CPR Volume I Main Report final - World Bank...Task Team Leader: Rakesh Nangia (Portfolio and...

VIETNAM COUNTRY PROGRAM REVIEW

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Country Program Review

2005

Volume I Main Report

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VIETNAM COUNTRY PROGRAM REVIEW 2

ABBREVIATIONS AND ACRONYMS AAA Analytical and Advisory Activities M&E Monitoring and Evaluation ADB Asian Development Bank MARD Ministry of Agriculture and Rural Development AFD Agence Française de Développement MOF Ministry of Finance BIDV Bank for Investment and Development of Vietnam MPI Ministry of Planning and Investment CAS Country Assistance Strategy ODA Official Development Assistance CG Consultative Group OED Operations Evaluation Department CPO Central Project Office PAD Project Appraisal Document CPR Country Program Review PCLIP Poor Communes Infrastructure & Livelihoods

Proj. CPRGS Comprehensive Poverty Reduction and Growth Strategy PCN Project Concept Notes CPPR Country Portfolio Performance Review PDO Project Development Objectives DO Development Objectives PPC Provincial People’s Committee EAP East Asia and Pacific Region PPMU Provincial Project Management Unit EG Energy PMO Project Management Office FAO Food and Agriculture Organization of the United Nations PMU Project Management Unit FM Financial Management PREM Poverty Reduction and Economic Management

Sector FSQL Fundamental School Quality Level PRSC Poverty Reduction Support Credit GA Grant Agreement PSR Project Status Report GDO Grant Development Objective RD Rural Development GEF Global Environment Facility QAG Quality Assurance Group GRM Grant Report and Monitoring SBV State Bank of Vietnam GOV Government of Vietnam SIDA Swedish International Development Agency HCMC Ho Chi Minh City SIL Specific Investment Loan HD Human Development SEDP Socio-Economic Development Plan ICM Implementation Completion Memorandum TA Technical Assistance ICR Implementation Completion Report TF Trust Fund ICT Information and Communication Technology TR Transport IDA International Development Assistance VBARD Vietnam Bank for Agriculture and Rural Devt IDF Institutional Development Fund VDG Vietnam Development Goals IMTF Inter-ministerial Task Force WB World Bank ISR Implementation Status Report IP Implementation Progress JBIC Japan Bank for International Cooperation JSDF Japan Social Development Fund KFW Kreditanstalt für Wiederaufbau KPI Key Performance Indicator

Task Team Leader: Rakesh Nangia (Portfolio and Operations Manager, World Bank, Hanoi)

Task Team: Lada Strelkova (Sr. Operations Officer, OPCS), Manuel Penalver (Consultant), Nga Thi Quynh Dang (Sr. Program Assistant, World Bank Hanoi), Phuong Anh Vu Tran (Program Assistant, World Bank, Hanoi), Son Duy Nguyen (Operations Officer, World Bank, Hanoi), Victoria Gyllerup (Operations Officer, World Bank, Hanoi) and Yoshine Uchimura (Consultant).

The Country Program Review was prepared under the overall guidance of Klaus Rohland, Country Director for Vietnam. The report is prepared in consultation with members of the World Bank country team and representatives of Government offices, implementing agencies, and other donors. The report also benefits from inputs and guidance from Christian Rey, Manager Quality and Trust Funds and Susan Stout, Manager Results Secretariat.


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Box 1. Vietnam Country Program Review (CPR) 2005

Background As part of the World Bank’s enhanced focus on results, the annual portfolio review framework is being adapted to systematically assess quality performance and alignment of all Bank instruments to the results framework in the Country Assistance Strategy. The Vietnam Country Program Review (CPR) is one of the first such program reviews undertaken in the Bank. Objectives The objectives of the Vietnam CPR are to assess the: • Strategic focus, alignment and development effectiveness of the ongoing and emerging program; • Focus on results at national, sector and project levels; and • Overall program sustainability and institutional effectiveness. The findings of the CPR will serve as a building block in the preparation of the World Bank Country Assistance Strategy for Vietnam (2006-2010). Methodology The CPR methodology included: • Desk review of available documentation on country-level strategies, sector studies and individual

project design and implementation progress. • Consultations with Bank HQ and Vietnam-based staff, Government officials, PMUs and donor

representatives. • Panel assessment of individual projects in the program with respect to alignment, results framework

and project implementation. The intent of the Panel assessments was not an in-depth evaluation of each operation, but an effort to gain an overall sense of the portfolio as a whole and to identify priority actions.

Scope The CPR covers IDA investment credits and trust-funded operations under implementation, as well as proposed new operations in an advanced stage of preparation. Only limited references are made to PRSCs and AAA activities. Structure The CPR is organized into two volumes: Volume I - Main report; Volume II - Sector reports. The Main Report provides a broad overview of the program. It provides information on the overall portfolio and discusses issues related to alignment of the portfolio with the CAS priorities, strengths and weaknesses in implementing the results agenda, as well as the portfolio performance and suggestions for scaling-up and sustaining high levels of resource transfer while strengthening portfolio management. The Sector Reports drill-down from the main report and provide details for each sector. These reports are envisaged as stand-alone pieces, and thus there is some duplication across sectors. Looking Forward. At the end of each chapter in the main report and in the sector notes, the "Looking Forward" section provides steps to strengthen alignment, results management and portfolio performance. These recommendations complement the ones of previous CPPRs and JPPRs. All the data in the CPR is as of December 2005.


TABLE OF CONTENTS

ABBREVIATIONS AND ACRONYMS.......................................................................................................2

TABLE OF CONTENTS............................................................................................................................4

EXECUTIVE SUMMARY ..........................................................................................................................7

Background ................................................................................................................................7 Structure of the Report: ..............................................................................................................7 Key Findings:..............................................................................................................................8

PORTFOLIO AT A GLANCE ..................................................................................................................13

1. IS THE PROGRAM ALIGNED TO CAS PRIORITIES? ......................................................................15

1.1 Overall Assessment of Alignment.......................................................................................17 1.2 Alignment to CPRGS Objectives ........................................................................................17 1.3 Alignment to CAS Sub-Themes..........................................................................................18 1.4 Alignment to Sector Priorities .............................................................................................18 1.5 How Does the CAS Guide Portfolio Strategy?....................................................................20 1.6 Lessons for the formulation of the Future CAS...................................................................23 Example of a possible sector Results Framework (Transport) .................................................24

2. PROGRAM ALIGNMENT TO OTHER CAS PRIORITIES ..................................................................25

2.1 Partnerships .......................................................................................................................25 2.2 Harmonization ....................................................................................................................27 2.3 Simplification ......................................................................................................................27

3. ARE WE MANAGING FOR RESULTS? .............................................................................................28

3.1 Project Development Objectives.........................................................................................29 3.2 Key Performance Indicators (KPIs) ....................................................................................29 3.3 Monitoring and Evaluation (M&E) .......................................................................................30 3.4 Synergies and Simplifications.............................................................................................31 3.5 Looking ahead – How to strengthen results management?................................................32

4. PORTFOLIO PERFORMANCE ..........................................................................................................34

4.1 Rapidly Growing Portfolio ...................................................................................................36 4.2 Projects are Successful But Slow to Implement .................................................................37 4.3 Disbursements....................................................................................................................38 4.4 Sectoral Disbursement performance ..................................................................................39 4.5 Start-Up Delays ..................................................................................................................40 4.6 Portfolio Risk ......................................................................................................................41 4.7 Project Closure ...................................................................................................................42 4.8 Trust Fund Portfolio Performance.......................................................................................44


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5. IMPLEMENTATION MECHANISM .....................................................................................................47

6. SCALING UP AND SUSTAINING HIGH LEVELS OF RESOURCE TRANSFER...............................50

6.1 Portfolio Projections............................................................................................................50 6.2 Balancing the Portfolio........................................................................................................51

7. STRENGTHENING PORTFOLIO MANAGEMENT ............................................................................53

7.1 Project Closure ...................................................................................................................53 7.2 Quality at Entry ...................................................................................................................53 7.3 Using Country Systems ......................................................................................................53 7.4 Managing Fiduciary Risk ....................................................................................................53 7.5 Watch the Watch List..........................................................................................................53 7.6 Improve Realism Rating .....................................................................................................53

Annex 1 Country Program Review ........................................................................................................54

Annex 2 Objectives outlined in the CAS................................................................................................56

Annex 3 Alignment of different types of portfolio interventions..............................................................61

Annex 4 CPR panel assessment of project level alignment ..................................................................66

Annex 5 Draft sectoral results framework..............................................................................................71

Annex 6 Results achieved by the portfolio to date ................................................................................78

Annex 7 CPR Assessment of Project Results frameworks ...................................................................83

Annex 8 CPR Assessment of M&E systems .........................................................................................85

Annex 9 Pipeline FY06-FY10 ................................................................................................................87

Annex 10 Project Watch List...................................................................................................................89

Annex 11 Realism of Ratings..................................................................................................................91


Tables Table 1: The World Bank Results Framework in Vietnam .............................................................................................. 15 Table 2: Examples of Consistent Strategic Objectives in the CAS ................................................................................. 15 Table 3: Examples of Areas of Inconsistency in the Strategic Objectives in the CAS .................................................... 16 Table 4: CPR Assessment of Alignment of Bank Credits ............................................................................................... 17 Table 5: TFs and CAS Sub-Themes............................................................................................................................... 21 Table 6: Co-financing TFs by Sector ............................................................................................................................. 25 Table 7: Largest TF Donors ........................................................................................................................................... 26 Table 8: CPR Ratings of Results Frameworks ............................................................................................................... 29 Table 9: Project M&E Frameworks ................................................................................................................................ 30 Table 10: IDA Credit Portfolio FY 94-05 ........................................................................................................................ 36 Table 11: OED Ratings of Closed Projects .................................................................................................................... 37 Table 12: IDA Disbursement Performance FY 00-05 ................................................................................................... 38 Table 13: Disbursement Performance by Sector ............................................................................................................ 39 Table 14: Start-Up Delays............................................................................................................................................... 40 Table 15: Assessment of IDA Portfolio ........................................................................................................................... 41 Table 16: Projects Closing in FY06 and FY07 ............................................................................................................... 42 Table 17: Success Factors for Grants ............................................................................................................................ 46 Table 18: Number of PMUs under current WB projects................................................................................................. 47 Table 19: Characteristics of Project Management Structures......................................................................................... 49

Figures Figure 1: The Lending Portfolio during Current CAS Period .......................................................................................... 14 Figure 2: Where IDA Resources are Utilized .................................................................................................................. 21 Figure 3: Where Trust Fund Resources are Utilized* ................................................................................................... 21 Figure 4: TF Co-Financing Commitments...................................................................................................................... 26 Figure 5: Average Credit Size ........................................................................................................................................ 27 Figure 6: Quality of the Project Results Frameworks...................................................................................................... 28 Figure 7: TF Portfolio ..................................................................................................................................................... 44 Figure 8: TF Portfolio Composition ................................................................................................................................ 44 Figure 9: TF Portfolio by Sector ..................................................................................................................................... 44 Figure 10: TF Start-up Delays........................................................................................................................................ 45 Figure 11 TF Disbursement Ratio.................................................................................................................................. 45 Figure 12: TF Disbursement Performance...................................................................................................................... 45 Figure 13 Ratings of Grants........................................................................................................................................... 46 Figure 14 Disbursement Scenarios................................................................................................................................ 50


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EXECUTIVE SUMMARY

BACKGROUND

As part of the World Bank’s enhanced focus on results, the annual portfolio review framework is being adapted to systematically assess quality performance and alignment of all Bank instruments to the results framework in the Country Assistance Strategy. The Vietnam Country Program Review (CPR) is one of the first such program reviews undertaken in the Bank. The findings of the CPR will serve as a building block in the preparation of the World Bank Country Assistance Strategy for Vietnam (2006-2010).

The objectives of the Vietnam CPR are to assess the: • Strategic focus, alignment and development

effectiveness of the ongoing and emerging program;

• Focus on results at national, sector and project levels; and

• Overall program sustainability and institutional effectiveness.

STRUCTURE OF THE REPORT

The CPR is organized into two volumes: (i) the main report (ii) sector reports

The Main Report provides a broad overview of the program. It provides information on the overall portfolio and discusses issues related to alignment of the portfolio with the CAS priorities, strengths and weaknesses in implementing the results agenda, as well as the portfolio performance and suggestions for scaling-up and sustaining high levels of resource transfer while strengthening portfolio management. The main report contains key issues while the annexes to the main report provide the details supporting the findings.

The Sector Reports drill-down from the main report and provide details for each sector. These reports are envisaged as stand-alone pieces, and thus there is some duplication across sectors.

Looking Forward. At the end of each chapter in the main report and in the sector notes, the "Looking Forward" section provides steps to strengthen alignment, results management and portfolio performance. These suggestions are more modest and easier to implement than previous years’ more ambitious action plans. These recommendations complement the ones of previous CPPRs and JPPRs.


KEY FINDINGS

Alignment to CAS Priorities:

CAS Priorities. The Bank strategy in Vietnam is broad and contains at least five sets of multiple objectives. While these different sets of objectives are consistent in many areas, in some respects they do not provide a fully consistent framework of priorities, which complicates an assessment of alignment of the portfolio.

� Strong Alignment with CPRGS Objectives. The CPRGS policy matrix is the most comprehensive set of objectives presented in the CAS. One advantage of these broad objectives is the ease with which most Bank operations align. More than 90 percent of the projects were rated “satisfactory” or “highly satisfactory” in terms of alignment with the CPRGS objectives.

� Good Alignment with CAS Sub-themes, but there are Gaps. Projects are reasonably well-aligned to the 16 CAS sub-themes as well. More than 60 percent of the projects were rated satisfactory or highly satisfactory in the CPR assessment. For projects approved within the current CAS framework, almost 40 percent of the projects were rated highly satisfactory. There are however a number of interventions in the current portfolio that are difficult to map to any CAS sub-theme.

� Sector Priorities. In addition to the cross-sectoral themes, the CAS provides sectoral priorities. Alignment in this regard is good, but these priorities are not as comprehensive so some gaps exist.

How Does the CAS Guide Portfolio Strategy? With the exception of six projects (30%), all

projects approved were included in the original CAS program. A mapping of the portfolio against the CAS sub-themes, shows a concentration in a few themes, with the largest volume of IDA resources (22 percent) committed to the sub-theme “Narrowing the development gap”. Based on PCN discussion minutes, it is noted that the issue of alignment to the CAS or strategic priority is rarely discussed and projects find justification in the overall CAS themes of growth, equity and governance, rather than in the more narrowly defined sub-themes.

Need for Prioritization. Projects often enter the pipeline and apply for preparation funding in early stages of formulation, sometimes prior to a formal discussion of draft project objectives. In the past, the number of project ideas always fell short of the IDA resource envelope for Vietnam. There were no “strategic choices” to be made. However, now the reverse is true. This presents an opportunity to make choices ensuring that the overall Bank program contributes strategically to the Socio-Economic Development Plan (SEDP) objectives. The CPR proposes a set of possible criteria to facilitate the prioritization process.

Lessons for the Next CAS. The key lessons drawn from the analysis of the alignment of the portfolio to the CAS are: (i) the need to present a consistent set of objectives, defined at the same strategic level; (ii) ensure that the existing stock of projects, which will yield the bulk of the results, is appropriately reflected within the framework, along with the pipeline projects; (iii) create stronger linkages between cross-sectoral themes, sector objectives and projects by developing sectoral results frameworks; and (iv) integrate Trust Funds into the planning process.


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Results:

Are We Managing for Results? There is ample evidence that the portfolio is achieving good results in many different areas. However, a convincing story of achievements at a portfolio level is difficult to articulate. This is largely because projects are reporting on results in a fragmented manner. Project results frameworks continue to be weak, are often inconsistent across projects in the same sector and lack a focus on outcomes.

Overall Quality of the Project Results Framework. The quality of the results framework is assessed against three pillars – Project Development Objectives (PDO), Key Performance Indicators (KPIs), and Monitoring and Evaluation (including baselines and targets). The quality of the results framework in the portfolio varies from excellent in several cases to weak and in need of strengthening.

Quality of PDOs and GDOs. The PDOs of around 40 percent of the ongoing projects in the portfolio are rated satisfactory. Many PDOs combine a focus on a higher-level goal such as economic growth with an explanation of the outputs that will be produced by the project. Often the outcome level i.e. the clearly targeted change in the key beneficiary is missing. Around 35 percent of the projects were rated MS indicating some issues with the clarity and focus on outcomes of the PDOs. Similarly, it is still common that Grant Development Objectives (GDOs) are too broadly defined and at a high level such as “to enhance the capacity of a Ministry”. Also, many GDO statements focus on “what to do” rather than “what to achieve”. This consequently causes difficulties for TTLs in monitoring and evaluating achievements. Greater attention and modesty in ambition needs to be paid to defining GDOs that clearly specify the expected change in the target beneficiary.

PDOs for Pipeline Projects Need Strengthening. While it may not be practical to change the PDOs for on-going projects, it would be important to ensure that all pipeline projects have well-defined PDOs. 60 percent of pipeline projects are rated either MU or U. Although, this

may well be because it is “work in progress”, there is a clear need to strengthen the PDOs for these projects early in the process.

Quality of Key Performance Indicators. About half the portfolio is rated satisfactory or highly satisfactory on KPIs when assessed against the SMART criteria. No correlation was found between the age of the project and the quality of the KPIs i.e. recently approved projects do not necessarily have stronger KPIs. For Operational Grants such as JSDF and GEF, the KPIs are generally good and presents an adequate results chain, whereas KPIs for technical assistance (TA) grants, especially IDF and ASEM, focus on outputs for the purpose of implementation monitoring only.

Gaps in Quality of KPIs. There are quality gaps in many project results frameworks. Some projects have KPIs that are descriptive, making it hard to determine if and when the objective is achieved. In many cases projects have multiple objectives, and the KPIs do not necessarily measure all aspects of the PDO. Some projects measure mainly progress on outputs, while others set out to monitor higher-level outcomes that are difficult to attribute to the project.

Quality of Monitoring and Evaluation. The quality and use of project M&E systems vary. Less than half the portfolio has a complete set of baselines and targets. Even when good M&E systems are established, these are not necessarily used to assess progress or for decision making during project implementation. Few projects refer to progress on KPIs when rating achievement on the Development Outcomes. Finally, the transition to the new reporting format (ISR) has weakened the results frameworks for as many as 12 projects. Simplification, where possible, of the KPIs is good, but there are many projects where progress measurements have been reduced in the ISR to only output indicators and where important parts of the overall project objectives are not covered. Although accountability and reputational risks may be more critical for grants, grant reporting often focus only on progress on


outputs and compliance with workplans. Most Grant Report and Monitoring (GRMs) contain only limited information on the results being achieved.

Synergies and Simplification. More than 300 indicators are used to monitor progress across Bank-financed projects. Although the portfolio contributes toward many similar objectives, when the indicators are aggregated at the country level, they do not support a consistent story line of the results being achieved. By focusing on sector and/or thematic outcomes, it may be possible to cluster projects and share outcome level KPIs among projects within the same sector or across sectors. Some examples of synergies, (with details in the individual sectoral reports) are presented in the main report.

Strengthening Results Management. Some suggestions to strengthen the results framework include: (i) Strengthen individual project results framework (details are in the sector reports). This

includes clarifying PDOs for all pipeline projects, ensuring that all parts of the PDO are monitored by SMART KPIs, that all projects have baselines and targets for all indicators, and that future ISRs are strengthened in line with the recommendations; (ii) Simplify and identify common KPIs by focusing project monitoring on fewer, common indicators directly related to fulfilling the sector objectives; (iii) Align the top down monitoring of the overall country performance and the bottom-up impact of the Bank operations. This includes establishing sectoral results frameworks; (iv) Utilize Government systems as much as possible by aligning Bank indicators with the Government’s monitoring systems. This can be at the national (ministerial level) or at other levels of government, e.g. city/province or corporate/utility levels; and (v) Strengthen the design of TFs so as to pay greater attention to defining achievable GDOs, effective KPIs, and adequate monitoring systems.

Portfolio Performance:

The Portfolio is Growing Quickly. The last two fiscal years have witnessed the highest ever levels of lending to Vietnam. In all, 13 projects with commitments of US$ 1.4 billion were approved. In FY05 alone, nine projects were approved, with another five projects for almost US$ 500 million approved during the first six months of FY06. The total stock has increased each year since FY94 and currently stands at 37 projects with net commitments of US$ 3.8 billion. The TF portfolio is also growing rapidly, with commitments and disbursement for recipient-executed grants in FY05 (US$138 million and US$124 million, respectively) nearly double that of FY04. 37 grants were signed in FY05, compared to 17 in FY04.

All Closed Projects have Excellent Results. For all 20 projects, completed over the last decade, the last Implementation/Project Status Report (ISR/PSR) rating is satisfactory on Development Outcomes (DO). Of these 20 completed projects, the Operations Evaluation Department (OED) has evaluated 17. All 17

evaluations show that these projects achieved satisfactory outcomes and are likely to be sustainable. ICMs rating of all closed grants over the last few years are also satisfactory. One of these was reviewed by QAG and rated satisfactory.

Disbursements Need to Increase Further. The last years have seen remarkable improvements in disbursements. Absolute disbursements have increased at a rapid pace, rising more than 100 percent over the last four years. The disbursement ratio has also continued to increase, albeit not as quickly since the rate of new commitment growth continues to outpace disbursement. At the end of FY05, with a disbursement ratio of 13.2 percent, Vietnam’s ratio is still seriously behind the East Asia and Pacific (EAP) regional average of 19.9 percent and the Bank-wide average of 23.4 percent. At the current rate of growth in undisbursed balances, FY07 disbursements will have to increase by 25 percent over FY05 to stay steady at the current disbursement rate of 13.2 percent.


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In order to reach the EAP average, Vietnam would have to increase disbursements to US$ 575 million or by more than 80 percent. Disbursement performance of the recipient-executed grant portfolio has also improved from 12.9 percent in FY04 to 16.5 percent in FY05 (excluding quick-disbursing grants like PRSC grants). However this ratio is still lower than the regional average (18.3 percent).

Projects are Slow to Start and Take Longer to Close. On average credit agreements take 4.7 months to sign, and more than 8.7 months to become effective. Not surprisingly, there is a direct correlation between the number of effectiveness conditions and effectiveness delays. The readiness filter for Vietnam has been developed and refined over the last 2-3 years, but remains under-utilized. Because of the slow start as well as delays in implementation, projects invariably extend. Over the last 10 years, only one investment credit closed without any extensions. While the average time for completion is 6.9 years, the longest time taken by any project to complete was almost 10 years. The portfolio now has ten projects over six years and close to a third of the portfolio is more than five years. In FY05, the average activation period for grants was 6.2 months, which partly explains why all grants require extensions on average by 10.4 months.

Increasing Undisbursed Balances. IDA allocations to Vietnam in the next CAS period are about US$ 750-800 million. At the current pace of disbursements and proposed lending of US$650-700 million in investment lending, undisbursed balances could rise to US$ 3.3 billion by the end of FY07 and more than US$ 4 billion by the end of the CAS cycle. Undisbursed balance for recipient-executed TF portfolio is also on the rise to US$ 157 million in FY05 from US$ 146 million in FY04.

Prioritizing Bank Initiatives. The rich pipeline will both allow and require selectivity in the lending program. It would be prudent to prioritize future initiatives based on performance and not on a first-come first-served basis, as in the past. Six general principles could be considered to guide priorities:

� Contribution to the CAS and SEDP;

� Past implementation experience in the sector;

� The Bank’s comparative advantage in undertaking the intervention;

� Complementarity with other donors and possibility to leverage other investment sources;

� Use of country systems; � Historical preparation costs in the

sector.

Adopting these principles would not only help achieve the CAS/SEDP objectives, but may help address the problem of an increasing undisbursed balance in the long-term.

Balance Investment and Adjustment Lending. While the pace of ODA-financed projects lag, implementation of non-ODA financed projects is rapid. Although the Bank has not done an independent assessment of the results, anecdotal evidence suggests that the results are satisfactory. Given the structural implementation issues facing individual lending operations, it may be useful to consider increasing the level of resources transferred as budget support. In addition to the PRSC, sectoral policy lending and sub-national lending could be considered. This would help improve the balance between investment and adjustment lending and continue the much needed resource transfer without leading to the undesirable outcome of much higher undisbursed balances.

Strengthening Portfolio Management. Several measures agreed by the Government and the Five Banks (ADB, AFD, JBIC, KfW and WB) in the Joint Portfolio Performance Review (JPPR) Action Plan are under implementation, albeit slowly. As a complement to these actions, some of the other steps that could be undertaken to strengthen the Bank portfolio include: (i) Instill closing date discipline by closing 10 of the 14 projects scheduled for closure over the next 15 months; (ii) Simplify the readiness filter and focus only on key readiness actions. This should then be applied to all new projects and ensure that effectives conditions are kept to a minimum; (iii) Strengthen the management of fiduciary risk by expediting implementation of the actions noted in the fiduciary approach paper; (iv) Strengthen monitoring of the project watch list; and (v)


Improve the realism of individual project ratings as suggested in the project-level assessments.


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Fig. 3 - Vietnam: Recipient-executed TF Portfolio

FY Disbursement Opening Balance Portfolio Amount

PORTFOLIO AT A GLANCE The Portfolio Since FY94:

• Total IDA Commitments of US$5.95 billion • Total IDA Disbursements of US$ 3.1 billion • 57 approved projects (including 6 quick disbursing) • 155 signed grants (including 19 quick disbursing)

Rapidly Growing, but Maturing Portfolio (as of Dec 2006): • 37 active credits (US$ 3.87 billion) • 6 projects awaiting effectiveness (US$ 517 million) • 48% of projects under three years old • Average project age of 3.7 years • Median project age of 3.5 • 6 projects older than 7 years; 10 older than 6 years • 74 active recipient-executed grants in FY05 (US$ 318 m) • 14 recipient-executed grants closed in FY05 (US$ 96 m)

Excellent Results:

• 100% of Portfolio currently rated satisfactory on DO and 95% on IP

• OED – All 17 evaluated projects are satisfactory on outcomes, likely to be sustainable, good institutional impact

• Grant ICM: 100% rated satisfactory or above

Slow Start-up, Long Extensions: • Average effectiveness lag/delays: 8.7 months • Average approval-signing delays: 4.7 months • Percentage of projects extended: 91% • Average grant start-up: 6.2 months • Unrealistic Grant Planning: 100% grants extended • Average period of grant extension: 10.4 months • Average number of extension for each grant: 1.7

Slow Disbursements: • Lifetime portfolio disbursements US$3.1 billion or

52% of total commitments • Active portfolio disbursements US$1.2 billion or

32% of active commitments • Only 30% of FY06 target achieved by December 2005

Disbursement Ratio below Regional Average: IDA Projects Grants (excl. PRSC grants)

FY01 11.9% 158 MUS$ 13.6% 10 MUS$ FY02 14.5% 230 MUS$ 13.7% 15 MUS$ FY03 14.3% 298 MUS$ 15.1% 18 MUS$ FY04 15.3% 327 MUS$ 12.9% 21 MUS$ FY05 13.2% 305 MUS$ 16.5% 32 MUS$ (EAP FY05: 19.9% for projects and 18.3% for recipient-executed grants)

Growing Unused IDA and Grant Commitments:

• Undisbursed credit balance US$ 2.8 billion (74%) • Undisbursed grant balance as of end FY05: US$ 157 million (49%)

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Fig. 1 - IDA Comm itm ents & Disbursements

Fig. 2 - Investment Project Progress

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Figure 1: The Lending Portfolio during Current CAS Period

Current CAS Fiscal Year 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10

Energy

Transmission, Distribution Rural Energy System Energy, Equitn & Ren. Rural Energy II 2nd Transmission, Distribution Transport Highway Rehabilitation Inland Waterways & Port Rehab. Urban Transport Rural Transport II Mekong Transport Road Network Improvement Road Safety Urban Water Supply 3 Cities Sanitation HCMC Env. Sanitation Urban Upgrading Water Supply Development

Infra-structure

Rural Water Supply & Sanitation Irrigation Rehabilitation Forest Protection Agriculture Diversification Mekong Delta Water Resources Coastal Wetlands Comm-based Rural Infrastructure Northern Mountains Pov. Red Rural Finance II Water Resources Assistance Forest Sector Development Avian Influenza Emergency

Rural

Natural Disaster Risk Management Primary Education Population and Family Health National Health Support Higher Education Primary Teacher Dev. Blood Transfusion Centers Primary Educ. for Disad. Children HIV/AIDS

HD

TBS Education For All Bank Modernization Public Financial Management Payment System & Bank Modern. Customs Modernization

PREM

PRSC I-IV ICT ICT Development


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1. IS THE PROGRAM ALIGNED TO CAS PRIORITIES?

CAS Strategic Objectives are Broad and Many… As in many other countries, the Bank strategy in Vietnam is broad and contains multiple sets of objectives: (i) the Government strategy as expressed in the CPRGS; (ii) the overall three CAS themes divided into 16 sub-themes; (iii) specific sector priorities (listed in CAS Box 4); (iv) the Vietnam Development Goals and (v) program goals such as strengthening partnerships and harmonization. Table 1 illustrates the large number of goals and indicators which currently guide the results framework for the portfolio.

…and Not Always Consistent. These different sets of objectives are consistent in many areas such as the focus on providing infrastructure access to the rural poor, the importance of enhancing environmental sustainability and the need for improved governance. However, in some respects the different sets of CAS objectives do not provide a fully consistent framework of priorities, including on urban growth interventions, large-scale infrastructure and agricultural development. This complicates an assessment of alignment of the portfolio.

Table 1: The World Bank Results Framework in Vietnam

Number of Objectives (Sub-goals)

CPRGS Strategic Objectives 29

CAS Thematic Objectives 16

CAS Sector Priorities 13 Vietnam Development Goals and Targets 12+ 32

Project Development Objectives (PDOs) 86

Project Key Performance Indicators (KPIs) >300

Table 2 provides some examples of cases where the various objectives in the CPRGS, CAS sub-themes, CAS sector priorities and the VDGs are consistent. The table is organized around the CAS sub-themes. Similarly, Table 3 provides some examples of areas of inconsistency. See Annex 2 for a mapping of all the strategic objectives in the CAS.

Table 2: Examples of Consistent Strategic Objectives in the CAS

��CPRGS Objectives from CAS Annex (incl. CPRGS Infrastructure Chapter)

CAS Sector Priorities (CAS Box 4)

VDGs

� ��

��

��

Develop infrastructure and create opportunities for access for the poor

Improve access to services among poor communities and in rural and remote areas

Ensure pro-poor infrastructure development (VDG 11)

Strengthen the sustainability of using natural resources in rural areas � ��

�� !�"�� !�"�� !�"�� !�"�

�#�!��$�"�!%�#�!��$�"�!%�#�!��$�"�!%�#�!��$�"�!%��Strengthen environmental protection and ensure a healthy environment for the poor

Improving the sustainable management of natural resources

Ensure environmental sustainability (VDG 7)

& ��' (��& ��' (��& ��' (��& ��' (��

'�� !��)�'�� !��)�'�� !��)�'�� !��)�

��(��%��*��(��%��*��(��%��*��(��%��*�

+#$"��,��"�+#$"��,��"�+#$"��,��"�+#$"��,��"�

�� !�� !�� !�� !��

Increase budget transparency to improve the information base for decision-making and target setting

(The CAS --Box 4 -- does not contain any sector priorities for PREM)

Improve governance for poverty reduction (VDG 9)


��CPRGS Objectives from CAS Annex (incl. CPRGS Infrastructure Chapter)


VDGs

& &�+#$"��& &�+#$"��& &�+#$"��& &�+#$"��

�* ��!��!��* ��!��!��* ��!��!��* ��!��!��

��

Accelerate the reform of public administration

Table 3: Examples of Areas of Inconsistency in the Strategic Objectives in the CAS

��

��

CPRGS Objectives from CAS Annex (incl. CPRGS Infrastructure Chapter)


VDGs

��Development of large-scale infrastructure services for growth and poverty reduction

Ensure improved management and maintenance of infrastructure investments

-

� � ��

�� #��!%�� #��!%�� #��!%�� #��!%�

��*��*��*��*�

'��!�#�!#��'��!�#�!#��'��!�#�!#��'��!�#�!#��

��*��"��*��*��"��*��*��"��*��*��"��*��

Provide targeted assistance to vulnerable groups - -

��Develop agriculture and the rural economy to reduce widely poverty

Intensifying and diversifying agricultural production -

� ��

�**��!��**��!��**��!��**��!��

��*��!��*��!��*��!��*��!��

��$��+��$��+��$��+��$��+��

Develop industry and urban areas to create more jobs and to improve the living standard for the poor

Address deficiencies in basic service provision in urban areas

Enhance Environmental Sustainability (VDG 7)

Move towards completion of junior secondary education universalization and illiteracy eradication

Build a more equal and higher quality education for people

Address inequalities in education service delivery across provinces, reduce the burden on poor for financing and modernize the education network

Universalize education and improve education quality (VDG 2)

� -��.�� -��.�� -��.�� -��.��

��"��"��"��"��

��$"��*��$"��*��$"��*��$"��*�

��*�$"��*�$"��*�$"��*�$"��

!��+��!��+��!��+��!��+��Improve quality of health services; increase the equity and efficiency of the health care system, concentrate on developing basic health care and community health care

Address inequalities in health service delivery across provinces, reduce the burden on poor for financing and modernize the health network

Reduce child mortality, child malnutrition and reduce the birth rate (VDG 4)

Improve maternal health (VDG 5)

Reduce HIV/Aids infection (VDG 6)


17

1.1 OVERALL ASSESSMENT OF ALIGNMENT

The Bank Portfolio. IDA’s program in Vietnam is in the last year of the current CAS period (FY03-FY06), and preparations for the next CAS (FY07-FY10) have begun. The program includes a growing portfolio of investment projects (37 as of Jan 2006), 85 active Trust Funds and numerous AAA activities, and a PRSC (the fourth in a series that started in FY01). Since IDA restarted lending in 1993, 20 operations have closed (including four PRSCs) and several more are scheduled to close within the coming year.

With only 11 years of IDA lending but rapid growth in the country and in the IDA portfolio,

and fast evolving country needs, the current portfolio includes a mix of operations, some designed and initiated in the first years of the program, while others are more recent. More than half of the lending portfolio was approved before the current CAS.

All Projects are Well-Aligned to at Least One Set of CAS Objectives. It is not difficult for most Bank operations to fit within the numerous (broad) CAS objectives. In general, all projects and grants are well-aligned to at least one set of CAS objectives (CPRGS, CAS Sub-Themes or Sector Priorities). This is true even when project implementation spans multiple CAS periods in a rapidly changing country environment.

Table 4: CPR Assessment of Alignment of Bank Credits

CPR PANEL RATINGS OF ALIGNMENT OF CURRENT AND PIPELINE LENDING PROJECTS

MU MS S HS ALIGNMENT

% No of projects % No of

projects % No of projects % No of

projects

CPRGS OBJECTIVES 0% 0 6 % 3 42% 20 52% 25

CAS SUB-THEMES 10% 5 29% 14 23% 11 38% 18

CAS SECTOR PRIORITIES* 5% 2 34% 15 34% 15 25% 11

* Alignment of 4 projects under PREM/CITPO sectors was not assessed, since no sector priorities were established in the CAS. See also Annex 4 for a summary of the assessments.

Detailed Assessment of Various Types of Lending and TF Initiatives. Since projects often cover several components which contribute to different objectives in the CAS, alignment was also assessed on the basis of different types of interventions e.g. “strengthening the transport network”, “providing access to water supply and sanitation”, “infectious disease prevention” and “primary teacher training”. Details of this assessment are provided in the separate sector notes. (See also Annex 3 for an overview). This detailed assessment confirms the picture of strong alignment with at least one set of CAS objectives. It also further highlights

the areas of inconsistency between the different sets of objectives.

1.2 ALIGNMENT TO CPRGS OBJECTIVES

Strong Alignment with the CPRGS Objectives. The portfolio alignment with the CPRGS is the strongest, with more than 90 percent of the projects rated as satisfactory or highly satisfactory. This is a consequence of the CPRGS objectives being broad and most comprehensive.


1.3 ALIGNMENT TO CAS SUB-THEMES

Satisfactory Alignment with the CAS Sub-themes, but there are Gaps. Alignment with the CAS sub-themes is generally good, with more than 60 percent of the projects rated satisfactory or highly satisfactory. Of the 18 investment lending projects approved during the current CAS framework, alignment of almost 40 percent was assessed as highly satisfactory, with another 20 percent assessed as satisfactory. For the projects approved prior to the CAS, the alignment is similarly strong with 60 percent rated satisfactory or above.

Gaps between CAS Sub-Themes and Bank Initiatives. Since the CAS sub-themes provide a narrower focus than the CPRGS objectives, there are some Bank initiatives which are more difficult to map to CAS sub-themes. Some examples:

� Infrastructure Services. The CAS sub-themes do not focus on improving efficiency of infrastructure services such as investments in the transmission and distribution power system and the main transport network. However, this is one of the mainstays of the current and future infrastructure lending portfolio. One of the causes for this incomplete alignment is that after the initial preparation of the CPRGS, it was updated to include a chapter on large scale infrastructure, while the CAS was not. In the subsequent CAS Update, a greater focus on infrastructure is clearly noted. However, rather than adding a CAS sub-theme to directly reflect the increased focus on large-scale infrastructure, the sub-themes of “Private Sector Development” and “Promoting Open Trade” were adjusted from previously focusing on governance reforms to also include infrastructure in support.

� Agricultural Development. Despite the importance of agriculture to economic growth and poverty reduction, in the CAS sub-themes, there is no direct reference to agricultural development and diversification. There are however several

recently approved and pipeline projects supporting investments in irrigation systems, as well as initiatives to support agricultural diversification and service development.

� Social Services Not Directly Targeting the Poor. The CAS sub-theme focuses on making basic services accessible and affordable to the poor. The HD portfolio is generally aligned to this objective, although improving the quality of social services, is becoming an increasing focus. This is not reflected in the CAS sub-theme. Also, there are interventions such as the Higher Education and the Regional Blood Transfusion Projects that do not directly target the poor which are more difficult to map to the CAS sub-theme.

� Urban Growth Interventions. Under the sub-theme of Narrowing the Development Gap, there is a sub-category for “addressing the needs of the urban poor”. Parts of the Urban Portfolio directly target poor urban citizens, but benefits of several interventions such as improving water supply, drainage systems and urban transport benefit the broader urban population often with only indirect benefits for the poor.

1.4 ALIGNMENT TO SECTOR PRIORITIES

Alignment is Good, but here too Gaps Exist. The CAS recognizes that although the strategy is organized around the cross-sectoral themes, the portfolio operates on a sectoral level. Therefore the CAS also outlines 13 sectoral priorities. Alignment of the portfolio to these priorities is good, with 59 percent of the projects rated satisfactory or above. The sector priorities are however not as comprehensive as the CAS sub-themes and the CPRGS objectives. Several areas of recent portfolio intervention are not mentioned, such as natural disaster mitigation and road safety.

Disconnect between CAS Sub-Themes and Sector Priorities. In some respects the sector priorities are not reflected in the CAS sub-


19

themes. For example, agricultural development and diversification are top priorities for the rural sector, but as discussed above not directly articulated in any of the CAS sub-themes. The urban sector priorities stress providing basic services to the urban population, while the CAS

sub-theme focuses on the urban poor. Similarly, the HD sector priorities include modernization of health and education systems, while the CAS sub-theme focuses more narrowly on making basic social services available and affordable for the poor.


1.5 HOW DOES THE CAS GUIDE PORTFOLIO STRATEGY?

Mapping Components against the CAS Sub-Themes. One way of analyzing how IDA resources are supporting the CAS implementation is to map project components to the different CAS sub-themes. For illustrative purposes, each lending project component has been mapped to one sub-theme, to which the major contribution is expected. It is recognized that a component could, and in many cases does, contribute to more than one sub-theme. This is however not reflected in the analysis.

IDA Resources are Concentrated to a Few CAS Sub-Themes. As can be seen from Figure 2, this way of looking at the portfolio shows a strong concentration around a few CAS sub-themes. More than 40 percent of IDA resources are contributing to three sub-themes: (i) Narrowing the Development Gap of Disadvantaged Areas; (ii) Making Basic Social Services Available and Affordable for the Poor;

and (iii) Enhancing Environment Sustainability. The largest volume of IDA resources (22 percent) is committed to the theme “Narrowing the development gap…”. Several sub-themes, such as Corporate Governance, Realizing Gender Equality and Legal System Development have no lending interventions. (It should be noted that major contributions are also made to many of these components by non-lending services which have not been included in this analysis.)

For the CAS completion report, a different approach to assessing the thematic distribution of the portfolio was used, allowing projects to contribute to up to five objectives per operation. This shows the portfolio contributing to the sub-themes more evenly, but still the largest contribution is to the three sub-themes named above, along with a large share for Public Administration Reform and Private Sector Development.


21

Figure 2: Where IDA Resources are Utilized

Energy Sector PortfolioTransport Sector

PortfolioUrban Sector Portfolio HD Sector Portfolio Rural Sector Portfolio

Public Administration Portfolio

Financial Sector Development

State Enterprise Reform

Promoting Open Trade

Support the Domestic Private Sector

Corporate Governance and Corporate Social Responsibility

Narrowing the Development Gap of Disadvantaged Areas

Raising Living Standards of Ethnic Minorities

Realizing Gender Equality

Making Basic Social Services Available and Affordable for the

Poor

Mitigating the Impacts of Natural Disasters and other shocks

Enhancing Environmental Sustainability

Improving Information Transparency and Public

Financial Management

Legal System Development

Public Administration Reform

ICT and E-Government

Fighting Corruption

Infrastructure to promote growth

Infrastructure topromote urban growth

HD interventions not targeting the poor

Agriculture Diversification/Irrigation

PMU

Theme I: Rapid and Sustainable

Economic Growth through

a Transition Towards a

Market-Oriented Economy

Theme II: Equitable,

Socially Inclusive and Environ-

mentally Sustainable

Growth

Theme III: Adoption of a Modern Public Administration,

Legal and Governance

System

OTH

ER

VWRAP

NHS

SEIER TD

RE RE IISEIER

PEDC

HE BT

HIV PT EFA

t

PFM

PS II

AD I

UU

U

RF II

UU

NM

NM CBRIP

MDW

UT UWS

UWS

HCMC ES 3CS

RT2

IWW MT RNIP

FS

TDII

ICT

CM

NDM

RW

Note: The size of the bubble reflects the IDA allocation (from 1 -200 MUSD).

CAS and the Use of TF Resources. The TF portfolio has grown significantly during the CAS period. As of Dec 2005, the TF portfolio consists of 85 active grants (US$ 242 million). This includes all types of Bank-Executed (19%) and Recipient Executed TFs (81%). As illustrated in Figure 3 below, TFs are utilized to support most CAS Sub-themes. Table 5 shows the sub-themes commanding the largest commitments and the ones that do not currently directly cover any TFs.

Lack of TF Strategic Planning. Currently, there is no systematic planning for the use of TFs and grant applications are developed by the sectors when calls for proposals are made. This limits the ability of the CMU and the Government to know in advance which grants are being proposed and thus also the possibility to prioritize strategically among proposals.

Table 5: TFs and CAS Sub-Themes CAS Sub-Themes with

Most TFs (in USD volume)

Sub-Themes not Directly Covered by TFs

1. Enhancing Environmental Sustainability

1. Promoting Open Trade

2. SOE Reform 2. Raising Living Standards of Ethnic Minorities

3. Financial Sector Development 3. Realizing Gender Equality

4. Public Administration Reform 4. ICT and E-Gov

5. Improving Public Financial Management 5. Fighting Corruption

An additional issue associated with the lack of planning, is the slow approval process on the Government’s side for TFs, since these are not included in the Government’s list of planned investments.

Figure 3: Where Trust Fund Resources are Utilized*


CAS Sub-Theme Energy Sector HD Sector Rural Sector

Poverty Reduction & Economic

Management Sector. Financial & Private

Sector

Others (Social & Environment, EAPCO,

EACVF)

Financial Sector Development

State Enterprise Reform

Promoting Open Trade

Support the Domestic Private Sector

Corporate Governance and Corporate Social Responsibility

Narrowing the Development Gap of Disadvantaged Areas

Raising Living Standards of Ethnic Minorities

Realizing Gender Equality

Making Basic Social Services Available and Affordable for the Poor

Mitigating the Impacts of Natural Disasters and other shocks


Improving Information Transparency and Public Financial Management

Legal System Development

Public Administration Reform

ICT and E-Government

Fighting Corruption

Theme I: Rapid and Sustainable

Economic Growth through

a Transition Towards a

Market-Oriented Economy

Theme II: Equitable,

Socially Inclusive and Environ-

mentally Sustainable

Growth

Theme III: Adoption of a Modern Public Administration,

Legal and Governance

System

ECC

BE

SOE Audit

SS

3GCs

BSRS

Influenza

CCBP

SEIER

CYS

TTA

IBSTACM

PFMM

HMunR GCPDMS

CDD

Vietcombank

PLCPHMunB

* Note: Excl. project-related grants like PHRD/Co-financing Grants. Thus transport and urban sectors are not included in the table.

Are CAS Sub-themes Important? The lending program during the CAS, by and large followed the planned program. With the exception of six projects, all projects approved were listed in the original CAS. One way of assessing the use of the CAS in providing priorities for new initiatives is to review how projects actually refer to the CAS. The CPR finds that most Project Concept Notes (PCNs) refer to the overall CAS objectives, but judging from the PCN minutes and comments raised, the issue of alignment with the CAS is rarely discussed. In general, the projects find their justification directly in the three overall CAS goals of economic growth, poverty reduction and governance. Not surprisingly, all projects can be easily justified against these overall goals, but not always to the sub-themes.

Project Appraisal Documents (PADs) seldom refer to the CAS sub-themes. This is true even

in cases where alignment of a project to a specific sub-theme is particularly direct and strong. Since the start of the CPR exercise, the portfolio team have been monitoring more closely how the pipeline project documentation refer to the CAS and provided detailed guidance on how to ensure alignment and strong linkages with the CAS sub-themes.

Making Strategic Choices Based on CAS Priorities. Projects often enter the pipeline and apply for preparation funding in early stages of formulation, sometimes prior to a formal discussion of draft project objectives. While Task Team Leaders (TTLs) are well meaning in their desire to save processing time, a valuable opportunity for the team to make strategic choices and prioritize interventions based on an agreed roadmap (CAS) is lost. In the past, the number of project ideas always fell short of the IDA resource envelope for Vietnam. There


23

were no “strategic choices” to be made. However, now the reverse is true and it is a unique opportunity to make choices ensuring

the overall Bank program contributes strategically to the Socio-Economic Development Plan (SEDP) objectives.

1.6 LESSONS FOR THE FORMULATION OF THE FUTURE CAS

Ensure a Consistent Set of CAS Objectives. The future CAS should avoid presenting multiple strategic frameworks and provide one set of clearly defined objectives, aligned with the broader Government SEDP and more closely linked with the current and planned Bank initiatives.

Define the CAS Objectives at the Same Strategic Level. The current CAS sub-themes are at different strategic levels. This is possibly why the portfolio is concentrated in a few areas. For example, the ICT and e-government sub-theme could easily have been included under public administration reform. On the other hand, “Narrowing the development gap of lagging and disadvantaged areas” is broad enough to cover many sector and portfolio objectives. Also, some sub-themes are specifically targeting certain groups such as “raising living standards for ethnic minorities” and “realizing gender equality”. These targets could be mainstreamed into other sub-themes e.g. “providing access to infrastructure services to the rural poor, with a particular emphasis on ethnic minorities” or “improving access and quality of basic education, particularly for disadvantaged children and girls” in line with the portfolio targeting of these specific groups.

Adjust the Strategy or Re-Align the Portfolio. The current portfolio and projects approved over the next few years will form the bedrock of the achievements for the next CAS cycle. If future CAS goals are to be achieved, a strong link between the portfolio and the CAS objectives and targets needs to be established. The current CAS framework focused on the pipeline projects and overlooked the existing stock. Thus, a number of project interventions are not covered within the original CAS sub-themes. To ensure this does not recur, either the portfolio should be re-aligned (particularly the pipeline) or the strategy should be redefined to include these areas of intervention.

Create Linkages by Establishing Sectoral Results Frameworks. The establishment of clear sector results frameworks for the Bank would be one way of linking the portfolio more clearly to the overall cross-thematic CAS goals. Below is an illustration of a possible sectoral framework. This framework has been derived based on the transport sector business plan and the development objectives of the current and pipeline portfolio. Draft sectoral results frameworks have been developed for all sectors and are attached in Annex 5, with details provided in the sector reports.

Prioritize the Pipeline based on Performance Criteria. The current pipeline for Vietnam far exceeds the available IDA resources. There is a need to prioritize the pipeline based on a set of performance criteria -- in-line with the criteria that is being established for the next CAS. Suggestions for these criteria are discussed in the chapter on Scaling Up and Sustaining High-Levels of Resource Transfer in the later part of this report.

Strategic Planning for TF. The CAS would benefit from thinking through strategic uses of TFs. Not only will this help the Government to effectively coordinate grant resources for various sectors but the strategy would also help the CMU to prioritize TF use. This also facilitates dialogues on potential partnerships with donors of common interests.

Integrate TF into Planning Processes. Once potential areas to be financed by TF sources are identified in the CAS, specific interventions will then be discussed in the Sector Strategy and annual WPA exercises. This will not only ensure a strong alignment with the CAS, but also help the sector team to decide on the best use of limited TF resources to compliment and leverage the Bank’s other resources.


24

EXAMPLE OF A POSSIBLE SECTOR RESULTS FRAMEWORK (TRANSPORT)

Bank Supported Sector Goals…

… and strategy

Additional Households provided with access to an all weather road within 2 kms

… with KPIs

Overarching CAS Goals

Improve Effectiveness of Transport

Sector Institutions…

Reduce Costs and Improve

Transport Efficiency…

Improve Mobility of People and Goods in

Urban Areas .. …

Reduce Traffic

Accidents and Fatali ties …


Rural Areas …

Improve Transport

Services …

… by investing in and maintaining all - year round access to poor communes in the North, We st, Mekong and Red River Delta � Mekong

Transport � Rural

Transport II � Rural

Transport III � Mekong

Transport II � Northern Delta

Transport

… by investing in expansion and maintenance of main roads, canal networks, provincial connecting roads and feeder ways. � Inland

Waterways � Mekong

Transport � Road Network

Improvement � Mekong


Transport

… by supporting urban strategic planning, traffic management, public transport and investments in urban roads in major cities. � Urban

Transport � Hanoi Urban

Transport � Danang

Priority Infrastructure

… by strengthening the National Traffic Safety Committee and implementing road safety programs � Mekong

Transport � Urban

Transport � Road Safety

Improvement � Hanoi Urban

Transport

… by building capacity to plan, manage and maintain transport system investments. � Inland

Waterways � Rural Transport

II & III � Road Network

Im provement � Hanoi Urban

Transport � Mekong


Transport

… by improving the regulatory framework for transport and logistics, developing private sector contracting, consulting services, private sector passenger and freight � Rural

Tran sport II � Rural

Transport III � Road Network

Improvement � Transport

SOE reform ?

Reduced travel time on improved national and provincial roads Reduced passenger and freight tariffs Increase in volume of freight Reduction in overl o a ding

Travel time on improved urban roads Outcome indicator on public transport

Reduced number of accidents, injury and fatalities in project corridors Performance targets for National Road Safety Strategy achieved

% of national and rural roads meeting standards for maintenance Improved performance of MOT, PDOTs, VRA, VIWA against targets

Increase in number of multi - modal transport provid ers Reduction in time/cost of moving goods across modes Milestones in strengthening regulat ions


25

2. PROGRAM ALIGNMENT TO OTHER CAS PRIORITIES

2.1 PARTNERSHIPS

Donor Coordination is Legendary…. The CAS places a strong emphasis on new ways of doing business and building strong partnerships. At a global level donor partnerships have moved from strength to strength. The Consultative Group (CG) meetings are well coordinated, with almost universal agreement on key issues. Most donors are committed to align with the Government’s proposed SEDP and some donors (including the Bank) have agreed to delay preparation of their assistance strategies to align with the launch of the SEDP.

Vietnam’s success in overall harmonization and aid effectiveness has been highlighted in the two High Level Forums held in Rome and Paris. Several countries are following Vietnam’s example of developing a country specific aid effectiveness agenda with appropriate targets to be achieved by 2010.

The PRSC now boasts of co-financing by more than ten donors, and increased donor participation in the future is likely. Several mechanisms to ensure that aid delivery is aligned to Government priorities, well coordinated to avoid overlaps, and streamlined to minimize transaction costs, are in place. More than 20 partnership groups coordinate sector discussions and policy issues.

….but Benefits at Sector Level are Difficult to Quantify. There could be several benefits to donor coordination – however, most are difficult to measure. One measure, which is quantifiable, but imperfect, is the level of co-financing at project level.

Table 6: Co-financing TFs by Sector

Sector IDA

Amount (US$ m)

Projects with no

Co-Financing

Number of Co-

financing TFs

TF Amount

(US$)

IDA $ vs CO $

Energy 794.0 1 4 12.9 0.02

Human Development

466.3 4 5 74.5 0.16

PREM 159.3 1 2 13.9 0.09

Rural Development

923.0 5 11 57.0 0.06

Transport 586.6 5 1 33.2 0.06

Urban Development

582.0 2 2 10.1 0.02

Total on-going projects: 3511.2 18 25 201.6 0.06PRSC IV 100.0 8 85.9 0.86

The table shows an impressive level of donor co-financing over the past decade. The ongoing portfolio of investment projects mobilized about US$200 million (excl. GEF and JSDF), or about 6 cents for each $1 of IDA resources. The HD sector has been the most successful (16 cents) while the Energy and Urban sector (2 cents) have mobilized less resources. Co-financing levels have recently declined and almost 60 percent of the ongoing projects have no co-financing arrangements. Of the 8 investment projects approved since FY05, only one project is co-financed and two supported by other TFs (GEF/JSDF).


26

Table 7: Largest TF Donors

UK 157.1

Multi-donors 64.6

Netherlands 44.4

Denmark 38.7

EC 31.1

GEF 18.8

Japan (through PHRD & JSDF) 14.3

Canada 10.5

Sweden 7.6

Spain 2.4

Ireland 1.8

Total: 391.3

Donor Contribution through Project Cofinancing during the last 10 years

(MUSD)

There are several reasons making co-financing levels an imperfect measure of partnership

quality. Co-financing levels are dependent on the most recent priority for bilateral donors who are usually guided by their respective capitals. It also depends on changing terms (as in the case of AFD) of bilateral funds, which recipient Governments may not readily accept. The level of co-financing also fails to quantify agreements reached on key policy issues (and joint AAA) leading to overall policy reform where the potential benefit is huge. Similarly, many parallel financing arrangements and bilateral lending arrangements are a result of close donor cooperation and common understanding, and these too are not reflected in the levels of co-financing.

Still, co-financing is a useful source of resources for the Government and a practical instrument for bilateral donors. One option worth considering is the establishment of an umbrella partnership (a multi-donor TF) with key donor partners. This would provide the flexibility and ease of access to funds (without the lengthy delays for individual Grant Agreements) while meeting objectives for the Government and participating donors.

Figure 4: TF Co-Financing Commitments

0 20 40 60 80 100 120

US$ million

FY01

FY02

FY03

FY04

FY05

Vietnam: New Commitment for Cofinancing

Energy

Financial & Private Sector

Human Dev

PREM

Rural

Transport

Urban


27

2.2 HARMONIZATION

Strong Government Ownership….The Government of Vietnam (GOV) has demonstrated strong ownership in ensuring that Official Development Assistance (ODA) resources are utilized well. The slow pace of disbursements has been acknowledged by the highest levels of Government and an Inter-Ministerial Task Force (IMTF) on ODA headed by the Vice Minister of the Ministry of Planning and Investments has been established to identify cross-cutting constraints to project implementation and bring these to the attention of the Deputy Prime Minister for resolution. The GOV has also recognized deficiencies in the legislation governing ODA management and have undertaken to address these gaps through revisions to the framework.

….but ODA Procedures Remain Complex. Despite good intentions and strong institutional frameworks, changes are slow. The IMTF took early action and appointed a “problem-solving team” to identify the generic implementation constraints. The IMTF has met with the Five-Banks Group (AFD, ADB, KfW, JBIC and WB) to discuss a joint action plan. Since then, some actions have been taken but the impact on disbursements is still negligible. The revised Decree 17 on ODA management has still not been issued and there is significant confusion between different pieces of the legislation governing public investment and ODA management. The GOV is well-aware of these conflicts, but resolution is slow.

2.3 SIMPLIFICATION

More Repeater Projects… While the original CAS framework did not comment on project design, the CAS-update proposed to simplify project design, increase repeaters and reduce the average project size. While simplification of project design is difficult to assess, the number of “Repeaters” in the portfolio is on the rise. Over the last three years, two projects are repeaters and four more are in the pipeline.

Figure 5: Average Credit Size

IDA Average Investment Credit Size FY94- 06

020406080

100120140160180200

FY94FY95

FY96FY97

FY98FY99

FY00FY01

FY02FY03

FY04FY05

FY06

$ M

illio

n

012345678910

No

. of

Op

erat

ion

s

Ave. credit Opns

… but Project Size Remains Large and is Increasing. The average size of investments, however, continues to be large when compared to global standards. The average project size so far during the CAS period is US$105 million, with projects ranging from US$5 million to US$ 225. The Bank average for SILs is about $70 million. While this does not necessarily imply more complex projects, it may be an indicator of larger scope and ambitious project design.


28

Box 2. What is a Good Project Results Framework?

A satisfactory project results management system contains:

(i) PDO defining the outcome (changes in behavior) of the target beneficiary;

(ii) Manageable number of specific and attributable KPIs that measure outcome (changes in behavior of target beneficiary);

(iii) Baselines and targets for all KPIs; and

(iv) Updated progress information on KPIs, used to inform decision making.

3. ARE WE MANAGING FOR RESULTS?

Results are Achieved, but not Measured and Monitored Systematically. There is ample evidence that the portfolio is achieving good results in many different areas (see Annex 6 and Volume II). However, a convincing story of achievements at a portfolio level is difficult to articulate. This is largely because projects are reporting on results in a fragmented manner. Project results frameworks continue to be weak, are often inconsistent across projects in the same sector and lack a focus on outcomes.

Assessing the Results Framework. A results framework consists of three key pillars: (i) the Project Development Objective (PDO); (ii) the key performance indicators; and (iii) a Monitoring and Evaluation (M&E) system (see Box 2). Each of these aspects was evaluated for each project, and the results compiled. Regardless of age, all projects were assessed against the same standard to ensure a consistent overall picture of the status of results management in the portfolio. It is however recognized that many projects were designed prior to the Bank’s focus on results management and using different formats. This may partly explain some of the weaknesses identified when a comparison is made against the latest definitions of a satisfactory results management system.

Overall Quality of the Project Results Framework. The quality of the results framework in the portfolio varies from excellent in several cases to weak and in need of strengthening. When assessing the framework, the quality of all three pillars of the results framework – PDO, KPIs, M&E (including baselines and targets) – were taken into account. Between 40-50 percent of the projects were rated satisfactory or highly satisfactory on the different elements of the results framework as illustrated in Figure 6. The findings are discussed in more detail below.

Figure 6: Quality of the Project Results

Frameworks

0%

20%

40%

60%

80%

100%

PDO KPI M&E Overall

<=MU MS =>S

Several Good Examples. Although many projects have highly satisfactory ratings on individual pillars, a few stand-out with respect to excellent overall results frameworks. These include: HIV/Aids Prevention, Northern Mountains Poverty Reduction, Road Safety, Rural Transport III, Primary Education for Disadvantaged Children, and Customs Modernization.

Sectoral Performance. The table below shows the average ratings for the sector portfolios. Overall, the urban and transport portfolios have the best project results frameworks, followed by health and education. Review findings are discussed in Volume II where details for individual projects are included. Annex 7 provides an overview of the individual project ratings.


29

Table 8: CPR Ratings of Results Frameworks

CPR PANEL RATINGS OF PROJECT RESULTS FRAMEWORKS

SECTOR PORTFOLIO AVERAGE (Scale 1-6)

Sector Clarity of PDO

Quality of KPIs

Quality of M&E

Overall Quality

Energy 3.8 4.2 4.8 4.2

Transport 4.3 5.0 4.2 4.8

Urban 3.8 5.2 4.8 4.8

Rural 4.3 4.2 4.4 4.1

Education 4.0 4.5 4.3 4.3

Health 4.8 5.2 3.5 4.5

PREM/ CITPO 4.3 4.0 3.8 4.0

Highly Unsatisfactory (HU) =1; Unsatisfactory (U) = 2, Moderately Unsatisfactory (MU) = 3; Moderately Satisfactory (MS) = 4; Satisfactory (S) = 5; Highly Satisfactory (HS) = 6

3.1 PROJECT DEVELOPMENT OBJECTIVES

Quality of the PDOs. The PDOs of around 40 percent of the ongoing projects in the portfolio are rated satisfactory or above when assessed against the criteria in Box 2. Two recently approved projects (HIV-AIDS Prevention, Road Safety) are considered “best-practice” and worth emulating.

Missing Focus on Outcomes. Many PDOs refer to higher-level objectives such as poverty reduction and growth. This is not the appropriate level for the PDO since impacts cannot easily be attributable to the project. Many PDOs combine a focus on a higher-level goal such as economic growth with an explanation of the outputs that will be produced by the project. Often the outcome level i.e. the clearly targeted change in the key beneficiary is missing. Around 35 percent of the projects were rated MS indicating some issues with the clarity and focus on outcomes of the PDOs. Some PDOs are vague in terms of what is to be achieved e.g. “The foundations are in place for a nationwide program to improve the quality

of the primary teaching service” and were rated MU/U (21 percent).

PDOs for Pipeline Projects Need Strengthening. While it may not be practical to change the PDOs for on-going projects, it would be important to ensure that all pipeline projects have well-defined PDOs. PDOs of ten pipeline projects at different stages of preparation were assessed. Six of these were rated either MU or U. While this may well be because it is “work in progress”, there is a clear need to strengthen the PDOs for these projects early in the process. The PDOs for these projects do guide project preparation and are disclosed to the public.

Quality of Grant Development Objectives (GDOs). It is still common that GDOs are too broadly defined and at a high level such as “to enhance the capacity of a Ministry”. Also, many GDO statements focus on “what to do” rather than “what to achieve”. More attention needs to be paid to defining GDOs that clearly specify the expected change in the target beneficiary. Given that grants usually provide only a few hundred thousand dollars, it would be important to set the objectives at a realistic level where it is feasible to demonstrate a link between outputs and outcomes of the project and the achievement of the GDOs. Currently, it is often hard for task teams to convincingly prove the achievement of the intended objectives upon grant completion.

3.2 KEY PERFORMANCE INDICATORS (KPIs)

Quality of KPIs. Little more than half of the portfolio was rated satisfactory or highly satisfactory when KPIs were assessed against the SMART criteria. The results show that the KPIs as originally envisaged and documented in the PAD for these projects are robust and relevant to measuring progress on PDOs. All projects in the urban portfolio were rated satisfactory or above and three transport projects were rated HS. No correlation was found between the age of the project and the quality of the KPIs i.e. recently approved projects do not necessarily have stronger KPIs.

Gaps in Quality of KPIs. On the other hand, there are quality gaps in many project results frameworks. Unfortunately, six projects were rated either MU or U on the quality of the KPIs. Some projects have KPIs that are descriptive,


30

making it hard to determine if and when the objective is achieved. The CPR has identified projects where the results frameworks would need to be strengthened. Suggestions for improvements are included in Volume II on a project by project basis.

KPIs do not Measure Outcomes. In many cases projects have multiple objectives, and the KPIs do not necessarily measure all aspects of the PDO. In addition, many KPIs measure project outputs, such as number of people trained, completion of a strategic plan or the establishment of a particular organization unit. These indicators may be valuable for the project monitoring but do not provide an indication of progress towards achieving outcomes. At the other end, some projects are set out to monitor higher-level outcomes that are difficult to attribute to the project such as health or tourism impacts of urban sanitation projects or poverty impacts of access to rural roads. These indicators are often not used in implementation, and updated progress data is often missing. Task Teams should ensure that relevant results-focused KPIs are established that measure progress on all aspects of the PDO.

Institutional Progress is Often not Measured. Many project objectives are related to improving the institutional capacity. However, few projects actually establish adequate indicators to measure progress in this regard and when established, these KPIs are often dropped during implementation, e.g. power sector reform indicators/milestones for the energy projects.

Quality of KPIs for TFs. For operational grants like JSDF and GEF, the KPIs are generally solid. The TA grants, especially IDF and ASEM, have weaker results frameworks. It is more difficult to identify SMART KPIs for TA grants since results in institutional strengthening may take longer than the grant life to achieve. Also, it is costly to monitor and collect data. It may be difficult to define good indicators apart from outputs, such as workshops and reports which is currently the most common KPIs in the grant portfolio. However, if the GDOs are well-defined to cover realistic changes in behavior of the target beneficiary, it is usually possible to identify simple measures/milestones to demonstrate progress and results achieved. KPIs for new

grants would need to be defined so that reporting on results would not only be based on a qualitative assessment.

3.3 MONITORING AND EVALUATION (M&E)

Quality of M&E. The quality and use of project M&E systems vary. Less than half the portfolio has a complete set of baselines and targets for the key performance indicators. Establishing baselines continues to be a problem and as many as 47 percent of the projects have not provided complete baseline information in the ISRs. This includes a number of projects that have been on-going for several years. Similarly, many projects have not established targets for the KPIs, thus making progress assessments difficult. In some cases baselines and targets are available, but are too descriptive to be used for efficient monitoring. (See Annex 8 and Volume II for project level assessments). Task teams should ensure that projects have baselines and targets by Board Approval, as intended in the project readiness filter.

Table 9: Project M&E Frameworks

Baselines Monitorable Targets

Energy 100% 80%

Transport 33% 33%

Urban 80% 60%

Rural 54% 45%

Education 50% 50%

Health 25% 25%

PREM 25% 25%

Total 53% 46%

Using the M&E System to Manage Projects. Even when good M&E systems are established, these are not necessarily used to assess progress or for decision making during project implementation. Few projects refer to progress on KPIs when rating achievement on the Development Objectives (DO). DO assessments are often based on physical progress of project implementation or general statements of improvements that are not supported by concrete information in terms of progress on KPIs. The


31

M&E system of the energy and urban portfolio rank among the best in the Vietnam portfolio. Nearly all projects have completed baselines and targets. In some cases, the KPIs are even explicitly used to monitor progress and information gathered used to assess the rating on the PDO.

The Move to ISRs Surprisingly Weakened the Results Framework of Many Projects. While the new progress report format provides a better framework for monitoring and reporting on results,1 the transition to the new format weakened the results frameworks for many (12) projects. Simplification, where possible, of the KPIs is good, but there are many projects where progress measurements have been reduced in the ISR to only output indicators and overall project objectives are no longer measured. For example, while many projects see policy development and institutional reform as key objectives, monitoring on progress in these areas is dropped. The move to ISR is an opportunity to remedy weaknesses in results frameworks, revise indicators, input baselines, and establish clear, monitorable targets.

3.4 SYNERGIES AND SIMPLIFICATIONS

Indicators Vary Across Projects with Similar Objectives. More than 300 indicators are used to monitor progress across Bank-financed projects. Although the portfolio contributes toward many similar objectives, when the indicators are aggregated at the country level, they do not support a consistent story of the results being achieved.

For example rural access is defined in different ways across rural transport projects. These include: (i) number of days communities are cut-off from district centers; (ii) decrease in time needed to get to district centers; (iii) increase in visits to health clinics and hospitals; (iv) increase in number of people who have off-farm jobs; (v) percentage of people living within 2 km of an all-

1 The move to ISRs gives more prominence to M&E, especially progress towards achieving project outcomes, during project implementation. The new ISR moves the project performance indicators from an annex to the main text. The project teams are now required to fill in the column on “progress made to date”.

weather road; (vi) number of communes lacking year round basic access.; and (vii) time to nearest schools and markets.

Similarly, different indicators measure rural electrification across the energy projects and the three primary education projects monitor progress differently. The two community-driven rural development projects (Northern Mountain Poverty Reduction and Community Based Rural Infrastructure) appear similar in design but have different results frameworks. This makes the compilation of results data at a portfolio level difficult. Clearly, there are many opportunities to develop consistency and synergy across projects and sectors.

Examples of Possible Synergies. Possibilities to simplify project level results frameworks by taking a sectoral and/or objective oriented approach should be explored. By focusing on sector and/or thematic outcomes, it may be possible to cluster projects and share outcome level KPIs among projects within the same sector or across sectors. Some examples of synergies, (with details in Volume II) are presented below:

� Rural Projects. Many projects target rural households: i.e. transportation to improve access to markets, education and health services; rural water systems to provide safe and/or less costly water; rural electrification; etc. Rather than taking a project by project approach, it would be more effective to work with provincial authorities (most likely provincial planning and investment and/or budget departments and the provincial statistical offices) to systematically collect information on households (e.g. through the bi-annual living standards surveys).

� Primary Education. The Bank’s three primary education projects, which currently have different results frameworks, could share a common set of outcome indicators that could be monitored through the Ministry of Education’s Management Information System.

� Urban Projects. Urban sanitation projects (Three Cities Sanitation, HCMC Environmental Sanitation and Urban Upgrading) share the common objectives of improving access to basic sanitation, improving health and promoting economic development in project affected areas (as


32

reflected in property values). A citywide approach to measuring progress on higher level outcomes such as health and economic development (against the same indicators across the portfolio) should be considered, rather than doing this assessment through individual projects.

� Transport Projects. The transport projects are measuring variations of the same standard transport efficiency indicators. There is scope for increasing harmonization between the projects. The Bank is working with Vietnam Road Administration to develop a database on road standards that could be used to monitor Bank interventions in the transport sector.

� Utility Performance. Many projects target institutional change e.g. irrigation management companies, urban drainage companies, water supply companies, power and distribution companies etc. There is scope for exploiting commonalities across projects and simplifying M&E by developing a common utility performance scorecard against which progress could be measured.

� Institutional Development Indicators. Given that capacity development is often an integral part of lending projects, it would be important to identify good indicators/milestones of institutional development and capacity strengthening for each sector.

3.5 LOOKING AHEAD – HOW TO STRENGTHEN RESULTS MANAGEMENT?

Strengthen the Project Level Results Frameworks. Suggestions to strengthen the results frameworks for individual projects are provided in Volume II. In general the following is recommended:

� PDOs for all pipeline projects need to be strengthened so they clearly focus on outcomes.

� KPIs. Sector teams should review KPIs for all projects. All parts of the PDO should be monitored by SMART KPIs.

� M&E. All projects should have baselines and targets for all indicators. For all new projects these should be available prior to Board approval.

� Improve ISR Reporting on Results. Future ISRs should ensure a complete list of KPIs. DOs should be assessed based on progress against these KPIs.

Improve TF Results Framework and Reporting. TFs should follow the rigor of projects with respect to the design, albeit in a simpler version. It would be much easier to have a stronger TF result framework, if attention to this is paid at the time of the grant design. This could be done if in the grant proposal format, the TTL is requested to select appropriate KPIs to monitor the grant outcomes. The TF committee screening the TF applications should review the GDO and results framework carefully. In the Grant Report and Monitoring (GRM) or other grant progress reports, it will be easier for the management to get the right message on grant performance towards GDO achievement if the TTL can illustrate the achievement via updates of good KPIs. The results could then be systematically monitored and aggregated in order to facilitate management decision making on partnerships and dialogues with the Government and donors.

Simplifying and Identifying Common KPIs. There is scope for simplifying and improving M&E by focusing project monitoring on fewer, common indicators directly related to fulfilling the sector objectives (as shown above). In the proposed sectoral results framework (see Annex 5), a reduced number of possible common KPIs are presented. Among them, it is proposed to establish a standard set of outcome indicators/milestones for institutional performance in each sector.

Linking the Top to the Bottom. The SEDP/CPRGS provides a framework for monitoring overall results at the country level. Bank projects are clearly aligned with the CPRGS and contribute to achieving the CPRGS objectives. However, while projects refer to the CPRGS, few attempt to link project level M&E with the overall CPRGS monitoring framework. There is scope to better align the top down monitoring of the overall country performance and the bottom-up impact of the Bank operations


33

(including not only the project portfolio, but eventually economic and sector work and trust funded technical assistance activities).

Aligning the Incentives for M&E. It is important to ensure that there are appropriate incentives for collecting, reporting on and using outcome data for decision-making. The PMU’s primary concern is project implementation: i.e. going from inputs to outputs. Most PMU staff focus on actual progress (usually physical outputs) during project implementation. Most often the PMU is assigned the task of generating higher-level key performance indicators, but they may not be best suited for the task. Most PMU staff also see outcome data as something to be collected towards the end of the project.

Using the Government System. The Bank should utilize Government systems as much as possible by aligning Bank indicators with the Government’s monitoring systems. This can be at the national (ministerial level) or at other levels of Government, e.g. city/province or corporate/utility levels. This will allow for systematic collection of information separate from the project, reducing the administrative burden on the PMU, as well as a comparison with other projects.

Harmonization of Project Reporting Tools. The Ministry of Planning and Investment (MPI) with assistance from the Australian government is developing a common project-reporting format with the Five Banks (ADB, AFD, KfW, JBIC and WB) for application in Government financed and ODA-financed projects. This Harmonized Progress Reporting Tool would allow for tracking of outputs, progress on key processes such as procurement and safeguard implementation, as well as financial reporting. This tool has been piloted in a number of Bank projects and is now being revised to incorporate lessons learned of the pilot. The Government intends to make this reporting format mandatory for all projects as part of the implementation guidelines for the revised Decree 17. This new tool is an important step in reducing the transaction cost of data generation and reporting. Even with a move to a stronger results focus, information on financial flows, contracting, and outputs will be important to both the Government and donors. This will provide a common platform to compare performance across different donors (and eventually Government projects).


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4. PORTFOLIO PERFORMANCE

Considerable Analysis on the Portfolio… During the last four years, there have been three Country Portfolio Performance Reviews and two Joint Portfolio Performance Reviews (JPPR) undertaken by the Government and the Five Banks. These reviews provide a rich analysis of the issues facing the portfolio. The range of issues hampering the pace of project implementation identified in these reviews is summarized in the box below. Following the reviews, action plans have been discussed and agreed with the GOV. However, many of these issues are structural and require time to address.

….and no Need to Restate these Findings. This chapter on the portfolio performance does not repeat the same messages on the implementation environment. Instead, it highlights the changing portfolio, new challenges to implementation and ways to scale-up and sustain resource transfer in light of these challenges. In line with past practice, it does provide guidance on the ratings of projects and also provides examples of some tough measures which need to be taken to strengthen portfolio management. These actions complement those which are already outlined e.g. in the JPPR action plan (see Box 4).

Box 3. Common Implementation Issues in Vietnam

Inconsistent Legal Framework for Public Investment Management. The frequent and often overlapping revisions of various parts of the legal framework continue to be an issue causing confusion to the project implementation units, and complicating the approval and implementation of investment projects.

Highly Centralized Government Approval Processes. One of the main reasons for the slow implementation of investment projects in Vietnam is the high degree of centralization of decision making. The authority related even to smaller contracts is, in most cases, not delegated to lower levels, significantly adding to the lead times required for Government approvals of key project decisions.

Delays in Procurement Processes. Long delays in procurement processes are common reflecting issues with cost estimations, quality of design and technical specifications, weak procurement capacity and lack of procurement planning. Lack of transparency and bidding irregularities have also been noted in some projects.

Low Quality of Project Preparation. As many technical and other issues are not carefully assessed in the Pre-FS/FS stage, these issues have to be addressed during project implementation, thereby increasing the time it takes to deliver project outputs and outcomes.

Counterpart Funding and Tariff Issues. Inadequate and late provision of counterpart funds by the Government, and for revenue earning entities, non-compliance with tariff and other financial measures needed to strengthen financial performance.

Weak Project Management Capacity. There are capacity gaps at both the central and local-level PMUs in core areas such as procurement, financial management, environment and resettlement, and results-based monitoring.

Delays in Implementation of Land Acquisition and Resettlement Activities. Delays in implementing the land compensation and resettlement policy are common, especially in the urban, rural development, energy and transport sectors.


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Box 4. Summary of recommendations of the JPPR IV

In May 2005, the fourth Joint Portfolio Performance Review (JPPR IV) was conducted bringing together over 100 representatives of Government Ministries, Line Agencies, PMUs and the Five Banks (ADB, AFD, JBIC, KfW and WB). The JPPR IV focused on four priority areas: (i) overall portfolio performance; (ii) project preparation; (iii) procurement management and (iv) project management structures. The findings and recommendations of the JPPR IV were discussed with the Inter-Ministerial Task Force on ODA Problem Solving in July 2005 and are summarized below.

1. Ensure a Decentralized and Consistent Legal Framework

o Review relevant regulations and guidelines for ODA project management in order to understand the procedures and documents necessary for each process step.

o Develop a flow-chart of overlaps and Inconsistencies between the regulations.

o Analyze opportunities for further decentralization, particularly for issues of a technical nature, such as design approval, procurement and contract management.

o Issue Investment Decree and Legal Amendments to resolve identified inconsistencies, as well as to simplify and decentralize approval procedures.

o Prepare plan to phase out inconsistencies in the procurement legislation between the Procurement Ordinance/Law and the Construction Law and their respective Decrees.

2. Prepare and Issue Improved Guidelines for Project Preparation

o Pilot the use of a proposed common Feasibility Study (FS) structure.

o Review the existing regulatory requirements for F/S preparation, as well as F/S reports produced and donors' requirements.

o Develop detailed F/S guidelines that could be issued as part of an official regulation, such as the implementing circular of the new Public Investment Decree.

o Develop detailed sector F/S guidelines. Based on the general guidelines, each Line Ministry could also formulate detailed guidelines covering sector issues.

3. Strengthen the Project Appraisal Mechanism

o Develop a process chart for project appraisal and approval to review mechanisms including on internal control system of checks and balances.

o Incorporate a strengthened appraisal mechanism into the legal framework.

4. Institutionalize Advance Actions to Shorten Project Start-up Periods

o Study and address institutional and legal barriers to use of preparatory management actions in procurement, financial management, land acquisition etc. prior to project approval.

5. Improve Procurement System and Capacity

o Implement the Action Plan of the Country Procurement Assessment Report

o Finalize and issue Standard Bidding Documents for Goods and Works

o Strengthen the cost estimation system with more accurate and timely cost norms and better contract price control mechanisms.

o Prepare updated Procurement Plans for all projects before the start of fiscal year.

6. Improve Project Management Structures and Capacity

o Conduct an in-depth study of project management structures in Vietnam and develop a strategy to rationalize structures and avoid creation of new PMUs for ODA projects/programs.


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4.1 RAPIDLY GROWING PORTFOLIO

High Levels of Project Approvals… The last two fiscal years have witnessed the highest ever levels of lending to Vietnam. In all, 13 projects with commitments of US$ 1.4 billion were approved. In FY05 alone, nine projects – the highest number ever – were approved. In the first half of FY06, five projects for almost US$ 500 million were approved. Vietnam has received one Adjustment credit (PRSC) each year for the last three years. The balance between adjustment and investment lending remains around 12 percent. The largest increase over the last three years is in the urban sector, while the smallest is in health.

….but Project Completion Lingers. The number of projects which exit the portfolio are slowing down, thus leading to a build-up in the total stock. The last four years have seen a declining percentage of project closures (Table 10). The total stock has increased each year since FY94 and currently stands at 37 projects with net commitments of US$ 3.8 billion. While this was understandable in the early years and can be attributed to “young borrower” and capacity issues, the continued buildup and deterioration in timely closures is leading to questions on urgency to implement. Part of the reason is the sequential way of doing business within the GOV and the need to build consensus. In addition, once the project is approved and funds allocated, there is no real tangible financial cost of delays to the line agency – only the notion of delayed benefits, which few in GOV recognize or consider important.

Table 10: IDA Credit Portfolio FY 94-05 (USD Million)

Project Entries Portfolio Stock Project Closures

FY New

Credits New Net

Commitments Credits Net Commitments

Planned credit

closures

Actual credit

closures

% of actual vs. planned

94 3 325 3 325 - -

95 3 415 6 740 - -

96 5 502 11 1,242 - -

97 3 349 13 1,441 1 1 100

98 5 395 17 1,801 1 1 100

99 4 308 20 2,014 2 1 50

00 3 286 21 1,954 6 2 33

01 4 629 25 2,557 1 0 -

02 5 593 27 2,815 7 3 42

03 3 293 26 2,484 10 4 40

04 4 706 27 2,993 8 3 37

05 9 699 34 3,525 9 2 22

06* 5 492 37 3,872 7 2 28 * Up to December 2005


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4.2 PROJECTS ARE SUCCESSFUL BUT SLOW TO IMPLEMENT

Development Objectives are Consistently Met…. For all 20 projects, completed over the last decade, the last Implementation/Project Status Report (ISR/PSR) rating is satisfactory on Development Outcomes (DO). Of these 20 completed projects, the Operations Evaluation Department (OED) has evaluated 17. All 17 evaluations show that these projects achieved satisfactory outcomes and are likely to be sustainable. The Implementation Completion Reports (ICRs) corroborate these findings – all ICRs point to satisfactory outcomes that are sustainable and have good institutional impact. All closed projects have achieved good results – an accomplishment few other developing countries can boast.

…. but Results are Slow to Materialize. While projects consistently achieve anticipated results, they are in most cases slower to realize than originally planned, thereby delaying the benefits. Over the last 10 years, only one investment credit closed without any extensions. While the average time for completion is 6.9 years, the longest time taken by any project to complete was almost 10 years. On average, projects were extended for 1.4 years and 1.2 times. At the present time, the portfolio has ten projects over six years old and twelve more than five years. Of these twelve projects, seven are scheduled to close in FY06. However, there is a good possibility that at least three will seek another extension. This is indeed a dismal record of timely implementation.

Table 11: OED Ratings of Closed Projects

Outcome* Sustainability Institutional

Development Implementn

Time

Approval

Date Closing

Date ICR OED ICR OED ICR OED (Years)

Irrigation 8/78 12/86 - S - - - Substantial 8.4

Primary Education 10/93 12/03 S MS Likely Likely M Modest 9.2

Highway Rehabilitation I 10/93 12/01 S S Likely Likely M Modest 8.2

Agriculture Rehabilitation 1/14 06/99 S S Likely Modest 5.4

SACI 10/14 09/96 S S Likely Substantial 1.9

Irrigation Rehabilitation 4/95 06/03 S S Likely Likely SU Substantial 8.2

Power Sector Rehabilitation 5/95 06/00 S S Likely Likely SU Substantial 5.1

Banking System Modernization 11/95 12/03 S S Likely Likely SU Substantial 8.1

Population and Family Health 1/96 12/03 S S Likely Likely SU Substantial 7.7

Power Development 2/96 12/99 S S HL Likely SU Substantial 3.9

Rural Finance 5/96 12/01 S S HS Likely SU Substantial 5.7

Rural Transport I 12/96 05/02 S MS Likely Likely M Modest 5.4 Highway Rehabilitation II 4/97 06/03 S MS Likely - M Modest 6.2

Debt Reduction 1/98 06/98 S S - Substantial 0.5

PRSC I 6/01 12/02 S MS HS - SU Modest 1.6

PRSC II 6/03 12/03 S MS Likely Likely Substantial 1.5

PRSC III 6/04 12/03 S S Likely Likely S Substantial 0.4

Average (Investment Credits) 6.8 years

* Outcome Ratings: S – Satisfactory; MS – Moderately Satisfactory, M- Modest, SU – Substantial.


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4.3 DISBURSEMENTS

Disbursements Increase…. The last three years have seen remarkable improvements in disbursements. Absolute disbursements have increased at a rapid pace, rising more than 100 percent over the last four years. While FY05 showed a slight drop (about US$ 22 million) from last FY, this is not significant and the previous increasing trend is expected to continue this FY. The disbursement ratio has also continued to increase, albeit not as quickly since the rate of new commitment growth continues to outpace disbursements, and thus increases the opening undisbursed balance, which has grown from US$ 1,973 million in FY03 to US$ 2,573 million by FY05. The current undisbursed balance is US$ 2,877 million. At the current rate, the opening undisbursed balance is expected to grow to US$ 3.3 billion by FY08 and more than US$ 4 billion by the end of the next CAS.

….. but not Enough. Despite increasing disbursements, the pace continues to lag both regional and Bank-wide averages. At the end of FY05 with a disbursement ratio of 13.2 percent, Vietnam’s ratio is seriously behind the East Asia and Pacific (EAP) regional average of 19.9 percent and the Bank-wide average of 23.4 percent. At the current rate of growth in the undisbursed balances, FY07 disbursements will have to increase to US$ 380 million to stay steady at the current disbursement rate of 13.2 percent compared to the US$ 305 million disbursed in FY05. In order to reach the EAP average, Vietnam would have to increase disbursements to US$ 575 million or more than 80 percent – a seemingly impossible task. In addition to lagging regional and Bank-wide averages, disbursements also lag planned levels.

Table 12: IDA Disbursement Performance FY 00-05

FY

Opening Undisbursed

Balance

(SDR million)

Investment Project

Disbursement

(SDR million)

Disbursement Ratio

(Investment Credits only)

Opening Undisbursed

Balance

(US$ million)

Investment Project

Disbursement

(US$ million)

Overall disbursement

ratio (including

adjustment credits)

00 974 115 12.0 % 1,250 150 12.0%

01 1,068 124 11.9 % 1,327 158 11.9 %

02 1,144 182 14.5 % 1,525 230 18.7 %

03 1,457 219 14.3 % 1,973 298 21.5 %

04 1,379 221 15.3 % 1,964 327 21.0 %

05 1,570 203 13.2 % 2,306 305 17.0 %

FY05 Disb.Ratio & Disb.Lag

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

Energ

y

Educa

tion

Health

PREM

Rural D

ev.

Trans

port

Urban

Dev.

EA

P A

ve.D

isb.

Lag

Disb.Lag FY05 Disb.Ratio EAP Aver.Disb.Ratio


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4.4 SECTORAL DISBURSEMENT PERFORMANCE

A Few Sectors Improve…. The Rural Development (RD) Sector has seen a remarkable turnaround over the last two years. Disbursements increased by more than 20 percent from US$ 111 million in FY04 to US$ 141 million in FY05. The increase was broad-based with four of the ten projects participating in the improvement. Similarly, the Urban Sector (UR) also showed an increase of more than 20 percent, albeit from a small base. During the first half of FY06, Transport and RD lead with disbursement ratios of 11.3 percent and 9.2 percent respectively.

…. While Many Languish. In FY05 RD and UR improved, while Human Development (HD), PREM, Energy (EG) and Transport (TR) all declined. For the first half of FY06, four sectors -- EG, UR, PREM and HD -- had disbursement ratios below 5 percent. The Energy sector has undergone a “sector restructuring” where three projects were restructured. Nevertheless, disbursements declined by almost 20 percent, and the average disbursement lag is close to 60 percent. The average age of the portfolio is 3.7 years, but three sectors (TR, HD and RD) are all over 4 years.

Table 13: Disbursement Performance by Sector

* Up to December 2005

FY04 FY05 Change FY04 FY05 FY06* FY04 FY05 FY06*

Infrastructure Energy 75 63 -19% 57% 49% 58% 16% 16% 3%

Transport 59 52 -13% 63% 48% 41% 17% 12% 11% Urban Dev. 23 32 29% 58% 45% 67% 9% 7% 2%

Overall 156 147 -6% 59% 44% 55% 16% 11% 5% Human Development

Education 18 15 -19% 60% 65% 61% 8% 7% 5% Health 20 2 -867% 60% 59% 13% 22% 3% 1%

Overall 39 18 -121% 60% 63% 37% 12% 6% 5% PREM 21 0 - 71% 93% 98% 26% 0% 0%

Rural Development 111 141 21% 42% 30% 33% 18% 21% 9%

Total 327 305 -7% 60% 45% 40% 17% 13% 6%

Sector Disbursement (MUSD) Disbursement Lag Disbursement Ratio


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4.5 START-UP DELAYS

Start-up Delays Continue to Plague the Portfolio…. On average credit agreements take 4.7 months to sign, and more than 8.7 months to become effective. There are large variations from the mean, so it is difficult to attribute signing and effectiveness delays to rigidities in Government processes alone. It is also difficult to attribute these delays to the reinstitution of commitment fees2 since the signing-effectiveness delays have also continued to increase. While two of the five projects approved in FY02 received an “effectiveness delay” flag, in FY05 five projects received this flag (Forest Sector, Avian Flu, RE-II, Water Supply, and Payment Systems). This flag will remain with the project for three years and thus contributes to the potential problem project status.

The average number of effectiveness conditions for the projects approved over the last two years is seven. Not surprisingly, there is a direct correlation between the number of effectiveness conditions and effectiveness delays. The more the effectiveness conditions, the longer elapsed time. The most common effectiveness conditions relate to project management (e.g. appointment of PMU staff including procurement and financial management (FM), institution of FM system, approval of Feasibility Study, and adoption of the Project Implementation Plan). This “basic plumbing” which is necessary for effective project implementation should be in place well before effectiveness.

2 The commitment fees reintroduced in July 2004 apply to undisbursed balances and accrue 90 days after signing.

….while the “Readiness-Filter” Remains Underutilized. The readiness filter for Vietnam has been developed and refined over the last 2-3 years and TTLs are responsible for the implementation of the filter. Unfortunately, results show that implementation of the filter may need to be strengthened. This is especially important since the Bank no longer requires that Project Implementation Plans and Procurements Plans, both elements of the filter, are included in the PAD package to the Board. Thus, some of the “pressure” to ensure project readiness may have vanished.

A review of the eight investment projects approved by the Board in FY05 shows serious lapses in the implementation of the filter. All the projects have conditions of effectiveness; most of which should have been accomplished by negotiations. In seven of the eight projects reviewed, there was no detailed definition of activities to be implemented during the first year of project implementation.

Table 14: Start-Up Delays

AVERAGE START-UP TIME FOR PROJECTS APPROVED IN FISCAL YEAR

Fiscal Year

Approval -

Effectiveness (Months)

Approval -

Signing (Months)

Signing -

Effectiveness (Months)

1996 4.2 1.4 2.9 1998 6.5 3.3 3.2 1999 5.9 1.6 4.3 2000 5.8 2.8 3.0 2001 9.5 4.8 4.7 2002 7.7 2.5 5.2 2003 4.4 1.4 3.0 2004 8.2 4.1 4.1 2005 8.7 4.7 4.0


41

4.6 PORTFOLIO RISK

Realism is Excellent…. The Realism and Proactivity Indices for Vietnam have consistently outperformed regional averages. The current realism and proactivity indices are both at 100 percent, which implies that the projects at risk of not meeting their objectives have been clearly and fairly identified. The 100 percent rating on the proactivity index shows that the Task Team takes action quickly (within a year) to address the problem. Table 15, which tracks these indices over time, also provides an indication of the most common problems reported during implementation.

….but are We too Optimistic? In FY05, no projects were classified at risk. In the past, the portfolio has also looked sanguine. Recently, however two projects were downgraded to unsatisfactory on Implementation Performance (IP). In other cases, projects facing disbursement lags of more than 75 percent have been rated “Satisfactory” on IP. While the Realism Index may be 100 percent, the realism in the ratings of the projects themselves may be unrealistic. In the past, independent teams have questioned optimistic ratings and subsequently projects have been downgraded. The figure below indicates the CPR suggested ratings on IP compared to the current IP ratings.

Table 15: Assessment of IDA Portfolio

Percent of Portfolio Rated Satisfactory in PSRs/ISR

Number of Projects rated Unsatisfactory

in PSRs/ISR Item

FY01 FY03 FY05 FY06 FY03 FY05 FY06 Development Objectives 100% 100% 100% 0 0 0 0

Implementation Progress 91% 84% 100% 95% 4 0 2

Procurement 74% 72% 92% 92% 7 3 3 Financial Performance 91% 84% 97% 97% 4 1 1

Project management 91% 88% 97% 95% 3 1 2

M & E 95% 92% 100% 97% 2 0 1 Legal Covenants 100% 92% 94% 92% 2 2

Safeguards Performance 79% 95% 100% 100% 1 0 0

Financial Management n.a. 100% 100% 100% 0 0 0

CPR ratings of DOs and IPs

05

101520253035

HU U MU MS S HS

Num

ber o

f Pro

ject

s

DO (current ratings = CPR ratings)IP (current ratings)IP (CPR ratings)


42

4.7 PROJECT CLOSURE

Project Closing Dates are not Taken Seriously… Over the last five years only one project has closed on time. While there are always legitimate reasons for continued extensions, stakeholders (PMUs, Line ministries, TTLs etc.) do not take the closing dates seriously.

… and Cancellations are Rare. Few projects over the last few years have cancelled funds even when closing dates are looming on the horizon and it is clear that funds cannot be utilized. Part of the problem is the GOV system, which frowns on any cancellations and treats the PMU as unable to deliver rather than as taking pro-active actions.

Table 16: Projects Closing in FY06 and FY07

Actual Potential

Urban Transport 7.4 12/31/2005 3 34.6 77% 9.6 8.2 8.0PRSCIV 0.5 12/31/2005 100.0 100% 0.0 0.0Inland Waterways & Port Rehab. 8.2 03/31/2006 3 62.7 74% 11.0 10.3 3.0Forest Protection 8.3 06/30/2006 1 21.5 62% 7.9 0.0 1.0Rural Transport II 6.1 06/30/2006 103.9 81% 17.3 0.0 0.0Mekong Transport 5.1 06/30/2006 110.0 41% 66.6 0.0Closing in FY07 18.5 12.0Coastal Wetlands 6.2 09/30/2006 31.8 54% 13.6 0.0National Health Support 10.0 10/31/2006 3 98.8 75% 14.5 2.4 1.0Transmission, Distribution 8.0 12/31/2006 1 199.0 56% 92.4 60+Agriculture Diversification 7.6 12/31/2006 1 66.9 73% 18.5 2.0Higher Education 7.4 12/31/2006 1 83.3 60% 38.7 5.0Rural Energy 5.7 12/31/2006 1 150.0 79% 36.1 4.0Avian Influenza Emergency Recovery 1.5 12/31/2006 5.0 20% 3.9 0.0Mekong Delta Water Resources 6.8 06/30/2007 1 101.8 53% 48.7 5.03 Cities Sanitation 6.7 06/30/2007 1 80.5 47% 46.7Primary Teacher Dev. 4.1 06/30/2007 1 19.8 33% 14.9Closing in FY08 2.4 77.0HCMC Env. Sanitation 4.8 12/31/2007 166.3 15% 158.4Comm-based Rural Infrastructure 4.6 12/31/2007 102.8 43% 74.0Northern Mountains Pov. Reduction 4.3 12/31/2007 110.0 51% 70.8System Energy, Equitization & Renewables3.6 12/31/2007 225.0 28% 192.9Blood Transfusion Centers 3.8 03/31/2008 38.2 11% 40.4Closing in FY09Rural Finance II 3.7 09/30/2008 200.0 76% 80.8Road Network Improvement 2.1 12/31/2008 225.3 6% 214.1Public Financial Management 2.7 02/28/2009 54.3 2% 56.5Targeted Budget Support for EFA 0.6 06/30/2009 50.0 0% 47.6

Closing in FY06

Net Comm.

Undisb. To Dec.05 Project Name Acomm.

RateCancellationAge

(Yrs)Closing

DateNo of Ext.


43

Projects Closing in FY06-FY07. There are 14 projects scheduled to close in FY06 and FY07. Given limited resources (financial and staff) the approach to these 14 projects should be based on:

� limited interventions leading to project completion,

� avoiding major (and costly) restructuring efforts, and

� managing the remainder of the projects’ life in a way that maximizes impact while minimizing extension of closing dates.

If this approach is adopted, by the end of CY06, only four of the 14 projects in this group will remain in the portfolio: Mekong Delta Water, Mekong Transport, 3 Cities Sanitation and Primary Teacher Development. This would result in more than US$ 250 million removed from the stock of current undisbursed balance.

Currently, limited cancellations are proposed for these projects and the task teams are encouraged to proactively review and act early on cancellations.

Projects Closing in FY08-FY09. There are nine projects closing in FY08-09. Task teams and the Government should be informed early that these projects will not be extended, except in exceptional circumstances and efforts should be made already now to ensure that these projects are completed on time. Given that the current undisbursed balance of these projects is US$ 936 million, this would require a significant effort from all parties involved. Where it would not be possible to complete activities on time, task teams should propose early cancellations.


44

4.8 TRUST FUND PORTFOLIO PERFORMANCE

Rapidly Growing.... The TF portfolio in Vietnam has steadily increased over the last 10 years. Vietnam has one of the largest TF portfolios in the region. As of Jan 2006, 155 recipient-executed grants had been signed with total commitments of US$ 474 million. Growth was remarkable in FY05, with 37 new recipient-executed grants signed (US$138 million). The active TF portfolio as of Jan 2006 consists of 70 recipient executed grants (US$ 231 million) and 17 bank-executed grants (US$ 13 million).

Figure 7: TF Portfolio

0

100

200

300

400

US

$ m

illion

FY01 FY02 FY03 FY04 FY05

Vietnam: Recipient-executed TF Portfolio

New Comitmment Amount Active Portfolio

... and Diversified TF Portfolio The TF portfolio in Vietnam continues to be diversified. Freestanding grants, including co-financing and stand-alone technical assistance grants, account for the largest share, followed by single-purpose grants, including grants to support the PRSC. There are also TFs from other sources such as GAIN, TFESSD, PPIAF, and PRSCTF.

Figure 8: TF Portfolio Composition

Vietnam: FY05 Active TF Portfolio by TF TypeASEM

2%

SPTF31%

GEF8%

PHRD8%

PRSTF0%

Free-standing49%

IDF1% JSDF

1%

ASEM GEF IDF JSDF PHRD PRSTF SPTF Free-standing

The “Soft Sectors” Actively Use Most of the Available Types of TFs… Including grants to support PRSC, PREM is currently the largest user of TFs in Vietnam, followed by the HD

sector. PREM, HD, and RD sectors are using most of the available TF types to support a wide range of works.

… while “Hard Sectors” use TF to Support Projects. The Energy, Urban and other sectors (Environment, COSU) account for a more modest part. The infrastructure sector only uses PHRD, PPIAF and GEF, apart from a few co-financing grants.

Figure 9: TF Portfolio by Sector

Vietnam: TF Portfolio active in FY05

EASPR34%

EAPCO0%

EASTR11%

EASHD23%

EASRD16%

EASUR4%

EASES/N0%

EASFP6%

EACVF1%

EASEG5%

Grant Activation Period Shortened, but still the Slowest in the Region. Vietnam recipient-executed TF portfolio suffers from activation delays. Recent years have seen significant improvements, but Vietnam is still the slowest in the region in terms of activating PHRD and JSDF grants. Delays in grant activation result in all recipient-executed grants requiring extension. The average grant activation period is 6.2 months from the proposal approval date to the countersignature date.

No correlation between the activation period and grant size is found. However, the type of the grant affects the start-up period. Co-financing grants were the quickest to activate (3.9 months), while operational grants (like JSDF) took the longest time (11.6 months). Project preparation PHRD grants and TA Grants (like ASEM and IDF) took on average 8.4 months and 8.9 months, respectively. With regards to activation period by sector, the Urban sector is the quickest (6 months), while the HD sector is the slowest (10.2 months).


45

Figure 10: TF Start-up Delays

Vietnam: Start-up Period of Trust Funds (from proposal approval to GA countersignature)

11.810

7.18.9

6.2

0

2

4

6

8

10

12

14


Mon

ths

Vietnam: TF Start-up Period by TF Program (FY01-05)

4.87.3 7.5 8.2

10.6 11.1 11.6

0

2

4

6

8

10

12

14

MISC ASEM SPTF PHRD IDF GEF JSDF

Mon

ths

Pro-Active Follow-up Needed. A detailed analysis indicates that delays in grant activation mostly occur at the MPI appraisal stage and in the issuance of the approval decision by the Line Ministry. The main reasons for delays include: i) PMUs are not familiar with the GOV guidelines for preparing Grant Dossiers; ii) lengthy processes to obtain comments from concerned ministries; and iii) slow issuance of Grant Approval Decision by Line Ministries. Task teams therefore need to work closely with PMUs and proactively follow up with both MPI and Line Ministries during the grant approval stage. An IDF Grant to strengthen ODA Management in MPI is underway to help streamline procedures and to develop practical manuals and checklists.

Disbursements3 Improve… The disbursement performance of recipient-executed grants improved in FY05 (16.5 percent) compared to FY04 (12.9 percent). Given that all grants were extended, the average total disbursement accomplishment rate of grants closed in FY05 was high (91.3 percent).

Figure 11: TF Disbursement Ratio

Vietnam: TF Portfolio Disbursement Ratio(excl. PRSC's grants)

0%

5%

10%

15%

20%


… but are still below Regional average. Despite the improved performance, the disbursements are still slightly below the regional level (18.3 percent). This ratio excludes quick disbursing grants. The in-flow of TFs is currently exceeding the out-flow - more than US$138 million (37 new grants) entered in FY05 while US$ 96 million (14 grants) exited the portfolio. The undisbursed grant balance rose to US$ 157 million in FY05 up from US$ 146 million in FY04. This poses a challenge in terms of maintaining and increasing the TF disbursement ratio.

Figure 12: TF Disbursement Performance

3 There could be differences in the calculation method for grant disbursement ratio. Here the disbursement ratio equals the FY disbursements divided by the FY Opening Balance. The Opening Balance includes all grants signed during the year, even those entering very late in the FY without disbursements during the year. If the amount of these grants is large, this could significantly reduce the disbursement ratio.

0 100 200 300 400

US$ million

FY00 FY01 FY02 FY03 FY04 FY05

Vietnam: Recipient-executed TF Portfolio

FY Disbursement Opening Balance Portfolio Amount

Vietnam: TF Start-up Period by Sector (FY01-FY05)

10.29.3

8.47.5 7.3 6.8 6.5 6.0

0

2

4

6

8

10

12

HD Energy Rural Others Transport PREM F&PSector

Urban

Mon

ths

average line


46

Disbursement Performance among Sectors Vary. Excluding quick-disbursing grants, the education sector has the largest TF amount (over US$ 70 million active in FY05) but has disbursed the least (5%). This seriously affects the country disbursement ratio. Disbursement performance of the Energy sector (14%) and Rural sector (15%) are also below the regional average (18.3%). The rest, led by the Financial and Private Sector (44%), is disbursing well.

Grant Implementation is Successful, but Slow. All completed ICMs rated closed grants as satisfactory or above. The GRM ratings are also encouraging with only a few grants rated Moderately Satisfactory or Moderately Unsatisfactory. In general, the grants are rated higher on achieving the objectives than on implementation progress. The common assessment in Implementation Completion Memorandums (ICMs) is that although implementation progress is slow, the grant objective is eventually met. Some success factors collected from ICMs of recent grants are summarized in the table below.

Table 17: Success Factors for Grants

Bank Government (GOV)

� Simple design with a clear focus

� Good quality consultants

� Grant task managed/supervised in the field

� Timely and effective assistance from the Bank

� Adequate funding for grant supervision

� Driven and led by GOV

� Directly supporting GOV’s own program

� Strong PMU capacity in project management

� Effective cooperation among GOV stakeholders

� GOV willing and ready to adopt changes

� Beneficiary capacity to absorb new ideas and skills in a short time

Figure 13: Ratings of Grants

Vietnam: Grant Rating in GRM by end FY05

0

5

10

15

20

25

30

35

HS S MS MU U HU

Num

ber

of G

rant

s

Grant Objective Implementation Progress

Need for More Realistic Grant Planning. All recipient-executed grants in Vietnam are extended. Each grant is on average extended 1.7 times and by 10.4 months. While IDF grants have a standard implementation period of 3 years, the average actual grant implementation period for ASEM grants is 2.7 years, and 2.1 years for project preparation PHRD grants. This means that in Vietnam it takes more than two years to prepare a project. This has significant implications on project preparation costs for both the Bank and the Government. The key reasons for extensions are delays in grant activation as mentioned above, weak capacity in project management of PMU given their temporary structure, and slow procurement processes, especially in the selection of international consultants. When designing the grant schedule, TTLs should take into account the above-mentioned delays so as to have a more realistic planning and thereby avoid extensions in the later phase. TTLs should also help PMU staff get adequate training on procurement and disbursement before or at least right after the grant activation to shorten their learning curves.

Portfolio Risk. For the Bank, grants are associated with a high reputational risk. However, there is still a mindset in some Government agencies that accountability for proper use of grant funds is less important than for credit funds and there is less oversight and controls in place for non-refundable money. In addition, TTLs pay more attention to supervision and reporting of projects than grants, given the often small grant size.


47

5. IMPLEMENTATION MECHANISM

Building Capacity is Good….Over the last decade the Bank has provided a substantial amount for building institutional capacity. A large part of the capacity building has been to support Project Management Units (PMUs). More than USD$ 55 million of IDA resources is currently allocated across the active portfolio for PMUs. To implement the on-going Bank portfolio, more than 50 PMUs at a central level, 245 Provincial PMUs (PPMUs) and more than 1200 District/Commune-level PMU structures are involved.

…. but it Needs to be Strategic and Systematic. Some of these PMUs are part of the Government’s structure for managing public funds, but many are created solely for the purpose of managing Bank projects and are dismantled after project completion. Given the significant capacity gaps at both the central and local-level in terms of project management capacity, ensuring that capacity strengthening efforts are strategic and provide sustainable results is thus becoming increasingly important.

Table 18: Number of PMUs under current WB projects

Existing GOV PMU structure

used

PMU Structure put in place for Implementation of WB project

Sector

PMU PPMUs PMU PPMUs District/

commune PMUs

Infrastructure

Energy 7 2 30

Transport 7 2 1 51

Urban 1 11 34

Human Development

Health 3 23

Education 3 38 189

PREM/CITPO 7 7

Rural Development 6 5 5 62 1053

Total 21 7 32 245 1242


48

Box 5. Project Management Structures in Vietnam

Below is a brief summary of the institutional arrangements for project management within a select number of Line Ministries and Agencies.

Ministry of Transport (MOT) There are eight PMUs, equivalent to Departments within MOT. The PMUs manage donors as well as PIP financed projects. In addition, there are also PMUs in the Agencies under such as Road Administration, Inland Waterway Administration. Electricity of Vietnam (EVN) EVN is a state-owned company. Under EVN, there are three Regional Power Companies and three Transmission Companies. EVN has established three Project Management Boards (PMBs) that report directly to EVN. Under each of the companies there are also PMBs. Altogether there are 30 PMUs in the EVN system managing around 2500 projects, including 54 ODA projects financed by ADB, JBIC, WB and a number of bilateral donors.

Ministry of Agriculture and Rural Development (MARD) There are three Central Project Offices (CPOs) in MARD, one each Forestry, Water Resources, and Agriculture. CPOs play a key role in general coordination during the implementation of ODA projects. The project management structures are different between the three sectors. For example in the Water Resources Sector, MARD has established a network of permanent Project Management Boards (PMBs) in different regions to implement MARD’s projects.

Ministry of Education and Training (MOET) A Project Coordination Unit is established for each project, as well as a Steering Committee providing overall guidance to project implementation. There are currently three ADB financed and three WB financed projects in MOET.

Ministry of Health (MOH) The Central Project Office was dissolved in 2002. Now, separate Project Coordination Unit is established for each project. There are currently 10 projects under MOH financed by ADB, WB, EC and Sida.

Arrangements for Project Management Differ Significantly between Agencies. Some Agencies use permanent structures to manage multiple ODA and also Government-financed projects, e.g. in the transport and energy sectors. These PMUs have acquired good skills and considerable experience in managing ODA –assisted projects. Many of these PMUs are adequately staffed and well-integrated into the respective line agency. Other agencies establish separate and temporary PMUs for individual donor projects. Often more than half of the PMU staff are externally contracted and will leave, taking with them the acquired skills. These PMUs require intensive capacity building efforts initially and project start-up and implementation is often slow, hampered by capacity gaps in managing procurement processes and key activities.

The Level of Autonomy and Decision Making Authority of the PMUs Varies. In general, the permanent PMUs, as the ones under Ministry of Transport, enjoy a higher degree of approval authority and independence, which facilitates project implementation. Other implementation structures, such as the Central Project Offices (CPOs) and Special Implementation Organizations (SIOs) under MARD enjoy more limited authority and all major procurement and disbursement decisions are made by the Vice Minister of MARD. The PMUs established under Ministry of Health and Ministry of Education and Training also have limited authority to make implementation decisions and the pace of project implementation is often affected by multiple layers of approvals required for implementation decisions.

Proliferation of PMUs at a Provincial Level. Since project implementation is rapidly moving to a decentralized environment, PPMUs have been multiplying. In most cases these are project (and donor) specific established under each local department of each Line Agency. However, in some provinces such as Bac Giang, one PMU is established under the Provincial People’s Committee (PPC) to handle all ODA and Government funded projects. The PMU comprises core project management staff and other technical staff seconded from concerned departments and agencies. Upon project

completion, these technical staff will return to their original offices, while the PMU undertakes new projects with other technical staff seconded from relevant local agencies.


49

PMUs Executing TFs. Most of the PMUs executing TF grants are temporary organizations that will be dissolved upon grant completion. As a consequence, the start-up phase is slow, since

the PMU staff need to familiarize themselves with Bank project management guidelines and procedures.

Table 19: Characteristics of Project Management Structures

Temporary or Permanent Structure?

PMU Senior Management from Parent

Agency?

>50% of PMU staff from

Parent Agency?

Same structure manages multi-

donor projects?

Same structure manages GOV

own projects and funds?

MOET Temporary Yes No No No

MOH Temporary Yes No No No

MARD Permanent Yes Yes Yes No

MOT Permanent Yes Yes Yes Yes

EVN Permanent Yes Yes Yes Yes

Factors Influencing the Choice of PMU Structure. Depending on the circumstances, one PMU structure may be better than another in terms of delivering efficient and sustainable project outputs and outcomes. Factors that could influence an Agency’s choice of PMU model include:

� Size of Agency Project Portfolio - without a continuous flow of projects, it is difficult for an agency to sustain a large permanent structure;

� Nature of Projects - the main focus of the project, whether it is infrastructure development, institutional strengthening, service improvement etc. impacts on the choice of project implementation structure.

� Continuity from Implementation to Operation - the required level of organizational continuity from the project implementing entity to the entity in charge of operation once the project is complete may also affect the structure;

� Level of Sector Decentralization - In sectors such as rural development, education and health, with a high degree of decentralization, provincial and lower level PMUs tend to play a more important role in implementation, while the central level PMU has a coordinating function. This coordinating role may be more

of a temporary character and reliance on external sources may be greater.

Ensuring that Project Management Structures Deliver Efficient and Sustainable Results. Many of the possible disadvantages of various structures can be mitigated in the design of future Project Management Arrangements. For example, to ensure sustainability of project results, the team involved in the design could be involved also in the implementation stage. This is being recognized for example in some projects in the transport sector, where the Ministry of Transport and the Agencies in charge of operation, such as Vietnam Road Administration and VINAMARINE, participate in the implementation phase.

Start-up delays and slow implementation can be addressed by strengthening the project management capacity, through certified training courses and development of comprehensive project management tools and manuals, as currently envisaged in the work plan of the Comprehensive Capacity Building Program. In order to identify the strengths and weaknesses of different organizational arrangements used in Vietnam, as well as ways to ensure the delivery of efficient and sustainable results, an in-depth study will be undertaken by MPI, as part of the preparation of implementation guidelines for the revised Decree 17.


50

6. SCALING UP AND SUSTAINING HIGH LEVELS OF RESOURCE TRANSFER

Increasing Lending Volumes and Emerging Absorption Issues. During the next CAS period, IDA allocations to Vietnam allow for an increase in annual lending levels, to a total of US$ 750-800 million, including a continuation of the annual PRSCs of about US$ 100 million. Emerging issues of absorptive capacity, however, will need to be considered in the preparation of the CAS, to ensure that the IDA resources available are utilized effectively and in a timely manner, and undisbursed commitments do not reach undesirable levels.

6.1 PORTFOLIO PROJECTIONS

Rapidly Increasing Undisbursed Commitments. A continuation of the current disbursement trend, combined with an increase in new annual commitments for investment lending of about US$ 650-700 million, could lead to unsustainably high levels of

undisbursed balances. At the current pace undisbursed balances could rise to US$ 3.3 billion by the end of FY07 and more than US$ 4 billion by the end of the CAS cycle.

Continued Low Disbursement Ratio. At the current rate of growth in the undisbursed balances, FY07 disbursements will have to increase to US$ 380 million to stay steady at the current disbursement rate of 13.2 percent. In order to reach the EAP average, Vietnam would have to increase disbursements to US$ 575 million– a seemingly impossible task. In addition to lagging regional and Bank-wide averages, disbursements also lag planned levels – the average disbursement lag is 39 percent.

Investment Portfolio Scenarios. Three scenarios for the portfolio development over the next CAS period are shown in the figure below.

Figure 14: Disbursement Scenarios

0

100

200

300

400

500

600

700

800

900


MU

SD

Scenario 1 - Timely closure of all projects & Disb. According to Project PlansScenario 2 - Some extensions, cancellations and then disb. acc. to planScenario 3 - Continued 13% disbursement ratio


51

� Scenario 1 – High Case - All Projects Close and Disburse According to Plan. This scenario is based on the following assumptions:

− The disbursement targets for all projects for FY06 are achieved (equaling a disbursement ratio of 17%)

− All projects scheduled to close in FY06-FY09 close on time (except Mekong Transport).

− All closing projects disburse between 95-100%. There are no major cancellations.

− Projects disburse according to plan. Given the large number of projects schedule to close in the coming years, in this scenario, disbursements would increase dramatically over the coming three years to between US$ 700 - 800 million and stabilize around US$ 600 - 650 million at the end of the CAS cycle. The disbursement ratio would initially exceed but then stabilize around the Bank average of 23%. In this scenario, the undisbursed balance would be maintained at the current level.

� Scenario 2 – Base Case – Extensions, Cancellations and then Disbursement According to Plan. This scenario is based on the following assumptions:

− 80 percent of the project-level disbursement target for FY06 is achieved (equaling a disbursement ratio of 14.3%).

− All projects scheduled to close in FY06-FY07 close on time (except Mekong Transport). US$ 125 million are cancelled.

− Several projects scheduled to close in FY08-09 are extended (HCMC ES, Regional Blood Transfusion, SEIER, PEDC, Road Network Improvement and PFM).

− Newer projects disburse according to plan.

In this scenario, disbursements would also increase significantly to between US$ 550 - 650 million. This would mean reaching the EAP average disbursement ratio of 20%. In this scenario, the undisbursed balance would increase by around 25 percent to US$ 3.2 billion by the end of FY10.

� Scenario 3 – Low Case – Continued Disbursement Ratio of 13.2 percent – This scenario is based on the assumption that the current disbursement ratio of 13.2 percent is maintained throughout FY06-FY10. This would still require significant increases in disbursements (10-15 percent increase annually). At the end of the CAS cycle, undisbursed balances would have reached more than US$ 4 billion.

6.2 BALANCING THE PORTFOLIO

The Pipeline. Strengthening the pipeline has generated a large number of projects that are candidates for IDA financing during the CAS period, in excess of the IDA allocation for the period4. The FY07-09 pipeline formally includes 18 projects in different stages of preparation, but many more are proposed by the sectors (see Annex 9).

Selectivity will be Essential. For the first time since the initiation of Bank assistance to Vietnam, the pipeline of projects under preparation exceeds the availability of IDA resources. This rich pipeline will both allow and require substantial selectivity in the lending program, and prioritization of projects in terms of their alignment with, and contribution to, the achievement of CAS objectives.

4 The tentative lending program for FY07 and FY08 includes investment projects for a total of $800/900 million per year, in excess of the IDA allocation of about $ 750 million (including the PRSC).


52

How to Prioritize Interventions? It would be prudent to prioritize future initiatives based on performance and not on a first-come first-served basis, as in the past. Six general principles could be considered to guide priorities:

� Contribution to the CAS and SEDP; � Past implementation experience in the

sector; � The Bank’s comparative advantage in

undertaking the intervention; � Complementarity with other donors

and possibility to leverage other investments sources;

� Use of country systems; � Historical preparation costs in the

sector;

Surely other criteria can be included, but this could be the basis of a first discussion. Based on the discussion, guidelines providing additional clarity to these principles could be prepared.

No Quick Solutions to Structural Constraints. There are a range of issues affecting the pace of project implementation. These have been highlighted in many forums,

including the three CPPRs, JPPRs, various workshops and seminars. Numerous action plans have been prepared and agreed. However, actions are slow and resolution of these problems remains “sticky”. Some are structural issues which will require time to address. These include the legal framework for public investment management, centralized government approval processes and PMU capacity. Balance Investment and Adjustment Lending. On the other hand, the pace of implementation of non-ODA financed projects is rapid. While the Bank has not done an independent assessment of the results, anecdotal evidence suggests that the results are satisfactory. While the structural implementation issues remain, it may be useful to consider increasing the level of resources transferred as budget support. In addition to the PRSC, sectoral policy lending and sub-national lending could be considered. This would help improve the balance between investment and adjustment lending and continue the much needed resource transfer without leading to the undesirable outcome of much higher undisbursed balances.


53

7. STRENGTHENING PORTFOLIO MANAGEMENT

7.1 PROJECT CLOSURE

Tougher Closing Date Management and Pro-Active Cancellations. With 14 projects scheduled to close in FY06 and FY07, there is now an opportunity to instill closing date discipline. Except where already indicated, no further extensions will be granted. This would allow the teams to adjust accordingly and disbursements would get an extra boost with the urgency communicated to the GOV in no uncertain terms. To facilitate completion, the teams should propose early cancellations for these 14 projects and the projects to be closed in the next 10 months should be brought to completion in a speedy manner. Supervision/closing plans should be prepared for each of the closing projects, including actions to be taken during the period, close review of ratings (to avoid the possibility of disconnect) and plans for preparation of ICRs.

7.2 QUALITY AT ENTRY

Enforce the Readiness Filter. In most recently approved projects the readiness filter has not been used. The number of effectiveness conditions continues to increase and based on the start-up delays, it is likely that most projects were not ready for implementation. To facilitate a check of conformity, the filter should be simplified and focus only on key readiness actions. The “self-enforcement” principle should then be re-applied.

7.3 USING COUNTRY SYSTEMS

There are several parallel initiatives within the Bank portfolio looking at increased use of country systems. These include the coordination in forestry, EFA, RTP-III and PCLIP. Lessons from some of these, such as EFA, would emerge soon. These should be incorporated as other ideas for increasing the use of country systems materialize. Given the strong capacity and

internal control systems in EVN, energy may be a good sector to pilot next.

7.4 MANAGING FIDUCIARY RISK

Implement the Fiduciary Strategy. The CAS notes that “corruption is a significant and growing problem in Vietnam and poses risks for the Bank and Vietnam’s development”. This statement is corroborated by the findings of the Detailed Implementation Review” completed in 2004. In response to these findings, a strategy to reduce fiduciary risks was completed in 2005. Several actions noted in this strategy have already been undertaken. These include: (i) Addressing collusion in NCB and shopping contracts; (ii) Improved the design of procurement arrangements for new projects; (iii) Incorporating procedural improvements in the side-letter for reducing collusion; (iv) Broadened scope of ex-post reviews; and (v) Organized training for government inspectorates. However, many other actions have been identified in the strategy and the pace of implementation for these actions should be expedited.

7.5 WATCH THE WATCH LIST

In the past a watch list has been prepared based on the FY anticipated disbursements. These criteria should now be expanded to include actual performance. Thus, in addition to the disbursement forecast, all “at risk” projects (those with three ratings at MS or below) should be included. In addition, all projects with a disbursement lag greater than 70 percent should also be included in this list. The TTLs and Sector Coordinators should jointly update the CD and Operations Manager on the progress on a monthly basis. (See Annex 10 for the proposed Watch List).

7.6 IMPROVE REALISM RATING

Based on a detailed review, suggestions from the CPR team on ratings are shown in Annex 11.


54

ANNEX 1 COUNTRY PROGRAM REVIEW

BACKGROUND

The Country Program Review (CPR) is a management tool that provides the Bank Country Team with a systematic assessment of the Bank-financed and supported program of operations in the country. The overarching purpose of the CPR is to ensure that the program is focused on achieving the country’s development objectives. The CPR is a process of examining the effectiveness of the program by looking at its strategic focus, as well as its performance both at the individual project level and across the portfolio of operations, both credits and trust funds.

The Vietnam Country Management Team has undertaken this CPR to examine the relevance of the on-going and planned program in Vietnam and to ensure that the program contributes to the achievement of the country’s development objectives defined in the CAS, which seeks to support the implementation of Vietnam’s Comprehensive Poverty Reduction and Growth Strategy (CPRGS) and the future strategy of the country.

OBJECTIVES

Against this background, the specific objectives of the Vietnam CPR, as defined in the CPR Concept Note, are to assess:

• the strategic focus, alignment and development effectiveness of the ongoing and emerging new program;

• the focus on results at national, sector and project levels; and

• the overall program sustainability and institutional effectiveness.

The CPR will serve as a building block in the new Country Assistance Strategy (CAS) preparation process and as a basis for the on-going discussion of the main issues in the current and planned program with a view to improving implementation, strengthening the results orientation, and ensuring alignment with the evolving needs of the country.

SCOPE

The CPR analyzes the Vietnam program since its inception in the early 90’s with a specific focus on the period since the 2003 Country Portfolio Performance Review (CPPR). The analysis covers operations under implementation (IDA credits and key trust-funded operations) and proposed new operations in an advanced stage of preparation. The analysis focuses primarily on the investment lending component of the IDA program, with limited references to the PRSCs and AAA activities. It proposed measures and actions for improving the overall program alignment and addressing critical issues across the credit and trust funds portfolio.


55

METHODOLOGY

The CPR methodology involved:

� A desk review of available documentation on country-level strategies and analytical work and on individual project design and implementation – Project Appraisal Documents (PADs), two latest ISRs/ PSRs, selected Implementation Completion Reports (ICRs), recent Operations Evaluation Department (OED) and Quality Assurance Group (QAG) reviews;

� Individual and group consultations with: (a) HQ-based task team leaders and sector managers during phase one - desk review in Washington DC, May 23-June 3, 2005; and (b) management, sector coordinators and task team leaders in the Country Office in Hanoi, Project Implementation Units (PIUs), government officials, and donor representatives in Vietnam during phase two, June 6-25, 2005, including a field visit to HCMC and Can Tho;

� Panel assessments of all 37 active projects plus many pipeline projects, with regard to the three key aspects of the analysis: (a) strategic focus, alignment, and development effectiveness (relevance to CAS, clarity of objectives and outcomes, contribution to achieving development outcome); (b) results processes and systems (strength of the results framework, institutional arrangements for M&E, focus of supervision on expected outcomes); and (c) project sustainability and institutional effectiveness (borrower ownership, quality of project management and institutional arrangements, portfolio management practices). Each dimension was rated on a six-point scale – 1 (Highly Unsatisfactory), 2 (Unsatisfactory), 3 (Moderately Unsatisfactory), 4 (Moderately Satisfactory), 5 (Satisfactory) and 6 (Highly Satisfactory). The intent of the Panel assessments was not an in-depth evaluation of each operation, but an effort to gain an overall sense of the portfolio as a whole and to identify priority actions.


56

ANNEX 2 OBJECTIVES OUTLINED IN THE CAS

��

��

CPRGS Objectives from Table in CAS

Annex + Infrastructure

Chapter

CAS Sector Priorities

(CAS Box 4) VDGs

CAS Results Matrix FY03-FY06

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Reform banking sector and financial organizations to mobilize domestic resources

- -

1.1 Strengthen the capacity of the financial sector to allocate credit on a sound basis

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Reform SOEs and strengthen their efficiency and competitiveness

- -

1.2 Reform SOEs and strengthen their efficiency and competitiveness

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Create a fair Business Environment for different forms of enterprises and increase the transparency of regulations and policies

Mobilization of private sector participation in infrastructure investments

-

1.4 Establish a more level playing field allowing the development of a more vibrant domestic private sector

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Measures to open trade, promote exports and international integration and strengthen the country’s competitiveness

- - 1.3 Strengthen the integration with the world economy

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Development of large-scale infrastructure services for growth and poverty reduction

Ensure improved management and maintenance of infrastructure investments

- -


57

��

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Chapter


(CAS Box 4) VDGs


Promote balanced and sustainable economic growth between regions

-

Reduce the percentage of poor and hungry households (VDG 1)

Narrow the development gap

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Create conditions to enable all social strata to fully take part in economic growth

Ensure that the benefits of rural growth are shared equitably

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Poverty Monitoring - - -

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Develop infrastructure and create opportunities for access for the poor

Improve access to services among poor communities and in rural and remote areas

Ensure pro-poor infrastructure development (VDG 11)

2.1 Improve access to services and markets in lagging areas

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Provide targeted assistance to vulnerable groups

- -

2.2 Strengthen targeted poverty reduction for poorest communes based on inclusion and empowerment

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Develop industry and urban areas to create more jobs and to improve the living standard for the poor


-

2.4 Increase access to basic services for urban poor, including migrants and unregistered residents

Intensifying and diversifying agricultural production

-

��

Develop agriculture and the rural economy to reduce widely poverty Expand off-farm

employment in rural and urban areas

-

2.3 Promote sustainable development of agriculture through market-oriented reforms


58

��

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Chapter


(CAS Box 4) VDGs


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? (not part of matrix, but “stabilize and raise the living standards of ethnic minorities” one objective)

- Reduce ethnic inequality (VDG 10)

2.5 Stabilize and raise the living standards of ethnic minorities

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Promote gender equity, enhance the participation of women at all levels of leadership

- Ensure gender equality and women empowerment (VDG 3)

2.6 Improve development opportunities for girls and women

Move towards completion of junior secondary education universalization and illiteracy eradication

Build a more equal and higher quality education for people

Address inequalities in education service delivery across provinces, reduce the burden on poor for financing and modernize the education network

Universalize education and improve education quality (VDG 2)

-

2.7 Improve access to and quality of basic education for all, with particular focus on the poor, ethnic minorities, mountainous provinces and remote and isolated areas

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Improve quality of health services; increase the equity and efficiency of the health care system, concentrate on developing basic health care and community health care

Address inequalities in health service delivery across provinces, reduce the burden on poor for financing and modernize the health network

Reduce child mortality, child malnutrition and reduce the birth rate (VDG 4)

Improve maternal health (VDG 5)

Reduce HIV/Aids infection (VDG 6)

2.8 Improve health outcomes and address disparities by location and ethnicity

Minimize the impacts of natural disasters on the poor

- - � 1��!��!�� 1��!��!�� 1��!��!�� 1��!��!��

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Minimize social impacts on the poor in the process of adjustment

- -

2.10 Reduce vulnerability of the poor and improve the capacity to better manage risks


59

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Chapter


(CAS Box 4) VDGs


Protect the poor from the negative impact of trade liberalization

- - ��"!��.��"!��.��"!��.��"!��.��

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Protect worker rights and working conditions in a market economy

- -

Strengthen the sustainability of using natural resources in rural areas � ��

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Strengthen environmental protection and ensure a healthy environment for the poor

Improving the sustainable management of natural resources

Ensure environmental sustainability (VDG 7)

2.9 Managing natural resources and environmental challenges

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Increase budget transparency to improve the information base for decision-making and target setting

-

3.1 Improving Information, Transparency and Public Financial Management

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Provide the poor with knowledge of the Law and their legal rights and obligations

-

3.2 Legal system development – ensure that all citizens, especially the poor have better access to the judicial system and information about the law and their legal rights and obligations

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Accelerate the reform of public administration

Help the Government plan for the coming urban expansion

Improve governance for poverty reduction (VDG 9)

3.3 Accelerate the reform of public administration

& -�'��*��& -�'��*��& -�'��*��& -�'��*�� - - 3.4 Advancing information and communication


60

��

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Chapter


(CAS Box 4) VDGs


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Develop a modern culture closely lined to the identity of the nation and improve the provision of information to help people expand their capacity to make choices

- - -

��Improve macro-economic statistics - - -

��

Implement appropriate fiscal policies to safeguard medium-term sustainability

- - -

��

Implement prudent monetary policy to control inflation

- - -

��

Foreign exchange policies to increase competitiveness, liberalize the current account

- - -

��

External debt policies to keep debt service burden at a serviceable level

- - -


61

ANNEX 3 ALIGNMENT OF DIFFERENT TYPES OF PORTFOLIO INTERVENTIONS

TRANSPORT CPRGS objectives (Policy matrix in CAS annex)

CAS sub-themes CAS Sector Priorities for Infrastructure &

Urban Development

Support for Domestic Private Sector

Improve management and maintenance of investments Strengthening

Transport Network

Develop large-scale infrastructure services for growth and poverty reduction Promoting Open Trade Mobilize private sector

involvement

Rural Transport

Develop infrastructure and create opportunities for the poor to access public services

Narrowing the development gap of disadvantaged and lagging areas

Improve access to services among poor communities in rural and remote areas

Road Safety Mitigate the impacts of natural disasters on the poor

Mitigating impact of natural disasters and shocks -

Develop industry and urban areas to create jobs and improve living conditions for the poor

Addressing the needs of the urban poor

Address deficiencies in basic service provision in urban areas Urban

Transport Strengthen environmental protection and ensure a healthy environment

Enhancing environmental sustainability -

Capacity Strengthening Public Administration Reform

Public Administration Reform Improving public financial management

Support planning for the coming urban expansion

ENERGY CPRGS objectives

(Policy matrix in CAS annex) CAS sub-themes CAS Sector Priorities for

Infrastructure

Rural Electrification


Narrowing the development gap of disadvantaged and lagging areas – providing basic services to lagging regions

Improve access to services among poor communities in rural and remote areas

Support for Domestic Private Sector

Improve management and maintenance of investments

Power Generation,

Transmission and

Distribution

Develop large-scale infrastructure services for growth and poverty reduction Promoting Open Trade Mobilize private sector

involvement

Energy Sector Reform

Reform SOEs to strengthen their efficiency and competitiveness

State Enterprise Reform Public Administration Reform

Improve management and maintenance of investments

Strengthen environmental protection and ensure a healthy environment

Enhancing environmental sustainability

Improve management and maintenance of investment

Promoting Renewables and Energy Efficiency Develop infrastructure and Narrowing the development Improve access to services


62

create opportunities for the poor to access public services

gap of disadvantaged and lagging areas – providing basic services to lagging regions

among poor communities in rural and remote areas

URBAN CPRGS objectives

(Policy matrix in CAS annex) CAS sub-themes

CAS Sector Priorities for Infrastructure & Urban

Development

Urban Access to Water

Supply and Sanitation

Drainage/ Sewerage Systems


Narrowing the development gap of disadvantaged and lagging areas – Addressing the needs of the urban poor


Waste water Treatment

Solid Waste Management

Strengthen environmental protection and ensure a healthy environment



Urban Growth Promotion


Narrowing the development gap of disadvantaged and lagging areas – Addressing the needs of the urban poor


Utility Reform / Capacity Building

Reform SOEs to strengthen their efficiency and competitiveness

State Enterprise Reform Support planning for the coming urban expansion

Micro-Finance

Reform banking sector and financial organizations to mobilize domestic capital resources

Financial Sector Development Address deficiencies in basic service provision in urban areas

RURAL DEV CPRGS objectives


Rural Development

Narrowing the development gap of disadvantaged areas Agricultural

Diversification and

Development

Develop agriculture and the rural economy to reduce poverty Raising the living standards of

ethnic minorities

Intensifying and diversifying agricultural production Expanding off-farm employment


Narrowing the development gap through community based infrastructure projects

Develop agriculture and the rural economy to reduce poverty

Raising the living standards of ethnic minorities

Ensuring that benefits of rural growth are shared equitably

Access to Infrastructure

Services

Community Based

Development Accelerate Public Administration Reform Public Administration Reform -


63

RURAL DEV CPRGS objectives


Rural Development

Strengthen the sustainability of using natural resources


Improving sustainable management of natural resources

Forest Sector Development

and Biodiversity Protection Reform SOEs State Enterprise Reform -

Water Resources

Management

Strengthen environmental protection and ensure a healthy environment for poor


Improving sustainable management of natural resources

Natural Disaster

Management

Minimize the impacts of natural disasters on the poor

Mitigate the impacts of natural disasters and other shocks -

Reform banking sector and financial organizations Financial Sector Development -

Rural Finance Develop agriculture and the rural economy to reduce poverty

Narrowing the development gap of disadvantaged and lagging areas

Expanding off-farm employment

HEALTH CPRGS objectives

(Policy matrix in CAS annex) CAS sub-themes CAS Sector Priorities for HD

Health Care Infrastructure

Improve the quality of health services and increase the equity and efficiency of the health system (particularly of basic/community health care)

Making basic social services accessible and affordable to the poor

Address inequalities in service delivery across provinces, resulting from the increased decentralization in public provision of health services

Making basic social services accessible and affordable to the poor Infectious

Disease Prevention

Improve the quality of health services and increase the equity and efficiency of the health system (particularly of basic/community health care)

Mitigate impacts of natural disasters and other shocks

Support modernization of health provider networks in line with pressures of globalization, a market-oriented economy and a greater role for the private sector

Making basic social services accessible and affordable to the poor

Health Insurance for

the Poor

Improve the quality of health services and increase the equity and efficiency of the health system (particularly of basic/community health care) Public Administration Reform

Reduce the burden of poor people in financing basic social services

Capacity Development

Accelerate the reform of public administration Public Administration Reform

Support modernization of health provider networks in line with pressures of globalization, a market-oriented economy and a greater role for the private sector


64

EDUCATION CPRGS objectives

(Policy matrix in CAS annex) CAS sub-themes CAS Sector Priorities for HD

Making basic social services accessible and affordable to the poor Build a more equal and higher

quality education for people Raising the living standards of ethnic minorities

Address inequalities in service delivery across provinces, resulting from the increased decentralization in public provision of education

Primary Education

Infrastructure and Services

Move towards completion of junior secondary education and illiteracy eradication

Realizing gender equality and advancement of women

Reduce the burden of poor people in financing basic social services

Making basic social services accessible and affordable to the poor Build a more equal and higher

quality education for people Raising the living standards of ethnic minorities

Primary Teacher Training,

Material and Methods Move towards completion of

junior secondary education and illiteracy eradication

Realizing gender equality and advancement of women

Support modernization of education provider networks in line with pressures of globalization, a market-oriented economy and a greater role for the private sector

Higher Education

Build a more equal and higher quality education for all people.

Support for the Domestic Private Sector

Support modernization of education provider networks in line with pressures of globalization, a market-oriented economy and a greater role for the private sector

GOV Capacity Development

Accelerate the reform of public administration Public Administration Reform Support modernization of

education provider networks…

PREM/CITPO CPRGS objectives


PREM

Financial and Banking Sector

Modernization

Reform Banking sector and financial organizations to mobilize domestic capital

Financial Sector Development -

Public Financial

Management

Increase budget transparency and improve the information base for decision making and target setting

Improving Transparency and Public Financial Management -

Public Administration

Reform

Accelerate the reform of the public administration Public Administration Reform -

SOE Reform Reform SOEs to strengthen their efficiency and competitiveness

SOE Reform -

Customs Modernization and Promoting Adopt measures to open

trade, promote exports and international integration and

Promoting Trade -


65

PREM/CITPO CPRGS objectives


PREM

strengthen the country’s competitiveness

Trade Create a fair business environment and increase transparency of regulations and policies

Support for the Domestic Private Sector -

Strong Alignment Weak Alignment


66

ANNEX 4 CPR PANEL ASSESSMENT OF PROJECT LEVEL ALIGNMENT

Alignment CPR Panel Assessment

FY Project Development Objective

(abbreviated) CPRGS CAS Sub-

Themes

CAS Sector

Priorities

ENERGY SECTOR

Transmission and Distribution 98

� Strengthen transmission network; rehabilitate and expand distribution and support sector reform HS MS MS

Rural Energy 00 � Expand rural access to electricity; develop rural

electrification strategy and implementation mechanism and promote renewable energy sources

HS HS HS

SEIER 02 � Improve system efficiency and reduce investment

needs; enhance rural access to electricity, sustain power sector reform and reduce GHG emissions

HS S S

Rural Energy II 05 � Improve access to good quality, affordable electricity

services to rural communities in an efficient and sustainable manner

HS HS HS

Transmission and Distribution II 06

� Efficient development of the transmission and distribution system through investment in the transmission system, dispatch and control system and reform and restructuring of EVN

HS MS MS

TRANSPORT SECTOR

'�"��*�'�"��*�'�"��*�'�"��*�

7�!��4�%�7�!��4�%�7�!��4�%�7�!��4�%��98

� Enhance capacity, efficiency and safety of inland waterway transport in Mekong Delta HS MS MS

��$��$��$��$��

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99 � Increase efficiency and safety in selected road

corridors in HCMC and Hanoi MS MU MS

�#��"��#��"��#��"��#��"��

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� Improve access of rural communities, improve and sustain the road network and foster private contractor development.

HS HS HS

��.��.��.��.��

��(��!��(��!��(��!��(��!��01

� Stimulate commercial use, improve rural access and ensure permanent access in flood-prone areas in Mekong Delta

HS MS MS

��*�3�!4��.��*�3�!4��.��*�3�!4��.��*�3�!4��.�

' (�� !' (�� !' (�� !' (�� !��04

� Improve the national road network through increased preventive maintenance, selective upgrading and capacity building

HS MS HS

��*��!%��*��!%��*��!%��*��!%�� 05 � Reduce accidents, injury and death from road transport MS S MU

�#��"��#��"��#��"��#��"�� 06 � Improve rural access in Northern and Central provinces HS HS HS


67

��(��!�'''��(��!�'''��(��!�'''��(��!�'''��

��$��$��$��$��

��(��!��(��!��(��!��(��!��07

� Support urban transport improvements that meet Hanoi’s growth needs while providing priority to public transport.

MS MU MS

HS- Highly Satisfactory, S-Satisfactory, MS- Moderately Satisfactory, MU-Moderately Unsatisfactory, U-Unsatisfactory, HU- Highly Unsatisfactory

Alignment

CPR Panel Assessment FY

Project Development Objective


Themes

CAS Sector

Priorities

��.��.��.��.��

��(��!��(��!��(��!��(��!�

'�� '�� '�� '��

08 � Reduce transport costs and raise efficiency of logistics

services HS MS MS

3��!��/�"!��3��!��/�"!��3��!��/�"!��3��!��/�"!��

��(��!��(��!��(��!��(��!��08

� Reduce transport costs and improve service quality, raise the efficiency of logistics across modes and build capacity of VIWA and PDT

HS MS MS

��3�/8�2+�3��2��3�/8�2+�3��2��3�/8�2+�3��2��3�/8�2+�3��2��

3 Cities Sanitation 99

� Sustained improvements to public health, increased economic development by reducing flooding, upgrading urban environment and developing sustainable URENCOs

S S S

HCMC Env. Sanitation 01

� Sustained improvements in public health and well-being of 1.2 million residents in HCMC particularly the poor and promote increased economic development

S S S

Urban Upgrading 04 � Alleviate poverty in urban areas by improving the living

conditions for the urban poor using participatory planning methods and influencing planning processes

S HS S

Urban Water Supply 05

� Improve water and household sanitation services in district towns and large urban centers in ways that are financially and environmentally sustainable

S MS S

Rural Water Supply * 06

� Improve water and household level sanitation services in rural communities in four provinces in the Red River Delta in a financially, technically and environmentally sustainable way

HS HS MS

Coastal Cities Sanitation 07

� Sustain improvements in environmental conditions in Nha Trang, Quy Nonh and Dong Hoi. S S S

Danang Priority Infrastructure 07

� Improve living conditions and productivity of low income households, promote economic growth and improve city and district level management

S MS S

PREM & CITPO SECTORS

+#$"��,��"�+#$"��,��"�+#$"��,��"�+#$"��,��"�

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� Strengthen budget planning, execution, reporting and accountability HS HS -

+�% ��!�+�% ��!�+�% ��!�+�% ��!�

�%�!� ��*��%�!� ��*��%�!� ��*��%�!� ��*�

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05 � Meet the economy’s demand for fast, reliable and safe

payment services; broaden access to finance and improve the operations of participating banks

S S -


68

''''''''��

�#�!� ��#�!� ��#�!� ��#�!� ��

��*��5�!��*��5�!��*��5�!��*��5�!��06

� Facilitate trade, increase revenue collection… by improving the effectiveness, efficiency, accountability and transparency of Customs Administration

HS HS -

'��'��'��'��

/��"�( ��!/��"�( ��!/��"�( ��!/��"�( ��!��06

� Facilitate implementation of GOV National ICT strategy, strengthen regulatory capacity of ICT sector, enhance ICT awareness and build models for replicable on-line public service delivery

S HS -



69

Alignment




Themes

CAS Sector

Priorities

RURAL DEVELOPMENT SECTOR

Forest Protection and Rural Dev 98

� Assist the GOV to protect and manage natural forests with high biodiversity. S S S

Agriculture Diversification 98

� Diversify and intensify agricultural production and thereby increase and stabilize farmers’ incomes. S MU HS

Mekong Delta Water Resources 99

� Increase agricultural production, improve living conditions and improve water resources management HS MS S

Coastal Wetlands 00 � Re-establish and sustainably protect the coastal

mangrove wetland ecosystems S S S

CBRIP 01 � Reduce rural poverty in up to 600 of the poorest

provinces in 13 provinces of Central Vietnam S HS MS

Northern Mountains 02 � Poor villagers in the northern mountains use a variety

of improved infrastructure and social services S HS MS

Rural Finance II 02 � Develop the rural economy and living conditions by

encouraging investments, strengthening the banking system and increase access to rural financial services.

HS HS S

Water Resources Assistance 04

� Foster agricultural diversification through improved irrigation, dam safety management and promote sustainable river basin management

HS MS HS

Forest Sector Dev. 05 � Achieve sustainable management of plantation forests

and the conservation of biodiversity S S S

Avian Influenza 05 � Support the National Action Plan for Avian Flu S S MS

Natural Disaster Risk Management 06

� Adoption by the Government of a comprehensive risk management framework for natural disaster prevention, preparedness, mitigation and recovery

HS HS MU

PCLIP (pipeline) 07

� Reduce poverty and foster secure and sustainable livelihoods for those living in the poorest communes HS HS MS

EDUCATION SECTOR

Higher Education 99

� Improve responsiveness of higher education system to changing demands of the market economy, improve efficiency of resource allocation and improve quality of curriculum, teaching, learning and research.

S MU S

Primary Teacher Development 02

� Lay the foundation for a nationwide program to upgrade the quality of primary teaching service HS MS MS

Primary Education for Disadv. Children 03

� Improve access to primary school and the quality of education for disadvantaged girls and boys HS HS HS

Education For All 05 � Assist the Borrower implement the National Education

for All Plan through targeted budget support to enhance quality and administration of basic education

HS HS HS

Higher Education II (pipeline) 07

� Increase the number of graduate students with relevant skills for the modern society and market-based economy

S MU S



70

Alignment




Themes

CAS Sector

Priorities

HEALTH SECTOR

3�!��"��"!��3�!��"��"!��3�!��"��"!��3�!��"��"!��

�#((��!�#((��!�#((��!�#((��!��98

� Improve the health of the rural population in the poorer areas HS HS HS

�"��*��"��*��"��*��"��*�

��#��#��#��#��00

� Secure health benefits of safe blood transfusions for the population in four regions S MS MS

'89��*��'89��*��'89��*��'89��*��

+��!��+��!��+��!��+��!��05

� Support programs to halt transmission of HIV/Aids among vulnerable groups S MS MS

��.��.��.��.��"!��"!��"!��"!�� 06 � Improve health services in the Mekong region and

enhance access to and coverage of these services S S S

��"!��,#�*��"!��,#�*��"!��,#�*��"!��,#�*��

!��+��!��+��!��+��!��+��07

� Reduce out-of-pocket spending for the poor and create incentives for efficient and equitable health services HS HS HS



71

ANNEX 5 DRAFT SECTORAL RESULTS FRAMEWORK

Possible Energy Sector Results Framework

Bank Supported Sector Goals …

… and strategy … by investing in

distribution, rehabilitation and expansion of low/medium voltage supply to 2000 communes by 2010 � Rural Energy � SEIER (incl. GEF TF) � Rural Energy II (incl.

GEF TF) � CBRIP (?) � Rural Distribution

…by investing in rehabilitation and expansion of power generation, transmission and distribution � SEIER (incl. GEF TF) � Transmission and

Distribution � Transmission and

Distribution II � Power Generation � Renewable Energy


Provide rural access to

reliable and affordable

electricity…

Meet demand for reliable, high quality least cost power…

Improve commercial and

financial efficiency of the power sector…

Reduce Social and

Enviornmental Impact at local

and global level

…by providing support to legal, institutional and regulatory reforms and investing in market transformation � Rural Energy � Transmission and

Distribution � SEIER (incl. GEF TF) � Rural Energy II (incl.

GEF TF) � Transmission and

Distribution II � Guarantee ? � Renewable Energy � GEF Grant – Demand

Side Management and Energy Efficiency

… by developing renewable energy sources, improving energy efficiency and demand side management � Rural Energy � SEIER (incl. GEF TF) � Rural Energy II(incl.

GEF TF) � Renewable Energy � Carbon Finance

Operations � GEF Grant – Demand

Side Management and Energy Efficiency

� Power Generation

Additional rural households/communes with electricity

Reduction in transmission and distribution losses Reduction in number and duration of transmission interruptions Measures of reliability (e.g. outages or costs associated with black outs) Lower cost of power

Performance improvements in EVN, affiliated power companies and local distribution companies measured on utility balanced scorecard Milestones on the energy reform road map achieved

Percentage of electricity from renewables (excl. large hydro) Reduction in green-house gas emissions Reduction in energy consumption and peak power demand

… with KPIs


72

Possible Transport Sector Results Framework


… and strategy

Additional Households provided with access to an all weather road within 2 kms

… with KPIs


Improve Effectiveness of Transport

Sector Institutions…

Reduce Costs and Improve

Transport Efficiency…


Urban Areas .. …

Reduce Traffic

Accidents and Fatali ties …


Rural Areas …

Improve Transport

Services …

… by investing in and maintaining all - year round access to poor communes in the North, We st, Mekong and Red River Delta � Mekong

Transport � Rural

Transport II � Rural

Transport III � Mekong


Transport

… by investing in expansion and maintenance of main roads, canal networks, provincial connecting roads and feeder ways. � Inland

Waterways � Mekong

Transport � Road Network

Improvement � Mekong


Transport

… by supporting urban strategic planning, traffic management, public transport and investments in urban roads in major cities. � Urban

Transport � Hanoi Urban

Transport � Danang

Priority Infrastructure

… by strengthening the National Traffic Safety Committee and implementing road safety programs � Mekong

Transport � Urban

Transport � Road Safety

Improvement � Hanoi Urban

Transport

… by building capacity to plan, manage and maintain transport system investments. � Inland

Waterways � Rural Transport

II & III � Road Network

Im provement � Hanoi Urban

Transport � Mekong


Transport

… by improving the regulatory framework for transport and logistics, developing private sector contracting, consulting services, private sector passenger and freight � Rural

Tran sport II � Rural

Transport III � Road Network

Improvement � Transport

SOE reform ?

Reduced travel time on improved national and provincial roads Reduced passenger and freight tariffs Increase in volume of freight Reduction in overl o a ding

Travel time on improved urban roads Outcome indicator on public transport

Reduced number of accidents, injury and fatalities in project corridors Performance targets for National Road Safety Strategy achieved

% of national and rural roads meeting standards for maintenance Improved performance of MOT, PDOTs, VRA, VIWA against targets

Increase in number of multi - modal transport provid ers Reduction in time/cost of moving goods across modes Milestones in strengthening regulat ions


73

Possible Urban Development Sector Results Framework

…for the urban population, particularly the Urban Poor

… by investing in water supply, sanitation, drainage, sewerage systems and other basic services etc.

� Urban Upgrading � Urban Water Supply � 3 Cities Sanitation � HCMC Environmental

Sanitation � Coastal Cities

Sanitation � Danang Priority Infra � Urban Water Supply II

… by investing in wastewater collection and treatment, solid waste management and measures to reduce air pollution (?). � 3 Cities Sanitation � Urban Upgrading � HCMC Env. Sanitation � Coastal Cities

Sanitation � Danang Priority

Infrastructure � Hanoi Urban GEF

Transport � GEF TF – WW

Technology Quy Nhon


Improve access to

basic infrastructure

services…

Reduce Environmental Degradation

in Major Cities…

Improve the Institutional

Effectiveness of Municipal

Utilities…

Improve Access to

Financing for Municipal

Infrastructure...

…by building capacity to plan, manage and maintain urban infrastructure investments. � 3 Cities Sanitation � Urban Upgrading � HCMC Environmental

Sanitation � Urban Water Supply � Coastal Cities

Sanitation � Danang Priority

Infrastructure � PPIAF Water Sector � Cities Alliance Cities

Development Strategy

…by developing municipal financing markets and establishing non-subsidized lending facilities. � Urban Water Supply � Danang Priority

Infrastructure � Municipal Development

Fund � Urban Water Supply II

Bank Sector

Goals …

… and strategy

No of people with new or improved access to basic services (water supply, sanitation etc.) Percentage of poor households with access to basic services Reduction in the frequency, duration and area of flooding at key locations

Percentage of wastewater per catchment collected and treated to agreed standards Percentage of waste collected Percentage of waste disposed of safely

Improved performance on balanced scorecard for utilities participating in Bank projects

An outcome indicator to measure improved access to financing (?)

… with KPIs


74

Possible Rural Development Sector Results Framework


… and strategy

No of incremental jobs created Improved farmer income (VND/person/yr) and distribution Improved agricultural productivity (VND/ha and VND/worker) Service coverage and farmer satisfaction rates

… with KPIs


Improve rural access to

basic services and

infrastructure..

Increase farm income and

off-farm employment

…

… by investing in agricultural infrastructure and support services, including research, extension and access to rural finance, strengthening food safety/agricultural health and promoting agricultural diversification. � Rural Finance II � Agricultural

Diversification � Mekong Delta

Water Resources � Vietnam Water

Resources Assistance Project

� Agricultural Diversification II

� Livestock Competitiveness and Food Safety

� Rural Finance III � GEF- TF Livestock

Waste Managmnt in East Asia

… by creating an enabling environment for market-oriented reforms and service development, furthering trade integration and pursuing SOE reform. � Rural Finance II � Forest Sector

Development � IMC reforms � Livestock

Competitiveness and Food Safety

� Land Administration

� Rural Finance III

… by promoting sustainable water resources management, sustainable forest development and biodiversity protection, preventing and mitigating natural disasters, and strengthening food safety/ agricultural health. � Water Res. Ass. � Mekong Delta Water � Forest Sector Dev. � Forest Protection � Coastal Wetlands � Natural Disaster � Avian Influenza � Land Admin. � GEF TF – Green

Corridor Project � GEF TF- Forest

Sector Development � TF – Hon Mun

Protected Area Pilot � GEF TF – Pu

Luong/Cuc Phuong � GEF TF – CYS

National Park � GEF- TF Livestock

Waste Managmnt

… by mainstreaming poverty reduction, pursuing participatory approaches to resource planning and management and providing access to basic infrastructure services and agricultural support services. � Northern Mountains

Poverty Reduction � CBRIP � Natural Disaster

Mitigation � ASEM TF –

Strengthening CDD � IDF TF – M&E of

CPRGS implementation

� PCLIP

… by investing in rural water and sanitation infrastructure. (other rural interventions covered under energy, transport and HD sectors) � Rural Water

Supply (UD) � Water Resources

Assistance � Mekong Delta

Water

Growth of agr GDP and exports Increased number of private SMEs created and their share in total inv. in rural economy % of HHs and agr land with LUC granted Improved performance of PFIs, ICMs and SFEs

Increased forest coverage/capacity Reduction in forest losses/damages Number of RBOs in operation Natural Disaster? Reduction in planted areas suffering from drought/floods

Reduction in rural head count poverty rate and acc poverty gaps Reduction in number of communes without basic infrastructure Improved peoples participation in P135 rural infrastructure

Number of additional people with access to safe water supplies/sanitation and the percentage of these that are poor

Pillar III: Reduce Rural Poverty and Improve Livelihoods

Pillar I: Accelerate Agricultural Sector Growth

Pillar II: Nat. Resources

Management

Promote market-oriented

reforms …

Managing water,

forestry and risks ...

Reduce poverty in the poorest

and most marginalized rural areas …


75

Possible Education Sector Results Framework

… by investing in education infrastructure improvements and implementing education initiatives targeting vulnerable groups including ethnic minorities, girls, working children, street children and children with disabilities. � Primary Education for

Disadvantaged Children

� Education for All � JSDF TF – Early

Chilhood Care and Development

… by investing in renovation of curriculum and textbooks/teaching methods and improving teacher training and qualification. � Primary Teacher

Development � Primary Education for


� Education for All � CIDA TF – Support

Basic Education Sector Budget Processes

� Education Workforce Quality


Ensure access to affordable quality basic education for all children…

Enhance primary school

student achievement ...

Improve the institutional

effectiveness of education agencies …

Increase the number of graduate

students with relevant skills..

… by strengthening the capacity at different Government levels to plan and manage the education sector. � Primary Teacher

Development � Primary Education for


� TF - Result-based Management for VN Education Managers

� ASEM II TF –Enhancing Poverty Reduction Focus in the Education

� Education for All � Education Workforce

Quality

… to assist in the transition to a market economy by supporting higher education reform, improving the quality of higher education, encouraging research and improving the cost-efficiency and equity in the higher education system. � Higher Education � Higher Education II


… and strategy

Gross intake in grade 1 Net primary enrollment Primary completion rate

Per-student spending on non-salary items Drop-out and repetition ratio Pupil -teacher ratio Student achievement in grade 5 in mathematics and Vietnamese language

Quality of Education Management Information System Quality of Education Quality Assurance System (requires subjective judgment on the part of donors)

> 85% of university graduates gain employment within 12 months of graduation

… with KPIs


76

Possible Health Sector Results Framework

… by supporting the demand especially the poor and near-poor through appropriate health insurance packages. � Mekong Health Support � Northern Upland Project � Central Region Health

Support

… by investing in preventive and curative health care improvements in selected regions and provinces. � National Health Support � Mekong Health Support � Northern Upland Project � Central Region Health

Support � TF- Iron Fortified Fish

Sauce Project


Improve access to health care services at different levels, especially for the

poor and near poor

Improve quality of preventive and

curative health care services, in part to

respond to increasing NDC prevalence

Reduce mortality and morbidity due to infectious diseases

incl. new threats (e.g. HIV/AIDS,

SARS, Avian Flu)

… by supporting appropriate division of roles and responsibilities between central and lower levels, and between public and private sectors. � National Health Support � Regional blood transfusion � HIV/AIDS Prevention � IDF TF – Health Sector

Expenditures and FM � TF JSDF – Prevention and

Control of SARs � Mekong Health Support � Prevention and Control of

SARS � Avian Flu AAA work


… and strategy

Proportion of population with access to adequate health services (poor, near-poor, overall) Reduced level of out-of-pocket health expenditure for the poor and near-poor

Proportion of population with access to primary health care (poor, others) Proportion of population with access to hospital care including emergency care (poor, near-poor, overall) Proportion of at-risk population (e.g., pregnant women and children) with access to iron fortified fish sauce (poor and non-poor) Mortality rate due to NCDs including injuries and accidents

Malaria prevalence /fatality rate TB case finding/cure rate Incidence of blood transmitted infections Percent of vulnerable groups reporting safer injection and sexual practices Incidence of other common infectious diseases (e.g., dengue, ARI, diarrhea) Incidence/outbreak of SARS and case finding Incidence/outbreak of Avian flu and case finding/cure rate

… with KPIs


77

Possible PREM++ Sector Results Framework


… and strategy

Milestones on roadmap for reform of banking and financial sector Indicators on financial sector efficiency

… with KPIs


Develop an efficient banking sector…

… by improving access to financial services, strengthening banking and payment systems, building a reliable legal banking environment, � Payment System

and Banking Modernization II

� ASEM TF– Mekong Housing Bank Diagnostic Review

� ASEM TF– BIDV Restructuring

� ASEM TF–Improving Banking Sector Transparency

� ASEM TF– SBV’s Road Mapping

� ASEM TF – Vietcombank Technical Twinning Program

� ASEM TF – Banking Sector Regulation, Supervision, and Development

� ASEM TF – SOCB Audit & Basel Core Principles Assessment

� Banking Sector Modernization

… by restructuring and equitizing SOEs, and building capacity on corporate governance � TF – Pilot

Restructuring of 3 GCs

� PHRD TF – Diagnostic Audits of SOEs

� ASEM TF – Monitoring of SOE New Establishment & Transformations

� ASEM TF –Resolution of Non-performing debts and assets of SOEs

� ASEM TF– Training on Corporate Governance

� Transport Sector SOE reform

… by strengthening public financial management and procurement systems, reforming public administration and strengtehing policy making � Public Financial

Management Modernization

� Custom Modernization

� ICT Development � IDF TF –Int’l Public

Sector Accounting Stnds

� ASEM TF –Evidence-based Pro-poor Policy

� IDF TF – Public Procurement Reform

� IDF TF –Financial Accountability

� IDF/PHRD – ODA management

� Tax Admin. Reform

… by supporting customs modernization, assisting in WTO accession and addressing impacts of WTO. � Custom

Modernization

Number of SOEs and their workers supported by SSN Number of Gov staff trained to managed the social security system

Milestones on roadmap for SOE reform Number of transformations completed by SOE reform category

Milestones on Public Procurement and FM Reform Road Map Increase in user satisfaction for e-Government services

Improvement in Client perception Reductions in mean clearance times Increase in revenue generation from customs intevention

Develop an efficient non-

banking sector…

Improve GOV effectiveness , transparency

and accountability

….

Create a vibrant

domestic private sector

...

Facilitate trade and integration into the world

economy ... ….

… by strengthening capital markets, pension, social security and insurance systems � ASEM TF -Social

Security Law � ASEM TF - Operation

and Monitoring of Social Security Net

� ASEM TF– Accelerating Capital Markets Development


78

ANNEX 6 RESULTS ACHIEVED BY THE PORTFOLIO TO DATE

Sector Goals Results

Achieved to Date by the Portfolio (As reported in ISRs/GRMs by Dec 2005)

ENERGY SECTOR

1. Provide access to affordable electricity � 767 communes electrified - benefitting 2.5 million people (RE I)

2. Meet demand for reliable, high quality least cost power

� Reduction in number of transmission line faults (times/year/100km) (SEIER): � 500kV: from 0.34 (2002) to 0.33 � 220 kV: from 0.61 (2002) to 0.596 � 110 kV: from 3.4 (2002) to 3.32

� Reduction in number of transmission line faults (times/year/100km) (TD): � 500kV: from 0.02 (1997) to 0.005 � 220 kV: from 0.22 (1997) to 0.22

� High voltage transmission line expanded from 1,480 km to 2,660 km (TD) � Transformer capacity expanded from 2,700 MVA to 4,400 MVA (TD)

3. Improve the commercial and financial efficiency of the power sector

� Reform plan of EVN (2003-2005) under implementation, including equitization of one provincial power distribution company (SEIER)

� Regulatory reforms are under implementation including first step to establishment of a power market and equitization of two hydro-power stations (TD)

TRANSPORT SECTOR

1. Improve mobility of people and goods in rural areas

� 20% increase in roads passable all year around (in 24 provinces surveyed) (RT II)

� Average 20% reduction in travel time to district centers (in 24 provinces surveyed) (RT II)

� Visits to health clinics and school attendance increased by 3-40% in areas with project roads (RT II)

� 4,692 km of road (1,299 road links) and 676 bridges rehabilitated in 40 provinces (RT II)

2. Reduce transport costs and improve the efficiency of freight mobility

� 9% increase in freight volume between Can Tho and HCMC (Mekong Transport)

� Cargo volumes in Can Tho have increased rapidly exceeding project targets by 7 to 60% (Inland Waterways)

� Throughput in Can Tho port was 600,000 tons in 2003 (an increase by over 300% compared to 1996) (Inland Waterways)

� 4 bridges constructed and 546 km of waterways dredged (Inland Waterways)

3. Improve mobility of people and goods in urban areas

� Travel time reductions in HCMC project corridors by 8-9% and 17% in central area (Urban Transport)

� 23 km of corridors and 78 junctions improved in Hanoi (Urban Transport) � 36 km of corridors and 135 junctions improved in HCMC (Urban Transport)


79



4. Reduce road accidents, injury and death

� Fatalities from motorized vehicles reduced from 80 to 51 per year in HCMC project corridors (Urban Transport)

5. Improve the institutional effectiveness of MOT/VIWA/VRA (LTUs, Provinces, City Authorities)

� 193 Maintenance training courses with involvement of 5,600 communes, 300 districts and 59 provinces (RT II)

� Financial performance of the Can Tho port has improved (Inland Waterways

URBAN DEVELOPMENT SECTOR

1. Improve access to basic infrastructures services for the Urban Population, with a particular focus on the urban poor

� More than 26,000 sanitation loans and 3,600 income generation loans disbursed (3 Cities)

� 98% repayment rate for micro-credit and sanitation facilities build within 2 months in almost all cases (3 Cities)

� 2,000 micro-credits for housing improvements (Urban Upgrading) � Significant reduction in the duration and depth of flooding in Danang, Halong

and Cam Pha (3 Cities) 2. Reduce environmental

degradation in major cities � 246,000 tons of waste collected in Danang, Halong and Cam Pha (an

increase by 80% over 1999) (3 Cities)

3. Improve the institutional effectiveness of URENCOs, Water Supply Companies,City authorities

� HCMC Urban Drainage Company is recovering 97% of operating, maintenance and depreciation costs (HCMC ES)

� Cost recovery in utility companies : Haiphong 46% (increased compared to baseline), Halong 44% (increased), Cam Pha 22% (decreased), Danang 58% (decreased) (3 Cities)


1. (a) Increase farm income and off-farm employment

� 30 irrigation/drainage systems completed (Mekong Delta Water) � Increased penetration of financial services in rural areas by granting more

than 100,000 sub-loans (Rural Finance II) � For more than 30% of the end-borrowers, it is the first time to have a credit

relationship with a formal banking institution (Rural Finance II) � 60% of the project end-borrowers opened a savings account for the first time

after being granted the project sub-loan (Rural Finance II) � 200,000 incremental jobs created (Rural Finance II) � 17,213 ha of new rubber smallholdings established (57% of revised target)

(Ag. Diversification) � 10,645 ha of existing rubber smallholdings rehabilitated (63% of target) (Ag.

Diversification) � 26,500 farmers have adopted cattle fattening techniques (71% of target)

(Ag. Diversification) � 30,700 farmers pig intensification techniques (82% of target) (Ag.

Diversification) � Land use rights issued to 38,720 households (including 6,729 ethnic

minority households) (35% of target) (Ag. Diversification)

2. (a) Water Resources Management

� River Basin Organization established for Mekong Delta (Mekong Delta Water)


80



2. (b) Sustainable Forestry Management and Biodiversity Protection

� Illegal harvesting reduced from 700 violations in 1999 to 146 in 2004 in the Cat Tien National Park and Chu Mom Ray Nature Reserve (Forest Protection)

� Barren land decreased by 30% through plantations/perennial crops in buffer zones (Forest Protection)

� Proportion of households that are poor in the buffer zone reduced from 33% to 28%. (Forest Protection)

� 2,438 ha of mangrove planted (Coastal Wetlands) � Long-term management plan for Mui Ca Mau National Park established

(Coastal Wetlands)

3 (a) Reduce poverty in the poorest and most marginalized areas

Northern Mountains: � 1,922 construction sub-projects supported � 949 km of roads � 40,000 people served by upgraded markets � 6,400 households using new clean water supplies � 4,620 sq km irrigated benefiting 43,227 households � 421 schools and classrooms upgraded and built � 154 commune health centers upgraded to acceptable standard In Northern Mountains Poverty project communes (average/commune) compared to 2001: � Travel time per market visit reduced by 15% � Households with access to clean water increased by 68% � Number of school-aged children not attending school reduced by 44% � 89% survey respondents reporting higher quality health services � Mean income per household 8,300,000 VND compared to 4,300,000 VND

in 2001 CBRIP: � 543 communes organized village meetings to select sub-projects � 543 O&M groups established � 1,113 communal infrastructure sub-projects have been constructed and

handed over benefiting 3,035,410 persons in project communes (transport 23%, clean water supply 9%, irrigation and flood control 9%, schools and kindergarten 15%, commune houses 32%)

3 (b) Improve access to basic services and infrastructure rural water and household level sanitation services –

� 420,000 persons have received clean drinking water supply and improved sanitation (Mekong Delta Water)

� 124 Rural water systems completed (Mekong Delta Water)

EDUCATION SECTOR

1. Ensure access to affordable quality education for all children

� 173 schools constructed to achieve Fundamental School Quality Level (PEDC)

2. Improve primary school student achievement

� Professional teaching standards for primary teachers introduced– trial application with over 2000 teachers (Primary Teacher Development)

� 7 teacher training modules have been completed and disseminated (Primary Teacher Development)

3. Improve the institutional effectiveness of education agencies

� ?


81



4. Increase the number and quality of graduate students

� 10% increase in average size of Higher Education Institutions (Higher Education)

� 76% of Higher Education Graduates gaining employment within 12 months of graduation date (Higher Education)

HEALTH SECTOR

1. Improve access to health care services at different levels, especially for the poor and near-poor

� ?

2. Improve quality of preventive and curative health care services, in part to respond to NCD prevalence

National Health Support: there was no baseline data collected and no progress measured against outcome indicators. Impacts observed by the final project evaluation (Oct 03) include:

� Improved morale and professionalism of CHC workers; � Raised community perceptions of CHC quality; � Utilization rates in CHCs that are on average 10% higher for both in-patient

and outpatient services compared with non-project communes; and � A higher quality of preventive services supplied by the national health

programs and actually accessed by the population.

3. Reduce mortality and morbidity due to infectious diseases including new health threats (e.g., HIV/AIDS, Avian Flu)

National Health Support: see above

PREM SECTOR

1. Develop an efficient banking sector…

ASEM TF – Mekong Housing Bank: Diagnostic Review and Preparation for Strategic Partnering/Equitization � A diagnostic review on deposit profile and loan portfolio � A Transaction Strategy

2. Develop an efficient non-banking sector…

ASEM TF – Support for the Operation and Monitoring of the Social Safety Net for Redundant Workers

� 910 SOEs and 45,000 displaced workers received compensation from the SSN Fund

� 6 trainings for about 1,000 officials and experts of ministries, people committees and enterprises on redundant labor issues were conducted

� A Database of 1,080 restructured SOEs and 54,500 redundant workers has been updated.

A Survey on 200 SOEs and 2,800 workers receiving subsidies from the SSN Fund were done

3. Create a vibrant domestic private sector...

PHRD TF – Diagnostic Audits of SOEs � 24 diagnostic of the largest SOEs in 5 industrial sectors implemented � 47 reviewed SOEs benefited from free professional advice on their

operations � 770 Recommendations and Action Plans on performance improvement for

SOEs, GCs, and policy level introduced. See Charts above on the implementation of recommendations.

� Private Development Options were fully explored and various divesture options were carefully analyzed for recommendations

� 5 workshops attended by 500 participants. Agreement was reached to put key conclusions of some of 25 reports on the MOF website.


82



4. Improve GOV effectiveness , transparency and accountability

� Draft 2006-2008 Medium Term Fiscal Framework and four sectoral Medium Term Expenditure Frameworks (to be published in January 2006) (PFM)

� Preparation of a Debt Management and Mobilization Plan initiated. (PFM) � Public Expenditure Review – Integrated Fiduciary Assessment (PFM) � A unified Chart of Accounts (PFM) � A new strategy for Government Financial Management Information (PFM)

5. Facilitate trade and integration into the world economy ... � ?


83

ANNEX 7 CPR ASSESSMENT OF PROJECT RESULTS FRAMEWORKS

Results Framework Sector / Project

Clarity of PDO Quality of KPIs Quality of M & E Overall Quality

ENERGY SECTOR

Transmission and Distribution MU MS* S MS

Rural Energy MS MS* MS MS

SEIER MU MS* S MS

Rural Energy II S S S S

Transmission and Distribution II MS MS S MS

TRANSPORT SECTOR

Inland Waterways S MS MU MS

Urban Transport S MS* MS MS

Rural Transport II S MS* MU MS

Mekong Transport MS HS MS S

Road Network MS S* S S

Road Safety HS HS S HS

Rural Transport III S HS HS HS

Hanoi Urban Transport (pipeline) MU - - -

Northern Delta Transport (pipeline) MU - - -

Mekong Transport II (pipeline) MU


3 Cities Sanitation S S* S S

HCMC Env. Sanitation S S* S S

Urban Upgrading MS S* MS MS

Urban Water Supply MS HS S S

Rural Water Supply S S S S

Coastal Cities Sanitation (pipeline) MS - - -

Danang Priority Infrastructure (pipeline) U - - -

Municipal Development Fund (pipeline) U - - -



84

Results Framework Sector / Project

Clarity of PDO Quality of KPIs Quality of M & E Overall Quality

Forest Protection and Rural Dev MS S S S

Agriculture Diversification S MS MS MS

Mekong Delta Water Resources MS MS* MS MS

Coastal Wetlands S MS MS MS

CBRIP MS MS U MU

Northern Mountains S HS S S

Rural Finance II MS S S S

Water Resources Assistance MS U MS MU

Forest Sector Dev. MS MU MU MU

Avian Influenza S S U MS

Natural Disaster Mitigation MS MS S MS

EDUCATION SEC TOR

Higher Education MU S S S

Primary Teacher Development U U MU U

Primary Education for Disadvantaged Children HS S HS HS

Education for All MS HS MU MS

Higher Education II (pipeline) S - - -

HEALTH SECTOR

National Health Support S S* MU MS

Blood Transfusion Centers S S* MU MS

HIV/AIDS Prevention HS HS S HS

Mekong Health Support (pipeline) S S MU MS

Health Fund for the Poor (pipeline) MU - - -

PREM SECTOR

Public Financial Management MS MU MU MU

Payment System and Bank Modernization II MS MS MU MS

Customs Modernization S HS S S

ICT Development MS MU MU MU

* The migration to ISR significantly changed the KPIs, compared to the original set in the PAD. The rating is based on the PAD/restructuring memo indicators.


85

ANNEX 8 CPR ASSESSMENT OF M&E SYSTEMS

SECTOR / PROJECT BASELINES? TARGETS?

ENERGY

Transmission and Distribution Yes Yes

Rural Energy Yes Partly

SEIER Yes Yes

Rural Energy II Yes Yes Transmission and Distribution II

Yes Yes

TRANSPORT SECTOR

Inland Waterways Partly Partly

Urban Transport Partly Partly

Rural Transport II No No

Mekong Transport Yes Yes

Road Network Yes Yes

Road Safety Partly Partly

Rural Transport III Partly Partly


3 Cities Sanitation Yes Partly

HCMC Env. Sanitation Yes Yes

Urban Upgrading Partly? Partly?

Urban Water Supply Yes Yes

Rural Water Supply Yes Yes


Forest Protection Yes Yes

Ag. Diversification No Partly

Mekong Delta Water Yes? Yes?

Coastal Wetlands Partly No

CBRIP No No

Northern Mountains Yes Partly

Rural Finance II Yes Yes

Water Resources Ass. Yes Yes

Forest Sector Dev. Partly Partly

Avian Influenza No No

Natural Disaster Yes Yes

EDUCATION SECTOR

Higher Education Partly Yes

Primary Teacher No No

PEDC Yes Yes

Education for All Yes No

HEALTH SECTOR

National Health Support No No

Blood Transfusion Centers Partly Partly

HIV/AIDS Prevention Yes Yes


86

SECTOR / PROJECT BASELINES? TARGETS?

Mekong Health Support No No

PREM

Public Financial Management Yes, but not clear Yes, but not clear

Payment System & Banking II Yes, but not clear Yes, but not clear

Customs Modernization Yes Yes

ICT Development Yes, but not clear Yes, but not clear


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ANNEX 9 PIPELINE FY06-FY10 Project

No Project Name IDA ($m) FY PCN Date PHRD TF

Energy

P099211 Rural Distribution Project 170 FY07 02/28/2006

P086509 Power Generation 150 FY08 04/15/2006

Renewable Energy

Rural Energy III

Guarantee Operation

Carbon Finance Operation

Transmission III

Education

P079665 Higher Education II 72 FY07 09/11/2003 x

P091747 Teacher Service Reform 72 FY08 05/30/2006

Science and Teachnology: Policy Development & Key Research

Education Full SWAP

Education for the Knowledge Economy

Health

P079663 Mekong Health Support 70 FY06 10/07/2003 x

P082672 Health Fund for the Poor 60 FY07 10/07/2003 x

P095275 Central Region Health Support 62 FY08 06/20/2006 x

Northern Upland Health Support

PREM/CITPO

P088759 Financial Sector Modernization & Information Management 115 FY07 08/02/2005 x

Tax Administration Reform

ICT for Business and Trade Facilitation FY08

Remote Connectivity and InforSystem FY09

Rural Development

P084935 Poor Communes Infrastructure & Livelihoods 100 FY07 07/06/2004 x

P084957 Agriculture Diversification II 55 FY07 07/06/2004

P090723 Agricultural Services 65 FY07 02/23/2006

Project No Project Name IDA ($m) FY PCN Date PHRD TF


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P096418 Land Administration 40 FY08 03/25/2006

Livestock Sector Development

New Village Models

Mountain Area Irrigation

Water Resources 2

Rural Finace 3

Fisheries and Aquaculture

Poor Communes Infrastructure & Livelihoods II

Integrated Rural Development

Agriculture Technology

Rural Service

Transport

P075407 Rural Transport III 100 FY06 02/06/2004 x

P083588 Mekong Transport Infrastructure Development 200 FY07 02/06/2004 x

P083581 Hanoi Urban Transport 135 FY07 11/06/2003 x

P095129 Northern Delta Transport Development 200 FY08 12/13/2005 x

RNIP II

Road Safety II

Provincial Transport Support Program

Expressway Development - PPP Advice

HCMC Urban Transport

Central Area Development

Urban Development

P094055 Municipal Infrastructure Development Fund 150 FY07 01/30/2006

P082295 Coastal Cities Environmental Sanitation 126 FY07 05/07/2004 x

P086508 Danang Priority Infrastructure 150 FY07 02/08/2006 x

P096911 Urban Water Supply Dev II 110 FY08 02/13/2006

National Urban Upgrading Program

Environmental Sanitation Program

Can Tho Development Program

Halong Development Program

Rural Water Supply II


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ANNEX 10 PROJECT WATCH LIST

Credit Project Name

Targeted Disb.

($mln) >15 MUSD in

FY06

Project at Risk (#)

>3 MS ratings

Disb. Lag

>60%

Infrastructure: Energy

P045628 Transmission, Distribution (x) P056452 Rural Energy x

P066396 System Energy, Equitization & Renewables x (x) x

P074688 Rural Energy II (x) x P084871 Transmission, Distribution II

Infrastructure: Transport

P004843 Inland Waterways & Port Rehab. x (x) P059864 Rural Transport II P042927 Mekong Transport x x P059663 Road Network Improvement x (x) x P085080 Road Safety

Infrastructure: Urban

P051553 3 Cities Sanitation x P052037 HCMC Env. Sanitation x x x P070197 Urban Upgrading x (x) P073763 Water Supply Development x P077287 Rural Water Supply

Infrastructure: ICT

P079344 ICT Development Human Development

P004838 National Health Support P004828 Higher Education x (x) P051838 Primary Teacher Dev. (x) P073305 Blood Transfusion Centers x x P044803 Primary Educ. for Disad. Children x (x) x P082604 HIV/AIDS prevention P085260 Targeted Budget Support for EFA

PREM

P075399 Public Financial Management (x) x

P082627 Payment System & Bank Modern. x

P085071 Custom Modernization


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Credit Project Name

Targeted Disb.

($mln) >15 MUSD in

FY06

Project at Risk (#)

>3 MS ratings

Disb. Lag

>60%

Rural Development

P004839 Forest Protection (x) P004844 Agriculture Diversification (x) P004845 Mekong Delta Water Resources x (x) P042568 Coastal Wetlands x P062748 Comm-based Rural Infrastructure x P059936 Northern Mountains Pov. Reduction x P072601 Rural Finance II x P065898 Water Resources Assistance (x) P066051 Forest Sector Development x P088362 Avian Influenza Emergency Recovery P073361 Natural Disaster Risk Management

(x) Project at Risk per CPR Panel Assessment


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ANNEX 11. REALISM OF RATINGS

Sectors/Active Projects DO IP Project

Management

Financial Managem

ent

Counter-part

Funding

Procurement M&E Safeguard

ENERGY

T&D S S (MU) S (MU) S (MS) S S (MS) S S

Rural Energy S S S S (MS) S S S S

SEIER S S (MS) S S (MS) S S (MS) S S

Rural Energy II S S (MS) S (MS) S S S (MS) S S

T&D 2 - - - - - - - -

TRANSPORT

Inland Waterways S S (MS) S(MS) S S S (MS) S S

Urban Transport MS S (U) S (U) S S S (U) S S

Rural Transport II S S S S S U S S

Mekong Transport MS MS MS MS S S MS MS

Road Network S S (MU) S (MU) S S S (MU) S S

Road Safety S S S S S S S S

URBAN

3 Cities Sanitation S MS (MU) MS S MS MS S MS

HCMC Env. Sanitation S U U S S U S MS

Urban Upgrading S S S S U MS S S

Urban Water Supply S MS S (MS) S S S S S

Rural Water Supply - - - - - - - -

RURAL DEVELOPMENT

Forest Protection S S (MS) S (MS) S S S S S

Ag. Diversification S S (MS) S (MS) S (MS) S S MS S

Mekong Delta Water S S (MS) S (MS) S S S (MU) S S

Coastal Wetlands S S S S S MS MS S

CBRIP S S MS S S S U S

Northern Mountains S S S S MS S S S

Rural Finance II S S S S HS S S S

Water Resources Ass. S S (MS) MS S S MU S S


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Sectors/Active Projects DO IP Project

Management

Financial Managem

ent

Counter-part

Funding

Procurement M&E Safeguard

Forest Sector Dev. S MS MS MS MS MS S S

Avian Influenza S S S S S S MS Na

Natural Disaster S S s S S S S S

EDUCATION

Higher Education S S (MS) S (MS) S S S (MS) MS Na

Primary Teacher S S (MS) S (MS) S S S (MS) S Na

PEDC S S (MU) MS (MU) S(MS) MS

(MU) S S S

Education for All - - - - - - - -

HEALTH

National Health Support S S S S S S S (MS) S

Regional Blood Transfusion Centers S U U MS MS U S (MS) MS (MU)

HIV/AIDS Prevention S S S S S S S S

PREM/CITPO

Public Financial Management S S (MS) S (MS) S S S(MS) S (MS) Na

Payment System & Bank Modernization S S S (MS) S S MS S (MS) Na

Custom Modernization S S S S S S S Na

ICT Development - - - - - - - -

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