42080-013: Strengthening Water Management and Irrigation ...€¦ · 3. Project title Strengthening Water Management and Irrigation Systems Rehabilitation Project 4. Borrower Socialist

Dr

Completion Report

Project Number: 42080-013 Loan Number: 2636 May 2019

Viet Nam: Strengthening Water Management and

Irrigation Systems Rehabilitation Project This document is being disclosed to the public in accordance with ADB’s Access to Information Policy.

CURRENCY EQUIVALENTS

Currency unit – dong (D)

At Appraisal At Project Completion (17 March 2010) (30 June 2018)

D1.00 = $0.0000526 $0.0000429 $1.00 = D19,000 D23,290

ABBREVIATIONS

ADB – Asian Development Bank AFD – Agence Française de Développement BHH – Bac Hung Hai CARC – Compensation assistance, and resettlement committee CPMU – Central Project Management Unit CPO – central project office DARD – Department of Agriculture and Rural Development DED – detailed engineering design DMF – design and monitoring framework DMS – detailed measurement survey EIRR – economic internal rate of return EMP – environment management plan EPC – engineering, procurement, construction GAP – gender action plan ha – hectare ICB – international competitive bidding IMC – irrigation management company LAR – land acquisition and resettlement m2 – square meter m3 – cubic meter MARD – Ministry of Agriculture and Rural Development NCB – national competitive bidding O&M – operations and maintenance ODA – official development assistance PCR – project completion report PIM – participatory irrigation management PMISC – project management and implementation support consultant PMU – project management unit PPMU – provincial project management unit QCBS – quality- and cost-based selection RRP – report and recommendation of the President SCADA – supervisory control and data acquisition SDR – special drawing right SPS – safeguards policy statement WRU

WRU-PMU WUG

– – –

Water Resources University Water Resources University project management unit water user group

NOTES

(i) The fiscal year (FY) of the Government of Viet Nam ends on 31 December. “FY” before a calendar year denotes the year in which the fiscal year ends, e.g., FY2018 ends on 31 December 2018.

(ii) In this report, “$” refers to United States dollars

Vice-President Ahmed M. Saeed, Vice-President, Operations 2 Director General Ramesh Subramaniam, Southeast Asia Department (SERD) Director Eric Sidgwick, Country Director, Viet Nam Resident Mission, SERD

Jiangfeng Zhang, Environment, Natural Resources and Agriculture Division, SERD

Team leader Khuc T. Lan Huong, Senior Project Officer, SERD Team members Dinh Kieu Oanh, Social Development Officer (Safeguards), SERD

Le Thi Quynh Trang, Associate Financial Management Officer, SERD Luong Thi Thanh Ngan, Procurement Officer, SERD Nguyen Thanh Giang, Senior Social Development Officer (Gender), SERD

Pham Quang Phuc, Senior Environment Officer, SERD Pham Thanh Hien, Financial Control Officer, SERD

Steven Schipani, Unit Head, Project Administration, SERD Vu Van Quang, Associate Project Analyst, SERD

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.

CONTENTS

BASIC DATA i

I. PROJECT DESCRIPTION 1

II. DESIGN AND IMPLEMENTATION 1

A. Project Design and Formulation 1 B. Project Outputs 2 C. Project Costs and Financing 4 D. Disbursements 4 E. Project Schedule 4 F. Implementation Arrangements 5 G. Consultant Recruitment and Procurement 5 H. Gender Equity 6 I. Safeguards 7 J. Monitoring and Reporting 8

III. EVALUATION OF PERFORMANCE 8

A. Relevance 8 B. Effectiveness 9 C. Efficiency 10 D. Sustainability 10 E. Development Impact 11 F. Performance of the Borrower and the Executing Agency 11 G. Performance of Cofinanciers 12 H. Performance of the Asian Development Bank 12 I. Overall Assessment 12

IV. ISSUES, LESSONS, AND RECOMMENDATIONS 12

A. Issues and Lessons 12 B. Recommendations 14

APPENDIXES 1. Design and Monitoring Framework 16 2. Contribution to the ADB Results Framework 18 3. Project Cost at Appraisal and Actual 19 4. Project Cost by Financier 20 5. Disbursement of ADB Loan Proceeds 22 6. Contract Awards of ADB Loan Proceeds 23 7. Gender Action Plan Monitoring Results 24 8. Land Acquisition and Resettlement 28 9. Status of Compliance with Loan Covenants 34 10. Economic Reevaluation 38

BASIC DATA A. Loan Identification

1. Country Viet Nam 2. Loan number and financing source 2636-VIE(SF) 3. Project title Strengthening Water Management and

Irrigation Systems Rehabilitation Project 4. Borrower Socialist Republic of Viet Nam 5. Executing agency Ministry of Agriculture and Rural

Development 6. Amount of loan SDR62,651,804.80 7. Financing modality Project loan

B. Loan Data

1. Appraisal – Date started – Date completed

2 November 2009 13 November 2009

2. Loan negotiations – Date started – Date completed

18 March 2010 19 March 2010

3. Date of Board approval 20 April 2010 4. Date of loan agreement 7 September 2010 5. Date of loan effectiveness – In loan agreement – Actual – Number of extensions

6 December 2010 (90 days after signing) 19 January 2011 0

6. Project completion date – Appraisal – Actual

30 June 2016 30 June 2016

7. Loan closing date – In loan agreement – Actual – Number of extensions

31 December 2016 31 December 2016 0

8. Financial closing date – Actual

18 June 2018

9. Terms of loan – Interest rate

– Maturity (number of years) – Grace period (number of years)

1% per annum during the grace period and 1.5% per annum thereafter 32 8

10. Disbursements

a. Dates

Initial Disbursement 7 November 2011

Final Disbursement 30 November 2017

Time Interval 80 months

Effective Date 19 January 2011

Actual Closing Date 31 December 2016

Time Interval 72 months

ii

b.1 Amount ($ million)

Categorya

Originalb Allocation

(1)

Increasedc during

Implementation (2)

Cancelled during

Implementation (3)

Last Revised

Allocation (4=1+2–3)

Amount Disbursed

(5)

Undisbursed Balance (6 = 4–5)

1 86.11 0.53 0 86.64 84.197 2.45 1A 53.45 (9.48) 0 43.97 42.532 1.44 1B 32.67 10.00 0 42.67 41.665 1.01 2 4.52 (3.70) 0 0.82 0.813 0.00 2A 2.28 (2.01) 0 0.27 0.263 0.01 2B 2.24 (1.70) 0 0.54 0.550 (0.01) 3 2.01 (1.68) 0 0.33 0.371 (0.04) 4 0.82 (0.36) 0 0.46 0.475 (0.01) 5 1.94 0.26 0 2.19 1.830 0.36 6 1.00 (0.07) 0 0.93 0.634 0.30 7 3.40 (1.65) 0 1.75 1.191 0.56 Total 100.00 (6.67) 93.12 89.511 3.61

( ) = negative. a 1 = civil works and mechanical works; 1A = civil works, Water Resources University; 1B = civil and mechanical works,

Bac Hung Hai subprojects; 2 = surveys, design, monitoring and supervision; 2A = Water Resources University; 2B = Bac Hung Hai subprojects; 3 = vehicles and equipment; 4 = training and workshops; 5 = consulting services; 6 = operations costs; 7 = interest charge.

b Exchange rate at appraisal: 1SDR = $1.53; at financial closure date: 1SDR = $1.43. c Including increase and/or decrease due to exchange rate fluctuation and final reallocation of loan proceeds.

b.2 Amount (SDR million)

Category

Original Allocation

(1)

Increased during

Implementation (2)

Cancelled during

Implementation (3)

Last Revised

Allocation (4=1+2–3)

Amount Disbursed

(5)

Undisbursed Balance (6 = 4–5)

1 56.283 4.407 0 60.690 59.051 1.639 1A 34.933 (4.183) 0 30.750 30.129 0.621 1B 21.350 8.590 0 29.840 28.922 1.018 2 2.952 (2.382) 0 0.570 0.571 (0.001) 2A 1.488 (1.298) 0 0.190 0.190 0.000 2B 1.464 (1.084) 0 0.380 0.381 (0.001) 3 1.311 (1.081) 0 0.230 0.230 0.000 4 0.537 (0.212) 0 0.325 0.309 0.016 5 1.265 0.268 0 1.533 1.228 0.305 6 0.653 0.000 0 0.653 0.427 0.226 7 2.221 (1.000) 0 1.221 0.836 0.385 Total 65.222 65.222 62.652 2.570

( ) = negative.

C. Project Data

1. Project cost ($ million)

Cost Appraisal Estimate Actual Foreign exchange cost 114.1 115.2 Local currency cost 64.9 45.0 Total 179.0 160.2

2. Financing plan ($ million)

Cost Appraisal Estimate Actual Implementation cost Borrower financed 51.0 47.8a ADB financed 100.0 89.5

iii

Other external financing 28.0 22.9 Total implementation cost 179.0 160.2 Interest during construction costs Borrower financed 0.0 0.0 ADB financed 3.4 1.2 Other external financing Q Q Total interest during construction cost 3.4 1.2

a Including $11.5 million for land clearance and compensation in the Water Resources University, financed by Hung Yen province.

3. Cost breakdown by project component ($ million)

Component Appraisal Estimate Actual A. Base Cost

1. New educational facilities for Water Resources University

2. Construction and rehabilitation of BHH I&D infrastructure

3. Strengthening capacity of BHH service providers 4. Project management and implementation

Subtotal A

85.6

73.2

1.8 5.9

166.5

61.9

82.4

3.6 11.1

159.0 B. Contingencies

1. Physical 2. Price

Subtotal B

4.8 4.3 9.1

0.0 0.0 0.0

C. Financing Charges During Implementation 3.4 1.2 Total 179.0 160.2

BHH = Bac Hung Hai, I&D = irrigation and drainage.

4. Project schedule

Item Appraisal Estimate Actual Date of contract with consultants

- International consultants for project implementation - Project annual audit - Baseline survey and benefits evaluation consultants

Completion of engineering designs - Engineering design for WRU - Engineering design for BHH infrastructure

Q2 2011 Q3 2011 Q3 2011

Q3 2011 Q3 2011

20 December 2011 18 April 2012

11 December 2012

Q4 2012 Q3 2012

Civil works contract Date of first contract award Date of last contract award

Q Q

27 January 2013 November 2013

Completion of work 30 June 2016 31 December 2016 Equipment and supplies Dates First procurement Q 25 October 2012 Last procurement Q 19 September 2012 Completion of equipment installation Q 31 December 2012 Start of operations Completion of tests and commissioning Q June 2014 Beginning of start-up December 2014 Other milestones

- ADB loan closing date - AFD loan closing date - Project completion date

31 December 2016

30 April 2017 30 June 2016

31 December 2016

30 April 2017 30 June 2016

BHH = Bac Hung Hai; WRU = Water Resources University. 5. Project performance report ratings

Implementation Period Ratings From 01 January 2011 to 31 December 2011 Potential Problem

iv

From 01 January 2012 to 31 December 2012 On Track From 01 January 2013 to 31 December 2013 Potential Problem From 01 January 2014 to 31 December 2014 On Track From 01 January 2015 to 31 December 2015 On Track From 01 January 2016 to 31 December 2016 On Track

D. Data on Asian Development Bank Missions

Name of Mission Date No. of

Personsa

No. of Person-

Days Specialization of

Membersb Loan fact-finding mission 2–13 Nov 2009 5 60 l, k, e, m, c Loan appraisal mission 25–29 Jan 2010 8 40 c, b, h, e, m Project inception mission 21–30 Mar 2011 5 50 c, j, k, m, e Loan review mission 26 Sep–10 Oct 2011 5 75 k, m, e, g, j Special project administration mission 24 Feb–09 Mar 2012 4 52 e, k, l, m Loan review mission 12–29 October 2012 5 90 e, j, k, l, m Loan review mission 8–16 April 2013 4 36 e, j, k, m Loan review mission 25 Nov–6 Dec 2013 5 60 k, m, e, g, j Mid-term review mission 14 Apr–5 May 2014 6 126 e, g, h, j, k, m Special project administration mission 23–27 Nov 2014 2 10 k, j Loan review mission 4–15 May 2015 2 24 k, j Special project administration mission 7–11 Dec 2015 2 10 k, j Loan review mission 16–27 May 2016 3 36 k, j Final review mission 12–22 Dec 2016 5 55 k, j, e, m, g Project completion review 27–29 August 2018 5 15 k, j, m, n, o

a AFD staff participated in most of review missions. b a = agronomist, b = control officer, c = economist, d = engineer, e = environment specialist, f = financial specialist, g

= gender specialist, h = portfolio management specialist, i = procurement specialist, j = project analyst, k = project officer, l = project specialist, m = resettlement specialist, n = project completion report consultant, o = environmental consultant.

I. PROJECT DESCRIPTION 1. Viet Nam has about 100 large and medium-scale irrigation and drainage schemes. One of the oldest and largest, the 60-year-old Bac Hung Hai (BHH) system, is in the heart of the Red River Delta and covers part or all of the provinces of Bac Ninh, Hung Yen, and Hai Duong. The Red River Delta is one of the key economic hubs of the country but faces serious economic and developmental challenges including high population density, high unemployment, changes of crop and land-use patterns, and rapid urbanization, along with increasing demand on water resources to meet multiple purposes. Effective water resources management is critical for continued economic growth. The BHH irrigates and drains 192,045 hectares (ha), of which 76% (146,756 ha) is used for agriculture, mainly for paddy rice, but increasingly for high value fruit tree and vegetable crops. 1 2. The project’s expected impact was to contribute to increased agricultural productivity in the BHH area. 2 The expected outcome was strengthened quality of water-related services provided by the Ministry of Agriculture and Rural Development (MARD). The four expected outputs included (i) increased human resource capacity for sustainable water management, including provision of new facilities for the Water Resources University (WRU); (ii) increased capacity of BHH irrigation and drainage infrastructure; (iii) strengthened institutional capacity of water-related service providers in the BHH irrigation and drainage system; and (iv) operational project management. The project was co-financed by the Agence Française de Développement (AFD) on a parallel collaborative co-financing basis.

II. DESIGN AND IMPLEMENTATION A. Project Design and Formulation 3. At the design stage, the project was relevant to the Government of Viet Nam’s development objectives and the Asian Development Bank (ADB) country strategy for Viet Nam, 2007–2010.3 It was formulated in line with the government’s National Water Resources Strategy, which defined the main objectives for the water sector until 2020 as the protection, efficient use, and sustainable development of water resources on the basis of integrated and unified water resources management. 4 The project also aligned with one of the major objectives of the government’s five-year socioeconomic development plan, 2006–2010: to accelerate agricultural and rural industrialization and modernization geared toward promoting large-scale agriculture commodity production relevant to market demand. The project was consistent with ADB’s Water Operational Plan and Operational Plan for Agriculture and Natural Resources, both of which emphasized continued support for irrigation development and water resources management by either providing irrigation and drainage or by rehabilitating and upgrading existing irrigation systems to improve their efficiency.5

1 The BHH irrigates and drains approximately 5% of the rice land in the country. 2 ADB. 2010. Report and Recommendation of the President to the Board of Directors: Proposed Loan to the Socialist

Republic of Viet Nam for the Strengthening Water Management and Irrigation Systems Rehabilitation Project. Manila.

3 ADB. 2006. Country Strategy and Program: Viet Nam, 2007–2010. Manila. 4 Prime Minister Decision 81/2006/QD-TTg, 14 April 2006. Approval of National Water Resources Strategy toward

2020. Hanoi. 5 ADB. 2011. Water Operational Plan, 2011–2020. Manila; ADB. 2015. Operational Plan for Agriculture and Natural

Resources. Manila.

2

4. The project was appropriately designed and adequately formulated, using project preparatory technical assistance (PPTA).6 The overall design and lending modality were based on the success of previous similar ADB-financed projects in the Red River Delta region, which were government priorities for development financing.7 The project scope included pre-identified subprojects that targeted improving water resources management in the BHH area by upgrading and/or constructing major structures, and introducing new water resource management technology and techniques. The project was also designed to contribute to national water resources management by providing support to the WRU to expand its training capacity. 5. The BHH project area was appropriately chosen. It is densely populated by significant urban and rural populations and prone to serious flooding during the monsoon season and periodic drought during the dry season. The aging BHH water resources infrastructure lacked the capacity to deal with major floods and irrigate all the potentially irrigable area. The system needed upgrading to handle seasonal water-volume changes and meet the need for increased agriculture production. 6. The design used proven project implementation arrangements. MARD was the executing agency, and its experienced central project office (CPO) was tasked with implementing the project through a central project management unit (CPMU) and provincial project management units (PPMUs). Irrigation management companies (IMCs)—the eventual owners and operators of the constructed schemes—were consulted during the feasibility study and detailed engineering design (DED) preparation. Also, the supervisory control and data acquisition (SCADA) system used was based on MARD’s survey of the BHH’s immediate needs and was within the capacity of IMCs responsible for operation and maintenance (O&M). 7. In 2012, the Government of Viet Nam, with ADB concurrence, decided to change the WRU new campus location from Chuong My district to a more remote area of Hung Yen province. The change was due to a large increase in compensation costs after Chuong My became part of Hanoi city in August 2008. Although the change reduced counterpart-financed compensation costs, the remote location led to lower than expected initial student enrolment. 8. In summary, the project was—and continues to be—relevant to ADB and government strategies to improve drainage capacity for flood control, expand irrigation, and upgrade water resource management capacity. The project’s outputs remain relevant in the context of Viet Nam’s on-going efforts to find solutions to continued challenges in water resources management, including environmental damage, climate change, and unsustainable water exploitation. B. Project Outputs 9. All project outputs have been substantially achieved as envisaged in the approved design and monitoring framework (DMF), although with some delay. Project achievements at completion

6 ADB. 2008. Technical Assistance to the Socialist Republic of Viet Nam for Strengthening Water Management and

Irrigation Systems Rehabilitation. Manila. (TA 7107-VIE) was financed by the Japan Special Fund for $1 million and approved on 28 July 2008. The TA letter was signed on 26 September 2008, and project preparation consultants were mobilized on 6 April 2009.

7 Similar ADB financed projects implemented from 1994 to 2013 include (i) Loan 1344-VIE: Red River Delta Water Resources Sector Project, (ii) Loan 1855-VIE: Second Red River Basin Sector Project, and (iii) Loan 2223-VIE: Central Region Water Resources Project.

3

compared to the DMF targets at appraisal are summarized in Appendix 1.8 Contributions to the ADB results framework are in Appendix 2. 10. Output 1 targets were substantially achieved. Construction of a new WRU campus was completed in 2016 and first-year bachelor-of-science student enrollment increased from 2,478 in 2009 to 3,600 in 2018, about 500 students less than targeted. Enrollment of master-of-science students at the WRU increased from 220 in 2009 to 840 in 2017, exceeding the target by 110 students. New WRU campus lacks some service facilities and amenities but its location far from Hanoi city center is the main reason why fewer than expected bachelor-of-science students enrolled.

11. Output 2 targets were fully achieved. Irrigation capacity for 11,200 hectares (ha) increased from 12.0 m3/second in 2009 to 25.2 m3/second in 2017 following construction of the new Phu My irrigation pumping station. BHH drainage capacity for 49,000 ha was increased from 76.0 m3/second in 2009 to 219 m3/second in 2017 after the project constructed and/or rehabilitated ten pumping stations.

12. Output 3 targets were fully achieved, except for lower than expected women’s participation in water user groups (WUGs).9 Participatory irrigation management (PIM) planning, implementation, and management systems were established in the PIM pilot area of Gia Binh district, Bac Ninh province. WUGs endorsed design and implementation arrangements for 79 on-farm subprojects and all 14 WUGs received PIM training. O&M guidelines were prepared and implemented for all project-supported subprojects, with provincial people’s committee’s allocating sufficient O&M funds for the completed infrastructure. In addition to providing IMCs with irrigation and drainage technical training, the project installed and launched successful operation of the SCADA system (housed in the BHH IMC), originally designed for piloting in Bac Ninh province only but expanded to all BHH schemes. In 2018 the system was being installed in other irrigation schemes including the Mekong Delta, with BHH irrigation and drainage management company’s technical assistance.

13. Output 4 targets were achieved, notwithstanding the eleven-month delay in mobilizing the project management and implementation support consultant (PMISC). ADB staff and consultants helped the CPMU, PPMUs, and WRU project management unit to formulate comprehensive project implementation guidelines. All counterpart staff received timely and adequate project management training. 14. The project completion review (PCR) mission visited most of the pumping stations and noted that they were built to high standards and fully operating as designed with adequate and well-trained staff. Minor design issues were mitigated by IMC actions such as providing air-conditioning for sensitive electrical equipment and installing nets to prevent detritus and garbage from entering the pumping stations, to avoid pump damage. There also appeared to be good liaison between IMC staff, WUGs, and other intended beneficiaries. The new WRU campus, as mentioned above, while physically completed, lacks some service facilities and amenities.

8 The project completion review mission clarified the output 1 indicator for WRU student enrolment was to measure

first-year bachelor-of-science student enrolment. This is reflected in Appendix 1. 9 Women’s participation was 11.7% compared to the 50% target.

4

C. Project Costs and Financing 15. The total project cost at appraisal was estimated at $179 million, of which (i) ADB was to finance $100 million; (ii) the government was to finance $51.0 million to cover taxes, duties, DED and land acquisition and resettlement (LAR) costs; and (iii) AFD was to finance $28 million (€20 million). AFD also provided a complementary grant equivalent to €0.8 million for a climate change study in the project provinces and strengthening management capacity in the pilot area through community-based, demand-driven approaches including PIM. Upon completion the final actual project cost was $160.2 million. The $18.8 million savings were from the lower than envisaged LAR and WRU campus construction costs. 16. The ADB loan was denominated in special drawing rights (SDR); the original exchange rate of $1.53 fell to $1.43 at the time of project financial closure in June 2018. The allocation in dollars was thus slightly less than originally envisaged. Of the total actual project cost, ADB financed $89.5 million, the government contributed $47.8 million equivalent, and AFD co-financed $22.9 million equivalent. In terms of ADB funds, savings of SDR2.57 million (equivalent to $3.61 million) were canceled from the loan account at completion. ADB’s loan proceeds were reallocated in July 2017 from categories 1A, 2, 3, 4, and 7 (where a surplus was identified) to categories 1B and 510 to finance supplementary small civil works, equipment and consulting services. This helped enhance effectiveness and efficiency of the BHH irrigation and drainage system. Appendix 3 compares project costs at appraisal and completion, and Appendix 4 presents the total project costs by financier. D. Disbursements 17. Loan proceeds were disbursed following ADB’s Loan Disbursement Handbook (2007, as amended from time to time) to an advance account under the CPO’s name. Disbursement was slow during 2011–2013 due to start-up delays and started to catch up in 2014 when large contracts were awarded. Statement of expenditure procedures were efficient and allowed timely payments for many small expenditures. During the last two years of project implementation the 10% advance account ceiling was insufficient and was therefore increased to six-month estimated expenditure. Advance account liquidation was completed in June 2018. The CPO’s financial management unit was experienced with projects financed by ADB and other development partners and managed the project account properly. Appendix 5 shows projected and actual disbursements of ADB loan proceeds. E. Project Schedule 18. The project was approved on 20 April 2010, signed by the borrower on 7 September 2010, and declared effective on 19 January 2011. Due to the government’s protracted procedures to approve final contract liquidations there was a long delay between physical completion (31 December 2016) and financial closing (18 June 2018). AFD signed their loan agreement with the government on 31 August 2011 and their loan closed on 30 April 2018. To minimize startup delays, envisaged advance actions included subproject feasibility study preparation and PMISC recruitment. 19. However, despite efforts to conduct advance actions, results were not as expected. The PMISC contract was signed on 20 December 2011, eleven months after project effectiveness.

10 See footnote a of Table b.1 in the Basic Data section for the names of these categories.

5

The relocation of the new WRU campus from Hanoi to Hung Yen and the long process to procure the pilot EPC contract for Co Ngua pumping station added to the cumulative two-year project start-up delay. Nonetheless, the startup delays did not affect the original loan closing date and all procurement, construction, and supply of goods financed by ADB was completed within the timeframe envisaged. Activities financed by AFD, such as PIM and construction of on-farm structures, continued up to 30 April 2018. F. Implementation Arrangements 20. Implementation arrangements approved at appraisal were appropriate and followed past, on-going, and successful projects executed by MARD. The project was among the centrally-managed projects for which MARD was the executing agency and delegated project management to its CPO, formed to implement large-scale activities. There was a CPMU within the CPO and one PPMU under the Department of Agriculture and Rural Development (DARD) in each project province that implemented smaller-scale activities. A separate WRU project management unit (WRU-PMU) implemented activities related to the new WRU campus. A minor change was made in 2014 to transfer the functions of implementing agency from Hai Duong DARD to Hai Duong IMC. The change was in line with the government strategy to gradually transfer ownership of the constructed pumping stations to IMCs and to strengthen IMC capacity. The AFD parallel co-financed outputs followed AFD’s project management procedures and ADB’s Safeguard Policy Statement 2009 (SPS). AFD and ADB staff joined semi-annual review missions and regularly exchanged information to monitor project progress and resolve issues. The PMISC added value in supporting the CPMU, WRU-PMU and PPMUs in overall project implementation and strengthening project management capacity. In summary, the project implementation arrangements were appropriate. There was reasonable decentralization of authority between the CPO and PPMUs, which increased project ownership by the participating provinces, while the CPO simultaneously supervised implementation progress and helped build PPMU capacity. G. Consultant Recruitment and Procurement 21. Consultant recruitment followed ADB’s Guidelines on the Use of Consultants by Asian Development Bank and Its Borrowers (2007, as amended from time to time). The CPO had prior experience and satisfactory capacity, including English language proficiency, to recruit consultants. The ADB-financed consulting services included (i) the PMISC; (ii) construction supervision consultants; (iii) independent consultants for environment and resettlement monitoring; (iv) benefit monitoring and evaluation consultants; and (v) an independent auditor. Advance actions following quality- and cost-based selection (QCBS) were made for PMISC recruitment including preparing terms of reference, advertising the request for expressions of interest, preparing the shortlist of firms, and issuing the request for proposals to shortlisted firms. 22. Several issues were noted regarding the original packaging. Too many small consulting services packages (19 in total with 11 small-scale construction supervision packages) were included in the original procurement plan, resulting in protracted recruitment.11 QCBS method with time-based contract took too long to recruit consultants for straight-forward and small-scale civil works construction supervision. Consultants’ qualifications selection method (CQS) with lump-sum contract was used for construction supervision consultants, allowing faster recruitment, though not always the best suited method. In retrospect, it was unclear that a QCBS equivalent method was available in the government policy. Fixed budget selection with bio-data technical proposal and lump sum contract would have been more appropriate where (i) content, duration

11 Including packages financed by Government’s counterpart fund and AFD

6

of services, and the required outputs of the consultants are clearly defined; and (ii) there are few external risks such that firms could accurately predict the inputs required for the assignment.

23. The performance of the consultants is considered generally satisfactory. The independent monitors provided quality external monitoring reports, although sometimes with delays, and the auditor provided quality audit reports on time and in accordance with their terms of reference. The PMISC comprised international and national consultants and supported the CPO in overall project management, including reviewing the DEDs prepared by local consultants and assisting the CPMU, WRU-PMU and PPMUs to address design deficiencies. The PMISC also assisted to prepare bidding and safeguard documents that were acceptable to ADB, and with contract management. A single PMISC for all implementation agencies had the advantage of lower costs and consistent approaches across subprojects for capacity building, procurement and safeguard document quality assurance, and project performance management. However, the PMISC’s contribution to quality control of the civil works and equipment was limited due to its inability to recruit good quality control specialists. This task was accomplished mainly by the CPO and the PPMUs. 24. Goods, works, and related services under ADB financing were procured in accordance with ADB’s Procurement Guidelines (2007, as amended from time to time). The packaging arrangements at appraisal (32 contracts) were implemented with several minor changes to include additional small-scale civil works and equipment packages.12 Procurement methods used were international competitive bidding (ICB), national competitive bidding (NCB), and shopping for works and goods. ADB prior-reviewed all ICB packages and first NCB civil works and goods packages. An EPC contract for Co Ngua pumping station was piloted. 25. The performance of the contractors and suppliers is considered generally satisfactory. The first NCB civil works contract was awarded for Doan Thuong pumping station on 10 April 2013 and the first ICB civil works contract was awarded for Co Ngua pumping station on 5 April 2013. The pilot EPC contract for Co Ngua pumping station faced difficulties during procurement and execution because (i) MARD was not familiar with ADB’s plant standard bidding document; (ii) joint ventures for EPC arrangements were uncommon in Viet Nam; and (iii) ADB and counterpart agencies’ interpreted work allocation and contractual obligations among the joint venture partners differently. Thus, it took a long time to prepare bidding documents, evaluate bids, and execute and liquidate the contract. 26. Contract award projections were made annually, although achievement was low during the first two years after effectiveness due to untimely compliance with readiness filters and startup delays (Appendix 6). H. Gender Equity 27. GAP implementation is rated successful. A gender action plan (GAP) was developed at the project design to ensure gender equality in the distribution of project benefits and to enable active engagement of women in project design and implementation. The GAP was developed before ADB’s Gender Mainstreaming Criteria Guidelines came into effect on 1 March 2010. All 17 GAP activities were completed and 5 out of 6 of GAP targets were achieved (Appendix 7). The target of 50% women’s representation in WUGs was partially achieved (11.7%) because most of the WUGs in the pilot area were established prior to subproject implementation. GAP activities covered skills enhancement in agriculture production, job creation, enhancement of women’s

12 Including contracts financed by AFD and Government.

7

participation during project preparation, and women leaders’ empowerment. A total of about 3,000 women benefited from the project, and 92 vulnerable and women headed households received support from the livelihood recovery program. I. Safeguards 28. Social safeguards. The project was categorized A for involuntary resettlement mainly because of land acquisition required for the WRU campus, and C for indigenous people, in compliance with ADB’s Safeguards Policy Statement (SPS) 2009. About 2,045 households were affected in the project area, with 1,029,850 m2 of land acquired. A total of 751 households were severely affected, including 737 households that lost more than 10% of their productive landholdings, and 14 households that required relocation. There were 234 households belonging to vulnerable groups. 29. In the CPO, one resettlement officer managed and coordinated resettlement. The PMISC and external monitoring consultants supported and monitored resettlement plan implementation. During the subproject design stage, the CPO and local authorities consulted IMCs and affected households to minimize resettlement impacts. Measures taken include canal alignment adjustments and properly sited pump houses. All social safeguards documents, including the resettlement framework, final resettlement plans, and monitoring reports, were uploaded on the ADB website and disclosed in Vietnamese to affected households following ADB’s SPS. 30. Implementation of LAR compensation activities complied with the SPS. By the time of project completion, all affected households and vulnerable households had received entitlements and assistance as outlined in the approved resettlement framework and updated resettlement plans. According to the external resettlement monitoring consultant’s evaluation, the affected people’s lives are stable and improving in tune with development trends in their communities. No household is worse off than before project implementation. More than 10% of the total agricultural land of 542 households was acquired to construct the WRU. A livelihood recovery program was developed for those affected households based on consultations with the affected people. For pumping station subprojects, the PPCs integrated the livelihood recovery programs for severely affected households into their provincial government-financed programs. 31. All subprojects applied a four-step grievance redress mechanism as stated in the resettlement framework and plans. During project implementation, most of the complaints received were related to land ownership verification, errors in the detailed measurement survey process, and missing entitlements. As confirmed by external consultants in the post-evaluation reports, no complaint was lodged at provincial level and there were no pending issues at project completion. LAR details are in Appendix 8. 32. Environment. The project was categorized B for environment. An initial environment examination was prepared and approved during the project preparation and uploaded on ADB website in 2010. The environmental management plan (EMP) for the new WRU campus was updated in 2013 to reflect the new location. An environment management system was established, consisting of a CPMU environment management officer and safeguards officer in each PMU to supervise subproject EMP implementation. Subproject construction supervision consultants also supported EMP implementation. At project completion, there were no pending issues beyond the need to continue implementing the EMPs, especially to guide O&M of the constructed facilities.

8

J. Monitoring and Reporting 33. The loan agreement had 12 covenants. The covenants were relevant; no covenant was modified, suspended, or waived; and all have been complied with. MARD and its CPO complied fully with the project’s monitoring and reporting requirements. They provided ADB with timely quarterly and annual progress reports in a format agreed with the government, using a report template called the aligned monitoring tool that was harmonized with other development partner and government requirements. Reports included the project’s basic data, implementation status, financial status, and outcome and outputs achievement status. Reports on safeguard compliance and GAP implementation were submitted biannually. The government’s project completion report was submitted within 1.5 years of physical completion. The executing agency also submitted good quality audited project financial statements to ADB in English, including the final audit report on 29 June 2017, within 6 months of the end of each fiscal year without delay. Audit reports stated loan proceeds were used for their intended purpose. A $6.5 million difference between ADB’s Loan Financial Information System and the final audited project financial statements 2016, as explained by MARD, was due to the estimated payables for WRU-related expenditures that were incurred before the loan closing date were paid during the extended winding up period. A satisfactory supplementary audit report covering all project expenditures incurred through the loan’s financial closing date, including this difference, was submitted to ADB in March 2019. Appendix 9 shows the status of compliance with the loan and project covenants.

III. EVALUATION OF PERFORMANCE A. Relevance 34. The project is assessed relevant at appraisal and relevant at completion in view of emerging erratic weather patterns and the greater need for flood control and drainage infrastructure. The government’s targets on sustainable water resource management remain unchanged with a likely strategic diversion to partial privatization of government water delivery servicing entities. Similarly, two pillars of ADB’s strategic support for Viet Nam are (i) increasing the inclusiveness of infrastructure and service delivery, and (ii) improving environmental sustainability and climate change response.13 The project targeted a high priority area that is densely populated, productive, and vulnerable to flood damage to both agricultural crops and residential property. 35. The project design was appropriate, using an investment project modality where all major subprojects were pre-identified. Implementation arrangements were also appropriate and measures to address the pressing need to urgently repair and upgrade key water resources infrastructure in the Red River Delta were implementable within the executing and implementing agencies available capacity. MARD, through its subsidiaries, is responsible for managing water resources facilities and thus was appropriately selected as the project executing agency. These design advantages contributed to timely project completion despite startup delays. 36. The project also addressed the need for qualified human resources to meet water sector development requirements. WRU is broadening its international and regional cooperation with academic institutions and research centers, which will bring access to international advanced university education standards and the capacity to develop scientific research collaboration in

13 ADB. 2016. Country Partnership Strategy: Viet Nam 2016–2020—Fostering More Inclusive and Environmentally

Sustainable Growth. Manila.

9

areas of common interest. The newly constructed educational facilities are expected to respond to this need. In terms of innovation, the project design included the SCADA system; PIM through consultation with WUGs and/or farmers and their participation in on-farm system development, design, construction, and management; and trained water users on water resources management. These features helped make the operation of the BHH facilities efficient and sustainable.

37. The original DMF used a highly technical outcome indicator, which was difficult for the executing agency to monitor, resulting in incomplete assessment in the government’s project completion report. However, this baseline indicator was evaluated during PCR mission. 38. Overall, the project was designed in line with government, sector and ADB strategies and priorities. It used a proven successful modality, an experienced and relevant government agency as the executing agency and suitable implementation arrangements. Moreover, the use of co-financing for a substantial part of the project enabled the government to optimize its foreign assistance resources and mobilize complementary grant assistance which would not otherwise have been available. The project is thus rated relevant. B. Effectiveness 39. The project is rated effective. The baseline outcome indicator was compared with the achievement at the project completion using the same methodology of Mapping Systems and Services for Canal Operation Technique (MASSCOTE) 14 that was used to design. Rapid appraisal procedure was used to map BHH system baseline performance from a representative area in Kim Dong district, Hung Yen province. However, Kim Dong was no longer a suitable site for reevaluating this indicator at completion, due to rapid urbanization, therefore, An Thi district was selected as an alternative for the end of project evaluation. 40. The project substantially delivered all its expected outputs and their targets, albeit with some delays and underachievement of one gender-related indicator. The ten constructed and/or rehabilitated pumping stations provides irrigation to 11,200 ha and drainage for 49,000 ha as intended. This directly contributed to achievement of the outcome. Farmers interviewed by the project completion review mission confirmed the efficacy of the infrastructure provided. They were happy with the upgraded irrigation and drainage system which ease their field work and enabled better control over water supply for paddy rice and vegetable crops. Other positive project results include damage prevention for residential land which makes up as much as 30% of all the land within pumping station service areas;15 and improved inland water transport, since the new SCADA system allows real time monitoring of water level at the major structures and sluices, allowing barges and boats to pass through the BHH system’s larger canals with fewer delays. 41. For the new WRU campus, the targets are for the whole university rather than just the new campus and have been substantially met, with some delay, although the new campus is not yet fully operational.16 As the project intention was to provide physical facilities to assist in the

14 Food and Agriculture Organization. 2007. Modernizing Irrigation Management – The MASSCOTE Approach.

FAO Irrigation and Drainage Paper 63. Rome. 15 Reduced damage was mentioned during discussion with the representatives of Hai Duong and Hung Yen IMCs. 16 First year bachelor-of-science students who were enrolled in 2018 totaled 3,600 and the number of master students

totaled 950 (2016 targets were 4,108 bachelor’s students and 840 master’s students)

10

establishment of a new WRU campus, it met this objective, providing students with a good alternative to the overcrowded Hanoi campus.17 C. Efficiency 42. The project’s estimated economic internal rate of return (EIRR) at appraisal was calculated at 22.6%. It was recalculated at completion using the same methodology as at appraisal. The key quantified economic benefits for both analyses included (i) increased yield and production of crops and aquaculture attributable to improved drainage and irrigation in the BHH system; and (ii) reduction of damage due to flooding of agricultural, residential, new urban and industrial land. 43. The economic reanalysis at completion shows an EIRR of 15.74%, with the sensitivity analysis showing robust results across the full range of adverse scenarios (Appendix 10). As is normal practice for higher education facilities, no economic analysis was undertaken for the new WRU campus, though there are considerable unquantifiable benefits as a result of improved education for water sector professionals and technicians, stronger water sector research and development programs, and better international cooperation at the WRU. It is generally accepted that higher education investments show positive and often high rates of return.18 However, the assessment of efficiency must consider the new campus’s delay in achieving full use and the fact that the campus comprises 38.6% of the total project investment. On this basis, the project is rated less than efficient, despite its high EIRR. D. Sustainability 44. The project is rated likely sustainable. MARD and provincial DARDs have operated and managed irrigation and drainage schemes within the Red River Delta for decades, including throughout the 60-year history of the BHH system. With the upgraded structures and strengthened IMC capacity the system is expected to operate more efficiently and sustainably. 45. The project, however, does not generate direct revenue to cover O&M costs. Since 2009, under Decree 115, the state-owned irrigation and drainage management companies and IMCs have been responsible for the O&M of large irrigation systems (above the tertiary canal level). Irrigation service fees for farmers were waived and covered by central government subsidies to central irrigation and drainage management companies and provincial government subsidies to provincial IMCs.19 Experience with this system, as indicated by an ADB study, has been generally positive, despite policy issues on government subsidies.20 However, a new law on irrigation became effective in July 2018 and its guidelines and regulations are being implemented.21 The new law supports O&M funding and will revise on-farm water service fee calculations. According to key persons interviewed, provincial governments within the BHH scheme will own the ten pumping stations and will be directly responsible for their management and O&M funding.

17 The Hanoi campus has 17,000 students with a capacity of 7,000. However, due to the lack of amenities and

services, students and teachers are not keen to transfer to the new campus. 18 The World Bank. 2018. Policy Research Working Paper: Return to Investment in Education. Washington, DC.

http://documents.worldbank.org/curated/en/442521523465644318/pdf/WPS8402.pdf. 19 Decree No. 115/2008/ND-CP of November 2008 amends and supplements many articles in Decree No.

143/2003/ND-CP (28 November 2003), detailing the implementation of articles on exploitation and protection of irrigation works.

20 ADB. 2013. Brief No. 12: Irrigation Service Fee Waiver in Viet Nam. Manila. 21 Government of Viet Nam. 2017. The Law on Hydrolic Works. Ha Noi. The law became effective 1 July 2018.

11

46. Sustainability will thus depend on provincial governments commitment to ensure sufficient funds for O&M. Further enquiries indicated that irrigation and drainage normally receive high priority in the budgeting process. MARD has assured funding for O&M to sustain the irrigation and drainage infrastructure constructed by the project for a minimum of 30 years through cost-sharing between the national and provincial governments. The WRU person-in-charge indicated in an interview that the university has enough budget to maintain all campus facilities until the whole university becomes self-financing in 2020 as in the WRU’s master development plan.22 E. Development Impact 47. The project development impact is rated satisfactory. The DMF impact targets of 6.7 tons/ha (average) and crop intensity of 2.24 per year by 2020 were substantially achieved ahead of schedule. According to the latest statistics, paddy rice productivity averaged 6.56 tons/ha in 2017 and crop intensity was 2.22 crops per year in 2015, with a diversion from paddy rice to higher value vegetable and fruit crops. Interviews with residents in the project provinces showed that improved drainage for flood damage reduction in agricultural and residential areas lessened their worries about crop losses. 48. The project exerts a broader impact through incremental benefits for inclusive growth and sustainable development. Farmers are among the poorer segments of the population in project areas and are the most vulnerable to poverty and climate change impacts. As irrigation and drainage have been improved by the project, farmers have started to grow more higher value crops. Their livelihoods are improving with higher and more stable income and reduced extreme weather damages, and thus the project contributes to the country’s food security. At the same time the exportable rice surplus is expected to increase and will add to the gross national product. 49. Impacts derived from capacity building for MARD, WRU, DARDs, and entities operating the BHH system will ensure improved water resource management in the medium and long term. Benefits from the new WRU campus will also be longer term and will contribute to (i) improved management of the country’s water resources and associated infrastructure; (ii) an overall increase in levels of higher education among the country’s population; (iii) decongestion of the current campus in Hanoi; and (iv) a consequent improvement in educational standards and the development of a new education cluster in a rural area. F. Performance of the Borrower and the Executing Agency 50. MARD’s and the CPO’s performance was satisfactory. MARD and the CPO have extensive experience in preparing and implementing official development assistance (ODA) projects including ADB financed projects. The CPO has around 70 staff, including contractors and permanent office, and specializes in irrigation. Its key staff are full time and dedicated to project implementation. Staff of the PPMUs and IMCs were also capable and had suitable technical and project management experience. The CPO was able to recover from delays during the first two years and completed all activities by the original closing date. MARD delegated project implementation authority sensibly to DARDs and spread ownership evenly among the executing and implementing agencies. Counterpart funding was adequately allocated. Liquidation of contracts was timely and adequate. MARD complied with ADB’s procurement, safeguards, financial management, and gender policies. The borrower complied with all covenants. The performance of the borrower and executing agency are rated satisfactory.

22 It was advised that about D5 billion–D6 billion (about $260,000) is needed for the new campus annual O&M.

12

G. Performance of Cofinanciers 51. AFD collaborated closely with ADB and MARD to prepare the project and remained closely involved in project implementation for its duration. AFD staff participated in most ADB review missions and cooperated closely with ADB staff, the CPO, and PPMUs to effectively solve identified issues. Activities financed by AFD were successfully completed by 30 April 2018. H. Performance of the Asian Development Bank 52. A review of the mission schedules and composition in the basic data section indicate ADB’s supervision of project preparation and implementation was sufficient. An appropriate number of well-staffed missions were conducted during preparation; at least two supervision missions were fielded annually during the implementation period; and special loan administration missions were conducted as required. ADB staff provided timely support and advice on loan signing and effectivity requirements, procurement, disbursement, technical and safeguards matters. Field discussions with implementing agency staff indicated that they are satisfied with their working arrangements with ADB and there was a good working relationship both with the CPO and with AFD, the co-financier. On this basis ADB’s performance is rated satisfactory. I. Overall Assessment 53. The project is considered relevant because of its high priority focus on improving management of the country’s water resources and related increase in rice production, which is in conformity with the government strategy, ADB’s country strategy and ADB’s sector operational plans for water resources and agriculture. It is considered effective due to substantial achievement of the outcome and all outputs. It is considered less than efficient despite the acceptable EIRR for the BHH component, due to lower than expected use of the WRU new campus at project completion. Finally, it is considered likely sustainable in view of (i) strong demand for quality drainage and irrigation in Viet Nam, (iii) good quality of civil works constructed and equipment provided, and (ii) suitable O&M arrangements are in place, along with new legislation firming up O&M funding. Overall, the project is rated successful.

Overall Ratings Criteria Rating Relevance Relevant Effectiveness Effective Efficiency Less than efficient Sustainability Likely sustainable Overall Assessment Successful Development impact Satisfactory Borrower and executing agency Satisfactory Performance of ADB Satisfactory ADB = Asian Development Bank. Source: Asian Development Bank.

IV. ISSUES, LESSONS, AND RECOMMENDATIONS

A. Issues and Lessons 54. There are no pending implementation issues. Post-implementation issues include the following:

13

(i) The new Law on Irrigation became effective in July 2018. Its implementation guidelines are being applied and will need to be monitored to verify that the expectations regarding O&M financing will be fulfilled. (ii) The WRU is not yet operating at its intended capacity due to the reluctance of students to study at a less accessible campus. This situation may last for some time and could undermine the project’s results. Measures need to be taken to remedy some of the current deficiencies and provide incentives for students to study at the new campus.

55. Lessons drawn from this project are as follows:

(i) The experience of organizing consultations for vulnerable women-headed households during the LAR due diligence process and those affected by (post) resettlement is a valuable lesson that demonstrates safeguards policy implementation is strengthened by proactive interventions to empower women through their participation, voice and leadership. (ii) Having a strong, experienced executing agency was important to the success of this project. The professional, permanent and technical CPO added value to project implementation and the quality of project outputs. However, for new similar projects, these implementation arrangements, where a central ministry such as MARD work as the executing agency, is in principle no longer possible in accordance with the new government policy. Instead, provinces will be the executing agencies except in the case of large and nationally important irrigation schemes, MARD can still be a central executing agency. For decentralized projects of similar nature, the implementation arrangements should allow experienced, capable agencies like CPO to provide technical guidance and backstop support, and lead coordination between ADB and provincial implementing or executing agencies, even MARD will no longer have executing agency status.

(iii) The DMF for this project made evaluation a more difficult exercise than it should have been and weakened design relevance. The outcome indicator is too technical, unfamiliar to the executing agency, and was difficult to reevaluate. A coherent DMF is necessary as a basis for project planning, monitoring, and evaluation. (iv) Advance actions were one of the measures to reduce project startup delay. However, there seems to be inadequate clarity on implementing advance actions in the government rules, and a good mechanism to make the subproject civil works ready for execution before or right after the project becomes effective. Currently, government control over the provincial debt ceiling and implementation of relevant budget management policies also contribute to startup delays and, therefore, limit project readiness. (v) Time-consuming recruitment of many consultants along with unsuitable selection methods resulted in implementation delays. For future projects of similar nature and scope, suitable procurement packaging and selection methods should be set up based on the requirements for project progress and capacity of the EA and/or IAs. Project procurement plan should be developed in close consultation with the executing agency and resident mission staff in charge of project implementation, considering the lessons under other projects, and be flexibly adjusted.

14

(vi) The PMISC added value in supporting project implementation, however, there was some overlap of responsibilities among the PMISC, CPO staff, and independent monitoring and construction supervision consultants. Therefore, the terms of reference for the PMISC should have been prepared based on capacity and expertise of the implementing agencies. Responsibility for quality control of project outputs should be clearly defined among the loan implementation support consultant and executing agency.

B. Recommendations 56. Based on the above observations on issues and lessons, the following recommendations are proposed:

(i) Project readiness requirements need to be thoroughly discussed and agreed with the government during country programming and portfolio review processes in advance of project processing. Financing mechanisms for readiness measures—which could be either from counterpart funds, co-financing or ADB loan proceeds through retroactive financing—should be made clear prior to the start of project preparation and included in the government project proposal and ADB’s project concept paper. (ii) Quality assurance at entry during project processing should include (i) adequate DMF training provided to operations staff, including knowledge sharing and mentoring sessions, and DMF quality control mechanism in place; and (ii) appropriate surveys conducted during project preparation to set feasible baseline values and gender targets. (iii) The procurement plan should aim for fewer and larger contracts. Fixed budget selection with bio-data technical proposal and lump-sum contract would have been more efficient than a default QCBS method with time-based contract for straightforward civil works supervision. CQS, although not always best suited, can fast-track consultant recruitment to accelerate project progress. Procurement methods should be determined based on complexity of the works and/or equipment to be procured and availability of the expertise in the country rather than only value threshold. An International Federation of Consulting Engineers-FIDIC contract was piloted and many of its conditions were unfamiliar to the executing agency. Future projects should provide adequate training to the executing agency when novel contract types are used.

(iv) IMCs should continue to implement EMPs during the operation of each pumping station and the entire BHH scheme to mitigate any potential environmental impacts. The independent monitoring agency should conduct a post-resettlement evaluation for the whole project within 6–9 months after all LAR activities have been completed to assess (b) the achievement of income restoration programs objectives, and (b) whether any support and/or measures need to be provided. (v) Future agriculture sector and natural resource management projects should consider the current dynamics of land and water use, the need for high-skilled human resources in the country, and trends in product demand, urbanization and economic linkages within the sector and across sectors. A reliable early warning system should be in place to inform policy actions; priorities should be set within an overall resource management and economic context rather than for a specific area of one sector.

15

57. Future monitoring. MARD should monitor the adequate provision of O&M fund allocation by the provincial government to the respective IMCs, the enrollment in WRU, and the use of new campus on an annual basis. 58. Covenants. The covenant in the loan agreement (Schedule 5, para. 7) to ensure adequate water level in the BHH area for proper functioning of the scheme should be maintained. This covenant requires establishing a legal framework for water sharing, water rights, and river basin management, including the agreements between ministries and agencies which provide inter-reservoir operation rules to optimize the use of water resources and achieve a 1.85-meter water level in the Red River at the Xuan Quan Intake.

59. Further action or follow-up. MARD needs to monitor the budget for annual O&M fund allocation for pumping stations, SCADA facilities, and progress toward the full use of WRU new campus. In addition, since this project is the latest among several ADB-supported investments in the water resources sector in the Red River Delta, it would be worthwhile to assess the benefits, sustainability, and impact of this investment type as part of a wider sector assistance program evaluation. 60. Timing of the project performance evaluation report. A project performance evaluation report should be undertaken within the next 3–5 years to assess the new WRU campus enrollment and operations, targeted paddy rice productivity and crop intensification, and O&M sustainability.

16 Appendix 1

DESIGN AND MONITORING FRAMEWORK As of August 2018

Design Summary Performance Indicators and Targets Project Achievements Impact Increased agricultural productivity in the BHH area

Productivity of paddy increased from

average 6.0 tons/ha in 2009 to 6.7

tons/ha in 2020

Substantially achieved Paddy productivity of 6.56 tons/ha in 2016 and 6.56 tons/ha in 2017 Conversion of paddy land to higher value vegetable and tree crops due to improved irrigation and drainage facilities

Cropping intensity increased from 2.09 crops per year in 2009 to 2.24 in 2020

Substantially achieved in 2015. Cropping intensity of 2.22 crops per year in 2015.

Outcome Quality of MARD’s water- related services strengthened

Water delivery services to farmers in BHH irrigation and drainage system improved from average value of 1.6 in 2009 to 2.5 in 2016 (on a scale from 0 to 4)

Achieved in 2018. The improved quality value of 2.6 was achieved in 2016. An Thi district in Hung Yen province was selected as a proxy for the end project evaluation because Kim Dong district was no longer a suitable representative site due to rapid urbanization

Outputs 1. Increased human resources capacity for sustainable water management

Annual enrollment of bachelor-of-science students at the WRU increased from 2,478 in 2009 to 4,108 in 2016 Annual enrollment of master-of-science students at WRU increased from 220 in 2009 to 840 in 2016

Substantially achieved in 2018. Enrollment of 3,600 first-year bachelor-of-science students in 2018. (Note: The PCR mission clarified the output 1 indicator for WRU student enrolment was to measure first-year bachelor-of-science student enrollment. The enrollment was only started in 2018 after completing liquidation activities with contractors and one-year warranty period, and the in-campus services were available)

Achieved in 2017. Enrollment of 840 master-of-science students in 2017 and 950 expected for 2018

2. Increased capacity of irrigation and drainage infrastructure in the BHH irrigation and drainage system

Irrigation capacity for 11,200 ha increased from 12.0 m3/second in 2009 to 25.2 m3/second in 2016 Drainage and internal irrigation capacity for 49,000 ha increased from 76.0 m3/second in 2009 to 211.2 m3/second in 2016

Achieved in 2016. Irrigation capacity increased to 25.2m3/second Achieved in 2017. Total drainage and internal irrigation capacity of 219 m3/second in 2017

3. Strengthened institutional capacity of water-related service providers in the BHH irrigation and drainage system

In the BHH area: Effective participatory planning and implementation arrangements established by 2012

Achieved in 2014. Participatory planning and implementation arrangements in place in BHH area as envisaged

Implementation agreements signed with beneficiaries and WUGs by 2012

Achieved in 2014. Implementation agreements explained and signed with 14 WUGs in all 14 project communes

Stipulated infrastructure provided with WUG-endorsed designs by 2014

Achieved from January 2015 to July 2017. A total of 79 on-farm subprojects (selected through participatory basis) endorsed

Appendix 1 17

Design Summary Performance Indicators and Targets Project Achievements WUGs strengthened and achieving

seasonal and/or annual targets by 2014 Achieved. PIM training provide to all 14 WUGs in 14 communes in the pilot area

Participation of women in WUGs increased to 50% of membership by 2014

Partially Achieved. 11.7% achieved. Most of WUGs were established prior to subproject implementation

Throughout the BHH project area: O&M guidelines and annual O&M plans prepared before commissioning infrastructure and implemented after completion by 2016 Sufficient funds allocated and/or generated to undertake stipulated O&M upon completion of the infrastructure by 2016 A total of 3 IMCs and 24 IMEs strengthened by 2016

Achieved. Annual IMC business plans (including O&M plans) approved by provincial people’s committees

Achieved. O&M funding for constructed headwork facilities committed by provincial people’s committees

Achieved. Adequate training in irrigation and drainage management provided to all IMC and IME key staff in 2015–2016; study tours on water resources operations and management conducted in 2013–2015

4. Project management is operational

Project implementation guidelines prepared and approved before loan effectiveness

Achieved. Training courses on project management for CPMU and PPMU officers organized before loan effectiveness

Project implementation consultants mobilized within 3 months of loan effectiveness

Achieved with eight-month delay. Loan effective 19 January 2011; the PMISC mobilized on 3 January 2012

PPMS fully operated within 12 months

of loan effectiveness Achieved. PPMS installed as scheduled; training courses, training materials on PPMS operations provided to CPMU and PMU staff

BHH = Bac Hung Hai, CPMU = central project management unit, IMC = irrigation management company, IME = irrigation management enterprise, MARD = Ministry of Agriculture and Rural Development, O&M = operation and maintenance, PIMSC = project management and implementation support consultant, PMU = project management unit, PPMS = project performance management system, WRU = Water Resources University, WUG = water user group Source: Asian Development Bank.

18 Appendix 2

CONTRIBUTION TO THE ADB RESULTS FRAMEWORK

No. Level 2 Results Framework Indicators

(Outputs and Outcomes)

Achievements Methods / Comments

1

Students benefiting from new or improved educational facilities (number)

4,490

Enrollment of 3,600 first-year bachelor-of-science students in 2018; and of 840 master-of-science students in 2017 and 950 expected for 2018.

2 Land improved through irrigation, drainage, and/or flood management (hectares)

60,200

Source: Asian Development Bank.

Appendix 3 19

PROJECT COST AT APPRAISAL AND ACTUAL ($'000)

Appraisal Estimate Actual

Item Foreign

Exchange Local

Currency Total Cost Foreign

Exchange Local

Currency Total Cost A. Civil Works

1. BHH – Bac Ninh subprojects 6,413.00 802.00 7,214.00 8,602.31 1,075.96 9,678.27 2. BHH – RID fund pilot 2,268.00 0.00 2,268.00 1,863.04 0.00 1,863.04 3. BHH – Cau Dua, Hai Duong 1,356.00 169.00 1,525.00 3,016.63 375.97 3,392.60 4. BHH – Chua Tong, Hung Yen 1,706.00 213.00 1,919.00 2,102.51 262.51 2,365.01 5. BHH – All other subprojects 13,559.00 1,695.00 15,254.00 23,396.49 2,924.78 26,321.27 6. WRU 45,274.00 5,659.00 50,934.00 41,674.60 5,208.98 46,883.58

Subtotal 70,576.00 8,538.00 79,114.00 80,655.59 9,848.19 90,503.78 B. Land Acquisition and Resettlement

1. BHH – Land acquisition and resettlement 0.00 6,102.00 6,102.00 0.00 6,928.76 6,928.76 2. WRU – Land acquisition and resettlement 23,955.00 23,955.00 0.00 11,491.15 11,491.15 Subtotal 30,057.00 30,057.00 0.00 18,419.91 18,419.91

C. Mechanical Works BHH 1. BHH – Bac Ninh subprojects 8,444.00 1,056.00 9,500.00 8,578.76 1,072.85 9,651.32 2. BHH – Cau Dua, Hai Duong 1,475.00 184.00 1,660.00 966.62 120.50 1,087.12 3. BHH – Chua Tong, Hung Yen 946.00 118.00 1,064.00 655.76 81.80 737.56 4. BHH – All other subprojects 14,258.00 1,782.00 16,041.00 14,661.01 1,832.24 16,493.25 Subtotal 25,124.00 3,140.00 28,264.00 24,862.15 3,107.39 27,969.54

D. Surveys, Design, Monitoring, Supervision 1. BHH – Bac Ninh subprojects 939.00 207.00 1,146.00 851.73 187.76 1,039.49 2. BHH – Cau Dua, Hai Duong 194.00 88.00 282.00 197.27 89.48 286.75 3. BHH – Chua Tong, Hung Yen 292.00 37.00 329.00 180.60 22.88 203.48 4. BHH – All other subprojects 1,926.00 241.00 2,167.00 2,097.74 262.49 2,360.23 5. WRU 1,956.00 245.00 2,201.00 1,287.07 161.21 1,448.28

Subtotal 5.307.00 817.00 6,125.00 4,614.40 723.83 5,338.23 E. Vehicles 284.00 0.00 284.00 325.68 0.00 325.68 F. SCADA Equipment 1,473.00 184.00 1,657.00 39.45 4.93 44.38 G. Training and Workshops 801.00 0.00 801.00 504.47 0.00 504.47 H. Consulting Services 1,287.00 540.00 1,827.00 1,289.26 540.95 1,830.20 I. Operation Costs 2,365.00 0.00 2,366.00 1,700.14 0.00 1,700.14

J. Duties and Taxes 16,044.00 16,044.00 0.00 12,363.67 12,363.67 Total Base Costs 107,217.00 59,321.00 166,538.00 113,991.14 45,008.86 159,000.00 Physical contingencies 2,624.00 2,142.00 4,766.00 0.00 0.00 0.00 Price contingencies 857.00 3,500.00 4,356.00 0.00 0.00 0.00 Total Project Costs 110,697.00 64,963.00 175,660.00 113,991.14 45,008.86 159,000.00

Interest during implementation 3,405.00 0.00 3,405.00 1,191.47 0.00 1191.47 Total 114,103.00 64,963.00 179,065.00 115,182.86 45,008.86 160,191.47

BHH = Bac Hung Hai, RID = rural infrastructure development, SCADA = supervisory control and data acquisition, WRU = Water Resources University. Source: Asian Development Bank estimates.

20 Appendix 4

PROJECT COST BY FINANCIER

Table A4.1: Project Cost at Appraisal by Financier Government

ADBa AFDa b

Total Cost

Amount % of Cost Category Amount

% of Cost Category Amount


Taxes and Duties

Item (A) (A/D) (B) (B/D) (C) (C/D) (D) (E) A. Civil Works

1. BHH – Bac Ninh subprojects 837 10.00% 0 0.00% 7,535 90.00% 8,372 837 2. BHH – RID Fund pilot 252 10.00% 0 0.00% 2,268 90.00% 2,520 252 3. BHH – Cau Dua, Hai Duong 177 10.00% 0 0.00% 1,591 90.00% 1,767 177 4. BHH – Chua Tong, Hung Yen 223 10.00% 0 0.00% 2,003 90.00% 2,226 223

5. BHH – All other subprojects 1,771 10.00% 15,941 90% 0 0.00% 17,712 1,771 6. WRU 5,951 10.00% 53,560 90% 0 0.00% 59,511 5,951 Subtotal 9,211 10.00% 69,501 75.50% 13,397 14.50% 92,108 9,211 B. Land Acquisition and Resettlement

1. BHH – Land Acquisition & Resettlement 6,431 100.00% 0 0.00% 0 0.00% 6,431 0 2. WRU–Land Acquisition & Resettlement 29,190 100.00% 0 0.00% 0 0.00% 29,190 2,919 Subtotal 35,621 100.00% 0 0.00% 0 0.00% 35,621 2,919

C. Mechanical Works – BHH 1. BHH – Bac Ninh subprojects 1,103 10.00% 0 0.00% 9,929 90.00% 11,032 1,103 2. BHH – Cau Dua, Hai Duong 193 10.00% 0 0.00% 1,733 90.00% 1,926 193 3. BHH – Chua Tong, Hung Yen 124 10.00% 0 0.00% 1,112 90.00% 1,235 124 4. BHH – All other subprojects 1,866 10.00% 16,793 90.00% 0 0.00% 18,659 1,866 Subtotal 3,285 10.00% 16,793 51.10% 12,774 38.90% 32,852 3,285 D. Surveys, Design, Monitoring, and Supervision 1. BHH – Bac Ninh subprojects 133 10.00% 0 0.00% 1,193 90.00% 1,325 133 2. BHH – Cau Dua, Hai Duong 33 10.00% 0 0.00% 297 90.00% 330 33 3. BHH – Chua Tong, Hung Yen 38 10.00% 0 0.00% 340 90.00% 378 38 4. BHH – All other subprojects 249 10.00% 2,244 90.00% 0 0.00% 2,494 249 5. WRU 254 10.00% 2,282 90.00% 0 0.00% 2,536 254 Subtotal 706 10.00% 4,526 64.10% 1,830 25.90% 7,063 706 E. Vehicles 32 10.00% 291 90.00% 0 0.00% 324 32 F. SCADA Equipment 191 10.00% 1,719 90.00% 0 0.00% 1,910 191 G. Training and Workshops 92 10.00% 824 90.00% 0 0.00% 916 92 H. Consulting Services 216 10.00% 1,940 90.00% 0 0.00% 2,155 216 I. Operations Costs 1,711 63.10% 1,001 36.90% 0 0.00% 2,712 271

Financial charges during implementation 0 0.00% 3,405 100.00% 0 0.00% 3,405 0 Total Project Cost 51,065 29.10% 100,000 55.80% 28,000 15.60% 179,065 16,923 % Total Project Cost 29.10% 55.88% 15.60% 100%

ADB = Asian Development Bank, AFD = Agence Française de Développment, BHH = Bac Hung Hai, RID = rural infrastructure development, SCADA = supervisory control and data acquisition, WRU = Water Resources University Notes: 1. Numbers may not sum precisely because of rounding. a Bank charges related to operations of advance accounts were financed from the respective loan proceeds. b AFD provided parallel co-financing for all Bac Ninh subprojects, and Cau Dua (Hai Duong), Chua Tong (Hung Yen), and Rural Infrastructure Development Fund

pilot in Gia Binh pilot area (Bac Ninh). Source: Asian Development Bank estimates.

Appendix 4 21

Table A4.2: Project Cost at Completion by Financier Government

ADB1 AFD

Total Cost

Amount % of Cost Category Amount



Taxes and Duties

Item (A) (A/D) (B) (B/D) (C) (C/D) (D) (E) A. Civil Works

1. BHH – Bac Ninh subprojects 2,821 26.37% 849 7.93% 7,028 65.70% 10,697 1,019 2. BHH – RID Fund pilot 559 27.04% 0 0.00% 1,509 72.96% 2,069 206 3. BHH – Cau Dua, Hai Duong 681 18.25% 745 19.95% 2,308 61.81% 3,735 342 4. BHH – Chua Tong, Hung Yen 476 18.29% 222 8.52% 1,906 73.19% 2,605 240

5. BHH – All other subprojects 4,103 14.16% 24,879 85.84% 0 0.00% 28,982 2,661 6. WRU 8,683 16.95% 42,533 83.05% 0 0.00% 51,216 4,332 Subtotal 17,324 17.45% 69,227 69.71% 12,752 12.84% 99,303 8,799 B. Land Acquisition and Resettlement

1. BHH–Land Acquisition & Resettlement 6,929 100.00% 0 0.00% 0 0.00% 6,929 0 2. WRU–Land Acquisition & Resettlement 11,491 100.00% 0 0.00% 0 0.00% 11,491 0 Subtotal 18,420 100.00% 0 0.00% 0 0.00% 18,420 0

C. Mechanical Works – BHH 1. BHH – Bac Ninh subprojects 2,344 22.08% 99 0.93% 8,173 76.99% 10,616 965 2. BHH – Cau Dua, Hai Duong 217 18.18% 0 0.00% 978 81.82% 1,196 109 3. BHH – Chua Tong, Hung Yen 148 18.18% 0 0.00% 664 81.82% 811 74 4. BHH – All other subprojects 3,271 18.03% 14,871 81.97% 0 0.00% 18,143 1,649 Subtotal 5,980 19.44% 14,970 48.66% 9,816 31.90% 30,766 2,796 D. Surveys, Design, Monitoring, and Supervision 1. BHH – Bac Ninh subprojects 853 74.64% 60 5.21% 230 20.16% 1,143 104 2. BHH – Cau Dua, Hai Duong 255 80.76% 19 6.06% 42 13.19% 315 29 3. BHH – Chua Tong, Hung Yen 174 77.57% 15 6.54% 36 15.89% 224 20 4. BHH – All other subprojects 2,140 82.43% 456 17.57% 0 0.00% 2,596 236 5. WRU 1,330 83.48% 263 16.52% 0 0.00% 1,593 145 Subtotal 4,752 0.00% 813 13.84% 308 5.24% 5,872 534 E. Vehicles 33 9.09% 326 90.91% 0 0.00% 358 33 F. SCADA Equipment 3 6.65% 46 93.35% 0 0.00% 49 4 G. Training and Workshops 80 14.48% 475 85.52% 0 0.00% 555 50 H. Consulting Services 146 7.41% 1,830 92.59% 0 0.00% 1,977 146 I. Operations Costs 1,066 62.71% 634 37.29% 0 0.00% 1,700 0

Financial charges during implementation 0 0.00% 1,191 100.00% 0 0.00% 1,191 0 Total Project Cost 47,805 0.00% 89,512 0.00% 22,875 0.00% 160,191 12,364 % Total Project Cost 29.84% 55.88% 14.28% 100%

ADB = Asian Development Bank, AFD = Agence Française de Développment, BHH = Bac Hung Hai; RID = rural infrastructure development; SCADA = supervisory control and data acquisition, WRU = Water Resources University. Notes: 1. Numbers may not sum precisely because of rounding. Source: Asian Development Bank estimates.

1 Cost variances between civil work items for Bac Ninh, Cau Dua and Chua Tong in tables A4.1 and A4.2 are due to fund reallocations from categories 1A, 2, 3, 4,

and 7 to categories 1B and 5 for additional small civil works, equipment and consulting services.

22 Appendix 5

DISBURSEMENT OF ADB LOAN PROCEEDS

Table 5.1: Annual and Cumulative Disbursement of ADB Loan Proceeds ($ million)

Annual Disbursement Cumulative Disbursement

Year Amount

($ million) % of Total Amount

($ million) % of Total 1 5.28 5.9% 5.28 5.9% 2 0.42 0.5% 5.70 6.4% 3 7.86 8.8% 13.56 15.1% 4 14.65 16.4% 28.21 31.5% 5 25.24 28.2% 53.44 59.7% 6 29.56 33.0% 83.01 92.7% 7 6.50 7.3% 89.51 100.0% Total 89.51 100.0% 89.51 100.0%

ADB = Asian Development Bank. Source: Asian Development Bank.

Figure 5.1: Projection and Cumulative Disbursement of ADB Loan Proceeds ($ million)

Note: The first projection revision was made on 7 January 2012; the second projection revision was made on 25 June 2014.

Appendix 6 23

CONTRACT AWARDS OF ADB LOAN PROCEEDS

Table 6.1: Annual and Cumulative Contract Awards of ADB Loan Proceeds ($ million)

Annual Contract Awards Cumulative Contract Awards

Year Amount

($ million) % of Total Amount

($ million) % of Total 1 1.91 2.2% 1.91 2.2% 2 0.93 1.1% 2.84 3.2% 3 25.95 29.4% 28.79 32.6% 4 47.21 53.5% 76.00 86.1% 5 3.98 4.5% 79.98 90.6% 6 8.34 9.4% 88.32 100.0% 7 0.00 0.0% 88.32 100.0% Total 88.32 100.0% 88.32 100.0%

ADB = Asian Development Bank. Source: Asian Development Bank.

Figure 6.1: Projection and Cumulative Contract Awards of ADB Loan Proceeds ($ million)

Note: The first projection revision was made on 7 January 2012; the second projection revision was made on 25 June 2014.

24 Appendix 7

GENDER ACTION PLAN MONITORING RESULTS

As of 22 August 2018

Output Objective of Gender Equality Interventions

Proposed Activities Implementation Status

Output 1. Increased human resources capacity for sustainable water management.

Increase understanding of gender and water issues for water sector professionals. Increase number of female students and faculty in WRU.

Action 1 Include gender education in curriculum addressing water use and society.

Not evaluated The activity was integrated in a DANIDA-funded project and was dropped during the MTR.

Action 2 Design campus site and facilities to accommodate residency needs and other facilities for women.

Achieved WRU consulted its faculty and student representatives about the campus design facilities to be provided, and WRU development strategy before the construction starts.

Target 1 Allocate budget and space to develop dormitories to house at least one-third of the student population; 50% of dormitory space will be designated for use by female students, as available on-site lodging will make university attendance more viable for women.

Achieved WRU has integrated the needs of women (teachers and students) in the design of new campus. The dormitories have 560 rooms, from floor 2 to floor 8, and 50% of them are designated for female students. In 2017 and 2018, WRU moved 4,900 students (including 1,680 female students) of K58 and K59 from Hanoi to the new campus in Hung Yen and 100% female students were allocated chambers in dormitories.

Target 2 Consult with women students and faculty about campus site design, buildings, and equipment to ensure women’s needs are addressed. All such consultations will include 30%–40% women stakeholders.

Achieved WRU consulted with 71 out of 200 participants (35.5% women) on design, facilities to be provided, and development strategy of the WRU.

Campus Construction Target 3 Fix target for hiring women as hired labor for construction workers (25%, adjusted in the MTR).

Achieved The contractor hired 860 local unskilled laborers, including 410 (47.7%) local women. Men and women laborers received equal pay for equal work.

Action 3 Ensure women are consulted on the resettlement process at every stage through separate meetings and

Achieved Consultation made about compensation policy and the income restoration plan including 121 women (30%), with the participation of commune women’s union.

Appendix 7 25



through dissemination of information through women’s unions.

Action 4 Introduce special measures to improve the situation of vulnerable women heads of households affected by resettlement.

Achieved Vulnerable women heads of affected households were consulted on their needs for livelihood restoration. Vulnerable women-headed households were provided with 30 kilograms of rice/head/month for 6–12 months (depending on area of land acquired).

Action 5 Take specific actions to address women’s livelihood priorities in the income restoration program.

Achieved Specific needs for income restoration (training in high quality rice cultivation, raising cattle, fish, and poultry) for women-headed households were identified and addressed. In 2017, 428 severely affected households, including 92 vulnerable households, participated in the income restoration program.

Action 6 Prepare women for employment opportunities created by the new campus through income restoration program.

Achieved: The WRU signed contracts with companies to provide services such as cleaning, security, and food supply for students and teachers. The companies have recruited laborers from affected communes. Employment opportunities for women on campus included building and campus cleaners, canteen suppliers of food and vegetables, and canteen staff.

Output 2 Increased capacity of irrigation and drainage infrastructure in the BHH irrigation and drainage system.

Ensure that women residents around construction sites affected by resettlement can recover their livelihoods. Ensure that women have equal access to employment opportunities generated by new civil works during and after construction.

Action 7 Ensure that women are consulted on the resettlement process at every stage through separate meetings and through dissemination of information through women’s unions.

Achieved Consultations on resettlement were conducted with 1,338 women of affected households through public consultation meetings and other meetings.

Action 8 Introduce special measures to improve the situation of vulnerable women heads of households affected by resettlement.

Achieved The income restoration interventions were integrated into provincial government-financed programs.

Action 9 Take specific actions to address women’s livelihood priorities in income restoration program.

Achieved Specific actions include income generation activities, assisted by the women’s union, such as vocational training on bamboo and rattan production, sewing, and embroidery.

26 Appendix 7



Target 4 Fix target for hiring women for civil works (25%, adjusted in MTR).

Achieved In construction sites of pumping stations, contractors hired 92 local women workers out of about 350 unskilled civil works laborers (26.3%).

Target 5 Fix target for hiring women for operation and maintenance of new structures (25%).

Achieved Out of 87 workers employed to operate and maintain the 10 pumping stations financially supported by the project 32 (36.8%) were women.

Output 3 Strengthened institutional capacity of water-related service providers in the BHH irrigation and drainage system.

Build recognition of women’s role in irrigation and drainage management systems. Increase the active participation of women in decision-making, management, and O&M of the BHH system.

Action 10 Allocate resources for a gender specialist to increase women’s participation in irrigation and drainage management.

Achieved A gender and social safeguard specialist was mobilized for 15.5 person-months to help implement the GAP.

Action 11 Consultations with women’s groups, through women’s unions and through focus groups of women at village level, on how improvements in irrigation services management can address women’s needs and priorities.

Achieved The gender specialist carried out the consultation in 10 project communes with women’s groups via commune women’s unions in November–December 2014. A total of 49 women out of 145 people (39.2%) participated in group discussions and 68 women out of 146 people (46.6%) responded to the questionnaires on irrigation service management improvement. The consultation results were integrated in the participatory irrigation management (PIM) training program to communes in 2015.

Target 6 Increase the participation of women in WUGs to 50% of the total members in 2014.

Partially achieved A total of 14 WUGs were strengthened in 14 communes in Gia Binh district of Bac Ninh province, with 223 members including 26 women (11.7%). Most of the WUGs in the pilot area were established prior to subproject implementation. The PPMU implemented women empowerment programs in many WUGs.

Action 12 Gender sensitization for DARDs, and IMCs to help address the lack of women’s representation in the water resources sector compared with high number of women farmers.

Achieved Gender sensitization and GAP orientation workshops were conducted for 50 staff of PMUs, and IMCs. Among them, 41 were women (82%).

Appendix 7 27



Action 13 Identify female staff in DARDs and the BHH scheme to take active role in project and training plans for enhancing their capacity.

Achieved According to gender survey report, women DARD and BHH staff were interested in improving their capacity in project management, social safeguard policies, gender action plan implementation, O&M, and gender mainstreaming in irrigation management. They also wished to receive technical instructions on management and maintenance of the on-farm canals, and water-saving program. The CPMU and consultants organized 35 training courses and workshops on these issues for PMU, DARD and BHH staff and stakeholders, with 2,093 participants, 465 of which were women (22.7%).

Action 14 Provide training for women to increase their capacity and confidence to take on leadership in WUGs.

Achieved The project organized training courses on PIM for 680 participants, including 129 women (19%) from WUGs and pumping station workers of 14 communes in the Gia Binh irrigation area pilot subproject.

Action 15 Identify follow-up activities by the gender specialist and women’s groups to promote greater participation of women in cooperatives and WUGs.

Achieved CPMU and PPMUs identified follow-up activities: training for women and men employed to work in the newly constructed pump station and continued strengthening the PIM model in sites with existing or newly established models.

BHH = Bac Hung Hai, DARD = Department of Agriculture and Rural Development, DMS = detailed measurement survey, GAP = gender action plan, IMC = irrigation management company, K58 = 58th course, K59 = 59th course, MTR = mid-term review, O&M = operation and maintenance, PIM = participatory irrigation management, PMU = project management unit, PPMU = provincial project management unit, WUG = water user group.

28 Appendix 8

LAND ACQUISITION AND RESETTLEMENT

A. Introduction

1. The Strengthening Water Management and Irrigation Systems Rehabilitation Project was implemented in the Bac Hung Hai irrigation system in three Red River Delta provinces: Bac Ninh, Hung Yen, and Hai Duong provinces. Two out of three project components required land acquisition and involuntary resettlement. There were 2,045 affected households, with 1,029,850 square meters (m2) of land affected, the majority of which entailed land acquired for the new facilities of the Water Resources University (WRU). A total of 737 severely affected households lost more than 10% of their productive landholdings, in addition to 14 households who had to relocate. No ethnic minorities were involved, but 234 households belonged to vulnerable groups. 2. The project thus falls under ADB’s Safeguard Policy Statement 2009 (SPS) category A for involuntary resettlement and category C for indigenous people, due to its nature and scale of resettlement impacts. To address the relocation and compensation of affected people, resettlement safeguards documents were prepared in accordance with the SPS. The project’s resettlement framework was approved by the Government of Viet Nam and ADB in January 2010 and the provincial people's committees agreed to implement it in the context of harmonizing government policies on land management, acquisition, compensation, and support for land acquired for public purposes and ADB requirements on involuntary resettlement. The resettlement framework required preparation of resettlement plans if the construction of subprojects caused land acquisition or loss of people's assets. All land acquisition, compensation, and livelihood recovery support in the resettlement plan had to comply with the resettlement framework guiding provisions.

3. Eleven resettlement plans were prepared during the feasibility study stage for the WRU extended campus and the ten pumping stations of Bac Ninh, Hung Yen, and Hai Duong. The resettlement plans were updated during project implementation following the detailed measurement survey (DMS). From 2011 to 2016, eleven updated resettlement plans were prepared and approved for the respective components (Table A8.1).

Table A8.1: Social Safeguards Documents Prepared for the Project

Province/Subproject

Submission of

RP to ADB

ADB

Approval of RP

Submission of

Updated RP to

ADB

ADB

Approval of

Updated RP

Bac Ninh

Phu My PS Jan 2011 7 Dec 2011 22 Dec 2011 28 May 2012

Nhat Trai PS Jan 2012 7 Dec 2011 7 Feb 2013 14 Dec 2013

Addition 28 Jun 2016 Jul 2016

Hung Yen

Lien Nghia PS Oct 2011 7 Dec 2011 18 Sep 2012 29 Jun 2012

Chua Tong PS Oct 2011 7 Dec 2011 13 Aug 2012 17 Aug 2012

Appendix 8 29

Province/Subproject

Submission of

RP to ADB

ADB

Approval of RP

Submission of

Updated RP to

ADB

ADB

Approval of

Updated RP

Nghi Xuyen PS Jan 2011 7 Dec 2011 18 Sep 2013 1 Oct 2012

Addition 6 Apr 2016 22 Apr 2016

Hai Duong

Co Ngua PS 2 Dec 2011 7 Dec 2011 10 Jun 2014 8 Jul 2014

Cau Dua PS Jan 2011 7 Dec 2011 2 Dec 2011 24 Jul 2012

Doan Thuong PS 2 Dec 2011 7 Dec 2011 2 Dec 2011 24 Jul 2012

Addition 21 Jun 2016 28 Jun 2016

WRU 2 Dec 2011 19 Dec 2011 27 Nov 2012 28 Dec 2012

ADB = Asian Development Bank, PS = pumping station, RP = resettlement plan, WRU = Water Resources University. Source: Central Project Office. 2018. Borrower’s Project Completion Report.

4. The resettlement framework and resettlement plans were prepared in accordance with Viet Nam’s laws and requirements 2 and 3 of ADB’s SPS. The tools available to mitigate adverse impacts were: (i) compensation to replace lost physical and non-physical assets, (ii) assistance for relocation, and (iii) assistance for rehabilitation. Resettlement plans were prepared and implemented for each subproject. A DMS was conducted for the assets of affected households (land, crops and trees and structures). Most of the assets were adequately counted (in case of inadequacy, an additional DMS was carried out upon the request of affected households). The resettlement plans specified the entitlements for the identified impacts, and all were subject to endorsement and acceptance by both the relevant government authorities and ADB.

B. Land Acquisition and Resettlement Activities

5. A total of 2,045 households were affected by the project, with D269,310 million in compensation and assistance paid. Of the affected households, 1,259 were marginally affected and 737 severely affected (with over 10% of the productive landholdings lost), in addition to 14 households who had to relocate. The breakdown by subproject is presented in Table A8.2.

Table A8.2: Affected Households by Subprojects

Province or Subproject

Number of Affected

Households

Number of Relocated

Households

Number of Severely Affected

Households

Number of Vulnerable

Households

Bac Ninh 519 0 35 17

Phu My 114 0 0 0

Nhat Trai 405 0 35 17

Hung Yen 449 5 108 37

Lien Nghia 84 0 43 14

30 Appendix 8


Number of Affected

Households

Number of Relocated

Households

Number of Severely Affected

Households

Number of Vulnerable

Households

Chua Tong 21 1 4 4

Nghi Xuyen 344 4 61 19

Hai Duong 389 9 52 88

Doan Thuong 369 9 51 88

Cau Dua 18 9 0 0

Co Ngua 2 0 1 0

WRU 688 0 542 92

Total 2,045 14 737 234 WRU = Water Resources University. Source: Central Project Office. 2018. Borrower’s Project Completion Report

6. Impacts on land. The total land area affected by the project was 1,029,850 m2, including 30,999 m2 residential land, 843,245 m2 agricultural land, and 115,605 m2 public structural land. Table A8.3 shows the types of affected land by subproject. In addition, the project temporarily acquired 269.136 m2.

Table A8.3: Land Affected by the Project

Province or

Subproject

Temporary Impacts on Land (m2) Permanent Impacts on Land (m2)

Total

Residen-

tial Land

Agricultural

Land

Public

Land Total

Residen-

tial Land

Agricultural

Land

Public

Land

Bac Ninh 111,181 I 85,055 26,126 206,929 23,800 136,224 46,905

Phu My 4,257 Q 4,257 Q 24,355 Q 24,355 Q

Nhat Trai 106,924 Q 80,798 26,126 182,574 23,800 111,869 46,905

Hung Yen 66,507 I 63,929 2,578 159,843 1,328 156,248 2,267

Lien Nghia 5,165 Q 5,165 32,721 23 32,698 Q

Chua Tong 3,123 Q 3,123 9,227 25 9,202 Q

Nghi Xuyen 58,219 Q 55,641 2,578 117,895 1,280 114,348 2,267

Hai Duong 91,448 58 58,921 32,469 97,166 5,871 23,347 67,948

Doan Thuong 62,078 58 42,571 19,449 76,495 5,395 23,347 47,753

Cau Dua 29,370 Q 16,350 13,020 20,195 Q 20,195

Co Ngua Q Q Q Q 476 476 Q Q

WRU I I I I 565,911 I 527,426 38,485

Total 269,136 58 207,905 61,173 1,029,849 30,999 843,245 155,605

WRU = Water Resources University. Source: Central Project Office. 2018. Borrower’s Project Completion Report.

Appendix 8 31

7. In accordance with SPS and government policies on compensation, assistance, and resettlement, the implementation of the resettlement plans ensured that all affected people were compensated for their losses at replacement cost and proposed life rehabilitation methods to help them to improve or at least maintain living standards and income generation capability to the pre-project level. The compensation, assistance, and resettlement began in 2012 and was completed in 2016. Based on the updated resettlement plans and the data provided by the central project office (CPO) and provincial project management units (PPMUs), the total amount of compensation and assistance for affected households was roughly D269,310 million (equivalent to $11.864 million, assuming an exchange rate of $1 = D$22,700). Table A8.4 provides total compensation made for each subproject.

Table A8.4: Total Compensation Cost


Number of Affected Households

Total Affected Land Area (m2)

Total Compensation, Assistance, and

Resettlement Cost (D) Bac Ninh 519 206,929 41,024

Phu My 114 24,355 1,290

Nhat Trai 405 182,574 39,734

Hung Yen 449 159,843 39,490

Lien Nghia 84 32,721 8,186

Chua Tong 21 9,227 2,419

Nghi Xuyen 344 117,895 28,885

Hai Duong 389 97,166 38,499

Doan Thuong 369 76,495 1,106

Cau Dua 18 20,195 1,591

Co Ngua 2 476 35,802

WRU 688 565,911 150,297

Total 2,045 1,029,849 269,310

Source: Central Project Office. 2018. Borrower’s Project Completion Report.

8. Resettlement activities required the involvement of national, provincial, district, and commune agencies. The provisions and policies of the resettlement plans formed the legal basis for the implementation of resettlement activities. Compensation, assistance, and resettlement committees (CARCs) managed the compensations, which followed resettlement plans prepared by the PPMUs, reviewed by provincial people’s committees, and endorsed by ADB. All affected households directly received compensation during payment meetings, with participation of project counterparts, CARCs, people’s committees, and village authorities. Documents related to the project were disseminated and distributed to the affected households. All entitlements of affected people, including compensation and allowances, were delivered prior to displacement from houses, land, and assets. 9. Information dissemination and public consultation. The project disseminated project information and compensation policies to the affected households before beginning resettlement activities. The project adequately implemented steps for information disclosure, public consultation, and DMS with the participation of the affected people and communities, vulnerable households, women, and political and social organizations. The external monitoring consultants confirmed the affected households’ participation in the community meetings and consultations

32 Appendix 8

organized by the CARCs at the affected communes and wards. The meetings covered the following key topics: (i) project’s objectives and schedule; (ii) rights and entitlements of the affected households to compensation and resettlement; (iii) necessary assistances for severely affected households, relocating households, and vulnerable households; (iv) income and livelihood restoration measures targeting the affected people; and (v) the grievance redress mechanism. 10. Detailed measurement survey process. The DMS activities were led by the CARCs and their established inventory units, comprising CARC staff, officials of the project communes and/or wards, and representatives of affected households. The external monitoring consultants reported on the participation of the affected households in the DMS process, the accuracy of the inventory of affected assets, and the payment of compensation, both unit prices and total amounts paid. This process identified a relatively small proportion of discrepancies caused by either error in the initial inventory process or by minor design changes. These discrepancies were corrected, and additional compensation paid where necessary. 11. Compensation for assets. The CARCs managed compensation prices, which followed the prescriptions of resettlement plans prepared by the PPMUs and WRU-PMU, as endorsed by ADB. The external monitoring consultants reviewed unit prices in the local market and concluded that they were consistent with replacement costs. Further, surveys show that nearly 100% of responding affected households in all subprojects were satisfied with their compensation rates. In post evaluation mission consultations, the external monitoring consultants did not receive any complaints regarding compensation prices. 12. Resettlement assistances and other support payment. During irrigation canals subproject preparation, the CPO and local authorities made efforts to minimize resettlement impacts for affected households by interviewing the affected people and adjusting pump house location and canal alignments. As a result, only three subprojects caused resettlement impacts: (i) Doan Thuong subproject with nine affected households (four households received cash for self-resettlement, one household moved to a new residential area near their old house, and four households rebuilt houses in remaining land); (ii) Chua Tong subproject with one household that received cash for self-resettlement; and (iii) Nghi Xuyen subproject with four households that received money for self-resettlement in a nearby resettlement site. External consultants found that the relocated households’ lives are stable. Their new houses are better than their previous houses. By the time of project completion, all severely affected households and vulnerable households received the required support in accordance with the policy and the details outlined in the approved resettlement framework and resettlement plans. 13. Regarding the pumping station subprojects, the livelihood recovery program for severely affected households was integrated in existing provincial programs, including vocational training. According to the evaluation results of the external resettlement monitoring consultant, the lives of the affected households have improved following local development trends. No households are worse-off than before the project implementation. 14. The component for building the WRU new facility required the acquisition of agricultural land greater than 10% of total agricultural land area of 542 households; therefore, a livelihood recovery program was developed for them. This livelihood recovery program was based on consultations with affected people and approved by the ADB on 4 September 2013 and Hung Yen People's Committee on 29 November 2013. During the implementation process, some proposed changes in program design required reassessment of the needs of the affected people. The program was formally implemented beginning at the end of 2016. The initial 453 households registered to

Appendix 8 33

participate in the livelihood recovery program fell to 428 households due to delays in program implementation. By the time of the project completion review mission, the program had almost been completed. Nine agricultural extension models and medical assistance were provided to affected households. The CPMU and Pho Hien WRU board concluded this program was successful in October 2018.

15. Grievance redress. A four-step grievance mechanism was set up in subproject updated resettlement plans and disclosed to the affected people before and during compensation implementation. Based on this mechanism, complainants could lodge their complaints to various levels. However, the external monitoring consultant reported no complaint was lodged to high levels because all complaints received were solved at commune or district level. Most of the complaints were related to land ownership verification, errors in DMS process, missing entitlements, and impacts that emerged during the construction period. There were some complaints due to houses cracking and delayed compensation. The CARCs, in cooperation with the CPMU, PPMUs, WRU-PMU, local authorities, and affected households, reviewed and solved the complaints on a case-by-case basis. By the time of the PCR mission, there were no pending issues. C. Conclusion 16. In general, the implementation of compensation and resettlement activities complied with ADB’s SPS. The coordination among agencies responsible for compensation and resettlement was assessed effective. A compensation and resettlement database was established and updated in the CPO and CARC offices to support reporting and monitoring. Internal monitoring reports were prepared and kept at the CPO office. External monitoring reports were uploaded on the ADB website. 17. Although LAR procedures proved to be much more extensive and lengthier than expected at appraisal, the requirements regarding adequate compensation for and mitigation of adverse impacts on incomes, including those of vulnerable people, have been achieved. Surveys by the external monitoring consultants confirm that affected people were satisfied with the outcomes.

34 Appendix 9

STATUS OF COMPLIANCE WITH LOAN COVENANTS

Covenant

Reference in Loan Agreement

Status of Compliance

MARD, though CPMU, shall be the Project Executing Agency. WRU, BHH IDMC and the Borrower's respective Provincial Peoples Committees and their Departments of Agriculture and Rural Development shall implement their respective parts of the Project.

Schedule 5, para. 1

Complied with

Established, Staffed, and Operating PMU or PIU Schedule 5, para. 2

Complied with

CPMU, headed by a Project Director with full delegated responsibility for decision making, shall comprise full-time qualified and experienced staff of the central project office under MARD, and shall (i) provide overall management and coordination of the Project, (ii) liaise with implementing agencies to improve WRU facilities and BHH irrigation management systems; (iii) implement the project performance management system; (iv) procure Goods, Works and consulting services in accordance with the Procurement Plan; (v) coordinate with implementing agencies the procurement of goods and services; (vi) prepare forecasts of contract awards and disbursements and arrange project account audits; and (vii) prepare Project reports including the project completion report.

Schedule 5, para. 2

Complied with

Five (5) PMUs, headed by project managers with qualifications acceptable to ADB, shall be established under the direct administration of WRU, BHH IDMC and the provincial Departments of Agriculture and Rural Development, and shall comprise full-time qualified and experienced staff. PMUs shall, with support of the Project consultants, (i) construct facilities for the new campus of WRU; (ii) improve irrigation management systems; (iii) construct new irrigation and drainage infrastructure; (iv) rehabilitate existing irrigation and drainage infrastructure; (v) procure Goods, Works and consulting services; (vi) operationalize the project performance and monitoring system; and (vii) implement resettlement plans, EMPs and the gender action plan.

Schedule 5, para. 3

Complied with

For Nghi Xuyen pumping station, CPMU shall be responsible for the activities as provided in paragraph 3 above.

Schedule 5, para. 4

Complied with

The Borrower shall finance: (i) planned canal cleaning and dredging works for the BHH and recurrent operation and maintenance expenses associated with such works; (ii) construction of the Cau Xe sluice in Hai Duong province to provide efficient drainage for a large portion of the BHH and tidal irrigation for parts of Dong Nam Cuu An, Binh Giang-Bac Thanh Mien and the Gia Loc-Tu Ky areas, and recurrent operation and maintenance expenses associated with such structure; (iii) cost of repairing or operationalizing the Nhu Quynh pump station to ensure efficient irrigation of the Gia Thuan area of the Bac Ninh province, and recurrent operation and maintenance expenses associated with such structure; and (iv) cost of operation and maintenance to sustain the irrigation and drainage infrastructure constructed under the Project for a minimum of 30 years through cost-sharing arrangements, acceptable to ADB, between the central government and relevant provincial governments.

Schedule 5, para. 5

Complied with

Appendix 9 35

Covenant



MARD shall ensure the proper care, training and operation and maintenance to sustain the effectiveness of the supervisory control and data acquisition system, and the supervisory control and data acquisition data and information will be shared among all relevant stakeholders including the Ministry of Natural Resources and Environment, and the relevant Departments of Natural Resources and Environment.

Schedule 5, para. 6

Complied with

With 12 months of the Effective Date, the Borrower shall have established a legal framework for water sharing, water rights and river basin management. The Borrower shall ensure that such legal framework will ultimately lead to agreements between relevant ministries and agencies which provide inter-reservoir operation rules optimizing the use of water resources and achieving a 1.85meter water level in the Red River at the Xuan Quan Intake during the dry season (January to February) when crucial agricultural land preparation takes place.

Schedule 5, para. 7

Complied with, late The Water Resources Law (No17/2012/QH13) was approved by National Assembly on 21 June 2012 with provision on water sharing, water rights and river basin management. Prime Minister’s Decision no. 1622/QD-TTg. dated 17/9/2015, promulgating the operation of cascade reservoirs in the Red River Delta, set the minimum water level at 2.2.m in Hanoi, which is understood to include Xuan Quan intake.

The Borrower shall ensure that the Project facilities will be constructed and operated in compliance with applicable environmental laws and regulations of Viet Nam and ADB's Environment Policy (2002). The respective EMPs for Components 1 and 2 shall be updated with detailed designs for the Project activities. The proposed mitigation measures specified in the EMPs shall be implemented and monitored to a satisfactory standard.

Schedule 5, para. 8

Complied with

The Borrower shall finance the full cost of land acquisition, compensation and resettlement arising out of the Project, including the site of the new Water Resources University (WRU) campus.

Schedule 5, para. 9

Complied with

The Borrower shall apply the policies of the Project's agreed Resettlement Framework that defines, in particular, severely affected households, who are eligible for livelihood stabilization and restoration programs, as those people being physically displaced from housing and/or having 10% or more of their productive income generating assets lost.

Schedule 5, para. 10

Complied with

All land acquisition and resettlement activities under the Project shall be implemented in accordance with the Resettlement Framework and the resettlement plans to be approved by both the Borrower and ADB. Prior to the start of land acquisition and resettlement activities for a particular Subproject and construction of WRU's new campus, the Borrower shall have (a) updated the relevant resettlement plan based on the detailed design and submitted to ADB for approval, and (b) signed a contract with a qualified social science or other suitably qualified institution acceptable to ADB to conduct independent external monitoring and evaluation of the resettlement process and impacts.


Complied with

The Borrower shall take measures to ensure that women benefit equally from the project activities as outlined in the project's Gender Strategy. These measures shall include: (i) ensuring that 50% of the dormitory space in the WRU is allocated to women; (ii) promoting training on gender awareness in participatory irrigation management for all government stakeholders in the Project; and (iii) supporting


Partially complied with The project complied with the covenant’s items (i) and (ii) and partially complied with item (iii) as 11.7% was achieved.

36 Appendix 9

Covenant



measures within Component 3 to increase the representation of women to 50% of active members of water user associations, and promote women taking on leadership roles in water user associations. The Borrower, through MARD, shall ensure that the Department of Agriculture and Rural Development in the Project provinces actively continue to promote community participation, equally targeting women and men, in selection, preparation, implementation, and performance monitoring of Subprojects. Bidding documents financed by the Project shall include provisions to ensure contractors’ preferential hiring of local labor, to guarantee equal opportunities for women with the principle of equal pay for work of equal value, and to prevent employment of child labor.


Complied with

Within two (2) months of the Effective Date, the Borrower, though MARD, shall create a Project website, accessible by the general public, to disclose information about various matters concerning the Project, including general project information, procurement, project progress, and contact details in the English and Vietnamese languages. The website shall also provide a link to ADB's Integrity Unit (http://www.adb.org/Integrity/complaint.asp) for reporting to ADB any grievances or allegations of corrupt practices arising out of the Project and Project activities. With regards to procurement, the website shall include information on the list of participating bidders, name of the winning bidder, basic details on bidding procedures adopted, amount of contract awarded, and the list of goods, works and consulting services procured.


Complied with The project website was created in Vietnamese and English.

Within 12 months of the Effective Date, the Borrower, through CPMU, shall establish and computerized management information system suited to the financial management and reporting needs of the Project, and each of PMUs shall prepare Project progress reports every three months.


Complied with Reports using the computerized aligned monitoring tool were submitted quarterly. The reports included information on project data, implementation status, financial management, and status of achievement of outcome and output. There were also quarterly reports by PMUs, and other ad-hoc reports at stakeholders’ request.

The Borrower shall (i) maintain, or cause to be maintained, separate accounts for the Project; (ii) have such accounts and related financial statements audited annually, in accordance with appropriate auditing standards consistently applied, by independent auditors whose qualifications, experience and terms of reference are acceptable to ADB; (iii) furnish to ADB, as soon as available but in any event not later than 6 months after the end of each related fiscal year, certified copies of such audited accounts and financial statements and the report of the auditors relating thereto (including the auditors' opinion on the use of the Loan proceeds and compliance with the financial covenants of this Loan Agreement as well as on the use of the procedures for imprest account/statement of expenditures), all in the English language; and (iv) furnish to ADB such other information concerning such accounts and financial statements and the audit thereof as ADB shall from time to time reasonably request.

Article IV, Section 4.02(a)

Complied with A separate account was maintained for the project; a qualified independent auditor was engaged and provided auditing services; audited accounts and financial statements were submitted to ADB in a timely fashion with auditor’s unqualified opinion on the use of loan proceeds, for the intended purpose.

Appendix 9 37

Covenant



The Borrower shall enable ADB, upon ADB's request, to discuss the Borrower's financial statements for the Project and its financial affairs related to the Project from time to time with the auditors appointed by the Borrower pursuant to Section 4.02(a) hereabove, and shall authorize and require any representative of such auditors to participate in any such discussions requested by ADB, provided that any such discussion shall be conducted only in the presence of an authorized officer of the Borrower unless the Borrower shall otherwise agree.

Article IV, Section 4.02(b)

Complied with

The Borrower shall enable ADB's representatives to inspect the Project, the Goods and Works financed out of the proceeds of the Loan, and any relevant records and documents.

Article IV, Section 4.03

Complied with

ADB = Asian Development Bank, BHH = Bac Hung Hai, CPMU = Central Project Management Unit, EMP = environmental management plan, IDMC = irrigation and drainage management company, MARD = Ministry of Agriculture and Rural Development, PCR = Project Completion Report, PIU = project implementation unit, PPMU = provincial project management unit, WRU = Water Resource University, WUG = water user group/association

38 Appendix 10

ECONOMIC REEVALUATION

A. Methodology and Assumptions 1. This economic reevaluation was conducted for the Bac Hung Hai (BHH) system at completion to compare the with- and without-project scenarios, using the same methodologies and major assumptions at appraisal and following the Asian Development Bank (ADB) Guidelines for the Economic Analysis of Projects (2017, as amended from time to time).1 2. The key economic benefits at both appraisal and completion included (i) increased yield of crops and aquaculture attributable to improved irrigation water availability in the BHH system; and (ii) reduction of flood damage in project areas (for agricultural, residential, new urban, and industrial land). No economic analysis was undertaken for the new Water Resources University (WRU) campus, though there are considerable unquantifiable benefits due to improved educational facilities for water sector professionals and technicians, enhanced international cooperation, and stronger water sector research and development programs at the WRU.2 3. Regarding the increased yield of crops and aquaculture, the mission collected data on the cultivated area, yield, and production of crops and aquaculture at the district level and converted into BHH sub-area cropping patterns and yields, using area-based conversion rates. Actual yield increases were used for past years (up to 2018), and projections were used from 2018 onward because project cashflows started in 2010 and are estimated to end in 2034. The projected increases of yields were forecasted based on trends during 2010–2018 in the Red River Delta and on potential new variety applications and increased cropping intensities enabled by better and more timely water supply. 4. The analyses uses a world price numeraire where economic prices for traded crop inputs and outputs have been based on commodity price data, following ADB guidelines. Benefits and costs were estimated in financial values and then converted to economic values. Labor costs were shadow-priced at 0.85 of the wage rates, while other inputs were adjusted by the standard conversion factor of 0.90 as applicable to Viet Nam. Data on the cultivated area, yield, and production of crops and aquaculture in 2008 were collected at appraisal and converted into BHH sub-area cropping patterns and yields, using area-based conversion rates. Agricultural land areas for 2018 were taken from the borrower’s project completion report and updated in August 2018. 5. The with-project cropping patterns and intensities were identified at the sub-area level based on the agricultural development orientation of the project provinces. For the without-project case, it was assumed that agricultural production and cultivated areas would continue developing similarly as in the with-project case. However, due to unreliable irrigation supply and expected inundation, the forecasted crop yields were lower than in the with-project case. The with-project and without-project cropping patterns and production were calculated along with the potential net incremental benefits for each sub-area and for the entire BHH system. 6. Regarding reduction in flood damages, the evaluation listed damages according to their annual frequencies and magnitude in each subarea. Based on the value of flood damage in 2001–

1 ADB. 2017. Guidelines for the Economic Analysis of Projects. Manila. 2 The World Bank. 2018. Policy Research Working Paper: Return to Investment in Education. Washington, DC.

http://documents.worldbank.org/curated/en/442521523465644318/pdf/WPS8402.pdf. In terms of social returns, these are higher than any plausible social discount rate though lower than private, across all income groups. The social returns to higher education are particularly high.

Appendix 10 39

2015 in the three project provinces (Hung Yen, Hai Duong, and Bac Ninh), average flood damage was reduced by $2.78 million per annum (Table A10.1).

Table A10.1: Annual Flood Control Benefits

Sub-areas (D million) ($ million)

Gia Thuan 16,817 0.764

Chau Giang 13,690 0.622

Bac Kim Son 2,546 0.116

Gia Loc – Tu Ky 2,546 0.116

Dong Nam Cuu An 1,322 0.060

Tay Nam Cuu An 24,193 1.100

Total 61,114 2.778 Source: Consultant’s estimates.

7. Unquantified benefits. Indirect benefits (such as improving backward linkage effects and improving income and employment effects in the agroindustry sector and non-farm sector of the rural economy) and unquantified benefits (such as improved environment, increased water resource management productivity) were omitted for both the economic analysis at appraisal, and the economic reevaluation at project completion. 8. The economic costs of the subprojects consist of incremental capital costs for drainage and irrigation pumping stations as well as operation and maintenance (O&M) costs. The financial capital costs include the costs of pumping stations, land acquisition and resettlement, and other project elements such as surveys, designs, supervision, and environmental and subproject management. The financial capital costs used for the reevaluation were expenditures and expressed in the prices of the year when they actually incurred. Costs and benefits after project completion were expressed in constant 2018 prices, excluding inflation. 9. Other specific assumptions used for the economic reevaluation were:

(i) The project life was assumed to be 25 years. (ii) The Viet Nam dong (D) was the unit of account, with a prevailing exchange rate of

D22,594 = 1 USD at project completion. (iii) Transfer payments such as taxes, duties, and subsidies were excluded from the

valuation of economic costs and benefits. (iv) The economic opportunity cost of capital was 12% per year.

B. Reevaluated Economic Internal Rates of Return at Project Completion 10. The economic internal rate of return (EIRR) recomputed to reexamine the economic viability of the project at completion is 15.74%. This EIRR is higher than the benchmark of 12%, indicating the project investment was economically viable at project completion, but lower than that calculated at appraisal (22.6%). The difference resulted principally from changes in capital costs and the lower than expected prices of some agricultural products (Table A10.2).

40 Appendix 10

Table A10.2. Summary of Cost and Benefit Flows ($ million)

Year

Economic Costs

Incremental O&M

Economic Benefits

Net Benefits

2010 0.396 0.000 0.000 (0.40)

2011 1.162 0.000 0.000 (1.16)

2012 5.185 0.000 0.000 (5.19)

2013 10.259 0.000 1.933 (8.33)

2014 18.638 0.167 4.556 (14.25)

2015 22.494 0.167 8.098 (14.56)

2016 11.039 1.548 9.400 (3.19)

2017 3.019 1.548 10.702 6.14

2018 3.141 1.548 12.005 7.32

2019 0.000 1.548 13.307 11.76

2020 0.000 1.548 14.609 13.06

2021 0.000 1.548 14.609 13.06

2022 0.000 1.548 14.609 13.06

2023 0.000 1.548 14.609 13.06

2024 0.000 1.548 14.609 13.06

2025 0.000 1.548 14.609 13.06

2026 0.000 1.548 14.609 13.06

2027 0.000 1.548 14.609 13.06

2028 0.000 1.548 14.609 13.06

2029 0.000 1.548 14.609 13.06

2030 0.000 1.548 14.609 13.06

2031 0.000 1.548 14.609 13.06

2032 0.000 1.548 14.609 13.06

2033 0.000 1.548 14.609 13.06

2034 16.2 1.548 14.609 (3.16)

EIRR = 15.74%

() = negative, EIRR = economic internal rate of return, O&M = operations and maintenance. Source: Consultant’s estimates.

11. The sensitivity analysis tested the robustness of the reevaluated EIRR using three scenarios: (i) a 10% decline in benefits, (ii) a 10% increase in O&M costs, and (iii) pump replacement after 15 years. The project would remain economically viable under these scenarios (Table A10.3).

Table A10.3. Sensitivity Analysis

Case EIRR

0. Base case 15.74%

1. Benefits decrease 10% 12.38%

2. O&M increases 10% 14.38%

3. Pumps replaced after 15 years 14.53% EIRR = economic internal rate of return, O&M = operations and maintenance. Source: Consultant’s estimates.