Viet Nam : Northern Mountain Provinces Transport Connectivity Project

Transport / Road transport (non-urban)

The project will improve and upgrade two road stretches totaling 198 km that connect several towns and districts in the provinces of Lai Chau, Lao Cai and Yen Bai to the Noi BaiLao Cai Expressway. These road stretches will connect to other main roads under the Lao Cai province transport development master plan to improve network connectivity with the Noi Bai-Lao Cai Expressway. The existing roads pass through very difficult terrain with high mountains or large rivers, so many substandard curves and grades have been adopted. Their conditions are poor; the average travel speed is 25 km per hour and several sections are not passable year round. Therefore, a major rehabilitation or improvement is required to accommodate the expected traffic growth due to the current economic development of the region.

The improved connectivity will (i) provide reliable access to basic social services such as education, health care, job training, and emergency disaster relief, and (ii) increase economic and employment opportunities for the people of the northwestern provinces, especially the poor ethnic minorities. The enhanced connectivity to the Noi BaiLao Cai Expressway will provide further opportunities of cross-border trade with the Lao People's Democratic Republic and the People's Republic of China (PRC). The improved roads will help save travel time and costs, hence reducing fuel consumption and carbon dioxide emissions. The improvement and upgrade works will ensure consistency of standards over the entire road stretches, including climate resilience features namely slope protection measures in areas prone to landslides and rockfalls, raising and/or reconstructing highway embankments and bridges along road sections prone to dangerous flooding, and increasing cross-drainage capacity. The project will include awareness campaigns for road safety, HIV/AIDS, and human trafficking which will enable the vulnerable ethnic minorities to cope with possible negative impacts of the project roads.

The economic and political reforms under the Doi Moi policy, launched in 1986, resulted in rapid economic growth (averaging over 6.5% annually during 19912017) and development in the past 30 years. This growth has subsequently transformed Viet Nam from one of the world's poorest nations to a lower middle-income country, with a gross domestic product per capita of $2,389 in 2017. Viet Nam's poverty rate was 7.0% in 2015, the second lowest among the ASEAN (Association of Southeast Asian Nations) countries.1 Increased foreign direct investment and closer integration with the global economy have accompanied the increasing market orientation of Viet Nam's economic policy, and the growth in private domestic enterprise.

The rapid economic growth of Viet Nam is largely because of the development of transport infrastructure. With the rigorous efforts of the government and the assistance of major development partners such as the Asian Development Bank (ADB), the Japan International Cooperation Agency, and the World Bank, a number of transport projects, mainly in the road subsector, have been completed. Presently, Viet Nam's road network has a total length of 268,787 kilometers (km) (0.81 km per square km). In the past 20 years, the government has prioritized the development of major highways and expressways, including part of the GMS Kunming-Haiphong Transport Corridor. To date, expansion of the GMS expressway network is nearing completion, and the government is increasingly considering the use of the publicprivate partnership modality or the buildoperatetransfer modality for further expressway development. Moreover, the government's investment priorities have shifted to the other category roads, which will further spread the benefits of the existing road network throughout the country, especially to people living in less-developed regions.

Viet Nam's Northwest Region, a high mountainous region comprising the provinces of Dien Bien, Hoa Binh, Lai Chau, Lao Cai, Son La and Yen Bai, lags behind the rest of the country, with the highest poverty rate ranging from 18% to 45% in 2016. Over 50% of the region's population is made up of ethnic minority groups, including Tay, H'Mong, Thai, Dao, and Muong. The ethnic minorities, who make up only 15% of the country's population, constituted 73% of the poor in 2016. Industrial production in the Northwest Region is less developed than in other regions, with many small-scale industrial companies. The major industries include stone, metal ore exploitation and processing, lime brick, and beer production. There are no large processing manufacturing enterprises in the region. The ethnic minority people in the region live with nomadic habits, and practice self-production and self-consumption. Their average per capita consumption remains less than 45% of the Kinh and Hoa (the two majority ethnic groups in Viet Nam). The poor, which comprised primarily of ethnic minorities, are also disadvantaged by their low education attainment and financial capacity; less than 60% of adults in poor households have primary education or less, and less than 7% have post-secondary education. Key factors causing the high poverty and slow development of the region include the following: (i) poorly developed infrastructure, particularly the infrastructure linking to markets and services; (ii) land that is comparatively not well suited to commercial agriculture; (iii) remoteness from commercial and industrial hubs; and (iv) undeveloped local economies with limited nonfarm livelihood opportunities.

With a relatively large area of land, high mountains, large rivers, fertile soil, beautiful landscapes, and a border with the Lao People's Democratic Republic and PRC, the Northwest Region has great potential for development of agriculture, forestry, hydropower, mining, tourism, and border trade. However, the underdeveloped transport infrastructure has hindered the region's economic development, as it limits access of the local population to public services and economic opportunities. It also discourages private investment in the region. Currently, the region's overall road density is 0.71 km per square km, 13% less than the country's average, while the national highway density is 0.051 km per square km, 20% less than country's average of 0.064 km per square km. Therefore, improved connectivity within the region and improved access to the economic centers of the country are critical for the development of the region.

The Noi BaiLao Cai Expressway, considered the backbone of the Northwest Region's road network, is part of the GMS KunmingHai Phong Transport Corridor that connects the Ha Noi region to Yunnan Province in the PRC and passes through the provinces of Lao Cai and Yen Bai. This expressway was completed in 2014, but the provinces in the corridors' proximity have not fully benefited from it, showing a slower pace of development than the rest of the country. This is because the national highway and provincial road networks are largely incomplete, and the condition of the existing roads is generally poor. The existing roads are also prone to natural disasters namely flash floods, landslides, rockfalls and wild fire, of which likelihood and magnitude of impacts are increasing due to global warming. The average annual temperature in Viet Nam has increased by 0.4o C since 1960 and is projected to increase by 0.8-2.7o C by 2060. The climate change assessment projects that the magnitude of May precipitation will increase possibly up to 59-61%, and the magnitude of December precipitation will increase possibly up to 173%- 208%.

Economic, sociocultural and environmental development in lagging and border areas accelerated (Viet Nam National Transport Strategy 2020)

Road connectivity to GMS corridors in northwestern provinces of Viet Nam improved.

Safe and climate-resilient national highways in lagging provinces of northwestern Viet Nam completed

Awareness for road safety, HIV/AIDS, and human trafficking created

Not yet due. As of Q3 2020, preparation of detailed engineering design is ongoing with financing from the Government of Australia.

Not yet due. As of Q3 2020, preparation of detailed engineering design is ongoing with financing from the Government of Australia. DED expected to be completed by Q4 2020.

Not yet due. As of Q3 2020, preparation of detailed engineering design is ongoing with financing from the Government of Australia. DED expected to be completed by Q4 2020.

Not yet due. As of Q3 2020, preparation of detailed engineering design is ongoing with financing from the Government of Australia. DED expected to be completed by Q4 2020.

The project's safeguard categorization is A for environment. An environmental impact assessment (EIA) was prepared and uploaded to the ADB website in April 2018. Without mitigation measures, the project's environmental impacts have the potential to be significant. Three hectares of protection and/or protected forest are anticipated to be affected by the project, including one hectare of protected forest in the Hoang Lien Van Ban Nature Reserve (HLVBNR). This impact will be fully offset in compliance with the Vietnam Forestry Law (2018). The project design is consistent with the HLVBNR master plan (2012), and the impacts on HLVBNR and its protection objectives will not be significant. Suitable disposal sites will need to be identified for the disposal of significant amounts of spoil, which was estimated at 6.3 million cubic meters. Spoil disposal within the boundary of the HLVBNR will be strictly prohibited. Training will be provided to construction workers on the nature reserve's sensitivities.

Other anticipated construction environmental impacts include fugitive dust, construction noise, temporary traffic disturbance and occupational and community safety at construction sites. Adherence to the environmental management plan (EMP) will reduce residual impact significance to acceptable levels. Incremental effects of operational traffic on ambient noise and air quality are not expected to be significant. The capacity of the PMU2 to oversee the EMP implementation will be strengthened through the training provided by the environment specialist of the CSC and an external monitoring consultant during project implementation. Public consultation involving 1,100 potentially affected people and more than 50 representatives from relevant provincial and district authorities was carried out during EIA preparation to inform the project design and environmental assessment process. A grievance redress mechanism has been defined.

The project's safeguard categorization is A for involuntary resettlement. A total of 776,897 square meters of private and public lands in Lao Cai, Yen Bai and Lai Chau provinces will be acquired affecting 957 households (4,370 people). 115 households (454 APs) will be severely affected, six households (28 APs) will experience physical displacement, 634 households (2,669 APs) will experience economic displacement due to loss of income from affected land or business. Three Resettlement Plans (RPs) compliant with ADB Safeguard Policy Statement (SPS) and Government of Vietnam requirements have been prepared to mitigate the impacts in consultation with the affected households. The RPs were disclosed on ADB website on 23 August 2018. Mitigation of involuntary resettlement impacts include: compensation at replacement cost for affected property, assistance for resettlement within existing communities, livelihood development program, ongoing meaningful consultations, including detailed needs assessment for livelihood

development. Details of the grievance redress mechanism (GRM) are included in RPs. Continuing capacity building for PMU2 and local authorities will be provided through project supervision consultants.

The project's safeguard categorization is B for indigenous peoples. Ethnic minority (EM) peoples are the overwhelming majority in the project areas (70% to 86% of the total population). Both positive and negative impacts are identified. The EM will be mainly affected by involuntary land acquisition and resettlement. Other identified risk includes HIV transmission, human trafficking, and other risks associated with road safety. Positive impacts include economic benefits from improved access for mobility and opportunity to participate in planned livelihood development program as detailed in project's resettlement plans (RPs). The project will not involve physical displacement of affected EM households outside their customary lands or development of the EM cultural and natural resources. Ethnic Minority Development Plans (EMDPs) in compliance with ADB SPS and other relevant documents (i.e. HIV and Human Trafficking Awareness Program, Road Safety Program, Consultation Participation and Communication Plan) were prepared to mitigate the identified impacts. 29 public consultations and 52 focus group discussions (FGDs) were conducted with the

affected EM communities in project areas during the preparation of the plans. The EMDPs were uploaded and disclosed on ADB website on 31 August 2018.