Water Efficiency Improvement in Drought-Affected Provinces Project (RRP VIE 49404)

Subproject Report: Nhon Hai-Thanh Hai Subproject

Viet Nam: Water Efficiency Improvement in

Drought-Affected Provinces Project

TABLE OF CONTENTS

Page

List of Tables List of Figures List of Abbreviations

I. BACKGROUND 1

II. PROJECT DESCRIPTION 2

A. Concept 2 B. Hydrology 2 C. Cropping Patterns, Command Area and Soils 6 D. System Feasibility Design 8 E. Detailed Design Requirements 9 F. Management and Operation 10

III. COST ESTIMATES 11

IV. PROJECT IMPACT 13

A. Social 13 B. Environmental 17 C. Resettlement 19 D. Economic 20

LIST OF TABLES

Number Title Page

1 Details of Tan My Headworks 3 2 Proposed Cropping Pattern for Ninh Thuan Subprojects 3 3 With and Without Subproject Cropping Patterns 7 4 Proposed Irrigated Area and Pipe Density 9 5 Possible Opportunities to Optimize Pipeline Design 10 6 Summary Costs - Nhon Hai-Thanh Hai Subproject 12 7 Land-use in Target Communes, 2016 14 8 Resettlement Cost Estimates 20 9 Economic Assessment of Nhon Hai-Thanh Hai Subproject 22

LIST OF FIGURES

Number Title Page

1 Mean and Reliable Rainfall Recorded at Phan Rang 4 2 Isohyetal Map of Mean Annual Rainfall - Ninh Thuan 4 3 Summary Water Balance Using IWRP Factors 6

LIST OF ABBREVIATIONS

ADB Asian Development Bank CPMU Central Project Management Unit CPO Central Project Office CRW crop water requirement CSS Construction Supervision Specialist DARD Department of Agriculture and Rural Development EMP environmental management plan ESS Environment Safeguard Specialist FA Farmers’ Association FGD focus group discussion FSC feasibility study cost GAP Gender Action Plan GRP glass fibre reinforced plastic HDPE high density polyethylene HGL hydraulic grade line or pressure HIV/AIDS Human Immunodeficiency Virus/Acquired Immune Deficiency

Syndrome HVC high-value crop IEE initial environmental examination IWR irrigation water requirement LD linked document LOS level of service LURC Land User Rights Certificate LUTS land utilization types O&M operation and maintenance MARD Ministry of Agriculture and Rural Development NDS national design specialist NGO non-government organization PPMU Provincial Project Management Unit PVC polyvinyl chloride

ROW right of way RRP Report and Recommendations of the President S2 moderate S3 poor SPB Social Policy Bank SPS Safeguard Policy Statement UIC unit investment cost UXO unexploded ordnance VND Vietnamese Dong WEIDAP Water Efficiency Improvement in Drought-Affected Provinces Project WU Women’s Union YU Youth Union

WEIGHTS AND MEASURES

l (liter) m(meter) mm (millimeter)

– – –

metric system unit of volume equal to 1 cubic decimetre (dm3) Base unit of length unit of length in the metric system

m2 (square meter) – A system of units used to measure areas m3 (Volume) ha (hectare)

– –

A system of units used to measure the spaces that an object or substance occupies. Unit of area equal to 100 ares (10,000 m2) or 1 square hectometre (hm2) and primarily used in the measurement of land as a metric replacement for the imperial acre.

Kg (kilogram) Km (kilometer)

– –

A decimal unit of weight based on the gram Unit of length in the metric system, equal to one thousand metres

NHON HAI-THANH HAI SUBPROJECT

I. BACKGROUND

1. Ninh Thuận is Viet Nam's most arid province, with some areas in the province receiving less than 800 mm rainfall per year. The province was declared one of the worst-affected provinces during the recent drought experienced between 2012-16 and both national and provincial resources were channeled into its agricultural sector to assist farmers in dealing with the extended period of water deficit. While rainfall in late 2016 and early 2017 was plentiful, the area has yet to fully recover from the impact of the extended drought with many of the perennial crops dying not only during the drought period but also during the heavy wet season of 2016-17 that followed. Vulnerability to climate fluctuation has had a significant impact upon economic activity that is dominated by agriculture (largely rice) but also with significant income derived from vegetables, perennial tree crops (grapes and Vietnamese apples), salt production and fisheries, all dependent upon water resources in the province. The province boasts 80 reservoirs with 2,710 kilometer (km) of irrigation canals that are managed by the irrigation management company (IMC) in Phan Rang (provincial capital). The area irrigated by these hydraulic works is 59,000 ha while the non-irrigated area is only 46,500 hectare (ha) - emphasizing the importance of water in the province to its leading sector.

2. The climate provides excellent growing conditions for certain crops requiring high levels of sunshine and low relative humidity (that limit fungal infestations) on growing crops. However, exploitation of these conditions is incumbent upon the provision of water. The government has ambitious plans for the development of its water resources extending from large reservoirs high in the catchments to the west, delivering to coastal areas where agricultural pursuits dominate (along with the consuming population). Recently, the government committed to building a 2,000 millimetre (mm) diameter pipeline from Tan My to deliver 6.5 cubic meter per second (m3/s) to the coastal area where further irrigation facilities are planned (also to be expanded as the Cai River Reservoir is completed).

3. The Tan My diversion weir on the Cai River is 95% complete, and the steel pipeline that offtakes on the right bank runs for 3.1 km before crossing the river by the recently completed pipe aqueduct at 3.1 km. The steel pipe then skirts around the base of the mountain, passing through the Cho Mo Reservoir command canal system for 16.5 km until it reaches the upstream part of the subproject’s command area at 19.6 km. The pipeline then continues through the Thanh Son-Phuoc Nhon subproject command area, to a branch at 31.1 km. The northern branch will continue another 3.3 km and discharge into the Ba Rau reservoir. The southern branch will head south for 9.5 km where it enters the command area of the proposed second subproject, Nhon Hai-Thanh Hai. To date, about 8 km of steel pipeline has been constructed. It is expected to be completed, at least to the branch at KM 31.1, in 2018. The Song Cai Reservoir is scheduled for completion in 2020 but has not been included in the water balance for either of the two subprojects.

4. At full development, the complete system is expected to support about 12,300 ha of irrigated agriculture,1 with water being an allocation to the two Water Efficiency Improvement in Drought-Affected Provinces (WEIDAP) subprojects, to supplement supplies to existing systems, Cho Mo, Ba Rau and Tran river, and replenishing the supply in the Ong Kinh Reservoir in the tail of the system. Allocations are also made for a power station, aquaculture, domestic and

1 Supported existing/ new irrigated areas are: (i) Cho Mo reservoir system 1,200 ha, (ii) Tan Lap upstream 3,100 ha,

(iii) WEIDAP SP1 Thanh Son-Phuoc Nhon 3,700 ha, (iv) WEIDAP SP2 Nhon Hai-Thanh Hai 1,000 ha, (v) Ba Rau reservoir 300 ha, and (vi) Trau river reservoir 3,000 ha.

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industrial use. The area of new irrigation development is estimated at about 6,800 ha. However, prior to construction of the Cai River Reservoir, dry season flows will constrain areas. Following discussions between Ministry of Agriculture and Rural Development (MARD), Asian Development Bank (ADB) and provincial stakeholders the net irrigation area to be developed under WEIDAP will be 1,800 ha for Thanh Son-Phuoc Nhon, and 1,000 ha for Nhon Hai-Thanh Hai subprojects respectively.

5. Engineering works for the Nhon Hai-Thanh Hai Subproject will include a supply pipeline taking off from the steel Tan My pipeline at Km 31.1, which leads to and though the subproject command area. The upper part of the command area is narrow, typically less than 1.0 km, and a single pipeline with hydrants to which farmers can connect is proposed. The lower part of the command area is 1-1.7 km wide, and a ring pipeline is proposed here to ensure that all farms are within 500 m of a hydrant. A branch pipe leading from the ring main will supply water to the Ong Kinh Reservoir. The subproject extends over part of three communes, Tri Hai, Nhin Hai and Thanh Hai, with a total population of 35,400 persons, 8,655 households, accounting for 39% of the districts population.

II. PROJECT DESCRIPTION

A. Concept

6. The proposed subproject will enable increased and sustainable high value cropping (HVC) though efficient distribution and use of surface water conveyed by pipeline from the Tan My Weir on the Cai River. Pressure on groundwater and crop losses in drought years will be reduced, and an increase in perennial crops, particularly grape, would be expected. Improved monitoring and management of water though a basic supervisory control and data acquisition (SCADA) system will facilitate efficient and productive use of water. Annex 1 presents the Layout for Nhon Hai-Thanh Hai Subproject.

B. Hydrology

7. Prior to construction of the Song Cai Reservoir with a planned storage of 10.3 million m3, there is likely to be insufficient dry season flow in the river to meet all the demands of the integrated scheme, in drought years, see water balance calculations. This may translate into difficulty in sustaining environmental flows during the months of April and May when irrigation crop water demand is at its highest. After completion of the reservoir, scheduled for 2020, dry season releases are expected to average about 15 m3/s, and 11 m3/s for the whole year and there will be no shortage. The design capacity of the Tan My main supply pipeline, at head, is 6.5 m3/s, with flows provisionally allocated as follows:

• WEIDAP subprojects: 2.7 m3/s; • Supplementary supply to existing reservoir schemes, Cho Mo, Ba Rau and Tran

River: 1.5 m3/s; and • Power station, urban and industrial use supply: at least 1 m3/s.

1. General

8. The two WEIDAP subprojects in this province lie within the larger (6,800 ha) Tan My irrigation system situated on the left bank of the Cai (Kinh Dinh) River in south central Ninh Thuan Province. The system is fed from the Tan My weir located about 40 km north west of Phan Rang-Thap Cham, the provincial capital. Details of the headworks are given in Table 1.

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Table 1: Details of Tan My Headworks

Headworks Catchment

Area Catchment

Rainfall Catchment Runoff Weir Crest Level Available Storage

(km2) (mm) (m3/s) (mm) (masl) (Mm3)

Tan My 805 1,314 23.8 935 99.50 0

Source: Technical Design Report of Tan My weir, 2017

9. An under construction steel pipeline feeds the irrigation area from the Tan My weir. Construction has also started on a large (204 Mm3 capacity) reservoir on the Song Cai about 15 km upstream of the Tan My headworks. This is designed to regulate flow in the Song Cai to Tan My and also to other irrigation headworks downstream at Nha Trinh and Lam Cam (near to Phan Rang city). However, construction of the dam has stalled and with no clear program for its recommencement, the subproject water balance specifically excludes the use of storage in the future Song Cai reservoir. Water availability, therefore, depends solely on reliable, run-of-river flows in the Cai River at Tan My weir. The Nhon Hai-Thanh Hai subproject lies at the tail end of the Tan My irrigation system pipeline. This tail-end system receives some water from the small Ong Kinh reservoir but the planned subproject is designed based on water supplied from the pipeline from the Tan My weir. Its water requirements will therefore not be satisfied until upstream requirements have been satisfied first. The proposed cropping pattern on which subproject designs are based is summarized in Table 2.

Table 2: Proposed Cropping Pattern for Ninh Thuan Subprojects

Crop Crops per

year

Crop Area (ha)

Thanh Son-Phuoc Nhon

Nhon Hai-Thanh Hai

Perennial crops: mostly Grape and some Vietnamese apple and mango

2 1000 400

Vegetables: green beans, onion, garlic, chili 3 600 400

Fodder grass 3 200 200

Total 1,800 1,000

2. Rainfall

10. The mean annual rainfall in Ninh Thuan varies from 1,750 mm in the far northern part of the Province to 800 mm or less along parts of the coast around Phan Rang. The two subprojects are located on the edge of one of the driest parts of the Province. Summary details of the nearest rain gauges are given in Hydrology (Table 1 of Annex 2).

11. The Nha Ho station best represents rainfall over the irrigation area. However, as monthly time series data for Nha Ho were not available, data from Phan Rang were used to estimate mean and reliable rainfall over the subproject areas (Figure 1). This may be slightly conservative. Based on Figure 2 the mean annual rainfall over the catchment above Tan My weir is estimated between 1,550 and 1,600 mm per annum.

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Figure 1: Mean and Reliable Rainfall Recorded at Phan Rang

Figure 2: Isohyetal Map of Mean Annual Rainfall - Ninh Thuan

Source of data: IWRP, Hanoi

0

20

40

60

80

100

120

140

160

180

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Rai

nfa

ll in

mm

reliable mean

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3. Climate

12. The climate stations at Phan Rang and Nha Ho are located in, or close-to, the subproject areas. Data observed at the two stations are similar. Relative humidity, hours of sunshine and evaporation measured with a Piche evaporimeter are slightly higher at Phan Rang while average temperature and Penman potential evapotranspiration are slightly lower. Mean monthly values of climate parameters are shown in Table 3 in Annex 2. Climate data from Phan Rang were used as the basis for computing potential evapotranspiration for use in crop water requirement calculations. Penman evapotranspiration varies from 3.52 mm/d in December to 5.03 mm/d in April.

4. Water Demand

13. CROPWAT has been used to compute crop water requirements (CWR) using climate data and reliable rainfall estimates from Phan Rang climate station. Reliable rainfall in the critical period from December to April is close to zero. CROPWAT calculates irrigation water requirements (IRW) using the planned cropping pattern.

14. An allowance for domestic water supply of 0.03 m3/s (0.08 Mm3) to Ninh Hai District is made from water delivered by the Tan My pipeline. This supply has high priority even without construction of Song Cai reservoir and is included in the headworks demand.

15. Demand for the Thanh Son-Phuoc Nhon subproject, for 1,800 ha, peaks at 1.06 m3/s in March, and averages 0.60 m3/s.

5. River Flow

16. Flows are measured in the Cai River at Phuoc Hoc. This gauge is close to the Song Cai dam site and would be ideal for indicating river flows at Tan My. However, detailed inspection of the flow record indicates these data are unreliable. In the absence of observed data from the Song Cai, flows at Tan My were estimated using a rainfall-runoff model. The estimated flows were calibrated against observed flows in the Luy River in Binh Thuan Province. The mean monthly observed and estimated flows are given in Table 5 of Annex 2. The data suggest that the upper Song Cai catchment is much wetter than the Song Luy. Flows at Tan My weir are minimal in April, just 15.5 m3/s (mean) and 8.7 m3/s (85% reliable flow).

17. Until the Song Cai Reservoir is built, there is no significant storage available to augment periods of low flow at the Tan My weir. The water available to the two subprojects, therefore, depends on minimum reliable flows in the river minus any environmental flow requirement that must be allowed to pass the weir and continue on down the river.

18. According to Vietnamese norms (QCVN 04-05: 2012/BNNPTNT), the environmental flow is set at the average dry season flow that is exceeded 90% of the time (usually referred to as Q90) plus any downstream water requirements. For the purpose of the WEIDAP, the dry season has been defined as the driest three months of the year on average. The Q90 monthly river flow at Tan My for the dry months of February to April is 1.23 m3/s.

19. There are other large irrigation areas downstream of Tan My that are fed from weirs on the Cai River at Nha Trinh and Lam Cam. However, there is also a large inter-basin transfer canal that joins Song Cai from the Don Duong Reservoir via the Da Nhim hydropower plant and Song Pha. The Pha River joins the Song Cai about 10 km downstream of the Tan My weir.

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NINHTHUANSUB-PROJECTS(TDA2+3)

DrySeason= 8months(Jan-Aug) Criticalperiod= 1months(June)

Weirinflow

SUPPLY

Grossdemandatheadwork

Environm-entalflow

DEMAND

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Supply Demand

Millioncubicmetres

Supply/demandbalance

supply/demand Deficit

Water Balance: in million cubic meters Supply Demand Usable reservoir storage 0 Gross demand at headwork 3.37 Resrvoir inflow 6.389 Environmental flow 3.188 Total 6.389 6.558 Balance -0.169 (Deficit)

20. The Song Cai reservoir plans for an allocation of water from Song Cai for the Nha Trinh and Lam Cam schemes. In the meantime, it is assumed that the large transfer from Don Duong reservoir is sufficient to support these schemes without additional water from Tan My.

21. The flow release downstream of Tan My weir is required to meet the environmental needs of the 10 km section of river between Tan My and Song Pha.

6. Subproject Water Balance

22. The supply demand balance for each month of the year is shown below and tabulated in Hydrology (Table 6 of Annex 2), and includes for both subprojects as well as environmental demands. The calculation indicates that this is just enough water for both subprojects, with a combined net area of 2,800 ha, as well as to meet environmental flow requirements (see Figure 3).

Figure 3: Summary Water Balance Using IWRP Factors

C. Cropping Patterns, Command Area and Soils

23. The subproject area is already heavily cropped to onion, garlic, grass for fodder, perennial grapes and a few mangos, mostly irrigated by groundwater. In drought years, wells dry-up and crops die or have depressed yields. Groundwater quality is a concern with run-off and infiltration of agrochemicals to the water table. Current and with-project cropping indicate an anticipated shift towards grapes. Vines entail a significant investment, typically bearing fruit from year two, and then three times a year for five or six years. Thereafter yields drop and new vines are re-planted. Garlic matures over about five months, and two crops are grown a year. Onions mature in 2-3 months, and three or four crops are grown each year. Chili is usually planted in January, and harvesting continues for 10 months, to about December after which land is cleared for a new crop (see Table 3).

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Table 3: With and Without Subproject Cropping Patterns

Cropping

Without Cropping,

(ha)

With-project Cropping

(ha) Remarks

Perennial crops: mostly grape and some mango

111 400 With assured irrigation supply, a shift into perennial crops is

anticipated Vegetables, beans, onion, garlic, chili 877 400

Grass for fodder 200

Paddy 12 -

Net Area 1,000 1,000

Gross Area 1,210 1,210

24. Manure, as well as chemical fertilizers, are applied to crops, manure during land preparation and chemical fertilizers, typically mixed with irrigation water, during crop growth and development.

25. The subproject area has four main soil groups, sandy dune soils, semi-arid red and grey soils, alluvial soils and red and yellow soils on acid magma rock. The sandy dune soils dominate in the lower part of the command area near the coast.

26. Water application rates vary, being particularly high for the sandy dune soils. On-farm measurements for onion give an irrigator stream flow of 6 l/s, with irrigation every 2nd day and taking about an hour for a 0.10 ha plot, equivalent to high field demand of 10.8 mm/d, or 1.25 l/s/ha. For heavier soils irrigator stream flows are smaller, and water demands are lower. Farmers typically irrigated in the morning, from 5-9 am or even later, and in the evening from 4-6 pm.

27. Pumped groundwater is the main source of irrigation water, but about 50-60 ha is irrigated, at least partially, by water stored in the Ong Kinh Reservoir. The reservoir usually runs dry by April-May, and about 20 ha is irrigated from the Ta Cu Weir in the Dong Nha River. A few farmers also pump from ponds excavated in river/stream beds.

28. Farmers interviewed expressed the view that groundwater was not as good as surface water for irrigation but were unable to explain why or comment on its quality. Most did not drink the groundwater but used it for washing and cleaning.

29. Land holdings vary, being typically 0.6-0.7 ha. Many farmers have a large 4-5 m diameter shallow well on their farm, as well as several tube wells, typically 0.2 m diameter, and 30-40 m deep. Most tube wells have low yields, in which case they are used to pump water into the large diameter shallow well rather than direct irrigation of crops. Irrigation is mostly by furrow-basin, using groundwater water pumped with 1-1.5 kW electric pumps, and distributed to fields by 60 mm high density polyethylene (HDP) or polyvinyl chloride (PVC) pipe. Some farmers use sprinklers.

30. Coping strategies during the 2013-16 drought included purchase and use of sprinklers to keep crops alive and improve efficiencies, sinking additional wells, purchase of water from neighbors, prioritizing water for perennial crops and letting annual crops die.

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D. System Feasibility Design

31. On completion, Song Cai storage dam is expected to supply 6,800 ha in Tan My irrigation system. In the meantime, completed parts of Tan My irrigation systems, including the Thanh Son-Phuoc Nhon and Nhon Hai-Thanh Hai subprojects, will operate as gravity piped run-of-river irrigation systems supplied by the new Tan My pipeline2 from the existing Tan My weir to the downstream end of the Thanh Son-Phuoc Nhon service area. The Tan My pipeline will function as the main Thanh Son-Phuoc Nhon subproject pipeline. As it is being financed by the government, it is not included under the project.

32. WEIDAP will extend the main Tan My conveyance pipeline from the downstream end of Thanh Son-Phuoc Nhon system to the Nhon Hai-Thanh Hai subproject, and this extension is included in the project cost.

33. Following discussions between MARD, the province, and ADB, net irrigable areas will be 1,800 ha for Thanh Son-Phuoc Nhon and 1,000 ha for Nhon Hai-Thanh Hai. The water allocation from Tan My pipeline for Nhon Hai-Thanh Hai is 0.87 m3/s, equivalent to 0.87 l/s/ha.

34. With limited water, high efficiency distribution and application is required to provide flexible supplies for high value cropping. Over some areas, seasonal crops including grass (fodder) will be cultivated for which flexibility is less important, and would not have such a high priority in case of drought compared to perennial crops such as grape. Groundwater may continue to be used but to a more limited extent. Details of the crop water calculations are presented in Supplementary Appendix 1 (Design Principles for Subprojects).

35. The new Tan My pipeline will branch at the downstream end of the Thanh Son-Phuoc Nhon service area where (i) the government Tan My project will extend the northern branch pipeline, to supply the existing Song Trau and Ba Rua reservoirs, and (ii) WEIDAP will extend the southern branch to supply the Nhon Hai-Thanh Hai subproject, see Figures attached.

36. The subproject comprises the following five pipeline sections designed to meet the level of service (LOS) standards adopted for WEIDAP:

• A single conveyance pipeline from the main Tan My pipeline branch, at the downstream end of Thanh Son-Phuoc Nhon service area, to the upstream end of Nhon Hai-Thanh Hai service area. This conveyance pipeline will not serve any irrigation area along its route. Therefore, it will not be equipped with hydrant manifolds and its design discharge will be 0.945 cumec (allocations of 0.87 cumec for irrigation plus 0.075 cumec for domestic water supply) over its entire 9.12 km length.

• A single distribution pipeline, along Kien Kien-Vinh Hy provincial road, at the south-west limit of the narrow 94.3 ha upstream service area (max design discharge = 0.87 cumec);

• A single distribution pipeline, along Kien Kien-Vinh Hy provincial road, through the middle of the narrow 306.4 ha intermediate sub-service area;

• A ring main distribution pipeline to divide the wider 599.3 ha downstream sub-service area into four equal strips, with similar access to water; and

• A single branch pipeline to convey water to and from the existing Ong Kinh Reservoir.

2 The government has constructed the first 31 km of the Tan My pipeline and expects to complete the rest in 2018.

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37. Within the 1,000 ha command area, the total length of pipeline is 15.8 km, giving a pipeline density of 15.8 m/ha, and (i) 531.8 ha (53%) has access to a pipeline within 250 m, (ii) 349.9 ha (35%) is between 250 m and 500 m, and (iii) only 118.3 ha (12%) is further than 500 m. Epanet software was used for hydraulic design of pipelines. In the Table 4 below the results of the hydraulic design are given for the following two extreme operational cases:

• When there is full flexible irrigation demand, the system is designed to deliver the required 870 l/s and provide a minimum residual head of 0.38 m. This occurs where the downstream ring main (section iv) branches to supply the Ong Kinh Reservoir (section v);

• When there is no upstream irrigation or domestic water supply demand, the system will supply 376.5 l/s to replenish storage in Ong Kinh Reservoir (full storage level = 31.00m).

Table 4: Proposed Irrigated Area and Pipe Density

Pipe Section

Diameter (mm)

Length (m)

Flexible Irrigation Demand Ong Kinh Reservoir

Q (l/s) HGL (m) RH (m) Q (l/s) HGL (m) RH (m)

945 60.00 24.00 60.00 24.00

i. 1,000 9.121 376.5 945/870 44.31 30.31 57.13 43.13 ii. 800 3,907 376.5 630 30.80 13.40 53.49 36.09 iii. 710 2,144 376.5 520/270 23.23 12.53 49.91 39.21 iv. 560 8,917 376.5 120 18.88 0.38 35.42 16.92 v. 560 835 376.5

31.00 0.00

Legend: HGL = hydraulic grade line or pressure and RH = residual head = HGL minus the natural surface level.

E. Detailed Design Requirements

38. At detailed design, the following may be considered further:

• Whether a branch from the ring main should be provided to allow surplus flow to be directed to the Ong Kinh Reservoir, (full storage level = 31.0 m).

• Re-assess the net irrigable area within the gross areas, based on soils, topographic features (e.g. exclude gullies and buffer strips along gullies), and infrastructure (i.e. excluding roads, housing, etc.).

• Refine the pipe layout for further improvement to the LoS without significantly increasing costs. For example, the LoS pipeline generally follows the road in the upper part of the command area for convenience and to minimize resettlement impact. However, this means than significant areas are more than 500 m from the pipeline. Reconsider options, including a more central single pipe through farm land, or a ring main design.

• The pipelines cross several stream beds. Safe crossing arrangements shall be designed; this is likely to entail calculation of scour depths to ensure the pipeline is buried to a safe depth and/or protected.

• Assess the need for inspection roads along the pipelines - these need not be provided along very small pipes.

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• Firm up the SCADA system for efficient/ effective operations including metering and a central control room (office) equipped as required with computer/devices/internet connection, software, database and so on, see below.

• Identify equipment that should be provided to a store for spares, e.g. meters, valves and so on.

39. A review of the feasibility level design identified possible refinements, tabulated below as Table 5.

Table 5: Possible Opportunities to Optimize Pipeline Design

Pipeline Section Possible Optimization Opportunity for Consideration

i. Reduce the pipe diameter, from 1,000 mm to 900 mm diameter or less, so that residual head (RH) at the downstream end of the pipeline is reduced from 30.31 m to no less than 10 m. This will reduce the downstream HGL, and may require larger pipe diameters in sections (ii) and (iii), but the total cost of pipeline sections (i) to (iii) is likely to be reduced.

ii. Likewise, reduce downstream residual heads to no less than 10 m. Size pipes accordingly.

iii. At the junction of sections (iii) and (iv), incoming design HGL and flow are 23.23 m 520 l/s. Outgoing design flow is then assumed to be 270 l/s in one direction (clockwise). It is reduced, to meet demand, until the flow and HGL reach zero and 18.37 m where it returns to the same junction. However, both the HGL at the junction and the flow in and out of it must be the same.

iv. Section (iv) should be properly redesigned as a ring main with two-way flow at the junction. The rule of thumb is that “half the flow requires 75% of the pipe diameter. Therefore, a 710mm diameter section (iii) with two 560 mm diameter section (iv) ring main branches sounds about right. However, instead of using a constant pipe diameter for the entire ring main, as in the present revised design, the diameter of pipes used for both branches of the ring main should be regularly reduced in the downstream direction until they reach a minimum of about 150 mm about half way around the ring main from the upstream junction with pipeline section (iii).

When it is full, Ong Kinh Reservoir has a water level of 31.00 m. However, when the piped system is supplying its full design discharge, its minimum HGL is only 18.88 m. Any water stored in Ong Kinh Reservoir may flow back into the piped irrigation system.

v. The piped irrigation network and Ong Kinh Reservoir could be designed as a single integrated system. This requires conventional hydraulic ring main analysis and design linked to conventional reservoir inflow, storage, water level (head) and outflow analysis.

F. Management and Operation

40. On-off control valves, flow, and pressure meters would be installed at the head of the supply pipeline, and at key locations in the ring main system. The valves would allow the system to be closed in case of leakage/pipe fracture, while the flow meters would allow water use to be monitored. Meters will also be installed at each hydrant. Clamp-on ultrasonic digital meters (measuring flow rate and volume) fixed around the pipes and powered by battery (5-years life) are suggested. Data from these meters would be transmitted over the cellular (GSM) network, and stored on computer at the control office. Pressure meters would also be linked to the central office, giving warning of pipe failure. Operation manual of values is proposed, though these could be upgraded later.

41. In addition to the above, individual famers’ who wish to connect to manifolds should have their water use metered if volumetric charging is to be adopted in the future. These meters would be cheap, possibly simple mechanical meters read manually. For the immediate use, they will inform of water application efficiency on individual farms that can be used in system management decision making.

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42. Operation and maintenance (O&M) arrangements require some management oversight and an emergency response mechanism in the event of pressure failure. The system is gravity fed and the natural head is sufficient to ensure reliable supplies to farmer hydrants. Operational requirements are minimal other than to respond to burst pipes or failed valves and meters, and may best be undertaken by a private operator under a public-private partnership PPP whereby the operator would collect a service fee from beneficiary farmers.

43. Ground and other surface water resources are scarce or of questionable quality in the command area, and high farmer interest is likely to translate into high connections to hydrants. Those farmers wishing to use high pressure application technologies would need to re-pressurize at the off-take point to raise the level of head as required (at the individual cost of the farmer).

III. COST ESTIMATES

44. Cost estimates are based on the design outlined herein. Direct material and installation costs are based on price estimates provided by the National Design Specialist (NDS). Costs associated with detailed engineering design and supervision, project management and other overhead costs have been based on a percentage of construction costs in accordance with government norms. Detailed engineering design costs include feasibility study costs (FSC) that are being financed by the government. Construction supervision and the cost of works are being financed by loan funds. Resettlement estimates are based on revised pipe alignments. The resettlement cost associated with the connecting 9.3 km main pipeline from the Tan My pipeline has been included in this estimate. Estimates are based on current pipe alignments and will need to be updated following detailed engineering design when alignments are finalized. The resettlement costs associated with the main 2,000 mm pipe have not been included in this estimate. The cost for operating and maintaining the facilities during implementation is based on an estimate for private operators that will recover operating costs from farmers within the command area. Table 6 presents the summary costs for the subproject. As this is a gravity fed system and piped as well, the Operating and maintenance costs are minimal. Annex 3 presents the engineering designs.

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Table 6: Summary Costs - Nhon Hai-Thanh Hai Subproject

Detailed Costs Unit Cost Total Total

Unit Total (US$ '000) D Millions US$'000

I. Investment Costs

A. Construction

1. Civil Works

a. Main Delivery Pipeline to Irrigation Area

Earthworks along the alignment lump sum 1 4,913.601 131,059.5 5,376.4

Abuttments lump sum 1 94.394 2,517.7 103.3

Pipeline crossing over railway lump sum 1 45.929 1,225.0 50.3

Air release valves lump sum 1 0.672 17.9 0.7

Other release valves lump sum 1 11.932 318.3 13.1

Signage for crossings lump sum 1 4.106 109.5 4.5

Subtotal 135,248.0 5,548.3

b. Distribution pipelines within the Irrigation System

Pipelines - mixed diameters lump sum 1 3,179.48 84,805.6 3,479.0

Abuttments lump sum 1 49.739 1,326.7 54.4

Air release valves lump sum 1 2.016 53.8 2.2

Other release valves lump sum 1 27.627 736.9 30.2

Distribution outlets at 12 locations lump sum 1 77.58 2,069.3 84.9

Signage along pipelines lump sum 1 3.931 104.9 4.3

Subtotal 89,097.1 3,655.0

c. Branch Puipelines within the irrigation Area

Pipelines - mixed diameters lump sum 1 504.497 13,456.3 552.0

Distribution outlets - type 1 (16 units) lump sum 1 31.528 840.9 34.5

Distribution outlets - type 2 (79 units) lump sum 1 188.75 5,034.5 206.5

Signage along the ppelines lump sum 1 2.194 58.5 2.4

Subtotal 19,390.3 795.4

d. Pipeline to Ong Kinh Reservoir

Pipeline lump sum 1 115.805 3,088.8 126.7

Headworks at the outlet lump sum 1 2.099 56.0 2.3

Signage along pipeline lump sum 1 0.288 7.7 0.3

Subtotal 3,152.5 129.3

e. Roads

Road 1 kms 4.559 79.204 10,112.9 401.0

Road 2 kms 13.251 41.742 16,265.7 623.5

Spillways accross road alignments lumpsum 1 113.815 3,035.8 124.5

Culverts lump su 1 166.345 4,436.9 182.0

Other counterpart costs kms 1 307 6,938.2 307.0

Subtotal 40,789.4 1,638.1

Subtotal 287,677.4 11,766.2

2. Other items Identified by the PPTA

Support for O&M during maintenance period l/sum 1 109.2 3,371.8 124.9

Subtotal 291,049.2 11,891.1

B. Other Non-structural Items Related to Works

Other construction related costs lump sum 1 547.407 14,600.9 599.0

C. Detailed Eng. Design, Bid Doc. Prep. & Const. Supervision

Detailed engineering design /a lump sum 1 445.445 10,067.1 445.4

Construction supervision /b lump sum 1 156.508 3,901.4 160.0

Subtotal 13,968.5 605.5

D. Resettlement and Compensation lump sum 9,600.0 424.8

Subtotal 329,218.5 13,520.3

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IV. PROJECT IMPACT

A. Social

45. Nhon Hai-Thanh Hai Subproject is located entirely within Ninh Hai District situated along the north-eastern coast of Ninh Thuan. The district land area is 25,358 ha. A large portion of the district is mountainous, especially in the eastern part parallel to the coast while agricultural land is only 23% of the total area. The district has eight communes and one township (Khanh Hai the district capital). The district population in 2016 was 105,038 from 26,025 households, of which 82.5% live in rural areas. The ethnic minority (EM) population accounts for 8.8% of the total and some 8.3% are of the Cham group residing in low land areas while the remaining 0.3% are from the Raglai group living in the mountains near Vinh Hy Bay. The EM groups in Ninh Hai are concentrated in Vinh Hai (Raglai EM group) and Xuan Hai (Cham EM group) communes.

46. The district incidence of poverty 2016 based on the multi- dimension poverty criteria were 7.9% compared with 14.9% for the province. However, poverty is more concentrated amongst the Raglai group with a poverty level of 67.5%.3 As a coastal district, fishing provides an important source of income with gross output of fisheries, agriculture and forestry estimated at D1,002, 480 and 0.6 billion respectively.4 Ninh Hai is second largest grape growing district in Ninh Thuan with 390 ha5 accounting for 33% of the provincial grape area. Garlic and spring onions are also grown as cash crops with high value along with other specialty items such as grass, aloe vera (cactus) and other vegetables.

47. Social services in the district include one general hospital, one regional clinic, and nine commune health care stations. The rate of immunized children under 1-year old was 91.5% 2015 as compared to 98% for the province. Kindergarten, primary and secondary school facilities are available in all communes of the district. There are three high schools located in the district center and inter-commune areas. About 97% of district households have access to clean water (2016).

48. The communes of Tri Hai, Nhon Hai, and Thanh Hai will benefit directly from the subproject. Their total land area is 6,458 ha with a joint population of 35,305 from 8,650 households (2015.)6 All inhabitants are of Kinh origin. Based on the multi-dimension poverty criteria for period 2016-20, the incidence of poverty was 7.8%, 8.35% and 7.17% in Nhon Hai, Tri Hai, and Thanh Hai communes respectively.

49. Although agriculture land represents 12.6%, 40% and 42.5% of total land area of Tri Hai, Nhon Hai and Thanh Hai communes respectively (Table 7), agriculture is still dominant providing 85-90% of output in the three communes. Fisheries and salt production play a crucial role in local livelihoods. The main crops include paddy and vegetables for subsistence while cash crops include garlic, spring onion, and Vietnamese apple.7 However, given the limitations from water, only 5-10% of the cultivated area is irrigated. The remainder is either rain-fed or

3 Ninh Thuan DOLISA and CEMA, 2016 4 Ninh Thuan Statistic Yearbook 2015. 5 Ninh Thuan Statistic Yearbook 2015; Ninh Phuoc District has largest area of grapes with 410 hectares. 6 Ninh Thuan DOLISA, 2016. 7 According to annual report 2016 of the Division of Agriculture and Rural Development of Ninh Hai district, total land

area of apple in the district was 14.7 hectares in 2016, only two target communes of Nhon Hai and Tri Hai are holding 54% of total land area (3 hectares in Tri Hai commune and 5 hectares in Nhon Hai commune).

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from individual household wells.8 Because of water shortages, there are significant areas that are left as fallow during the dry months of March-May.

Table 7: Land-use in Target Communes, 2016

Natural Area

Tri Hai Nhon Hai Thanh Hai

Area Proportion Area Proportion Area Proportion

(ha) (%) (ha) (%) (ha) (%)

Total natural land area 2,708 100.0 3,099.2 100.0 650.8 100.0

Agricultural production land 342.6 12.7 1,228.0 39.6 275.8 42.4

Annual crop 305.0 11.3 1,120.7 36.2 253.7 39.0

Perennial crop 37.6 1.4 107.4 3.5 22.1 3.4

Forestry land - 900.6 29.1 195.9 30.1

Water surface land for aquaculture

13.0 0.5 9.6 0.3 5.1 0.8

Land for salt production 778.5 28.8 300.9 9.7

Source: National FS Specialists

50. The subproject will provide irrigation water for 1,000 ha of agricultural land. Participants in commune farmer group discussions indicated the impact of the subproject would be (i) access to more reliable water; (ii) reduced pumping costs; (iii) crop diversification into HVCs such as garlic, spring onion and perennial crops of grape and Vietnamese apple. Examples of micro irrigation have been introduced and adopted in target communes under a non-government organization (NGO) financed project.

51. There are two social issues identified that need to be addressed including (i) vulnerable villagers (poor, female-headed household amongst poor households) are less likely to benefit from the subproject because some are landless or have only small areas of land; (ii) the high investment cost is likely to constrain the adoption of modern irrigation methods and practices to improve application efficiencies in poor households. For these reasons, it is proposed that financial assistance be provided under the project directed specifically at the vulnerable households within the command area to achieve the desired result of increased adoption of micro irrigation.

1. Socio-economic Survey Results

52. The socio-economic household survey was carried out in the subproject command area based on 26 farmer-interviews. Key features are:

• The overall average household size is 4.0/household.

• Eight women (30.8%) and 18 men (69.2%) responded to the survey.

• One households were classified as poor (4%).

• Some 25 households were classified as non-poor (96%).

• There are no ethnic minority in survey sample.

8 It is reported that farmers spent VND million 20- 25 to have well/borehole with a depth of 30- 50 meters and spent

VND 6 million/ year of electricity expenditure for water pumping during period of drought. Some wells/ boreholes are being salty

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53. The results of the socio-economic survey are presented below and are summarized in tabular form in Annex 4 attached hereto. Annex 5 presents the subproject pictures.

54. Education Level: The educational level of farmers is considered important for technology adoption. The majority of respondents attended secondary school (46%). About 20% of respondents attended vocational training and college/university, while 4% have never attended school. There was no significant difference between men and women in access education in the subproject area.

55. Occupation and Household Income: The major occupation is agriculture production accounting for 70% in total household income. However, vulnerable groups like the poor and women headed households are disadvantaged in terms of income sources and income levels. The survey results showed that the average income of non-poor household was 1.5 times higher than one of poor household.

56. Household Expenditure: In 2015, the average annual household consumption was D60 million (VND15 million per head). This varied between the social groups. Consumption per household and per capita was almost two times higher in non-poor households than in poor households. The share of expenditure on daily food and drink was about 50% of the total consumption expenditure in all groups with exception in poor households where the equivalent figure was 60%. The proportion spent on social events like Tet holidays, wedding, festivals etc. accounts for a significant proportion (15-20%) of household consumption expenditure.

57. Household Assets: All interviewed farmers have their own house. A greater percentage (76%) of non-poor household live in permanent dwellings while poor households live in semi-permanent housing. All respondents had access to electricity from main supplies and all had televisions. Vehicles (motorbike) ownership is high but there were large differences between poor and non-poor households and between women and men household heads.

58. Drinking Water and Sanitation: All sampled households obtain their water from either single-family water tap (89%) or wells (11%). Flush toilets connected to a septic tank or sewage pipes and double-vault compost latrines were the most common in the area. However, about 4% of surveyed households still have no toilet. Some 12.5% of women-headed households claimed they did not have toilet facilities. It is noted that lack of proper sanitation facilities impacts women more severely than men. The most common health problem experienced by households was ‘flu and cold (85%) followed by malaria (4%) and hepatitis (4%). However, the poor and women appear to be disadvantaged in term of health problems compared with other groups. A much higher proportion of the poor household (100%) and women (12.5%) reported experiencing colds, ‘flu and hepatitis respectively.

59. Land Holding and Land Ownership: All respondents own residential land (resident plot) with average area of 258 m2. Farmers in this subproject area have the smallest area of agricultural land compared to other subprojects with average of 5.2 sao. No one has forest land. Regarding legal ownership status of the resident and farming land, some 73% of survey households owning residential plots had Land Use Right Certificate (LURC). Only 19% and 50% of households had LURCs for their house-garden plots and agricultural land respectively. Ownership of house and farming land were dominated by males rather than female, a pattern evident in all social groups.

60. Agricultural Activities: Crops grown in the area included paddy and vegetables for subsistence while cash crops include garlic, spring onion, grapes and Vietnamese apple.

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Farmers grow crops throughout the year depending on water availability. They plant rice and vegetables in their agricultural land areas when water is thought to be available for the cropping cycle (100 days for rice and reduced periods for vegetable crops).

61. Source of Water and Irrigation Practices: Sources of water in the subproject area included surface water from canals, ponds and reservoirs and ground water from wells and boreholes. The most common application method was hand-held hoses. About 8% farmers have adopted micro irrigation to water spring onions and garlic under the financial support of an NGO implemented project. One reason is the investment cost for equipment to deliver water to more remote locations and adoption of micro irrigation.

62. Household Liabilities: Some 92% of respondents have some type of debt. Indebtedness of vulnerable people like poor and women-headed households was more common than in other social groups. Loans are mainly obtained from the state-owned banks like Agribank and the Social Policy Bank (SPB). All borrowers cited agricultural activities as their main reason for borrowing.

63. Constrains and Vulnerability: The most serious constraint was the lack of irrigation facilities. Other constraints cited included livestock and crop disease, and low prices received for agricultural products. Furthermore, farmers, especially the poor and women-headed households claimed they lack land suitable for cultivation together with the technical knowledge associated with production - fertilizer and other input timing and rates of application.

64. Participation and Awareness: Mass organizations like Farmers Associations (FA), Youth Union (YU), and Women’s Union (WU) appear to be very active in the area with nearly 62%, 23% and 23% of households participating as members respectively. Some 62% of women are members of the WU. Unlike these mass organizations, other types of community groups such as water use groups, cooperatives, interest groups etc. appear to be weak, with small proportions of households belonging to same. There is some indication that men (husbands) participated more actively in community meetings, in attending extension training course and other community activities compared to women and wives.

65. With respect to benefit and potential impact of the subproject, clearly, people believe that the greatest benefit would be increased yield of existing crops. Some 12.5% of women believe the irrigation improvement will improve food security. Disruption during construction, loss of land and resettlement issues is considered the most serious negative impact identified by farmers. This implies that, before and during implementation of the subproject, a communication strategy and dissemination campaign should be conducted.

2. Gender Aspects

66. Over the last few decades, Viet Nam has made significant progress in improving its population’s well-being in general and reducing gender disparities. There still exist gender issues in the subproject area as following (i) lower education levels; (ii) lower levels of asset ownership, (iii) less participation in decision making, and (iii) excessive workloads.

67. Gender Division of Work: Men are mainly responsible for heavier production work, while women spend more time on un-paid domestic work such as taking care children, cooking, cleaning etc. In agricultural production, the intra-household tasks and responsibilities tend to be husbands having responsibility for soil preparation, watering and operating motorized equipment while the wife is responsibility for harvesting. Among younger couples, there is an increasing

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tendency for sharing housework. However, due to the pervasive influence of conservative traditional culture, many young women continue to be responsible for housework.

68. Participation and Decision Making: The husband/men mostly participated in any community activities and training courses. As a result, decision making is often the responsibility of the husbands in these households.

69. Awareness of respondents on Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome (HIV/AIDS) and Climate Change was rather good with 96% having heard of HIV/AIDS and 89% having heard of climate change. A higher proportion of men were aware of HIV/AIDS and climate change compared to women. The sources of information they rely upon comes mainly through television.

70. The main challenges faced by female farmers relate to their limited ownership of productive assets as well as their limited access to knowledge, technology, services, and markets. In focus group discussions (FGDs), married women report that they only attend agricultural extension training when their husbands were temporarily absent. They suggested their non-attendance at such events was largely due to their housework and caring responsibilities.

71. Overall, the subproject will benefit men and women equally and is not expected to impose hardship or negative impacts. The irrigation modernization will provide enough water to satisfy their need for irrigation. Being supplied under pressure, it will reduce labor costs and time saving for watering. A gender action plan is needed to address concerns of women to improve their social status in local communities.

B. Environmental

72. The subproject has been categorized as B on environmental safeguard in the Project Concept Note as few significant impacts are identified and none of them is irreversible. This IEE has been prepared to screen impacts and formulate mitigation measures in three phases of subproject implementation including pre-construction; construction and operation. Institutional arrangements have been formulated to ensure that subproject Environment Management Plan (EMP) is implemented.

73. In the design and preconstruction phase, the potential impacts have been identified relating to (i) land acquisition and resettlement; (ii) clearance on unexploded ordnance (UXO) before construction. To minimize the impacts, Central Project Management Unit/ Provincial Project Management Unit (CPMU/PPMU) will (i) undertake necessary land acquisition and compensation before construction starts to ensure that all affected households have received compensation in accordance with the current provincial market and ADB’s Safeguard Policy Statement (SPS); and (ii) conduct survey on UXO in the subproject area to ensure it is cleared before construction.

74. Potential negative impacts in the construction phase have been identified as (i) disturbance of the cultivation activities when installing pipe lines, (ii) excavated of soil, domestic and toxic wastes effect the environment if they are improperly managed at sites, (iii) dust generation caused by the activities of excavation, leveling and operation of construction machines and transportations at sites, (iv) occupational and community health and safety impact are potential at sites where the subprojects being constructed with machines, excavated holes without being covered and conflicts between locals and the subproject migrant workers,

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and (v) community road may be damaged due to heavy transportation of materials to sites. To address all above adverse impacts, contractors will (i) collaborate with local people and authorities to plan pipeline installation through farms, (ii) preventing stockpiling of materials on access roads, (iii) properly manage excess excavated soil or allow farmers to reuse them, (iv) collect construction and domestic waste at sites to sort out for reuse, selling for recycling, otherwise discharge them to local landfill, (v) comply with management of hazardous wastes such as oil, grease leaking out at site, following Circular 36/2016/BTNMT, (vi) suppress dust by keeping excavated soil and stockpile moist, minimize gas emissions throughout well maintained machinery and turn off machines if not working, (vii) provide workers with adequate personal protective equipment (PPE) when working at sites and training courses of health, safety and behavior attitude respect to community cultures especially with ethic minority communities; and (viii) rehabilitate or compensate any damage on community roads due to the subproject construction.

75. In the operation phase, potential negative impacts have been identified as relating to (i) pipe line system being potentially damaged due to cultivation activities, and (ii) conflict of water use among beneficiaries in period of shortage of water. To minimize the impacts, the implementing agency, Ninh Thuan Department of Agriculture and Rural Development (DARD) will (i) manage the right of way of the pipe carefully, prevent villagers to occupy the right-of-way for cultivation; and (ii) establish a reasonable mechanism of operating the system especially in the period of water shortages to ensure all beneficiaries have equal opportunities to access the irrigation system.

76. Identified key stakeholders received public consultations from provincial to commune level with a focus on the affected people views where beneficiaries were highly supportive of subprojects because of recent experiences with drought. Environmental issues are not viewed with high importance by participants because they have known that most of civil works are in small scale and construction works are far from the residential areas. They are more concerned at land acquisition and compensation issues and using the currently unused land. All of these concerns are addressed in the EMP outlined in the Initial Environmental Examination (IEE).9 There are no impacts on the coastal national park located near Vinh Hy commune as the command area is some 20 km distant and lies outside any drainage influence.

77. Institutional Arrangements: Ministry of Agriculture and Rural Development’s (MARD’s) Central Project Office (CPO)/CPMU and Ninh Thuan DARD’s PPMU are the institutions that will play key roles in the implementation of the subproject as well as ensuring environment safeguards. One Environment Safeguard Specialist (ESS) will be recruited under Loan Implementation Consultants to support subproject implementation in Ninh Thuan. The ESS will support the CPMU in updating the EMP and as well as monitor the compliance of the contractors during construction phase. The ESS will also be responsible for training and capacity building on the implementation of EMP.

78. DARD’s PPMU will engage Construction Supervision Specialists (CSS) for the monitoring and supervision of the subproject in general and for environmental monitoring. These consultants will support the PPMU officers to ensure that contractors implement the provisions of the subproject EMP.

79. Conclusion: The IEE for Ninh Thuan Province subprojects was undertaken to determine the environmental issues and concerns associated with the proposed irrigation modernization

9 Initial Environmental Examination (accessible from the list of linked documents in RRP Appendix 2).

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subproject. Design modifications made during preparation are considered more suitable in terms of ensuring better irrigation level of service. The assessment confirms that the subproject remains classified as Category B for environment based on ADB Safeguards Policy Statement (SPS, 2009).

80. There are expected beneficial impacts on health and well-being of people because of the proposed irrigation project for Ninh Thuan Province. Besides, most of the environmentally negative impacts are expected to occur during the construction phase, not expected to cause irreversible and significant adverse environmental impacts and are easily mitigated by appropriate and conventional measures. All adverse impacts are addressed by the EMP including the institutional responsibilities for implementing the mitigation measures. The IEE concludes that the subproject combined with available information on affected environment is sufficient to identify the scope of environmental impacts of the subproject. No further environmental assessment is therefore required. The ESS will update the EMP before finalization of the detail design.

C. Resettlement

81. Resettlement cost estimates are based on the existing ring pipelines at the tail and the single pipeline delivering to that distribution system. Roads to provide service access will be limited to the larger pipe diameters (above 500 mm) and are unlikely to extend much into the existing command area. The greatest impact on resettlement is likely to come from the feeder pipeline between the Tan My pipeline and the irrigation system. Estimates will be firmed up as the detailed engineering designs are completed and precise alignments are located in order to identify affected persons and any compensation required.

82. The initial estimates (Table 8) are based on the pipe layout as presented in Annex 1 hereto. The resettlement impact will need to be reassessed once the final alignment of pipes is determined. As the area is largely planted to annual crops (with some grapes), and that it is more developed with temporary water distribution systems, it is likely the extent of compensation will increase marginally on a per unit basis. The total number of affected households is estimated at 246 while only three households qualify for vulnerable person’s assistance.

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Table 8: Resettlement Cost Estimates

No. Item Unit Quantity Unit price

(VND) Amount (VND)

A. Compensation and assistance

7,867,738,500

1. Land compensation

2,480,292,000

Annual cropland m2 137,794 18,000 2,480,292,000

2. Crops compensation

420,862,500

Grape tree 1,080 300,000 324,000,000

Rice m2 27,675 3,500 96,862,500

3. Assistance

4,966,584,000

Assistance for job training/conversion m2 137,794 36,000 4,960,584,000

Allowance for vulnerable households HH 3 2,000,000 6,000,000

B. Detailed measurement survey HH 246 200,000 49,200,000

C. Management costs (2% X A)

157,354,770

D. Sub-total (A+B+C)

8,074,293,270

E. Unidentified costs associated with resettlement

1,121,992,066

F. Contingency (5% X D)

403,714,664

Total (D+E+F)

9,600,000,000

D. Economic

83. The economic impact is likely to be significant in this subproject given the already extensive agricultural production in the command area and the fact that recent drought conditions have had a significant impact on their livelihoods and income generation. Most farmers adopted high cost coping strategies to maintain water supplies to their crops during the recent drought as is evidenced by the extensive extraction from Ong Kinh Reservoir that is undertaken completely at farmer initiative and expense. The project will make reliable water supplies more easily and cheaply accessible to support their agricultural livelihoods. The additional water will provide incremental yields of existing crops and permit a diversification into HVC production that demands a greater reliability given the perennial nature of some of these crops. For the high proportion of farmers electing to connect to the surface irrigation system, the impact will be through improved yields of existing and new crops whilst for those electing not to connect, the reduced demand on ground water will result in more being available for those not connecting that should save significantly the farmers individual pumping costs.

84. The main concern with the subproject is the relationship between incremental benefits and the cost for developing the system. The 9.3 km pipe that brings water from the Tan My pipeline to the command area (and Ong Kinh Reservoir) is a significant overhead for the subproject to bear. The fact that the irrigable area has been increased from an initial figure of 600 ha to the 1,000 ha will help in spreading the high investment cost over a larger benefit area that will assist in resolving the issue. However, given the importance of water in generating farmer incomes to support them from further protecting against drought and, in the longer term, climate change, the investment is considered a valuable investment of public funds likely to generate a satisfactory return for the benefit of Ninh Thuan economy.

85. The Nhon Hai-Thanh Hai Subproject is expected to have a command area of 1,000 ha and be served by the same pipe line that will serve the Thanh Son-Phuoc Nhon Subproject. Unlike its upstream neighboring subproject, however, the Nhon Hai-Thanh Hai Subproject is already developed with farms of grapes, Vietnamese apple and vegetables (particularly garlic,

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peppers and other vegetables). These high-value crops are expected to expand modestly and to have increased yields with a more secure water supplies than the groundwater that is now largely in use. The subproject will supply water through ringed delivery pipes to hydrant manifolds from which farmers will connect to draw irrigation water.

86. The economic analysis of this subproject examines the incremental net value of production “with” the project relative to that “without” the project. Financial valuations of the subproject investment, agricultural output and the cost of production are, in this analysis, converted to their economic equivalents by excluding transfers from one part of society to another and attempting to identify the real benefits and opportunity costs to the economy by translating all prices into a common, undistorted footing. The results of this analysis are derived from work of the national feasibility study consultants in late 2016. As the costs of the subproject investment and the size of the command area were refined in early 2017, the earlier work was adjusted to these new costs and area and bring prices to a common domestic or international derivation as the case required. The revised financial cost of this investment is estimated to be VND 33.4 billion ($13.9 million) or $13.9 thousand per ha. Normal O&M costs are expected to total VND 0.2 billion per year or VND 0.2 million/ha.

87. The Economic Internal Rate of Return (EIRR) for this subproject is expected to be 27.1% and the Economic Net Present Value is estimated at D444.1 billion evaluated at a discount rate of 9%. If incremental benefits were to decrease (from the base case) by 20%, the EIRR would fall to 22.6% while an increase in the cost of investment by 20% would decrease the EIRR to 23.4%. Overall, these results indicate that the subproject is expected to give sound economic returns due primarily to the high cost per ha of the investment but also that the water is being applied to high-value crops. The sensitivity results confirm a robust investment to the likely risk elements. The switching value for a decline in benefits is 35% and for cost increases, is 323%. The switching value for changes in operating costs report a switching value of 1324% - an unlikely outcome in all cases.

88. A “snapshot” of the tenth year after construction would indicate that the incremental net crop economic value “with” the subproject may be D110.6 billion ($4.9 million) more than might be expected “without” the project. In household financial terms this year 10 “snapshot” would translate to an increased net crop income of D54.8 million ($2.4 thousand) per “average” household farm (estimated to be of 0.5 ha in size). The economic assessment summary is presented in Table 9 over. More detailed analysis is presented in Annex 5.

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Table 9: Economic Assessment of Nhon Hai-Thanh Hai Subproject

Nhon Hai - Thanh Hai Subproject, Ninh Thuan Province 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 202526 2026/27 2027/28

Benefits

FS Command Area (CA) assumption ha 1,000

PPTA Command Area (CA) assumption ha 1,000

FS Economic stream of benefits/a

(VND106) - - - - 33,194 77,453 105,114 110,646 110,646 110,646

FS benefits adjusted to PPTA CA (VND106) - - - - 33,194 77,453 105,114 110,646 110,646 110,646

Costs (includes technical support and management costs in PPTA costs)

FS economic cost calculation (VND106) 8,214 14,748 39,340 133,572 38,179 3,511 3,511 3,511 3,511 3,581

PPTA economic cost calculation (VND106) 9,944 23,069 104,819 103,106 25,953 775 138 138 138 138

PPTA Financial Cost Total $ '000 14,824.1

Constant 2017 Financial O&M Cost (VND106) 153 153 153 153 153 153

Current Financial O&M Cost (VND106) 7.6 191 199 206 214 222 229

Net Economic Benefit Stream

FS net economic benefit stream (VND106) (8,214) (14,748) (39,340) (133,572) (4,985) 73,942 101,603 107,136 107,136 107,065

PPTA adjusted net economic benefits (VND106) (9,944) (23,069) (104,819) (103,106) 7,241 76,677 104,977 110,509 110,509 110,509

EIRR

FS EIRR % 31.4%

PPTA FS EIRR adjusted for cost and CA % 27.1%

ENVP (at 9% discount rate)

FS ENVP (VND106) 438,514

PPTA FS ENPV adj. for cost and CA (VND106) 444,082

ENVP (at 10% discount rate) (PPTA figures) (VND106) 379,025

Sensitivitity analysis (on PPTA's FS adjusted figures)

Benefit decrease of 20% EIRR % 22.6% (9,944) (23,069) (104,819) (103,106) 603 61,187 83,954 88,380 88,380 88,380

Cost increase of 20% EIRR % 23.4% (11,932) (27,682) (125,782) (123,727) 2,051 76,522 104,949 110,481 110,481 110,481

Switching Values for a 9% EIRR

Benefit decrease switching value % 35%

Investment cost increase switching value % 323%

O&M cost increase switching value % 1324%

Annex 1 23

Annex 1

SCHEME LAYOUT

FIGURE A1.1: LAYOUT FOR NHON HAI-THANH HAI SUBPROJECT

24 Annex 1

FIGURE A1.2: LAYOUT FOR NHON HAI-THANH HAI SUBPROJECT

Annex 2 25

Annex 2

HYDROLOGY STATISTICS

Table A2.1: Rainfall Stations Close to Thanh Son-Phuoc Nhon

Rainfall station

Location Mean annual Rainfall

Latitude Longitude Elevation (masl) Amount (mm) Period

Tan My 11° 43’ 108° 50’ 35 1166 1977 – present

Khanh Son 12° 01’ 108° 58’ 60 1764 1976 – 2015

Ba Thap 11° 42’ 108° 03’ 5 772 1979 – present

Nha Ho 11° 42’ 108° 54’ 5 821 1978 – 2009

Phan Rang 11° 34’ 109° 59’ 5 804 1979 – present

Data source: i) Ninh Thuan Water Resources Planning for 2020 and Vision of 2030, 2016 and ii) IWRP (2016), Bao Cao, Ra Soat Tong Hop Tinh Toan Can Bang Nuoc.

Table A2.2: Monthly Mean and Reliable Rainfall at Stations Close to the Subproject

Rainfall station Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual

Tan My

mean 5 2 21 41 117 99 97 115 216 218 153 75 1,160

Khanh Son

mean 15 5 25 52 186 180 177 173 293 243 281 134 1,764

Nha Ho

mean 3.2 2.5 15.5 21.9 80.8 66.3 75.4 60.8 150 155 135 55.3 821

Phan Rang

mean 6.4 2.7 12.2 21.0 68.9 59.8 53.4 49.5 142 163 160 65.4 804

85% 0 0 0 0 11 9 20 17 65 49 35 0

Note: Data from Phan Rang were used to calculate both mean and reliable rainfall for the subproject irrigation areas.

26 Annex 2

Table A2.3: Mean Monthly Values of Climate Parameters at Phan Rang and Nha Ho

Parameter Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual

Phan Rang climate station

T°C 24.7 25.3 26.7 28.2 28.2 27.3 26.8 26.7 26.5 26.5 26.2 25.2 26.5

RH% 77 77 78 79 82 85 86 86 87 85 82 79 82

Sun (hrs.) (hrs./day)

264 8.5

263 9.4

296 9.6

277 9.2

237 7.6

193 6.4

202 6.5

192 6.2

182 6.1

199 6.4

215 7.2

228 7.4

2750 7.5

Wind (m/s) 1.7 1.9 1.9 1.8 1.5 1.7 1.6 1.8 1.4 1.5 1.6 1.6 1.7

Evaporation Piche (mm) (mm/day)

143 4.6

140 5.0

155 5.0

141 4.7

118 3.8

97.9

3.3

91.3

2.9

92.3

3.0

81.6

2.7

86.4

2.8

103 3.4

122 3.9

1373

3.8 Penman (mm/day)

3.81 4.35 4.82 5.03 4.49 3.97 3.91 3.88 3.76 3.68 3.66 3.52 4.07

Nha Ho climate station

T°C max. 32.3 33.4 34.6 35.8 37.7 37.7 37.6 37.7 36.6 34.3 33.2 32.1 35.3

min. 17.8 18.6 20.1 22.5 23.6 23.7 23.5 23.2 22.9 21.8 20.6 18.3 21.4

mean 24.6 25.4 26.7 28.2 29 29.1 28.7 28.7 27.8 26.9 26.2 25.1 27.2

RH% 71 73 75 77 78 76 76 76 82 83 80 74 77

Sun (hrs.) 215 231 247 249 227 215 204 214 171 170 167 171 2480

(hrs./day 6.9 8.2 8.0 8.3 7.3 7.2 6.6 6.9 5.7 5.5 5.6 5.5 6.8

Wind (m/s)

Evaporation Piche (mm)

123 114 124 114 110 112 124 126 83.2 71.4 83.9 111 1296

(mm/day) 4.0 4.0 4.0 3.8 3.5 3.7 4.0 4.1 2.8 2.3 2.8 3.6 3.5

Penman* (mm/day)

3.68 4.25 4.56 4.85 4.57 4.61 4.41 4.60 3.94 3.59 3.40 3.31 4.15

* Penman evapotranspiration at Nha Ho has been calculated using wind data from Phan Rang Key to parameters:

• T°C - Temperature in degrees Celsius

• RH% - Relative humidity in %

• Sun - Sunshine duration

• Wind - Wind run in m/s, assumed to be measured 2m above ground level

• Piche - Evaporation as measured using a Piche evaporimeter

• Penman - Potential evapotranspiration has been computed from climate parameters

in the above table use the Penman-Monteith equation embodied in FAO’s CROPWAT software (version 8).

Table A2.4: Monthly Water Demand (85% reliable) for Thanh Son-Phuoc Nhon Subproject at the Headwork (conveyance efficiency of 80%)

Month 1 2 3 4 5 6 7 8 9 10 11 12 Annual

Discharge (m3/s) 0.79 0.97 1.06 0.51 0.64 0.70 0.67 0.70 0.36 0.34 0.01 0.44 0.60 Volume (10^6m3) 2.12 2.37 2.84 1.32 1.71 1.81 1.79 1.87 0.93 0.91 0.03 1.18 18.89

Source: Institute of Water Resources Planning, “WEIDAP Feasibility Study (FS) Summary Report; Review and Summary of Water Balance Assessment, Hanoi, 5/2017.

Annex 2 27

Table A2.5: Mean Monthly River Flows at Song Luy (actual) and Tan My Weir (est.)

Location Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual

Song Luy gauging station

m3/s 4.19 2.22 2.29 3.78 13.7 17.7 18.3 19.6 36.7 64.8 27.0 9.41 18.3

mm 11 5.5 6.2 10 37 45 50 54 97 177 71 26 590

Tan My weir – mean monthly flows

m3/s 15.3 8.93 5.94 5.96 14.9 19.8 19.8 17.2 38.8 45.2 57.5 36.4 23.8

Mm3 41.0 21.8 15.9 15.5 39.9 51.4 52.9 46.2 100 121 149 97.5 752

mm 51 27 20 19 50 64 66 57 125 150 185 121 935

Tan My weir – 85% reliable monthly flows

m3/s 13.7 8.5 5.3 3.3 6.1 2.5 2.8 8.4 22.0 22.7 9.2 11.5 9.68

Mm3 36.81 20.85 14.28 8.67 16.30 6.39 7.63 22.49 56.92 60.85 23.87 30.72 305.78

mm 45.7 25.9 17.7 10.8 20.3 7.9 9.5 27.9 70.7 75.6 29.6 38.2 379.8

Notes: Catchment area to Song Luy gauging station - 982 km2 Catchment area to Tan My weir - 805 km2

Table A2.6: Monthly Subproject Supply-demand Balance, Mm3

Location Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Tan My weir

85% reliable monthly flow

36.81 20.85 14.28 8.67 16.30 6.39 7.63 22.49 56.92 60.85 23.87 30.72

Environmental flow requirement

3.29 3.00 3.29 3.19 3.29 3.19 3.29 3.29 3.19 3.29 3.19 3.29

Available water 33.52 17.85 10.98 5.48 13.01 3.20 4.33 19.19 53.73 57.55 20.68 27.43

Total subproject demand

Thanh Son -Phuoc Nhon

2.12 2.37 2.84 1.32 1.71 1.81 1.79 1.87 0.93 0.91 0.03 1.18

Nhon Hai - Thanh Hai

1.18 1.37 1.71 0.65 0.54 1.56 1.29 1.07 0.13 0.56 0.52 0.48

Supply/ demand balance

Thanh Son -Phuoc Nhon

31.40 15.48 8.14 4.16 11.29 1.39 2.54 17.32 52.80 56.64 20.65 26.25

Nhon Hai - Thanh Hai

30.23 14.12 6.43 3.51 10.76 -0.169 1.25 16.25 52.67 56.08 20.13 25.77

Notes: 1. All figures in Mm3

28 Annex 3

Annex 3

ENGINEERING DRAWINGS

Figure A3.1: Control Valve and Chamber at Head of each Pipe System

Annex 3 29

Figure A3.2: Possible Hydrant - Manifold Arrangement

30 Annex 3

Figure A3.3: Service Road Sections

Annex 4 31

Annex 4

SOCIO-ECONOMIC SURVEY TABLES

Table A4.1: Education by Economic Status, Ethnicity and Gender

Education level

% respondent

By economic status By Ethnicity By Gender

Total Poor Non- Poor Kinh Female Male

Never been to school 0.00 4.00 3.85 0.00 5.56 3.85

Primary school 0.00 16.00 15.38 12.50 16.67 15.38

Secondary school 100.00 44.00 46.15 62.50 38.89 46.15

High school 0.00 16.00 15.38 12.50 16.67 15.38

Vocational training 0.00 4.00 3.85 0.00 5.56 3.85

College/University 0.00 16.00 15.38 12.50 16.67 15.38

Source: WEIDAP Socio- Economic Baseline Household Survey, 2017.

Table A4.2: Major Occupation of Sampled Households

Main occupation

% respondent

By Economic Status By Ethnicity By Gender

Total Poor Non- Poor Kinh Female Male

+ Agriculture 0.0 68.0 65.4 66.7 62.5 65

+ Non-agriculture 0.0 28.0 26.9 27.8 25.0 27

+ Others 100.0 4.0 7.7 5.6 12.5 8

Total 100.0 100.0 100.0 100.0 100.0 100.0

Source: WEIDAP Socio- Economic Baseline Household Survey, 2017.

Table A4.3: Average Household Income by Ethnicity and Economic Status

Income (VND’000s)

From Agriculture

From non-Agriculture

From Laboring

Other Sources Total Income

$ equivalent (VND 22,600)

By Ethnicity

Kinh 69,192,308

3,269,231

26,423,077

1,153,846

100,038,462

4,426

By Economic Status

Poor 70,000,000 - - - 70,000,000 3,097

Non- poor 69,160,000 3,400,000 27,480,000

1,200,000 101,240,000 4,480

By Sex Disaggregated

Men 80,500,000 2,777,778 28,111,111 1,666,667 113,055,556 5,002

Women 43,750,000 4,375,000 22,625,000 - 70,750,000 3,131

Source: WEIDAP Socio- Economic Baseline Household Survey, 2017.

32 Annex 4

Table A4.4: Expenditure in Sample Households, 2015

Consumption Total survey

By Ethnicity By Economic Status By gender

Kinh Poor Non-poor Women Men

Average Household Expenditure (Dong)

60,015,385

60,015,385

40,800,000

60,784,000

53,900,000

62,733,333

Average household size (person)

4

4

5

4

4

4

Annual average per capita (Dong)

15,003,846

15,003,846

8,160,000

15,196,000

13,475,000

15,683,333

Share of total

Routine living expenditure

53.7 53.7 61.3 53.5 49.6 55.3

Health care 8.0 8.0 4.9 8.1 8.5 7.8

Education 3.9 3.9 2.5 3.9 2.4 4.5

Clothing and shoes 5.4 5.4 4.9 5.4 7.5 4.6

Transport and communications

6.4 6.4 4.9 6.4 7.2 6.1

Energy (electricity, etc.) 5.7 5.7 1.2 5.8 3.0 6.7

House repairs 1.3 1.3 - 1.4 0.9 1.5

Social events (Tet etc.) 14.6 14.6 19.6 14.5 20.2 12.5

Community expenses 0.9 0.9 0.7 0.9 0.6 1.0

Source: WEIDAP Socio- Economic Baseline Household Survey, 2017.

Table A4.5: Household Assets in Sampled Households

Type of Assets

% of respondents

By economic status By ethnicity By Sex

disaggregated Total survey Poor Non- Poor Kinh Women Men

Type of House

Solid Permanent 0.0 76.0 73.1 62.5 77.8 73.1

Semi - permanent 100.0 24.0 26.9 37.5 22.2 26.9

Wood frame/ thatched roof 0.0 0.0 0.0 0.0 0.0 0.0

Electricity 100.0 100.0 100.0 100.0 100.0 100.0

Indoor kitchen 100.0 60.0 61.5 50.0 66.7 61.5

Refrigerator 0.0 76.0 73.1 37.5 88.9 73.1

Working TV 0.0 100.0 96.2 87.5 100.0 96.2

Working radio 0.0 24.0 23.1 12.5 27.8 23.1

Bicycle 100.0 52.0 53.8 62.5 50.0 53.8

Motor cycle 0.0 96.0 92.3 75.0 100.0 92.3

Tractor 0.0 0.0 0.0 0.0 0.0 0.0

Car 0.0 0.0 0.0 0.0 0.0 0.0

Animal Cart 0.0 0.0 100.0 0.0 0.0 0.0

Source: WEIDAP Socio- Economic Baseline Household Survey, 2017.

Annex 4 33

Table A4.6: Type of Latrine by Economic Status, Ethnicity, and Gender

Type of Latrine Facility Used

% of respondents

By economic status By ethnicity By Sex disaggregated

Total Poor Non poor Kinh Women Men

Flush toilet with septic tank, sewage pipes

0.00 88.00 84.62 62.50 94.44 84.62

Pit latrine 0.00 0.00 0.00 0.00 0.00 0.00

Single Vault Compost Latrine

0.00 4.00 3.85 12.50 0.00 3.85

Double Vault Compost Latrine

100.00 4.00 7.69 12.50 5.56 7.69

Public Toilet 0.00 0.00 0.00 0.00 0.00 0.00

No toilet 0.00 4.00 3.85 12.50 0.00 3.85

Source: WEIDAP Socio-Economic Baseline Household Survey, 2017.

Table A4.7: Households Experiencing Health Problem in the Last Year

Survey Respondents

(% of Households)

Cold, Flu Eye

Redness TB Malaria Petechial

fever Hepatitis Diarrhea

Total survey 84.6 0.0 0.0 3.8 0.0 3.8 0.0

By Ethnicity

+ Kinh 84.6 0.0 0.0 3.8 0.0 3.8 0.0

By Economic Status

Poor 100.0 0.0 0.0 0.0 0.0 0.0 0.0

non poor 84.0 0.0 0.0 4.0 0.0 4.0 0.0

By Gender

Women 75.0 0.0 0.0 0.0 0.0 12.5 0.0

Men 88.9 0.0 0.0 5.6 0.0 0.0 0.0

Source: WEIDAP Socio- Economic Baseline Household Survey, 2017.

Table A4.8: Average Land Holding by Ethnicity, Economic Status and Gender

Source: WEIDAP Socio- Economic Baseline Household Survey, 2017.

Residential Land Area Holding Agricultural Land (sao)

Forestry Land (ha) Residential Plot (m2) House garden (m2)

Whole sample 585.7 310.9 7.1 0.0

By Ethnicity

Kinh 200.0 2800.0 3.0 0.0

Indigenous Ethnic Minority 650.0 205.0 5.6 0.0

Immigrated Ethnic Minority

425.0 266.7 12.8 0.0

By Economic Status

Poor 652.1 179.4 7.2 0.0

Non poor 187.5 1100.0 6.1 0.0

By Gender

Female headed Household

2110.0 60.0 5.1 0.0

Male headed Household 254.3 365.4 7.5 0.0

34 Annex 4

Annex Table A4.9: Households with Land Use Rights Certificates

RESIDENTIAL PLOT HOUSE GARDEN AGRICULTURAL LAND

Name on LURC Name on LURC Name on LURC

Husband Wife Both Other family

member Husband Wife Both Other family

member Husband Wife Both Other family

member

Total of survey Household 26 26 26

Number of Household with LURC

73.1 19.2 50.0

In name of 57.9 10.5 10.5 21.1 80 0 20 0 53.8 7.7 7.7 30.8

By Ethnicity

Kinh 57.9 10.5 10.5 21.1 80 0 20 0 53.8 7.7 7.7 30.8

By Gender

Women 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Men 57.9 10.5 10.5 21.1 80.0 0.0 20.0 0.0 53.8 7.7 7.7 30.8

By Economic Status

Poor 0.0 0.0 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Non poor 61.1 11.1 11.1 16.7 80.0 0.0 20.0 0.0 53.8 7.7 7.7 30.8

Table A4.10: Source of Water

Sources of water Total response

By ethnicity By Sex disaggregated By Economic status

Kinh Women Men Poor Non Poor

Rainy season

Rain fed only 3.8 3.8 0.0 5.6 0.0 4.0

Irrigated by pumping from river/stream/canal/ reservoir 26.9 26.9 25.0 27.8 0.0 28.0

Irrigated by pumping formfarmer's own shallow well/pond/ borehole 26.9 26.9 12.5 33.3 0.0 28.0

Irrigated by buying water from private 0.0 0.0 0.0 0.0 0.0 0.0

Dry season

Rain fed only 0.0 0.0 0.0 0.0 0.0 0.0

Irrigated by pumping from river/stream/canal/ reservoir 34.6 34.6 37.5 33.3 0.0 36.0

Irrigated by pumping from farmer's own shallow well/pond/ bore-hole 50.0 50.0 25.0 61.1 0.0 52.0

Irrigated by buying water from private 0.0 0.0 0.0 0.0 0.0 0.0

35 Annex 4

Table A4.11: Type of Water Application Method

Irrigation Practices

Percentage of Household

Applied

By Ethnicity By Sex Disaggregate By Economic Status

Kinh Women Men Poor Non- Poor

Flooding/ moveable hose irrigation

65.4 65.4 62.5 66.7 0.0 68.0

Overhead sprinkler irrigation 0.0 0.0 0.0 0.0 0.0 0.0

Micro sprinkler irrigation 7.7 7.7 0.0 11.1 0.0 8.0

Drip irrigation 0.0 0.0 0.0 0.0 0.0 0.0

Other 3.8 3.8 0.0 5.6 0.0 4.0

Source: WEIDAP Socio- Economic Baseline Household Survey, 2017.

Table A4.12: Indebtedness in Subproject Command Area

Number of Household

Percentage of respondents

Kinh Poor Non- poor Women Men

Number of surveyed Household 26 26 1 25 8 18

Number of indebted Household 25 25 1 24 8 17

Percentage 96.2 96.2 100.0 96.0 100.0 94.4

Sources of loan

Relatives, Friends, neighbors 8.0 8.0 0.0 8.3 12.5 5.9

Money lender 0.0 0.0 0.0 0.0 0.0 0.0

Credit fund/ People’s credit Cooperatives

8.0 8.0 0.0 8.3 0.0 11.8

Agribank 72.0 72.0 100.0 70.8 75.0 70.6

Social policy Bank 12.0 12.0 0.0 12.5 12.5 11.8

Fund for poverty 0.0 0.0 0.0 0.0 0.0 0.0

Women Union/other Associations 0.0 0.0 0.0 0.0 0.0 0.0

Others(specific) 0.0 0.0 0.0 0.0 0.0 0.0

Purposes of borrowing

Agricultural Activities 84.0 84.0 100.0 83.3 75.0 88.2

Non-agricultural Activities 0.0 0.0 0.0 0.0 0.0 0.0

Purchase of consumer durables 0.0 0.0 0.0 0.0 0.0 0.0

Purchase/improvement of dwelling 8.0 8.0 0.0 8.3 12.5 5.9

Household consumption needs 8.0 8.0 0.0 8.3 12.5 5.9

Health treatment, injury, accident 0.0 0.0 0.0 0.0 0.0 0.0

Other (specify) 0.0 0.0 0.0 0.0 0.0 0.0

Formality of loan

Loans without collateral or deposits 52.0 52.0 100.0 50.0 62.5 47.1

Mortgage loans 48.0 48.0 0.0 50.0 37.5 52.9

Source: WEIDAP Socio- Economic Baseline Household Survey, 2017.

36 Annex 4

Table A4.13: Most Serious Issues in Agriculture (%Responses Agreeing)

MOST SERIOUS AGRICULTURAL CONSTRAINTS

Lack of Land

Lack of

Labor Lack of

Irrigation

Lack of New or Hybrid

Varieties Insect/ pests

Lack of Agriculture Extension

service and technical

knowledge

High Price

of Inputs

Lack of Fertilizer

and Other Inputs

Low Selling Price

Percentage of response

11.5 3.8 53.8 7.7 26.9 3.8 23.1 7.7 26.9

By Ethnicity

Kinh 11.5 3.8 53.8 7.7 26.9 3.8 23.1 7.7 26.9

By Economic Status

Poor 100.0 0.0 100.0 0.0 100.0 0.0 0.0 0.0 0.0

Non poor 8.0 4.0 52.0 8.0 24.0 4.0 24.0 8.0 28.0

By Gender

Women 37.5 12.5 25.0 12.5 12.5 0.0 25.0 0.0 25.0

Men 0.0 0.0 66.7 5.6 33.3 5.6 22.2 11.1 27.8

Source: WEIDAP Socio- Economic Baseline Household Survey, 2017.

Annex 4 37

Table A4.14: Community Participation

Membership in Community Organizations (% of respondents)

Farmer Association

WUG/WUA

Cooperative Interest group

Agricultural Extension group

Youth Union

Women Union

Religion group

Saving and credit group

Agricultural processing group

Total survey 61.5 3.8 3.8 0.0 3.8 23.1 23.1 15.4 3.8 0.0

By Ethnicity

Kinh 61.5 3.8 3.8 0.0 3.8 23.1 23.1 15.4 3.8 0.0

By Gender

Women 25.0 0.0 0.0 0.0 0.0 25.0 62.5 0.0 12.5 0.0

Men 77.8 5.6 5.6 0.0 5.6 22.2 5.6 5.6 0.0 0.0

By Economic Status

Poor 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Non- poor 64.0 4.0 4.0 0.0 4.0 24.0 24.0 16.0 4.0 0.0

Source: WEIDAP Socio- Economic Baseline Household Survey, 2017.

Table A4.15: Sources of Information on HIV/AIDS

Survey Respondents

(% Survey Responses)

Have you heard of HIV/AIDS?

Main Source of Information on HIV/AIDS

TV Radio Poster Relative/ Friend Health Worker Other

Total 96.2 92.3 23.1 19.2 15.4 15.4 0.0

By Gender

+ Men 100.0 94.4 27.8 22.2 11.1 11.1 0.0

+ Women 87.5 0.0 0.0 0.0 0.0 0.0 0.0

By Ethnicity

+Kinh 96.2 92.3 23.1 19.2 15.4 15.4 0.0

By Economic status

+ Poor 100.0 100.0 0.0 0.0 0.0 0.0 0.0

+Non poor 96.0 92.0 24.0 20.0 16.0 16.0 0.0

Source: WEIDAP Socio- Economic Baseline Household Survey, 2017.

38 Annex 4

Table A4.16: Sources of Information on Climate Change

Survey Respondents

(% Survey Responses)

Have you heard of Climate Change?

Main Source of Information

Internet TV News paper

Radio/Loud speaker

Display panel Leaflet

Community meetings

Self- searching

Relatives/ Friends

Total 88.5 30.8 88.5 34.6 42.3 3.8 3.8 11.5 7.7 7.7

By Ethnicity

+ Kinh 100.0 30.8 88.5 34.6 42.3 3.8 3.8 11.5 7.7 7.7

By Economic Status

+Poor 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

+ Non poor 92.0 32.0 92.0 36.0 44.0 4.0 4.0 12.0 8.0 8.0

By Gender

+ Men 94.4 38.9 94.4 44.4 44.4 5.6 5.6 11.1 11.1 11.1

+ Women 75.0 12.5 75.0 12.5 37.5 0.0 0.0 12.5 0.0 0.0

Source: WEIDAP Socio- Economic Baseline Household Survey, 2017.

Table A4.17: Benefits from Improved Irrigation System (% Survey Responses)

Survey respondents

Increased yields of current crop

production Increased number of crops per year

Increased cultivated land area

Opportunities for crop

diversification

Increased land

values

Provide food

security

Create more job

opportunities Opportunity

for aquaculture

Total 96.2 0.0 0.0 0.0 0.0 3.8 0.0 0.0

By Ethnicity

Kinh 96.2 0.0 0.0 0.0 0.0 3.8 0.0 0.0

By Economic Status

Poor 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Non Poor 96.0 0.0 0.0 0.0 0.0 4.0 0.0 0.0

By Gender

Men 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Women 87.5 0.0 0.0 0.0 0.0 12.5 0.0 0.0

Source: WEIDAP Socio- Economic Baseline Household Survey, 2017.

Annex 4 39

Table A4.18: Women in the Survey Sample

Women Female headed

household

Total in survey sample 8 0

By Economic Status

Poor 1 0

Non poor 7 0

By Ethnicity

Kinh 8 0

Indigenous Ethnic Minority 0 0

Immigrated Ethnic Minority 0 0

Average household size 4 0

Source: WEIDAP Socio- Economic Baseline Household Survey, 2017.

Table A4.19: Gender Division of Responsibilities in Production Activities (% of responses)

Responsible Person Farming Fishery/

Aquaculture Worker/

hired labor Trading

Occasional Working outside

Total Survey Husband 38.5 0.0 3.8 0.0 0.0

Wife 3.8 0.0 0.0 7.7 0.0

Both husband and wife 30.8 0.0 11.5 0.0 0.0

Other 7.7 0.0 15.4 0.0 3.8

No activity 19.2 100.0 69.2 92.3 96.2

Women’s Response

Husband 37.5 0.0 0.0 0.0 0.0

Wife 12.5 0.0 0.0 25.0 0.0

Both husband and wife 12.5 0.0 0.0 0.0 0.0

Other 0.0 0.0 25.0 0.0 0.0

No activity 37.5 100.0 75.0 75.0 100.0

Men’s Response

Husband 38.9 0.0 5.6 0.0 0.0

Wife 0.0 0.0 0.0 0.0 0.0

Both husband and wife 38.9 0.0 16.7 0.0 0.0

Other 11.1 0.0 11.1 0.0 5.6

No activity 11.1 100.0 66.7 100.0 94.4

Source: WEIDAP Socio- Economic Baseline Household Survey, 2017.

40 Annex 4

Table A4.20: Gender Division of Responsibilities in Non- Production Activities (% of responses)

Responsible Person

Fetching Water

Fetching Fuel

Caring for

Children

Caring for

Elderly

Housework- Cooking/ Cleaning

House Repair

Buying Goods at

Market

Selling agricultural

products

Total Survey

Husband 19.2 3.8 0.0 0.0 0.0 34.6 3.8 19.2

Wife 0.0 0.0 7.7 7.7 61.5 3.8 26.9 15.4

Both husband and wife

0.0 3.8 23.1 3.8 11.5 7.7 30.8 46.2

Other 7.7 3.8 0.0 3.8 0.0 0.0 3.8 3.8

No activity 73.1 88.5 69.2 84.6 26.9 53.8 34.6 15.4

Women’s Response

Husband 25.0 12.5 0.0 0.0 0.0 12.5 12.5 12.5

Wife 0.0 0.0 12.5 12.5 62.5 12.5 12.5 12.5

Both husband and wife

0.0 0.0 12.5 0.0 0.0 0.0 12.5 50.0

Other 0.0 12.5 0.0 12.5 0.0 0.0 12.5 12.5

No activity 75.0 75.0 75.0 75.0 37.5 75.0 50.0 12.5

Men’s Response

Husband 16.7 0.0 0.0 0.0 0.0 44.4 0.0 22.2

Wife 0.0 0.0 5.6 5.6 61.1 0.0 33.3 16.7

Both husband and wife

0.0 5.6 27.8 5.6 16.7 11.1 38.9 44.4

Other 11.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0

No activity 72.2 94.4 66.7 88.9 22.2 44.4 27.8 16.7

Source: WEIDAP Socio- Economic Baseline Household Survey, 2017.

Table A4.21: Gender Division of Responsibilities in Participation and Decision Makings (% of responses)

Responsible Person

Participation in Decision making on

Community meetings

Attend agricultural extension training courses

Mass organization

Community supervision

activities Budgeting & Financial

Production investment

Education/ job of their

children

Total Survey Husband 69.2 76.9 65.4 50.0 38.5 34.6 26.9

Wife 11.5 3.8 11.5 11.5 0.0 0.0 0.0

Both husband and wife

11.5 7.7 15.4 7.7 50.0 42.3 57.7

Other 3.8 3.8 3.8 3.8 3.8 3.8 3.8

No activity 3.8 7.7 3.8 26.9 7.7 19.2 11.5

Women’s Response

Husband 37.5 37.5 25.0 25.0 37.5 25.0 25.0

Wife 25.0 12.5 25.0 25.0 0.0 0.0 0.0

Both husband and wife

25.0 12.5 25.0 25.0 37.5 37.5 50.0

Other 12.5 12.5 12.5 12.5 12.5 12.5 12.5

No activity 0.0 25.0 12.5 12.5 12.5 25.0 12.5

Men’s Reponses

Husband 83.3 94.4 83.3 61.1 38.9 38.9 27.8

Annex 4 41

Responsible Person

Participation in Decision making on

Community meetings

Attend agricultural extension training courses

Mass organization

Community supervision

activities Budgeting & Financial

Production investment

Education/ job of their

children

Wife 5.6 0.0 5.6 5.6 0.0 0.0 0.0

Both husband and wife

5.6 5.6 11.1 0.0 55.6 44.4 61.1

Other 0.0 0.0 0.0 0.0 0.0 0.0 0.0

No activity 5.6 0.0 0.0 33.3 5.6 16.7 11.1

Source: WEIDAP Socio- Economic Baseline Household Survey, 2017.

Table A4.22: Average Working Hours per Day by Gender Disaggregation (hours)

Survey Respondents

Productive Work

House Work/ Child

Community Work Total Hours

Total survey 4.12 1.50 1.00 6.62

Men 4.11 1.06 1.22 6.39

Women 4.13 2.50 0.50 7.13

Source: WEIDAP Socio- Economic Baseline Household Survey, 2017.

42 Annex 5

Annex 5

ECONOMIC AND FINANCIAL ANALYSIS OF NHON HAI-THANH HAI SUBPROJECT

A. Introduction

1. The economic analysis assesses the economic viability of the project through standard cost benefit analyses. The analysis is undertaken for each of the eight subprojects proposed for inclusion in Water Efficiency Improvement in Drought-Affected Provinces (WEIDAP) ‘the project’ and for the overall project, including the incremental costs of project management allocated to individual subprojects. The economic analysis is conducted in accordance with the ADB’s Guidelines for the Economic Analysis of Projects (1997) and Key Areas of Economic Analysis of Investment Projects (2013).

2. When completed, the Song Cai storage dam is expected to supply water to 6,800 ha in Tan My irrigation system. In the meantime, completed parts of Tan My irrigation systems, including the Thanh Son-Phuoc Nhon and Nhon Hai-Thanh Hai subprojects, will operate as gravity piped run-of-river irrigation systems supplied by the new Tan My pipeline10 from the existing Tan My weir to the downstream end of the Thanh Son-Phuoc Nhon service area. The Tan My pipeline will function as the main Thanh Son-Phuoc Nhon subproject pipeline. As it is being financed by the government, it is not included under the project. The subproject will involve the extension of the main pipeline to the west to serve the Nhon Hai-Thanh Hai command area, requiring the construction of an estimated 9.3 kms of pipe with a range of diameters of over 500 mm. WEIDAP will extend the main Tan My conveyance pipeline from the downstream end of Thanh Son-Phuoc Nhon system to the Nhon Hai-Thanh Hai subproject, and this extension is included in the project cost.

3. Following discussions between MARD, the province, and ADB, net irrigable areas will be 1,800 ha for Thanh Son-Phuoc Nhon and 1,000 ha for Nhon Hai-Thanh Hai. The water allocation from Tan My pipeline for Nhon Hai-Thanh Hai is 0.87 m3/s, equivalent to 0.87 l/s/ha. With limited water, high efficiency distribution and application is required to provide flexible supplies for high value cropping. Over some areas, seasonal crops including grass (fodder) will be cultivated for which flexibility is less important, and would not have such a high priority in case of drought compared to perennial crops such as grape. Groundwater may continue to be used but to a more limited extent. The current command area of 1,000 ha is watered by a combination of ground water (lifted by pumping - also to provide head to drive sprinklers) and diverted drainage line water as it traverses towards the ocean. The command area is close to the coast and there is evidence of salinization within the command area. With sustained pumping, the rate of saline intrusion is expected to accelerate. The design incorporates a main delivery pipeline, a ringed distribution system within the command area with the option of contributing to the Ong Kinh Reservoir in times of water shortage. Farmers currently make good use of water from this source installing individual farm distribution connections to the weir using mechanically driven pumps. The design will increase the level of service to those within the 1,000 ha command area providing more reliable supplies of superior quality water, reducing the existing pressure on groundwater.

B. Economic Rationale

4. Agricultural development in Ninh Thuan is constrained by a combination of sub-optimal agricultural practices, limited water resources, low efficiency of water utilization, highly variable

10 The government has constructed the first 31 km of the Tan My pipeline and expects to complete the rest in 2018.

Annex 5 43

water resources made available through deteriorating irrigation distribution systems, excessive use of fertilizers and pesticides, inadequate market access roads and irrigation systems that rely upon ground water sources (where they exist) that, in coastal environs, are threatened by saline intrusion and inadequate drainage systems for high-value crops. Investment is required to modernize irrigation infrastructure to promote production of high-value crops compared with traditional rice systems that will improve water use efficiency, thereby leading to sustainable use of productive resources that are generally beyond the available resources of predominantly small-scale producers. Moreover, the sustainable use of this fragile underground and surface water environment should be considered a public good since the broader community will benefit increasingly from the improved environment. In an attempt to better use existing land resources, the government is financing the installation of a 34 km pipeline to deliver water from the Tan My Reservoir bringing surplus water within more convenient access to these abandoned areas as well as to areas impacted by the rapidly spreading saline wedge creeping into coastal areas. The area is well suited to HVCs and has a climate suitable for crops that are vulnerable to high levels of humidity and thus increased vulnerability to fungal related infestations. The introduction of water will facilitate the expansion of high-value crop production with unique crops for Viet Nam including Vietnamese apple, grapes, aloe vera, asparagus and other vegetable crops. The low humidity is also conducive to livestock rearing and grass production is proposed to support this initiative.

C. Demand Analysis

5. The main outputs to be produced by the subproject include Vietnamese apple, grapes, garlic, aloe vera, asparagus and other high-value vegetable crops. This demand analysis focuses on selected, high valued commodities that are expected to dominate plantings in the new irrigated areas, not the perpetuation of previous maize and cassava that are viewed as low valued commodities that suffer relatively high water-requirements compared to any revenue they generate. Prior to the project, wet season rainfed maize and industrial crops were grown in areas to the north west of Phan Rang.

6. Table grapes are grown in small quantities in Ninh Thuan on a very small scale commonly of less than 0.2 ha per plot adjoining farmer households although the provincial government is keen to attract larger scaled commercial investors in this industry. Both green and red varieties are produced but suffer from small berry size and low sugar content when mature. They are destined for the domestic market and compete directly with the imported fresh table grape from PR China with larger sized berries and sweeter taste. Grapes are traditionally grown using a horizontal elevated canopy allowing the harvest of bunches underneath the canopy. In view of the water shortages in this area, many farmers irrigate their grapes from rivers that drain the area, some adopting trickle irrigation using micro-sprayers to water more efficiently given the frequent shortages. The local varieties have been selected from trials at the local research station11 but more recently, more promising varieties have been introduced using tissue culture and cuttings from other countries. As such, there is greater confidence in their ability to compete with the imported product but it will take time for old varieties to be culled and new ones established (gestation period of three years before commercial harvest). The comparative advantage local producers have is their limited use of chemicals and consequently the risk of chemical residues on the berries. Imports from PCR are considered by local consumers to have high levels of chemicals

11 There are three organizations that have been tasked to produce planting material of grapes for farmers, namely the

Cotton Research Centre, Ninh Thuan Domestic Animal and Crop Breeding Centre and Binh Thuan Socio-Economic Development Centre. All of them are researching on rootstocks to identify suitable planting materials for different soil and climatic conditions of the various grape growing regions. Besides, the Cotton Research Centre is conducting studies to propagate grapes by the in vitro method.

44 Annex 5

applied to achieve the quality delivered and as a result, there is some reluctance to buy table grapes from this source.

7. Viet Nam has an area of table grapes of approximately 3,000 ha, 1,500 ha of which are grown in Ninh Thuan and the country produces an estimated 75,000 tons of grapes per annum. Incremental plantings considered achievable in Nhon Hai-Thanh Hai Subproject is 400 ha that will produce an estimated 10,000 tons at full production. This represents a significant increase over the existing area (40%) and with the latest varieties, will be a significant boost to supplies on the local market. Domestic prices make possible a very attractive return to the farmers and many have expressed a desire to plant table grapes to supply this rapidly growing market. Given the level of imports from PR China and the USA, import substitution should be possible as long as local producers can match the berry size and sugar levels achieved with the imported product. Those farmers who are able to access improved planting material and with the resources to produce high quality fruit have demonstrated a capacity to produce berries of comparable characteristics to the imported varieties.

8. The other common land use proposed is for vegetable production that include garlic, spring onions, shallots, onions, aloe vera, asparagus, and a number of specialty vegetables. The dry climate is very conducive to production of high-value vegetables as long as water can be delivered for their growth. Returns to farmers are high from these crops and the level of production is insignificant compared with national demand. The area has established itself as a source of high quality alliaceous vegetables that command a significantly higher price on domestic markets and buyers recognize the superior quality of goods produced in Ninh Thuan. These crops take typically three to four months to grow and harvest allowing double cropping subject to water availability. The incremental area planted to vegetables is estimated at over 1,500 ha per annum. While this is a significant addition to local supplies (some 20-30 tons/ha can be achieved from these crops), the domestic demand far exceeds likely incremental production. Given the high-quality characteristics for which vegetable production in Ninh Thuan is recognized, incremental production is unlikely to impact upon price levels farmers will achieve with the subproject.

D. Cost Analysis

9. The subproject proposes new piped irrigation systems over traditional canal systems for sound technical reasons. Canal systems are suited to paddy production, which do not require high degrees of flow control. The existing irrigation sources rely heavily on groundwater where it is available that have become affected by the saline intrusions as the volume extracted exceeds the available recharge rates. Agriculture in the subproject area is either non-existent or limited to wet season low valued crops - maize and industrial annual crops. The proposed piped system to serve the new Nhon Hai-Thanh Hai Subproject, allows for flexible and efficient delivery of irrigation water because of their high degree of flow control capacity and minimal operating costs being a gravity-fed system. Piped distribution systems are suited for high value crops, which the government strongly promotes to reduce environmental impact (e.g., groundwater depletion) of inefficient irrigation water use, meet the increasing water demand from residential and industrial users, and help farmers increase their cash income. Piped irrigation systems are designed to take water from the government built Tan My pipeline that is already under construction. The subproject will connect to this pipeline and adopt ringed distribution designs that maintain head in the piped systems so that farmers in the project areas draw water from the piped water supply systems to their plots - many without incurring additional pumping/distribution costs. The systems also allow future improvements such as adoption of field drip or sprinkler systems, metering, and cost recovery. Different pipe distribution alignments were developed to identify the least cost alternative that resulted in the lowest pipe density in terms of meters per square kilometer. This

Annex 5 45

modernization is therefore not the least cost alternative compared to open canals but provides for a better managed system that will provide a higher level of service to farmers with improved water efficiency.

E. Major Assumptions and Methodology

10. The economic analysis was carried out for Nhon Hai-Thanh Hai Subproject by comparing with- and without-subproject scenarios, following ADB’s Guidelines for the Economic Analysis of Projects. “Without” the subproject scenario does not assume the status quo, but declining water availability impacting on crop production anticipated over the 25-year project life-span. Financial costs and benefits were converted to economic values using the world price numeraire. Economic costs and benefits were expressed in constant 2017 prices with an exchange rate of VND 22,600 per US dollar. Transfer payments such as taxes, duties and subsidies are excluded in calculating economic values. In the case of major traded goods, economic values are based on border parity prices. For non-traded goods and services, a standard conversion factor of 0.9 was used. The economic opportunity cost of the capital of 9% was assumed.

F. Economic Analysis

11. Economic Benefits. Benefits expected from the investment in the modernized piped irrigation system under the subproject include:

(i) Enhanced crop yields due to increased and more reliable water during the dry season. Weighted average yield increases on existing crops are expected (estimated at 20% for all crops and fodder grown in the command area).

(ii) Improved average quality of production resulted from the increased proportion of better quality crops, which translates into higher average prices. Average price increases are expected for all crops - grapes and specialty vegetables based on improved proportions of higher quality produce.

(iii) Conversion of land growing lower valued crops (such as rain-fed maize and rice) or fallow, to cultivating HVCs. In this subproject, even though a significant percentage of the command area is planted to HVCs, incremental areas are yet to be converted (see Table1).

12. Economic Cost. The financial cost of the subproject investment is VND 335.0 billion ($14.8 million), which is equivalent of VND 266.9 billion in economic terms. Costs include construction, detailed design and supervision, resettlement compensation, O&M during the implementation period that under the new law will become the responsibility of the recipient farmers, together with the cost of connecting to the piped water distribution system and the technical support for the introduction of water efficient application techniques. O&M is estimated to be 1% of investments for the gravity fed irrigation water through a piped system that will provide an estimated 10 m of residual head throughout the subproject command area where farmers can connect directly to strategically placed hydrants. Total routine annual O&M for the subproject is expected to be VND 0.14 million in economic terms. It is assumed that every tenth year there will be a major maintenance effort (periodic maintenance) for more expensive repairs associated with sections of underground pipes, the purchase of new pumps and other major items estimated at VND 82.7 billion. Comparative production areas with and without the subproject are detailed in Table A5.1 below.

46 Annex 5

Table A5.1: Comparative ‘With’ and ‘Without’ Subproject Areas

13. Economic Viability. The results of the overall economic analysis are estimated by comparing the economic costs and benefits of the subprojects to demonstrate it is economically viable with an economic internal rate of return (EIRR) of 27.14% and an economic net present value (ENPV) of VND 444.1 billion (Table 2). The flow of economic benefits and associated costs for Nhon Hai-Thanh Hai Subproject are presented in the Table below.

Table A5.2: Economic Analysis of Thanh Son-Phuoc Nhon Subproject (Economic Terms VND million)

Source: Consultant’s estimates based on domestic feasibility study reports.

Crop ha Crop ha Crop ha Crop ha

Ninh Thuan Province

Nhon Hai - Thanh Hai Rice 12 Onion 1 100 Rice - Onion 1 400

Maize 600 Onion 2 100 Maize - Onion 2 400

Grass 108 Garlic 200 Grass 200 Garlic 400

Grape 80 Grape 400

SubprojectTraditional Crops

Without Project (in 2032)

High Value Crops

With Project (in 2032)

Traditional Crops High Value Crops

O&M Total Incremental Net

Cost Costs Benefit Benefit

2018-19 9.94 - 9.94 - (9.94)

2019-20 23.07 - 23.07 - (23.07)

2020-21 104.82 - 104.82 - (104.82)

2021-22 103.11 - 103.11 - (103.11)

2022-23 25.81 0.14 25.95 33.19 7.24

2023-24 0.64 0.14 0.78 77.45 76.68

2024-25 - 0.14 0.14 105.11 104.98

2025-26 - 0.14 0.14 110.65 110.51

2026-27 - 0.14 0.14 110.65 110.51

2027-28 - 0.14 0.14 110.65 110.51

2028-29 - 0.14 0.14 110.65 110.51

2029-30 - 0.14 0.14 110.65 110.51

2030-31 - 0.14 0.14 110.65 110.51

2031-32 - 0.14 0.14 110.65 110.51

2032-33 - 82.67 82.67 110.65 27.98

2033-34 - 0.14 0.14 110.65 110.51

2034-35 - 0.14 0.14 110.65 110.51

2035-36 - 0.14 0.14 110.65 110.51

2036-37 - 0.14 0.14 110.65 110.51

2037-38 - 0.14 0.14 110.65 110.51

2038-39 - 0.14 0.14 110.65 110.51

2039-40 - 0.14 0.14 110.65 110.51

2040-41 - 0.14 0.14 110.65 110.51

2041-42 - 82.67 82.67 110.65 27.98

2042-43 - 0.14 0.14 110.65 110.51

2043-44 - 0.14 0.14 110.65 110.51

2044-45 - 0.14 0.14 110.65 110.51

EIRR 27.14%

ENPV (9%) 444.08

Year

Investment

Cost

Annex 5 47

G. Sensitivity Analysis

14. Sensitivity tests were conducted individually for each of the subprojects and for the overall project, including project management costs. The tests included: (i) a 20% investment cost increase; (ii) recurrent cost increases; and (iii) a 20% benefit decrease; Switching values were estimated for the impact of either a cost increase or a benefit decrease as well as for the change in O&M expenses. The results of the sensitivity analyses indicate that the overall project is sufficiently robust with a 20% investment cost increase reducing the EIRR to 23.4% and a 20% benefit decrease reducing it to 22.6% (Table A5.3).

Table A5.3: Sensitivity Analysis of Nhon Hai-Thanh Hai Subproject

EIRR = economic internal rate of return, ENPV = economic net present value. Source: Consultant’s estimates based on domestic feasibility study reports.

H. Distribution Analysis

15. The poverty incidences used for the analysis comprised the weighted values for each commune represented in the command area of the subproject. The socio-economic household survey was carried out in the subproject command area based on 26 farmer-interviews in beneficiary communes. Key findings from the survey include:

(i) The overall average household size is 4.0/household. (ii) Eight women (30.8%) and 18 men (69.2%) responded to the survey. (iii) One household was classified as poor (4%). (iv) Some 25 households were classified as non-poor (96%). (v) There are no ethnic minority in survey sample.

16. A “snapshot” of the 10th year after construction would indicate that the incremental net crop economic value “with” the subproject may be VND 110.6 billion ($4.9 million) more than might be expected “without” the project. In household financial terms, this year 10 “snapshot” would translate to an increased net crop income of VND 54.8 million ($2,400) per “average” household farm (estimated to be 0.5 ha in size).

I. Investment Sustainability

17. An assessment of the financial sustainability of the investment is complicated by the recent introduction of the Law on Hydraulic Structures in which the principle of ‘user pays’ has been proposed. This goes against the previously (2007) Decree No.115 that waived all service fees for irrigation water by the beneficiary farmers. Under that Decree, responsibility for payment of O&M charges was allocated to the provincial government. The irrigation management companies charged with operating and maintaining irrigation systems received a budgetary allocation from the provincial government to provide these services. Under the new Law, responsibility for O&M charges are to be paid by the farmer beneficiaries. The extent to which this

Benefit decrease of 20% EIRR % 22.6%

Cost increase of 20% EIRR % 23.4%

Switching Values for a 9% EIRR

Benefit decrease switching value % 35%

Investment cost increase switching value % 323%

O&M cost increase switching value % 1324%

48 Annex 5

can be achieved remains to be seen and it has been assumed that the provinces will continue to be responsible for irrigation O&M charges. For this reason, incremental O&M costs due in respect of the Thanh Son-Phuoc Nhon Subproject have been compared to the provincial budget to determine its capacity to meet the incremental charges.

18. For the purposes of this exercise, the incremental O&M costs have been assessed as a percentage of the investment costs for annual routine O&M (1% for the gravity fed piped system). In addition to the routine O&M costs, it is assumed that periodic maintenance will be required every 10 years after subproject completion that has been estimated at 30% of the investment cost. The sum of these two figures has been compared to the annual budget allocation for the economic sector in the province and the ratio estimated to assess the impact of the incremental costs. The results of the assessment are presented in the tables below.

Table A5.4: Analysis of the Provincial Budget Allocation - Ninh Thuan

Actual

Thực tế

Projection

Dự kiến

2013 2014 2015 2016 2017 2018 2019 2020

REVENUE

NGUỒN THU

I. Development budget

Ngân sách nhà nước cho đầu tư phát triển 1,471,927 739,540 1,010,310 737,425 533,117 880,880 932,400 986,933

- State Budget for investment

Ngân sách nhà nước 1,151,927 739,540 1,010,310 737,425 470,627 864,344 914,896 968,406

- Foreign Loan

Vốn vay nước ngoài 0 0 0 0

- Local mobilization fund for investment

Huy động đầu tư 320,000 0 62,490 16,536 17,503 18,527

II. Revenue

Nguồn thu của tỉnh 1,833,603 1,200,000 1,476,621 1,953,414 1,891,500 1,865,159 1,974,246 2,089,714

III. State Budget

Hỗ trợ từ ngân sách nhà nước 1,296,265 1,334,653 966,827 966,827 1,458,285 1,363,963 1,443,737 1,528,177

Total Revenue

Tổng nguồn thu 4,601,795 3,274,193 3,453,758 3,657,666 3,882,902 4,110,001 4,350,383 4,604,824

EXPENDITURE

CHI

I. Development Investment

Chi đầu tư phát triển 1,478,272 928,740 1,047,189 1,115,725 445,213 1,034,235 1,094,725 1,158,752

II. Social and Economic Services

Dịch vụ xã hội và kinh tế 3,652,177 2,197,603 2,255,399 2,363,471 2,813,685 2,769,135 2,931,093 3,102,524

Education and Training

Chi giáo dục và đào tạo 211,128 948,322 990,996 1,033,307 1,176,259 1,194,994 1,264,885 1,338,865

Health Care

Chi Y tế 228,202 278,069 286,934 291,446 359,418 349,469 369,908 391,543

Science and Technology

Chi cho khoa học và công nghệ 8,410 13,643 14,189 14,900 15,880 16,925 17,914 18,962

Culture, Information and Broadcasting

Chi Văn hóa, thông tin và truyền thông 39,878 36,727 36,658 36,147 38,462 42,873 45,380 48,034

Pension and Social Relief

Chi lương và bảo trợ xã hội 124,788 87,027 43,704 66,018 39,584 69,906 73,995 78,323

Economic Services and Enviroment Protection

Chi sự nghiệp kinh tế và sự nghiệp môi trường 218,087 160,843 182,646 219,368 237,776 229,488 242,911 257,118

General Public Administration

Chi hành chính công 229,091 233,426 220,799 287,252 309,210 301,524 319,159 337,826

Other social & economic expenditures

Chi khác cho dịch vụ xã hội và kinh tế 2,592,593 439,546 479,473 415,033 637,096 563,956 596,940 631,853

Addition to Financial Reserve and others

Chi bổ sung quỹ dự trữ tài chính và các khoản chi 271,359 147,850 151,170 178,470 582,004 295,518 312,801 331,096

Total Expenditure

Tổng chi 5,401,808 3,274,193 3,453,758 3,657,666 3,840,902 4,098,887 4,338,619 4,592,372

SURPLUS (DEFICIT)

CHÊNH LỆCH THU CHI (800,013) - - - 42,000 11,114.11 11,764.15 12,452.20

O & M Cost without Project

Chi phí bảo trì các công trình thủy lợi khi chưa có 29,614.97 30,367.19 26,850.91 35,296.14 43,962.95 44,311.68 44,674.29 45,051.32

O & M Cost with Project

Chi phí bảo trì các công trình thủy lợi sau khi có dự 29,614.97 30,367.19 26,850.91 35,296.14 43,962.95 44,311.68 44,674.29 45,051.32

Incremental O & M Cost (IOMC)

Chi phí bảo trì công trình thủy lợi tăng thêm

Plan

Dự toán

Annex 5 49

Table A5.5: O&M Sustainability Analysis of Ninh Thuan Subprojects

2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

REVENUE

NGUỒN THU

Total Revenue

Tổng nguồn thu 4,874,147 5,159,221 5,460,969 5,780,365 6,118,441 6,476,291 6,855,070 7,256,003 7,680,385 8,129,588

EXPENDITURE

CHI

Total Expenditure

Tổng chi 4,860,966 5,145,270 5,446,202 5,764,734 6,101,896 6,458,778 6,836,533 7,236,382 7,659,616 8,107,604

SURPLUS (DEFICIT)

CHÊNH LỆCH THU CHI 13,180.49 13,951.38 14,767.35 15,631.05 16,545.26 17,512.95 18,537.23 19,621.41 20,769.01 21,983.73

O & M Cost without Project

Chi phí bảo trì các công trình thủy lợi khi chưa có 45,443.36 45,850.99 46,274.85 46,715.57 47,173.83 47,650.32 48,145.77 48,660.93 49,196.59 49,753.56

O & M Cost with Project

Chi phí bảo trì các công trình thủy lợi sau khi có dự 45,443.36 45,850.99 53,835.82 47,045.06 47,503.32 47,979.81 48,475.26 48,990.42 49,526.08 50,083.06

Incremental O & M Cost (IOMC)

Chi phí bảo trì công trình thủy lợi tăng thêm 7,560.97 7,560.97 7,560.97 7,560.97 7,560.97 7,560.97 7,560.97 7,560.97

Ratio Analysis

Phân tích tỷ lệ

IOMC/Total Revenue

IOMC/ Tổng nguồn thu 0.14% 0.13% 0.12% 0.12% 0.11% 0.10% 0.10% 0.09%

IOMC/Total Expenditure

IOMC/Tổng Chi 0.14% 0.13% 0.12% 0.12% 0.11% 0.10% 0.10% 0.09%

IOMC/Expenditure on Economic Services and

Enviroment Protection 2.48% 2.34% 2.21% 2.09% 1.98% 1.87% 1.76% 1.67%

IOMC/Surplus (Deficit)

IOMC/Chênh lệch thu chi 51.20% 48.37% 45.70% 43.17% 40.79% 38.53% 36.41% 34.39%

Ninh Thuan Province (Million VND)

Annex 5 50

19. Based on the historic budget allocations to the respective categories for the provincial budgets, it is estimated that O&M in respect of the two subprojects in Ninh Thuan will reach between 0.09-0.14% of total revenue. Taking into consideration the allocation to Economic Services in the province, the ratio increases to between 1.67-2.5% of the allocation each year for routine maintenance. Every 10 years the requirement for periodic maintenance is more significant reaching 46% of the Economic Services allocation in that year. This is unlikely to occur as periodic maintenance does not occur in only one year and can be spread over a number of years. It is therefore unlikely that the periodic maintenance will reach that level in any one year. For this reason, it is concluded that the incremental O&M required by the investment in the subprojects can be addressed within the provincial resources. The situation will be further improved if farmers assume some responsibility for this maintenance as is proposed under the new Law.

Annex 5 51

Table A5.1.1: Estimation of Economic Price of Rice

Vietnam: Water Efficiency Improvement in Drought-Affected Provinces

(2017 Constant Viet Nam Dong) 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Rice: (Export parity in 2017 currencies)a/

Thailand (current $)a/

$/t 396 385 389 393 397 401 405 409 414 418 422 427 431 436 440

Thailand (constant 2010 $)a/

422 406 400 397 395 392 389 386 383 380 377 374 371 368 365

MUV (2010=1.00)b/

2010 0.94 0.95 0.97 0.99 1.01 1.02 1.04 1.06 1.08 1.10 1.12 1.14 1.14 1.14 1.14

MUV (2017=1.00)b/

2017 0.99 1.00 1.03 1.04 1.06 1.08 1.10 1.12 1.14 1.16 1.18 1.20 1.20 1.20 1.20

Rice FOB Bankok (constant 2017 $) $/t 400 385 379 377 374 371 369 365 363 360 357 355 358 362 366

Quality Adjustmentc/

$/t 360 347 341 339 337 334 332 329 327 324 322 319 322 326 329

Freight, insurance, etc. $/t 35 35 35 35 35 35 35 35 35 35 35 35 35 35 35

CIF Ho Chi Minh City $/t 395 382 376 374 372 369 367 364 362 359 357 354 357 361 364

CIF Ho Chi Minh City in VND d/

'000 VND/t 8,931 8,622 8,506 8,450 8,396 8,344 8,294 8,225 8,177 8,113 8,058 8,005 8,079 8,153 8,228

Freight & handling Saigon to project areae/

'000 VND/t 429 429 429 429 429 429 429 429 429 429 429 429 429 429 429

Conversion to paddyf/

'000 VND/t 5,526 5,325 5,250 5,214 5,179 5,145 5,112 5,067 5,036 4,994 4,958 4,924 4,972 5,021 5,069

Milling chargese/

'000 VND/t 129 129 129 129 129 129 129 129 129 129 129 129 129 129 129

Handling and transport farm to mille/

'000 VND/t 107 107 107 107 107 107 107 107 107 107 107 107 107 107 107

Economic Farmgate Price per tonne '000 VND/t 5,290 5,089 5,014 4,977 4,942 4,909 4,876 4,831 4,800 4,758 4,722 4,688 4,736 4,784 4,833

Economic Farmgate Price per kg '000 VND/kg 5.29 5.09 5.01 4.98 4.94 4.91 4.88 4.83 4.80 4.76 4.72 4.69 4.74 4.78 4.83

a/ WB Commodity Price Projections prepared January 24, 2017 for 2016-2025 and 2030 with 2026-2029 interpolated and post 2030 equal to 2030 prices.

(Thailand, 5% broken, white rice, milled, f.o.b. Bangkok)

b/ Manufacturing Unit Value Index

c/ Adjustment for Quality 10%

d/ Exchange rate of Vietnamese Dong (VND) per $ during in March 2017: 22,600

e/ SCF --- applied on half the amount of handling, tranportation and milling. 0.9

f/ Conversion factor of paddy to rice 65%

52 Annex 5

Annex Table A5.1.2 : Estimation of Economic Price of Maize

Vietnam: Water Efficiency Improvement in Drought-Affected Provinces

(2017 Constant Viet Nam Dong) 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Maize: (Import parity in 2017 currencies)a/

Maize: Gulf Port (in current $)a/

$/t 159 160 163 167 170 174 178 181 185 189 193 197 202 206 210

Maize: Gulf Port (constant 2010 $)a/

$/t 169 169 168 169 169 170 170 171 171 172 172 173 173 174 174

MUV (2010=1.00)b/

2010 0.94 0.95 0.97 0.99 1.01 1.02 1.05 1.06 1.08 1.10 1.12 1.14 1.16 1.19 1.21

MUV (2017=1.00)b/

2017 0.99 1.00 1.02 1.04 1.06 1.08 1.11 1.12 1.14 1.16 1.18 1.21 1.23 1.25 1.27

Maize: Gulf Port (in constant 2017 $) $/t 160 160 159 160 160 161 161 162 162 163 163 164 164 164 165

Frieght and Insurance to Ho Chi Minh City $/t 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50

CIF Ho Chi Minh City $/t 210 210 209 210 210 211 211 212 212 213 213 214 214 214 215

CIF Ho Chi Minh City in VNDc/

'000 VND/t 4,746 4,746 4,725 4,746 4,746 4,767 4,767 4,789 4,789 4,810 4,819 4,827 4,836 4,844 4,853

Storage/marketing margin 5% 237 237 236 237 237 238 238 239 239 241 241 241 242 242 243

Transport to district leveld/

'000 VND/t 429 429 429 429 429 429 429 429 429 429 429 429 429 429 429

Price at district center '000 VND/t 5,413 5,413 5,390 5,413 5,413 5,435 5,435 5,458 5,458 5,480 5,489 5,498 5,507 5,516 5,525

Conversion to farm production (pre-processing) 60% 3,248 3,248 3,234 3,248 3,248 3,261 3,261 3,275 3,275 3,288 3,293 3,299 3,304 3,310 3,315

Less transport from farm and milling costsd/

'000 VND/t 215 215 215 215 215 215 215 215 215 215 215 215 215 215 215

Farmgate price per tonne '000 VND/t 3,033 3,033 3,019 3,033 3,033 3,046 3,046 3,060 3,060 3,073 3,079 3,084 3,090 3,095 3,100

Farmgate price per kg '000 VND/kg 3.03 3.03 3.02 3.03 3.03 3.05 3.05 3.06 3.06 3.07 3.08 3.08 3.09 3.09 3.10

a/ WB Commodity Price Projections prepared January 24, 2017 for 2016-2025 and 2030 with 2026-2029 interpolated and post 2030 equal to 2030 prices.

(U.S. hard red winter, Gulf port)

b/ Manufacturing Unit Value Index

c/ Exchange rate of Vietnamese Dong (VND) per $ during in January 2010: 22,600

d/ SCF --- applied on half the amount of handling, tranportation and milling. 0.9

Annex 5 53

Table A5.1.3: Estimation of Economic Price of Rock Phosphate Fertilizer

Vietnam: Water Efficiency Improvement in Drought-Affected Provinces

(2017 Constant Viet Nam Dong) 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

(TSP: (in 2010 currencies)a/

TSP: Morocco (in current $)a/

$/t 112 105 106 108 109 111 112 114 115 117 119 120 122 123 125

TSP: Morocco (in constant 2000 $)a/

$/t 119 111 110 109 109 108 108 107 107 106 106 105 105 104 104

MUV (2010=1.00)b/

2010 0.94 0.95 0.96 0.99 1.00 1.03 1.04 1.07 1.07 1.10 1.12 1.14 1.16 1.18 1.20

MUV (2017=1.00)b/

2017 0.99 1.00 1.02 1.05 1.06 1.09 1.10 1.13 1.14 1.17 1.19 1.21 1.23 1.25 1.27

TSP:Casablanca (in constant 2017 $) $/t 113 105 104 103 103 102 102 101 101 100 100 100 99 99 98

Freight and Insurance to Ho Chi Minh City $/t 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50

CIF Ho Chi Minh City $/t 163 155 154 153 153 152 152 151 151 150 150 150 149 149 148

CIF Ho Chi Minh City in VNDc/

'000 VND/t 3,674 3,503 3,482 3,460 3,460 3,439 3,439 3,417 3,417 3,396 3,388 3,379 3,370 3,362 3,353

Handling and transport to district centerd

'000 VND/t 429 429 429 429 429 429 429 429 429 429 429 429 429 429 429

Price at District Center '000 VND/t 4,103 3,932 3,911 3,890 3,890 3,868 3,868 3,847 3,847 3,826 3,817 3,808 3,800 3,791 3,783

Transport and Handling to Farmd/

'000 VND/t 107 107 107 107 107 107 107 107 107 107 107 107 107 107 107

Farmgate price per tonne '000 VND/t 3,996 3,825 3,804 3,782 3,782 3,761 3,761 3,740 3,740 3,718 3,710 3,701 3,693 3,684 3,675

Farmgate price per kg '000 VND/kg 4.00 3.83 3.80 3.78 3.78 3.76 3.76 3.74 3.74 3.72 3.71 3.70 3.69 3.68 3.68

a/ WB Commodity Price Projections prepared January 24, 2017 for 2016-2025 and 2030 with 2026-2029 interpolated and post 2030 equal to 2030 prices.

(70% BPL, contract, f.a.s. Casablanca)

b/ Manufacturing Unit Value Index

c/ Exchange rate of Vietnamese Dong (VND) per $ during in January 2010: 22,600

d/ SCF --- applied on half the amount of handling and tranportation. 0.9

54 Annex 5

Table A5.1.4: Estimation of Economic Price of Urea

Vietnam: Water Efficiency Improvement in Drought-Affected Provinces

(2017 Constant Viet Nam Dong) 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

(Urea: (in 2017 currencies)a/

Urea: Black Sea (in current $)a/

$/t 199 220 225 231 236 242 248 254 260 266 273 280 286 293 300

Urea: Black Sea (in constant 2010 $)a/

$/t 212 232 232 233 235 236 238 239 241 242 243 245 246 248 249

MUV (2010=1.00)b/

2010 0.94 0.95 0.97 0.99 1.00 1.03 1.04 1.06 1.08 1.10 1.12 1.14 1.16 1.18 1.20

MUV (2017=1.00)b/

2017 0.99 1.00 1.02 1.05 1.06 1.08 1.10 1.12 1.14 1.16 1.18 1.20 1.23 1.25 1.27

Urea: Black Sea (in constant 2017 $) $/t 201 220 220 221 223 224 226 227 229 229 231 232 233 235 236

Freight and Insurance to Ho Chi Minh City $/t 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50

CIF Ho Chi Minh City $/t 251 270 270 271 273 274 276 277 279 279 281 282 283 285 286

CIF Ho Chi Minh City in VNDc/

'000 VND/t 5,673 6,102 6,102 6,123 6,166 6,188 6,231 6,252 6,295 6,316 6,346 6,376 6,406 6,436 6,466

Handling and transport to district centerd

'000 VND/t 429 429 429 429 429 429 429 429 429 429 429 429 429 429 429

Price at District Center '000 VND/t 6,103 6,531 6,531 6,553 6,596 6,617 6,660 6,681 6,724 6,746 6,776 6,806 6,836 6,866 6,896

Transport and Handling to Farmd/

'000 VND/t 107 107 107 107 107 107 107 107 107 107 107 107 107 107 107

Farmgate price per tonne '000 VND/t 5,995 6,424 6,424 6,445 6,488 6,510 6,553 6,574 6,617 6,638 6,668 6,698 6,728 6,758 6,788

Farmgate price per kg '000 VND/kg 6.00 6.42 6.42 6.45 6.49 6.51 6.55 6.57 6.62 6.64 6.67 6.70 6.73 6.76 6.79

a/ WB Commodity Price Projections prepared January 24, 2017 for 2016-2025 and 2030 with 2026-2029 interpolated and post 2030 equal to 2030 prices.

(Bulk, f.o.b. Black Sea ports)

b/ Manufacturing Unit Value Index

c/ Exchange rate of Vietnamese Dong (VND) per $ during in January 2010: 22,600

d/ SCF --- applied on half the amount of handling and tranportation. 0.9

Annex 5 55

Table A5.1.5: Estimation of Economic Prices

Vietnam: Water Efficiency Improvement in Drought-Affected Provinces

(2017 Constant Viet Nam Dong) 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Economica

Outputs

Paddy (Spring) '000 VND/kg 5.3 5.1 5.0 5.0 4.9 4.9 4.9 4.8 4.8 4.8 4.7 4.7 4.7 4.8 4.8

Paddy (Autumn) '000 VND/kg 5.3 5.1 5.0 5.0 4.9 4.9 4.9 4.8 4.8 4.8 4.7 4.7 4.7 4.8 4.8

Srawb/ '000 VND/kg 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5

Maize '000 VND/kg 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1

Dragon Fruit Grade 1 (70% w/o proj., 80% with proj.) '000 VND/kg 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0

Dragon Fruit Grade 2 (20% w/o proj., 30% with proj.) '000 VND/kg 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0

Dragon Fruit Grade 3 (10% w/o proj., nil with proj.) '000 VND/kg 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0

Dragon Fruit weighted average w/o proj. '000 VND/kg 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2

Dragon Fruit weighted average with proj. '000 VND/kg 13.6 13.6 13.6 13.6 13.6 13.6 13.6 13.6 13.6 13.6 13.6 13.6 13.6 13.6 13.6

Dragon Fruit weighted ave. with proj. (incl. switch) '000 VND/kg 12.5 12.5 12.5 12.5 12.5 12.5 12.5 12.5 12.5 12.5 12.5 12.5 12.5 12.5 12.5

Mango (Grade 1 (40% w/o proj., 60% with proj.) '000 VND/kg 72.0 72.0 72.0 72.0 72.0 72.0 72.0 72.0 72.0 72.0 72.0 72.0 72.0 72.0 72.0

Mango (Grade 1 (40% w/o proj., 30% with proj.) '000 VND/kg 31.5 31.5 31.5 31.5 31.5 31.5 31.5 31.5 31.5 31.5 31.5 31.5 31.5 31.5 31.5

Mango (Grade 1 (20% w/o proj., 10% with proj.) '000 VND/kg 10.8 10.8 10.8 10.8 10.8 10.8 10.8 10.8 10.8 10.8 10.8 10.8 10.8 10.8 10.8

Mango weighted average w/o project. '000 VND/kg 43.6 43.6 43.6 43.6 43.6 43.6 43.6 43.6 43.6 43.6 43.6 43.6 43.6 43.6 43.6

Mango weighted average with project. '000 VND/kg 49.7 49.7 49.7 49.7 49.7 49.7 49.7 49.7 49.7 49.7 49.7 49.7 49.7 49.7 49.7

Mango weighted average with project (with switch) '000 VND/kg 48.5 48.5 48.5 48.5 48.5 48.5 48.5 48.5 48.5 48.5 48.5 48.5 48.5 48.5 48.5

Pepper Grade 1 '000 VND/kg 150.0 150.0 150.0 150.0 150.0 150.0 150.0 150.0 150.0 150.0 150.0 150.0 150.0 150.0 150.0

Pepper Grade 2 '000 VND/kg 130.0 130.0 130.0 130.0 130.0 130.0 130.0 130.0 130.0 130.0 130.0 130.0 130.0 130.0 130.0

Pepper w/o 50% grade 1, 50% grade 2 '000 VND/kg 140.0 140.0 140.0 140.0 140.0 140.0 140.0 140.0 140.0 140.0 140.0 140.0 140.0 140.0 140.0

Pepper with project 65% grade 1, 35% grade 2 '000 VND/kg 143.0 143.0 143.0 143.0 143.0 143.0 143.0 143.0 143.0 143.0 143.0 143.0 143.0 143.0 143.0

Pepper with project (includes switch) '000 VND/kg 143.0 143.0 143.0 143.0 143.0 143.0 143.0 143.0 143.0 143.0 143.0 143.0 143.0 143.0 143.0

Coffee Grade 1 '000 VND/kg 45.5 45.0 44.0 43.1 42.5 41.7 40.9 40.0 39.4 39.0 38.3 37.5 36.8 36.1 35.4

Coffee Grade 2 '000 VND/kg 36.4 36.0 35.2 34.5 34.0 33.3 32.7 32.0 31.5 31.2 30.6 30.0 29.5 28.9 28.3

Coffee weighted average w/o (.5 gr.1, .5 gr 2) '000 VND/kg 41.0 40.5 39.6 38.8 38.2 37.5 36.8 36.0 35.5 35.1 34.4 33.8 33.2 32.5 31.9

Coffee weighted average with (.65 gr 1, .35 gr. 2) '000 VND/kg 42.3 41.9 41.0 40.1 39.5 38.8 38.0 37.2 36.6 36.2 35.6 34.9 34.3 33.6 32.9

Coffee weighted ave. with project (incl. switch) '000 VND/kg 42.3 41.9 41.0 40.1 39.5 38.8 38.0 37.2 36.6 36.2 35.6 34.9 34.3 33.6 32.9

Cashew '000 VND/kg 27.0 27.0 27.0 27.0 27.0 27.0 27.0 27.0 27.0 27.0 27.0 27.0 27.0 27.0 27.0

Inputs

Rice seed '000 VND/kg 6.3 6.1 6.0 6.0 5.9 5.9 5.9 5.8 5.8 5.7 5.7 5.6 5.7 5.7 5.8

Maize seed '000 VND/kg 58.5 58.5 58.5 58.5 58.5 58.5 58.5 58.5 58.5 58.5 58.5 58.5 58.5 58.5 58.5

Coffee cuttings (poly bag) '000 VND/kg 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0

Manure '000 VND/T 720.0 720.0 720.0 720.0 720.0 720.0 720.0 720.0 720.0 720.0 720.0 720.0 720.0 720.0 720.0

Foliat Fetilizer spray '000 VND/pole 11.0 11.0 11.0 11.0 11.0 11.0 11.0 11.0 11.0 11.0 11.0 11.0 11.0 11.0 11.0

Rock Phosphate '000 VND/kg 4.0 3.8 3.8 3.8 3.8 3.8 3.8 3.7 3.7 3.7 3.7 3.7 3.7 3.7 3.7

NPK Special (16:16:8) '000 VND/kg 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0 12.0

NPK Special (20:20:15) '000 VND/kg 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0

Liquid ferrtilizer for leaf '000 VND/kg 33.0 33.0 33.0 33.0 33.0 33.0 33.0 33.0 33.0 33.0 33.0 33.0 33.0 33.0 33.0

Liquid fertilizer '000 VND/kg 33.0 33.0 33.0 33.0 33.0 33.0 33.0 33.0 33.0 33.0 33.0 33.0 33.0 33.0 33.0

Organic Fertilizer '000 VND/kg 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3

Magnesium Sulphate '000 VND/kg 18.0 18.0 18.0 18.0 18.0 18.0 18.0 18.0 18.0 18.0 18.0 18.0 18.0 18.0 18.0

Gypsum/Limestone '000 VND/kg 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5

Urea '000 VND/kg 6.0 6.4 6.4 6.4 6.5 6.5 6.6 6.6 6.6 6.6 6.7 6.7 6.7 6.8 6.8

Mulch material '000 VND/roll 27.0 27.0 27.0 27.0 27.0 27.0 27.0 27.0 27.0 27.0 27.0 27.0 27.0 27.0 27.0

Fungicide '000 VND/lt 1,500.0 1,500.0 1,500.0 1,500.0 1,500.0 1,500.0 1,500.0 1,500.0 1,500.0 1,500.0 1,500.0 1,500.0 1,500.0 1,500.0 1,500.0

Ínsecticide '000 VND/unit 500.0 500.0 500.0 500.0 500.0 500.0 500.0 500.0 500.0 500.0 500.0 500.0 500.0 500.0 500.0

Herbicide - Glyphosate '000 VND/lt 75.0 75.0 75.0 75.0 75.0 75.0 75.0 75.0 75.0 75.0 75.0 75.0 75.0 75.0 75.0

Pole '000 VND/each 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0

Pump '000 VND/each 3,000.0 3,000.0 3,000.0 3,000.0 3,000.0 3,000.0 3,000.0 3,000.0 3,000.0 3,000.0 3,000.0 3,000.0 3,000.0 3,000.0 3,000.0

Sprayer '000 VND/pole 2,260.0 2,260.0 2,260.0 2,260.0 2,260.0 2,260.0 2,260.0 2,260.0 2,260.0 2,260.0 2,260.0 2,260.0 2,260.0 2,260.0 2,260.0

Electricity (without subsidy)b

'000 VND/kwh 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5

Fuel '000 VND/lt 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0

Labor (Du Du) '000 VND/day 225.0 225.0 225.0 225.0 225.0 225.0 225.0 225.0 225.0 225.0 225.0 225.0 225.0 225.0 225.0

Labor (Dak Lak) '000 VND/day 157.5 157.5 157.5 157.5 157.5 157.5 157.5 157.5 157.5 157.5 157.5 157.5 157.5 157.5 157.5

Labor (Khanh Hoa) '000 VND/day 153.0 153.0 153.0 153.0 153.0 153.0 153.0 153.0 153.0 153.0 153.0 153.0 153.0 153.0 153.0

a/ Economic prices are as derived in Tables 1 and 2 above and (for other items) adjusting the financial prices by the SCF.

b/ A 10% existing public subsidy of electricity prices is indicated in "Fossil Fule Fiscal Policies and Greenhouse Gas Emissions in Vietnam", p. 26, Hanoi, 2012. For an economic price of electricity this subsidy amount has been added to the financial price.

56 Annex 6

Annex 6

SUBPROJECT PICTURES

Nhon Hai-Thanh Hai Subproject

0.6 ha farm with 5 m dia. shallow well for

groundwater pumping using 1kW pump, 23rd March 2017

60mm dia. PE hose for furrow-basin irrigation of garlic, 23rd March 2017

200 mm 33 m deep tubewell used to fill up larger shallow well of water table drops low, submersible

pump, 23rd March 2017

Furrow-basin irrigation of grape vines using water pumped from shallow well, 23rd March

2017

Pumping from dry river bed, 23rd March 2017 Pumping water from Ong Kinh Reservoir, 23rd March 2017