45098-001: Project Preparation and Startup Support Facility | Asian Development Bank

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
  • Viet Nam
  • Loan
  • 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

The first application of $13 million for Metro Line 5 has been approved by ADB and MPI for consulting service package for Frond-End Engineering Design (QCBS). Contract award is expected in Q1 of 2018.

ADB has also endorsed seven new applications (AF), including: AFs of Lang Son, Bac Kan and Ha Giang provinces of BIIG1 project, and AFs of Ha Tinh and Nghe An provinces of BIIG2 project, and AFs of the Northern Mountains Connectivity Project and GMS East-West Transport Corridor Improvement Project.

Implementation Progress
Description of Project Outputs

1. Production of quality project documents and actions to fast track project startup

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

Status of Implementation Progress (Outputs, Activities, and Issues) Sub-loan agreement of the engineering design for Metro Line 5 Project has been signed between HCMC and MOF and Project agreement has been signed between HCMC and MPI. Submission 2 of this consulting service package is being finalized. Contract award is expected in Q1 of 2018.
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



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
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 26 Sep 2017

Loan 2982-VIE

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 1.72 0.00 5%
Counterpart 2.50 Cumulative Disbursements
Cofinancing 0.00 13 Dec 2012 2.00 0.00 6%

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.

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 Public Communications Policy (PCP) 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.


Tender Title Type Status Posting Date Deadline
Detailed Engineering Designs for phase II road subprojects and the production support component subprojects Firm - Consulting Active 26 Jan 2018 24 Feb 2018
Training Coordinator Individual - Consulting Active 09 Dec 2017 15 Dec 2017
Detailed Engineering Design for Water Supply subproject in Loc Ha, Can Loc Districts (Representative Subproject) Firm - Consulting Active 16 Nov 2017 15 Dec 2017
Detailed Engineering Design for phase I road subprojects Firm - Consulting Active 25 Oct 2017 23 Nov 2017
Information Technology Specialist Individual - Consulting Active 17 Oct 2017 23 Oct 2017
Monitoring and Evaluation Consultant Individual - Consulting Active 07 Oct 2017 13 Oct 2017
Consultancy on safeguard policy and updating FS Firm - Consulting Active 29 Sep 2017 28 Oct 2017
Administration Manager Individual - Consulting Active 27 Sep 2017 03 Oct 2017
Procurement Consultant Selection Individual - Consulting Active 17 Aug 2017 23 Aug 2017

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan