Viet Nam: Central Region Water Resources Project

Evaluation Document | 21 December 2017

This report presents the findings of an evaluation of the Central Region Water Resources Project in Viet Nam. The project aimed to introduce a user-oriented service approach to irrigation water management. This is to be undertaken by improving irrigation management systems by establishing financially independent irrigation management companies (IMCs) with user-oriented water services and new style water user groups (WUGs) on the basis of hydraulic boundaries; and improving irrigation infrastructure by rehabilitating and upgrading existing irrigation schemes.

During implementation, the project experienced a shift in irrigation-related policy when the government promulgated Decree 115, which exempted farmers from water charges and instead provided subsidies to IMCs for the operation and maintenance (O&M) of the schemes. Under the project, IMCs and the water users were to be empowered to manage irrigation schemes effectively, however, the institutional reform efforts were reversed by the government policy. Notwithstanding, the project increased agricultural production, reduced water wastage, and achieved crop diversification. The new style WUGs established on the basis of hydraulic boundaries under the project were, however, merged back into the cooperatives after the project. The evaluation selected three subprojects out of six for field visit and recalculated the economic internal rate of return, verifying that the project was economically viable, although, due to the policy change, IMCs are financially dependent on governments. The main challenge remains funding of adequate maintenance of the irrigation systems. In the absence of institutional reforms, budgeting and financial constraints on O&M are expected to persist. The development of user-oriented water services is a key issue for irrigation systems in Viet Nam. WUGs and agriculture cooperatives must work closely with IMCs to ensure timely and effective O&M.