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

Project Name

Greater Mekong Subregion Southern Coastal Corridor Project - Additional Financing

Project Number

41496-014

Country / Economy

• Viet Nam

Project Status

Active

Project Type / Modality of Assistance

• Grant
• Loan

Source of Funding / Amount

Grant 0337-VIE: Greater Mekong Subregion Southern Coastal Corridor Project - Additional Financing

Source	Amount
Government of Australia	US$ 12.43 million

Loan 2988-VIE: Greater Mekong Subregion Southern Coastal Corridor Project - Additional Financing

Source	Amount
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

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 LuongCa Mau city section. Improvements to be funded under future stages will include improvements to the Ha TienRach 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 ExportImport 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

Cross-border processing times of under 0.5 hours for passengers and under 2.0 hours for freight by project completion achieved.

Traffic on improved roads to increase by 40% from 2008 baseline within 2 years of project completion achieved. The actual traffic of the project corridor in 2018 increased by 117% in comparing with that in 2005.

Reduction in passenger and freight vehicle operating costs by an average of 30%, in real terms, within 5 years of project completion is achieved. Upon project completion, the unit VOC was reduced by 23% to 36% for different vehicle types by comparing "with-project" and "without-project" cases

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)

Partially achieved.

Fnalization of updated RPs in Xa Xia-Ha Tien and Minh Luong Thu Bay sections was delayed compared to progress in compensation payments and land acquisition.

Achieved

Achieved

Achieved

Partially achieved.

Achieved.

Completed.

Completed.

Completed.

Completed.

Completed.

Cancelled

Geographical Location

Nation-wide, Ca Mau, Ha Tien, Ha Tien Township, Huyen An Bien, Huyen Chau Thanh, Huyen Hon Dat, Huyen Kien Luong, Kien Luong, Minh Hoa, Ngoc Hon Doc, Rach Gia, Rach Thu Bay, Song Cai Be, Song Cai Lon, Tac Cau, Thi Xa Ca Ma, Thi Xa Rach Gia, Tinh Kien Giang, Xom Ta Lua Moi, Xom Xa Xia

Safeguard Categories

Environment

B

Involuntary Resettlement

A

Indigenous Peoples

B

Summary of Environmental and Social Aspects

Environmental Aspects

Existing safeguards plans under the original loan/grant (L2372/G0095) have been used to implement the additional financing.

Involuntary Resettlement

Existing safeguards plans under the original loan/grant (L2372/G0095) have been used to implement the additional financing.

Indigenous Peoples

Existing safeguards plans under the original loan/grant (L2372/G0095) have been used to implement the additional financing.

Stakeholder Communication, Participation, and Consultation

During Project Design

During the feasibility study of the Project, consultations were held with relevant stakeholders including the communities affected by the road. The community perspective on the Project, in terms of positive and negative impacts, was discussed. The community felt that roads to market and school might be more accessible because of the Project. Less vehicle damage was considered an important benefit because of the improved road. Road safety was noted as a serious concern of local residents.

During Project Implementation

Environmental monitoring during construction phase includes documentation of affected people's complaints on the Project's environmental performance and the corresponding plan of action or actions taken to resolve such complaints.

Cuu Long CIPM, together with the local authorities and supervision consultants monitored all resettlement-related activities. In addition, Cuu Long engage an independent monitor to conduct an independent review and evaluation of resettlement activities on a quarterly basis.

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 was from March 2013 to June 2014 but has been postponed pending the decision to implement stage 2. The implementation-support part of the services was tentatively expected from July 2014 to December 2018, but has been indefinitely postponed pending a decision to implement the loan. If it is decided to implement the project, Cuu Long CIPM will recruit the consulting firm(s) according to ADB's Guidelines on the Use of Consultants (2013, 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 90:10 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 issued 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.

Contact

Responsible ADB Officer

Shim, Chaorin

Responsible ADB Department

Sectors Group

Responsible ADB Division

Transport Sector Office (SG-TRA)

Executing Agencies

Ministry of Transport

Timetable

Concept Clearance

22 Oct 2012

Fact Finding

-

MRM

24 Oct 2012

Approval

11 Feb 2013

Last Review Mission

-

Last PDS Update

02 Dec 2022

Funding

Grant 0337-VIE

Loan 2988-VIE