The Asian Development Bank is working with Viet Nam to improve water services to over 1 million people, including over 17,500 poor households. The program is helping water supply companies strengthen their planning and financial and asset management capabilities, paving the way for lower subsidies, full cost recovery and reduced water losses. Tranche 3 supports seven companies.
|Project Name||Water Sector Investment Program - Tranche 3|
|Project Type / Modality of Assistance||Loan
|Source of Funding / Amount||
|Strategic Agendas||Environmentally sustainable growth
Inclusive economic growth
|Drivers of Change||Governance and capacity development
Private sector development
|Sector / Subsector||
Water and other urban infrastructure and services - Urban water supply
|Gender Equity and Mainstreaming||Effective gender mainstreaming|
In November 2014, Asian Development Bank (ADB) received the State Bank of Vietnam's periodic financing request letter for project 3 requesting $142.5 million to finance seven water companies (WSCs) having completed their project preparation and initiated advance action under project 2. The investments would improve water services for 1.2 million persons, including 17,500 poor households with their own piped water connection for the first time.
Project 3 outputs will support the multitranche financing facility (MFF) outputs: (i) increased coverage; (ii) improved business planning, financial management, and asset management; and (iii) effective nonrevenue water reduction for seven WSCs for the following: Bac Giang City, Cua Lo Town, Nghi Son Economic Zone, Tam Hiep-Dien Nam, Dien Ngoc Towns, Thai Hoa Town, Thai Nguyen City and Vinh City in four provinces.
Special features of project 3 include (i) promoting technical and financial sustainability by enforcing water tariff increase to full-cost recovery, while reducing subsidies and meeting targets of selected key performance indicators; (ii) providing access to finance for second-ranked WSCs willing to secure their debt through water tariff increase, resulting in greater access to safe water for the poor; and (iii) promotion of engineering, procurement, and construction (EPC) contracts.
The Ministry of Planning and Investment (MPI), coordinating agency for the MFF, is responsible for (i) selecting WSCs that can access the MFF, and (ii) consolidating reports with the assistance of the WSCs. Under project 3, the project management is delegated to the WSCs, and the provincial people committees (PPCs) are the executing agencies. Each WSC has set up a project management unit (PMU) in its organizational structure under project 2. The PMU organizes the procurement of consulting services and works. The MPI has no role in procurement.
Project 3 is structured with one loan to the government. The Ministry of Finance will sign seven subsidiary loan agreements with the participating WSCs with a letter of guarantee from the respective PPC, after the loan signing. Each WSC, acting as implementing agency, will implement its procurement plan separately. The MPI will consolidate the reporting with assistance of the WSCs. The project performance management information system was set-up under project 1 and applies to all subsequent tranches.
|Project Rationale and Linkage to Country/Regional Strategy||The project 3 impact will be the sustainable provision of safe water in Bac Giang, Nghe Anh, Quang Nam, Thai Nguyen, and Thanh Hoa Provinces. The outcome will be the improved efficiency of participating water companies. The project impact and outcome address the core sector problem of _Inefficient Water Service Delivery_ and contribute to the overall impact of the mutitranche financing facility sustainable provision of safe water in Viet Nam.|
|Impact||Sustainable provision of safe water in Bac Giang, Nghe An, Quang Nam, Thai Nguyen, Thanh Hoa Provinces|
|Description of Outcome||improved efficiency of participating water supply companies.|
|Progress Toward Outcome||As of January 2017, 4 out of 7 water supply companies (WSCs), the implementing agencies, signed the sub-loan agreement with Ministry of Finance, Viet Nam. All 7 WSCs established the project management units to implement and coordinate day-to-day work. The loan inception mission was fielded on 5-8 & 19 December 2016. Four bidding packages have been successfully advertised in January 2017 and evaluations are on-going in March 2017.|
|Description of Project Outputs||
improved business planning, asset and financial management
nonrevenue water reduced.
|Status of Implementation Progress (Outputs, Activities, and Issues)||
Summary of Environmental and Social Aspects
Project 3 is categorized B for environment, as environmental impacts are not reversible and primarily related to construction works and the safe disposal of sludge the WTPs produce. Those would be mitigated through environmental management plans (EMPs), covering design, pre-construction, construction, and operations phases. Climate resilience measures have been integrated into the project primarily pertaining to water availability as well as site preparation. Environmental impacts related to siting, design, construction, and operation, and mitigation measures for environment impacts are incorporated in the EMPs.
The final EMPs specific to each subproject, cleared by ADB, will form part of the contract bidding documents. The adequate incorporation of environmental considerations during design, and allocation of sufficient budget for operation and maintenance will mitigate the potential adverse impacts during operation. Water balance will be maintained by the water utilities through compliance with the Decree 201/2012 on water abstraction. Public consultations were conducted as part of the initial environment examinations (IEEs) and include communities upstream and downstream of water source and intake points. The IEEs will be updated during detailed design.
Project 3 is categorized B for involuntary resettlement because the seven subprojects are assessed to cause potential nonsignificant involuntary resettlement impacts.
For the Vinh Subproject, the investments will support pipe laying and pipe replacement within public roads and hence there is no detailed alignment yet. Should there be any land acquisition and resettlement impacts during the final alignment, the WSC will prepare a RP, based on the MFF RF during detailed design.
One subproject in Cua Lo, already completed land acquisition and resettlement activities for which a due diligence report is prepared. Land acquisition for the construction of the water treatment plan is about 8.2 ha, managed by Nghi Hoa communal people's Committee and 1.25 ha for booster pumping station and administration office is sandy soil and managed by Nghi Hoa ward of Cua Lo town. None of the 32 HHs own the affected land; local authorities had allowed people to temporarily plant trees and cultivate fish on public land. The compensation payments for all assets was paid to them and the due diligence report confirms the same. There are no gaps in accordance with MFF RF and no CAP is required.
The remaining five subprojects include about 420 affected households (about 1,890 people) to be affected under project 3. Those impacts are mostly partial with no relocation required and no structure affected. There are 26 severely affected households (117 people) that will lose more than 10% of their total productive land holding under project 3; 25 households in Nghi Son Economic Zone and 1 in Thai Hoa Town. The RPs and the entitlement matrix include sufficient provisions and mitigating measures for all the impacts. Involuntary resettlement is limited to the footprint required to build the water treatment plants (WTPs) and the pumping stations. The construction of the networks mostly takes place in the right of way of the urban road network with temporary land acquisition and resettlement impacts. All unanticipated impacts will be mitigated in accordance to the MFF RF. When there are information changes noted after detailed design and during project implementation, project 3's RPs will be updated and disclosed.
Project 3 is categorized C for Indigenous Peoples. Due diligence confirmed that there are no ethnic minority peoples who may be considered Indigenous Peoples per the Safeguard Policy Statement present in the project 3 subprojects' areas.
Nevertheless, the MFF's indigenous peoples planning framework will guide the application of indigenous peoples safeguards should any unanticipated impact on ethnic minority communities arise during project 3's implementation
|Stakeholder Communication, Participation, and Consultation|
|During Project Design||The Water Companies have conducted stakeholders workshops during the project preparation.|
|During Project Implementation||
A Stakeholder Communication Plan is included into the Project Administration Manual.
A Participation Plan is included into Supplementary Appendix 4.
|Consulting Services||Refer to above section|
|Procurement||All procurement of goods and civil works will be carried out in accordance with ADB Procurement Guidelines (2013, as amended from time to time). All consulting services will be recruited in accordance with the Guidelines on the Use of Consultants (2013, as amended from time to time). All procurement will follow International Competitive Bidding. Preferred methods of consultants selection are quality- and cost-based selection (QCBS), using quality-cost ratio 90:10, and least cost selection (LCS). Other selection methods can be used with the prior approval of ADB and duly justified. Upon review of procurement thresholds by ADB and information provided by the detailed design, the WSC will propose and optimize the contract packaging for approval by ADB.|
|Responsible ADB Officer||Ishii, Satoshi|
|Responsible ADB Department||Southeast Asia Department|
|Responsible ADB Division||Viet Nam Resident Mission|
Bac Giang Water Supply and Sewerage One Mem Ltd Co
No. 386 Xuong Giang Street, Bac Giang
City, Bac Giang province Cua Lo Water Supply One Member Limited Company
Nghi Tan Ward,Cua Lo Town,
Nghe An Province Nghe An Water Supply One Member Limited Company
No. 32 Phan Dang Luu, Vinh City,
Nghe An Province Quang Nam Wter Supply&Drainage Joint Stock Company
Lot 6, Phan Boi Chau Str, Tam Ky city,
Quang Nam province Song Chu One Member Limited Company
24 Pham Banh, Ngoc Trao Ward, Thanh Hoa
City, Thanh Hoa Province Thai Hoa Water Supply One Member Limited Company
Lien Thang, Hoa Hieu ward, Thai Hoa Town
,Nghe An Province Thai Nguyen Water Joint Stock Company
Ben Oanh Street, Trung Vuong ward, Thai
Nguyen City, Thai Nguyen Province
|Fact Finding||29 Aug 2014 to 05 Sep 2014|
|MRM||07 Oct 2014|
|Approval||27 Mar 2015|
|Last Review Mission||-|
|Last PDS Update||20 Mar 2017|
|Approval||Signing Date||Effectivity Date||Closing|
|27 Mar 2015||19 Nov 2015||29 Mar 2016||31 Dec 2020||-||-|
|Financing Plan||Loan Utilization|
|Total (Amount in US$ million)||Date||ADB||Others||Net Percentage|
|Project Cost||169.00||Cumulative Contract Awards|
|ADB||142.50||27 Mar 2015||6.52||0.00||6%|
|Cofinancing||0.00||27 Mar 2015||0.27||0.00||0%|
Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.
The Public Communications Policy (PCP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.
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|Title||Document Type||Document Date|
|Water Sector Investment Program - Tranche 3: Procurement Plan||Procurement Plans||Mar 2017|
|Project Agreement for Loan 3251-VIE: Viet Nam Water Sector Investment Program - Project 3||Project/Program Agreements||Nov 2015|
|Loan Agreement for Loan 3251-VIE: Viet Nam Water Sector Investment Program - Project 3||Loan Agreement (Ordinary Resources)||Nov 2015|
|Water Sector Investment Program - Tranche 3: Gender Action Plan||Gender Action Plans||Mar 2015|
|Water Sector Investment Program - Tranche 3: Periodic Financing Request Report||Periodic Financing Request Reports||Mar 2015|
|Water Sector Investment Program - Tranche 3: Project Administration Manual||Project/Program Administration Manual||Mar 2015|
Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.
Evaluation Documents See also: Independent Evaluation
None currently available.
None currently available.
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