government of Viet Nam. In 2010, the Government of the Republic of Korea approved a parallel cofinancing loan through the Export Import Bank of Korea of $50 million to improve about 96 km of the southern coastal corridor. In addition to the improvement of 218 km of roads, the project includes improvement of cross-border facilities, and an HIV/AIDS and human trafficking awareness and prevention program.

The ADB loan and AusAID grant for the Viet Nam project became effective on 29 May 2008 with a closing date of 30 June 2015. The project scope includes civil works, consulting services, resettlement, contingencies, and financing charges on ADB's loan. The project is performing well and is in an advanced stage of implementation. All contracts have been awarded and the project performance is on track at 60% of physical completion. Cumulative contract awards and disbursements based on net amounts as of 31 December 2012 are at 99% and 51%, respectively.

A midterm review mission (MTR) conducted jointly by ADB and AusAID in December 2011 assessed that project outputs were expected to be delivered as intended, and that the outcome would be achieved if proposed corrective measures were effectively implemented. These measures, as specified by the MTR, were to improve the soft-ground treatment design and construction methodology, resolve delays on resettlement implementation, and ensure compliance with the project's covenants on resettlement and environment. Since the MTR, the government has taken necessary corrective actions and revised technical designs for soft-ground treatment, updated all resettlement plans for implementation, which ADB has approved, resolved claims from affected people, and improved environmental oversight of construction sites. Output-related project risks are being effectively managed and assumptions remain valid.

Based on the findings of the MTR and the government's request, additional financing is required to achieve the project's intended outputs with greater technical quality, and to resolve delays on resettlement implementation. Additional financing is proposed to (i) fund changes in the project scope that improve soft-ground treatment measures for better overall quality of the completed roads and better road safety characteristics, (ii) meet the cost overruns and financing gaps due to increased cost of (a) land acquisition and resettlement and (b) general price escalation, and (iii) scale up a well-performing project by financing the cost of detailed design and implementation support for the subsequent stage 2 of the project.

Impact Promoting economic growth in the project area and GMS by strengthening connectivity with neighboring countries and increasing competitiveness
Project Outcome
Description of Outcome Reduce transport times and costs, and induce more efficient movement of passengers and goods within the project area and between GMS countries
Progress Toward Outcome On track (refer to parent loan 2372)
Implementation Progress
Description of Project Outputs

Completion of the road and bridge improvements enabling unrestricted passenger and freight transport

Border facilities constructed under Stage 2 GMS-SCCP

HIV/AIDS and trafficking awareness and prevention programs completed on the project road

Detailed design agreed and implementation support for Stage 2 GMS-SCCP is commissioned

Status of Implementation Progress (Outputs, Activities, and Issues) On track (refer to parent loan 2372)
Geographical Location
Safeguard Categories
Environment B
Involuntary Resettlement A
Indigenous Peoples B
Summary of Environmental and Social Aspects
Environmental Aspects Existing safeguards plans will be used to implement the additional financing.
Involuntary Resettlement Existing safeguards plans will be used to implement the additional financing.
Indigenous Peoples Existing safeguards plans will be used to implement the additional financing.
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services Associated services of international and national firms will be required to undertake the detailed design, supervise construction activities, and help implement stage 2 under a single contract. This will require about 110 person-months of international consulting services and 1,400 person-months of national consulting services. The expected implementation period for the detailed design part is from March 2013 to June 2014. The implementation-support part of the services is tentatively expected from July 2014 to December 2018, subject to ADB's approval of ensuing loan and satisfactory performance of the consulting firm(s). Cuu Long CIPM will recruit the consulting firm(s) according to ADB's Guidelines on the Use of Consultants (2010, as amended from time to time). An international consulting firm (or firms) in association with national consulting firm(s) will be engaged using the quality- and cost-based selection method with a quality cost ratio of 80:20 and a full technical proposal.
Procurement This additional financing will not require additional procurement of civil works and goods. The additional scope for soft-ground treatment is an integral part of the ongoing civil works, as these works will be integrated into the ongoing construction sequence and schedules, and covered by the existing civil works contracts. Cuu Long CIPM will issue contract variations to incorporate additional soft-ground treatment works into the scope of existing civil works contracts. Associated supervision of these works will be arranged through a variation to the existing construction supervision contract, and necessary funds reallocated from Grant 0095-VIE.
Responsible ADB Officer Shihiru Date
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Transport and Communications Division, SERD
Executing Agencies
Ministry of TransportRU-PMU1@FPT.VN80 Tran Hung Dao
Ha Noi, Viet Nam
Timetable
Concept Clearance 22 Oct 2012
Fact Finding -
MRM 24 Oct 2012
Approval 11 Feb 2013
Last Review Mission -
Last PDS Update 17 Mar 2015

Grant 0337-VIE

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
11 Feb 2013 23 May 2013 16 Sep 2013 30 Jun 2019 - -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 12.43 Cumulative Contract Awards
ADB 0.00 11 Feb 2013 0.00 11.91 96%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 12.43 11 Feb 2013 0.00 4.73 38%

Loan 2988-VIE

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
11 Feb 2013 23 May 2013 16 Sep 2013 30 Jun 2019 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 27.10 Cumulative Contract Awards
ADB 25.00 11 Feb 2013 0.97 0.00 4%
Counterpart 2.10 Cumulative Disbursements
Cofinancing 0.00 11 Feb 2013 2.53 0.00 11%

Evaluation Documents

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