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  • Report No: ACS9424

    Socialist Republic of Vietnam

    Vietnam Water Sector Reform/Regulation

    Review of Urban Water and Wastewater Utility Reform and

    Regulation

    10 June 2014

    TWIEA

    EAST ASIA AND PACIFIC

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  • Standard Disclaimer:

    This volume is a product of the staff of the International Bank for Reconstruction and Development/ The World Bank. The

    findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views of the Executive

    Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the

    data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work

    do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement

    or acceptance of such boundaries.

    Copyright Statement:

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  • FINAL REPORT

    SOCIALIST REPUBLIC OF VIETNAM

    REVIEW OF URBAN WATER & WASTEWATER

    UTILITY REFORM & REGULATION

    June 2014

  • Abbreviations and Acronyms

    (VND 21,200 : US$ 1)

    ADB Asian Development Bank

    BR-VT Ba Ria-Vung Tau Province

    ERAV Electricity Regulatory Authority of Vietnam

    GC General Corporation

    GSO General Statistics Office

    Daily-life water Water for domestic use or for households

    HCMC Ho Chi Minh City

    JSWSC Joint Stock (Shareholding) Water Supply Company

    LGU Local Government Unit

    MoC Ministry of Construction

    MoF Ministry of Finance

    MoNRE Ministry of Natural Resources and Environment

    MoH Ministry of Health

    MPI Ministry of Planning and Investment

    NSCERD National Steering Committee for Enterprise Reform and Development

    NRW Non-revenue water

    ODA Official Development Assistance

    OECD Organization for Economic Cooperation and Development

    PC People’s Committee

    PPC Provincial People’s Committee

    PPP Public-Private Partnership

    SAWACO Saigon Water Supply Corporation

    SCIC State Capital Investment Corporation

    SMLLWSC Single Member Limited Liability Water Supply Company

    SOE State-owned Enterprise

    VND Vietnam Dong

    WB World Bank

    WSC Water Supply Company

  • Acknowledgements

    The Water and Sanitation Program (WSP) would like to express its great appreciation of the effort and support extended to the study team by the relevant ministries/ agencies of the Government of Vietnam at different central and local levels and the water supply and sewerage utilities during this study. The study was implemented during April – June 2014 and included (i) desk review, (ii) site visits, (iii) draft report, (iv) consultation workshop, and (v) finalization of the report. At the consultation workshop on June 9, 2014 jointly held by the Ministry of Construction and the World Bank/WSP with representatives from ministries, donors, water supply and sewerage utility companies, and provincial peoples committees, the key findings and recommendations of the study were presented and positively received by the parties. Many comments were received at the consultation workshop and these will form the basis of ongoing dialogue with the government on the reform agenda. The views and conclusions presented in this report are those of the study team and do not necessarily represent those of the WSP or of the World Bank. We hope that this report will serve as a useful resource for further dialogue and discussions on reform/regulation and policy making in the urban water and sanitation utility sector, and as such contribute towards the successful achievement of the Government’s SOE reform goals and targets for the benefit of the peoples of Vietnam. Study Team: Mr Iain Menzies, Senior Regional Water and Sanitation Specialist, WSP EAP (TTL) Mr Nguyen Quang Vinh, WSP Country Coordinator for Vietnam Mr David Stiggers, Utility Reform/Regulation Specialist Mr Pham Ngoc Thang, Financial Specialist Quality Assurance: Ms Almud Weitz, WSP Principal Regional Team Leader, EAP/SA Regions

  • Contents Review of Urban Water & Wastewater Utility Reform & Regulation in Vietnam ................................... i

    Executive Summary .................................................................................................................................. i

    Section 1: Review of Reform: The current Urban Water Supply Enterprise Equitization Program ..... i

    Section 2: Review of Regulation of the Urban Water & Waste Water Utilities ................................. iii

    INTRODUCTION ....................................................................................................................................... 2

    Basis of this Review: ............................................................................................................................ 2

    Urban Water & Waste Water Utilities ............................................................................................ 3

    Equitization of SOEs ............................................................................................................................ 4

    SECTION 1 : URBAN WATER & WASTE WATER UTILITY REFORM ........................................................... 5

    Section A .Effectiveness of Sector Reform .............................................................................................. 5

    1 Equitization: ......................................................................................................................................... 5

    Extent of Equitization .......................................................................................................................... 5

    a. Difficulties in establishing mechanisms .................................................................................. 5

    b. The equitization of WSCs is a lengthy process ........................................................................ 5

    c. Difficulties in finding investors/capital for the non-state shares ........................................... 5

    (1) Asset Valuation ................................................................................................................... 6

    (2) Business Related Valuation : ............................................................................................... 6

    d. Levels of State Shareholding ................................................................................................... 6

    e. The varying nature of individual regional economies; the size and form of the Utilities ....... 7

    f. Utility Diversification ............................................................................................................... 7

    g. Fragmentation......................................................................................................................... 7

    h. Capacity of Utility Management for effective change ............................................................ 7

    2. Sector Performance& Levels of Service Improvement: .................................................................. 8

    (a) Benchmarking of sector performance .................................................................................... 8

    Key Performance Indicators for Vietnam: ...................................................................................... 8

    Drinking Water Quality: .................................................................................................................. 9

    KPI of other Countries relativ