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Viet Nam: Project Preparation and Startup Support Facility

Sovereign (Public) Project | 45098-001 Status: Active

PPSSF will enable the Government of Viet Nam (Government) to better startup, prepare and implement projects to improve effectiveness of Asian Development Bank (ADB) financed projects in Viet Nam.

Project Details

Project Officer
Do, Hoang Nhat Southeast Asia Department Request for information
Country
  • Viet Nam
Modality
  • Loan
Sector
  • Public sector management
 
Project Name Project Preparation and Startup Support Facility
Project Number 45098-001
Country Viet Nam
Project Status Active
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 2982-VIE: Project Preparation and Startup Support Facility
concessional ordinary capital resources lending / Asian Development Fund US$ 37.88 million
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Sector / Subsector

Public sector management / Economic affairs management

Gender Equity and Mainstreaming No gender elements
Description PPSSF will enable the Government of Viet Nam (Government) to better startup, prepare and implement projects to improve effectiveness of Asian Development Bank (ADB) financed projects in Viet Nam.
Project Rationale and Linkage to Country/Regional Strategy

Trends in Viet Nam's Official Development Assistance (ODA) portfolio. Viet Nam's rapid economic growth has been impressive during the past decades. Although growth is not directly attributed to ODA, it has nevertheless played an important role in catalysing investments. This is reflected in the Government's Socioeconomic Development Plan (SEDP) 2011-2015, which highlights development targets in key economic sectors and the importance of ODA along with projected increases in the number, size and complexity of investments. In monetary terms, from 2006-2010, signed ODA for Viet Nam was $20.26 billion, whereas estimated ODA for 2011-2015 is $ 32.0 billion. Increased investments have not been complemented by aid effectiveness. Currently, the stock of undisbursed ODA is over $6 billion and is expected to increase to over $10.0 billion by the end of 2015. As aid is channeled through ODA-funded programs and projects, its effectiveness is measured in terms of how well programs and projects are implemented, required time for completion, and impacts on beneficiaries. Viet Nam's track record has been mixed. Project evaluation reports of donors show that in general, projects have been completed satisfactorily, yet the same reports indicate poor project performance during implementation which, among others, is caused by delayed project preparation and startup. Based on Viet Nam Country Portfolio Review by ADB, it takes around 12 to 18 months on average from fact-finding to loan effectiveness; an additional 2 years for project startup and first contract award, and approximately 2 years of loan extensions. These, in turn, cause unnecessary implementation difficulties, increased transactional costs, and delayed development benefits, which subsequently reduce aid effectiveness and investment efficiency. Comparison across development partners show that the portfolio performance indicators of Viet Nam fare poorer than those of other Asian countries.

The Government, together with the development partners, has realized the importance of addressing implementation bottlenecks, including actions to improve effective utilization of ODA-funded projects. For example, the ODA Inter-Ministerial Task Force, established in 2004, conducts annual reviews of ODA utilization in coordination with the development partners (including ADB) and produces action plans for improvement of ODA. Decree 131/2006/ND-CP on delegated management of ODA funded projects is, currently, undergoing revision to better utilize ODA resources and define the responsibilities of stakeholders involved in ODA in Viet Nam. The Aid Effectiveness Forum (AEF), comprising key Government agencies and development partners, are engaged in various thematic group dialogues (e.g., on social impact assessment, environmental impact assessment, and procurement etc.,) to narrow gaps between Government procedures and international practices. However, these initiatives will need to be supplemented by concrete actions to address implementation delays arising from inadequate project preparation and project readiness; lack of effective mechanisms to fast track project startup; and limited capacity of counterpart staff to administer projects and manage implementation. This is consistent with the various portfolio performance reviews on Viet Nam (footnote 3), which have identified several underlying technical, institutional and financial constraints that hinder smooth project preparation, startup, and implementation.

Project startup. Once loan negotiations are concluded and loan documents are signed, most project management units (PMUs) are reluctant to start any project related activities (even inviting expressions of interest from consultants) before the loan is declared effective, even where advance action has been approved . In Viet Nam, the legal structure usually restricts any agency implementing an ODA-funded project from spending counterpart funds until the loan is declared effective. On average, it takes 8 months from loan signing to loan effectiveness; over 12 months to recruit consultants; and 18 months from loan effectiveness to the first loan disbursement. Startup delays can delay projects for up to 2 to 3 years. While the revision of Decree 131/2006/ND-CP will allow advance action, the funding needed for advance action may still not be available.

Capacity issues. There is a varied level of capacity to implement projects at the central and provincial levels. In many cases, the executing and implementing agencies do not have the requisite experience to implement ODA-funded projects. Even those which have previous experience may lack the capacity to implement ODA-funded projects because of limited financial resources, lack of technical skills and ability to communicate with the donors.

The Government, therefore, needs a facility that will adequately address the technical, institutional and financial shortcomings to startup ODA-funded projects. The PPSSF will allow the selected agencies to startup, prepare and implement ADB-financed projects to ensure effective aid utilization. This can only be achieved, if adequate front-loading of needed resources is provided. The PPSSF is, therefore, proposes to enable: (i) better preparation of investment projects by providing funds for updating feasibility studies, finalizing detailed engineering designs, and preparing bidding documents; (ii) quick project startup; (iii) resolution of project implementation related bottlenecks due to the lack of capacity of most executing and implementing agencies on safeguards (conducting baseline surveys, updating resettlement plans and compensation plans, incorporating environmental management plans into the bidding documents), procurement (selecting the first consulting firm for detailed design and supervision) and disbursement (opening imprest accounts and managing withdrawal applications); and (iv) provision of transaction advisory services. As a result, PPSSF will improve project performance, enhance the quality of investments, speed up disbursements, and ensure the realization of economic benefits.

A project design advance (PDA) from the Project Design Facility (PDF), available to a borrowing country supports project formulation encompassing detailed engineering design, feasibility studies and due diligence, safeguard and pre-implementation work including advance procurement actions of up to $5 million. However, the Government has no mechanism to fast track the processing of a PDA, which would then have to be processed as a loan. As such, the PPSSF intends to go beyond the PDF, with mobilization of the funding after only a one off approval by the EA, no funding restriction, and provide capacity building to the EA for the implementation of the PPSSF and to the IAs for project preparation and advance action, including recruitment of consultants, preparation of detailed engineering design and bidding documents.

By financing detailed engineering designs, bidding and other key project documents, PPSSF will accelerate and complete the project preparation in a way that a typical project preparation technical assistance (PPTA) grant would not be able to accommodate. In addition, the PPSSF could also be used as an alternative to a PPTA to finance the entire project preparation from feasibility study to bidding documents. The PPSSF is included in ADB's Country Partnership Strategy (CPS) 2012-2015. Lessons learned. In 2010, the World Bank (WB) developed the Project Preparation Technical Assistance Facility (PPTAF). The PPTAF supports World Bank-funded projects by preparing feasibility studies, detailed designs and bidding documents, and providing necessary resources to speed up project preparation. Several issues were encountered during its early stages of implementation, mostly delays caused by the complicated application process and lack of capacity in implementing agencies to prepare and process applications.

Impact Improved aid effectiveness in Viet Nam
Project Outcome
Description of Outcome Government capacity to fast track preparation and implementation of ADB financed projects in Viet Nam is strengthened
Progress Toward Outcome

Applications of (i) $1.97m for Ha Tinh subproject under BIIG2; and (ii)$0.96m for Lang Son subproject under BIIG1 approved by ADB and MPI for consulting services.

Consultant recruitment completed for Ha Tinh subproject under BIIG and Lang Son subproject under BIIG1 with contract awards awarded.

Implementation Progress
Description of Project Outputs

Production of high-quality project documents and actions to fast track project start-up

Capacity Development of Executing Agency and Implementing Agencies to prepare and appraise viable public investments developed

Status of Implementation Progress (Outputs, Activities, and Issues)

Currently, the PPSSF finances two subprojects, including: Ha Tinh subproject ($1.97million) under BIIG2 and Lang Son subproject (0.96 million) under BIIG1. Consultant recruitment completed for Ha Tinh subproject and Lang Son subproject.

As of 31 December 2019, Loan 3633-VIE (BIIG1) awarded the 1st contract on 25 December 2019. Time from the loan effectiveness (1 Oct. 18) to 1st contact is 15 months. Loans 3634/3635-VIE (BIIG2) have not warded the 1st contract. These loans were effective in October 2018.

The PPSSF financing mechanisms were set up by the Government in January 2015. The PPSSF funds has been made available to eligible EAs on grant or on-lent basis or combination of both in accordance with Decree 97/2018/ND-CP.

Geographical Location Nation-wide
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects There is no impact
Involuntary Resettlement There is no impact
Indigenous Peoples There is no impact
Stakeholder Communication, Participation, and Consultation
During Project Design Facility is used to finance project preparation and start-up activities
During Project Implementation

As the multisector coordinating agency for ODA-funded projects and the executing agency for the facility, the MPI will be responsible for executing the facility. A PCU will be established under MPI to undertake day-to-day activities. Selected line ministries and provincial and city peoples' committees eligible under Decree 131/2006 will be the implementing agencies for subprojects.

ADB will work closely with the MPI and the implementing agencies to implement the facility. The ADB team, responsible for implementation of the facility (facility team), will support and supervise the MPI's execution of the facility by (i) exercising no objection to all consultant recruitment and procurement managed by the MPI, (ii) ensuring that implementation complies with fiduciary requirements, and (iii) monitoring and evaluating the portfolio of subprojects.

Business Opportunities
Consulting Services

1- Consulting Services for Capacity Development:

ICS (intenational) - 40 person-months

Amount: $1,040,000

ICS (national) - 740 person months

Amount: $2,260,000

Consultation Qualification Selection or Least Cost Selection - 1 contract for audit services

Amount: $100,000

2- Consulting Services for Preparation of Subprojects

Firm and/or individual consultant selection - to be determined during implementation

Amount: to be determined during implementation

Procurement

Shopping

2 Contracts for information technology equipment and office furniture

Amount: $20,000

Responsible ADB Officer Do, Hoang Nhat
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Viet Nam Resident Mission
Executing Agencies
Ministry of Planning and Investment
6 B Hoang Dieu street, Ba Dinh district, Hanoi, Viet Nam
Timetable
Concept Clearance 17 Feb 2012
Fact Finding 17 Apr 2012 to 17 Apr 2012
MRM 25 Jun 2012
Approval 13 Dec 2012
Last Review Mission -
Last PDS Update 06 Feb 2020

Loan 2982-VIE

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
13 Dec 2012 07 Mar 2013 19 Jun 2013 30 Jun 2020 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 40.38 Cumulative Contract Awards
ADB 37.88 13 Dec 2012 3.67 0.00 20%
Counterpart 2.50 Cumulative Disbursements
Cofinancing 0.00 13 Dec 2012 3.01 0.00 16%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory - - Unsatisfactory - Unsatisfactory

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 Access to Information Policy (AIP) 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.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

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.

None currently available.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Tenders

Tender Title Type Status Posting Date Deadline
Horticulture Sector Industry Organization (HortLangson) and Horticulture Sector Strategic Plan Firm - Consulting Closed 30 May 2019 13 Jun 2019
Consulting Service for Detail Engineer Design and Procurement Document for Water Supply Subprojects Firm - Consulting Closed 30 Mar 2019 12 May 2019
Engineering Desgin and Bidding Documents for additional subprojects of Road Component Firm - Consulting Closed 30 Mar 2019 12 May 2019
HortLangSon Establishment Document and Preparation of Horticulture Sector Strategy Plan under Component 3 Firm - Consulting Closed 30 Mar 2019 12 May 2019
Detailed Engineering Designs for phase II road subprojects and the production support component subprojects Firm - Consulting Closed 26 Jan 2018 24 Feb 2018
Training Coordinator Individual - Consulting Closed 09 Dec 2017 15 Dec 2017
Detailed Engineering Design for Water Supply subproject in Loc Ha, Can Loc Districts (Representative Subproject) Firm - Consulting Closed 16 Nov 2017 15 Dec 2017
Detailed Engineering Design for phase I road subprojects Firm - Consulting Closed 25 Oct 2017 23 Nov 2017
Information Technology Specialist Individual - Consulting Closed 17 Oct 2017 23 Oct 2017
Monitoring and Evaluation Consultant Individual - Consulting Closed 07 Oct 2017 13 Oct 2017
Consultancy on safeguard policy and updating FS Firm - Consulting Closed 29 Sep 2017 28 Oct 2017
Administration Manager Individual - Consulting Closed 27 Sep 2017 03 Oct 2017
Procurement Consultant Selection Individual - Consulting Closed 17 Aug 2017 23 Aug 2017

Contracts Awarded

Contract Title Approval Number Contract Date Contractor Contractor Address Executing Agency Contract Description Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
ENGINEERING DESIGN AND BIDDING DOCUMENTS FOR ADDIT IONAL SUB-PROJECTS OF ROADS COMPONENT Loan 2982 15 Nov 2019 JSC OF LANG SON TRANSPORT CONSTRUCTION QUANG TRUNG ROAD, CHI LANG WARD, LANG SON CITY, LANG SON PROVINCE VIET NAM,SOC REP OF Ministry of Planning and Investment CONSULTANCY 430,939.57 430,939.57
HORTICULTURE SECTOR INDUSTRY ORGANIZATION (HORTLAN GSON) AND HORTICULTURE SECTOR STRATEGIC PLAN ENT 3STRS Loan 2982 15 Nov 2019 JV OF AMDI-IAC VN (ASIAN MANAGMENT AND DEV 9TH FLR, SUCED BUILDING,108 NGUYEN HOANG STR, NAM TU LIEN DIST, HANOI VIET NAM,SOC REP OF Ministry of Planning and Investment CONSULTANCY 149,088.48 149,088.48
DETAILED ENGINEERING DESIGN FOR PHASE 2 ROAD SUB- PROJECTS AND THE PRODUCTION SUPPORT COMPONENT SUB-PROJECTS Loan 2982 09 Jan 2019 VARIOUS VARIOUS VIET NAM,SOC REP OF Ministry of Planning and Investment CONSULTANCY 478,534.21 478,534.21
DETAILED ENGINEERING DESIGN FOR CLEAN WATER SUPPLY SUB-PROJECT FOR SOME COMMNUES IN LOC HA, CAN LOC DISTRICTS, HA TINH PROVINCE Loan 2982 25 Sep 2018 VIETNAM CONSTRUCTION&ENVIRONMENT JSC (VINSE) NO.33, LOT 2A, TRUNG YEN 11, TRUNG HOA WARD, CAU GIAY DISTRICT, HANOI VIET NAM,SOC REP OF Ministry of Planning and Investment Consulting Services 188,026.00 187,800.00
PACKAGE PCS1: DETAILED ENGINEERING DESIGN FOR PHASE 1 ROAD SUB-PROJECT Loan 2982 10 Sep 2018 THANH SEN CONSTRUCTION&CONSULTING JSC COMPANY NO.25, NGUYEN CONG TRU STR, HA TINH CITY HA TINH PROVINCE VIET NAM,SOC REP OF Ministry of Planning and Investment Consulting Services 288,197.00 287,605.00
PCS3:CONSULTANCY ON UPDATING SAFEGUARDS POLICY & UPDATING FS Loan 2982 02 Aug 2018 INT'L ENGINEERING CONSULTANT JSC HANOI VIET NAM,SOC REP OF Ministry of Planning and Investment Consulting Services 273,091.00 272,974.00

Procurement Plan