Document of The World Bank FOR OFFICIAL USE ONLY Report No: ICR00004415 IMPLEMENTATION COMPLETION AND RESULTS REPORT IDA-50830 ON A CREDIT IN THE AMOUNT OF SDR188.3 MILLION (US$292 MILLION EQUIVALENT) TO THE SOCIALIST REPUBLIC OF VIETNAM FOR A MEKONG DELTA REGION URBAN UPGRADING PROJECT June 18, 2019 Social, Urban, Rural, And Resilience Global Practice East Asia and Pacific Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective December 28, 2018) Currency Unit = Vietnamese Dong (VND) VND 23,195 = US$1 US$1.39 = SDR 1 FISCAL YEAR July 1 - June 30 Regional Vice President: Victoria Kwakwa Country Director: Ousmane Dione Senior Global Practice Director: Ede Jorge Ijjasz-Vasquez Practice Manager: Francis Ghesquiere Task Team Leader(s): Hoa Thi Hoang ICR Main Contributor: Mansha Chen ABBREVIATIONS AND ACRONYMS CA Cities Alliance CPF Country Partnership Framework CPS Country Partnership Strategy CSC Construction Supervision Consultant CUP Community Upgrading Plan EIA Environmental Impact Assessment EIRR Economic Internal Rate of Return EMDP Ethnic Minority Development Plan EMP Environmental Management Plan FM Financial Management GoV Government of Vietnam GRM Grievance Redress Mechanism HCMC Ho Chi Minh City ICR Implementation Completion and Results Report IEMC Independent Environment Monitoring Consultant ISR Implementation Status and Results Report IRR Internal Rate of Return LIA Low-income Area M&E Monitoring and Evaluation MDR Mekong Delta Region MDR-UUP Mekong Delta Region Urban Upgrading Project MoC Ministry of Construction MTIP Medium-term Investment Plan MTR Midterm Review NUDP National Urban Development Program NUUP National Urban Upgrading Program NPV Net Present Value O&M Operation and Maintenance PAD Project Appraisal Document PAH Project-affected Household PCU Project Coordination Unit PDO Project Development Objective PMU Project Management Unit PPC Provincial People’s Committee RF Results Framework RP Resettlement Plan RPF Resettlement Policy Framework TA Technical Assistance VUUP Vietnam Urban Upgrading Project TABLE OF CONTENTS DATA SHEET .......................................................................................................................... 1 I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ....................................................... 5 A. CONTEXT AT APPRAISAL .........................................................................................................5 B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) .......................................9 II. OUTCOME .................................................................................................................... 10 A. RELEVANCE OF PDOs ............................................................................................................10 B. ACHIEVEMENT OF PDOs (EFFICACY) ......................................................................................10 C. EFFICIENCY ...........................................................................................................................16 D. JUSTIFICATION OF OVERALL OUTCOME RATING ....................................................................18 E. OTHER OUTCOMES AND IMPACTS (IF ANY)............................................................................18 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ................................ 21 A. KEY FACTORS DURING PREPARATION ...................................................................................21 B. KEY FACTORS DURING IMPLEMENTATION .............................................................................22 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 24 A. QUALITY OF MONITORING AND EVALUATION (M&E) ............................................................24 B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE .....................................................26 C. BANK PERFORMANCE ...........................................................................................................28 D. RISK TO DEVELOPMENT OUTCOME .......................................................................................30 V. LESSONS AND RECOMMENDATIONS ............................................................................. 30 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 33 ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ......................... 41 ANNEX 3. PROJECT COST BY COMPONENT ........................................................................... 43 ANNEX 4. EFFICIENCY ANALYSIS ........................................................................................... 44 ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ... 52 ANNEX 6. SUPPORTING DOCUMENTS (IF ANY) ..................................................................... 59 ANNEX 7. LAND ACQUISITION AND RESETTLEMENT ............................................................. 61 ANNEX 8. RESULTS STORIES ................................................................................................. 63 ANNEX 9. PHOTOS OF PROJECT RESULTS.............................................................................. 66 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) DATA SHEET BASIC INFORMATION Product Information Project ID Project Name P113904 Mekong Delta Region Urban Upgrading Project Country Financing Instrument Vietnam Investment Project Financing Original EA Category Revised EA Category Partial Assessment (B) Partial Assessment (B) Related Projects Relationship Project Approval Product Line Supplement P127175-Strengthening 06-Jul-2011 Recipient Executed Activities of the Vietnam UrbanForum (VUF) and Operationalizing the National Urban Upgrading Program (NUUP) Organizations Borrower Implementing Agency Socialist Republic of Vietnam Ministry of Construction Project Development Objective (PDO) Original PDO The Project Development Objective is to improve infrastructure services in Low Income Areas in the Project Cities in the Mekong Delta Region. Page 1 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) FINANCING Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) World Bank Financing P113904 IDA-50830 292,000,000 292,000,000 229,402,495 Total 292,000,000 292,000,000 229,402,495 Non-World Bank Financing 0 0 0 Borrower/Recipient 90,000,000 0 0 Local Communities 10,000,000 0 0 Total 100,000,000 0 0 Total Project Cost 392,000,000 292,000,000 229,402,495 KEY DATES Project Approval Effectiveness MTR Review Original Closing Actual Closing P113904 22-Mar-2012 09-Aug-2012 15-Jan-2016 31-Dec-2017 28-Dec-2018 RESTRUCTURING AND/OR ADDITIONAL FINANCING Date(s) Amount Disbursed (US$M) Key Revisions 02-Jun-2016 126.36 24-Nov-2017 189.21 Change in Loan Closing Date(s) 29-Jun-2018 216.83 Change in Loan Closing Date(s) KEY RATINGS Outcome Bank Performance M&E Quality Satisfactory Satisfactory Substantial Page 2 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) RATINGS OF PROJECT PERFORMANCE IN ISRs Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 13-Jun-2012 Satisfactory Satisfactory .37 02 03-Mar-2013 Satisfactory Moderately Satisfactory 1.67 03 20-Oct-2013 Satisfactory Moderately Satisfactory 6.99 04 12-Jul-2014 Satisfactory Moderately Satisfactory 21.34 05 18-Nov-2014 Moderately Satisfactory Moderately Satisfactory 29.37 06 16-Jun-2015 Moderately Satisfactory Moderately Satisfactory 62.03 07 11-Dec-2015 Moderately Satisfactory Moderately Satisfactory 82.02 08 11-May-2016 Moderately Satisfactory Moderately Satisfactory 117.14 09 11-Nov-2016 Moderately Satisfactory Moderately Satisfactory 129.87 10 25-May-2017 Moderately Satisfactory Moderately Satisfactory 156.58 11 12-Oct-2017 Satisfactory Moderately Satisfactory 187.78 12 13-Apr-2018 Satisfactory Moderately Satisfactory 208.28 13 16-Sep-2018 Satisfactory Moderately Satisfactory 217.46 14 24-Dec-2018 Satisfactory Satisfactory 220.80 SECTORS AND THEMES Sectors Major Sector/Sector (%) Public Administration 19 Sub-National Government 19 Education 27 Other Education 27 Page 3 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) Transportation 27 Urban Transport 27 Water, Sanitation and Waste Management 27 Other Water Supply, Sanitation and Waste 27 Management Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Urban and Rural Development 100 Urban Development 100 Urban Infrastructure and Service Delivery 50 Services and Housing for the Poor 50 Environment and Natural Resource Management 2 Climate change 2 Adaptation 2 ADM STAFF Role At Approval At ICR Regional Vice President: Pamela Cox Victoria Kwakwa Country Director: Victoria Kwakwa Ousmane Dione Senior Global Practice Director: John A. Roome Ede Jorge Ijjasz-Vasquez Practice Manager: Jennifer J. Sara Francis Ghesquiere Task Team Leader(s): Andre A. Bald Hoa Thi Hoang ICR Contributing Author: Mansha Chen Page 4 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES A. CONTEXT AT APPRAISAL Context 1. Vietnam had a low level of urbanization (30 percent of the population in 2008) compared to most countries in the East Asia region, but its urbanization has accelerated. Since the comprehensive economic reform in 1986, known as ‘Doi Moi’, Vietnam’s urban population experienced an average growth rate of 3.4 percent annually and its urbanization rate is expected to reach 50 percent by 2035. Although the fastest growth has been in the larger cities, particularly in Hanoi and Ho Chi Minh City (HCMC), overall urbanization has spread out nationwide, with the number of urban centers having increased from 629 (1999) to 805 (2017). Most urban centers were struggling to keep up with the demands of the demographic and socioeconomic changes brought about by urbanization. 2. The Mekong Delta Region (MDR), being the agricultural base of Vietnam, was one of the most densely populated and rapidly urbanizing regions outside the metropolitan regions of Hanoi and HCMC. Cities in the MDR had average annual economic growth rates between 13 percent and 20 percent (2006– 2010) owing to growing industrial investment, tourism, increases in agricultural productivity, and improved regional connectivity. However, between 14 percent and 30 percent of the population in the MDR cities still consisted of low-income households, many of whom lived in ‘low-income areas’ (LIAs) characterized by substandard housing, inadequate access to basic infrastructure and services, high environmental pollution, dilapidated tertiary roads, and low connectivity to wider infrastructure networks. Most LIAs in these cities also suffered from frequent flooding and other negative climate change impacts because of their low elevation and infrastructure deficits. Therefore, the MDR became one of the strategic regions for the Government of Vietnam (GoV) for infrastructure improvement and urban upgrading to facilitate urbanization and address climate change. 3. Rationale for Bank involvement. The World Bank has been supporting the GoV’s efforts on urban upgrading over the last two decades. In 2003, the GoV requested the World Bank support to prepare and finance a project aimed at upgrading LIAs in selected cities in accordance with its ‘Orientation Master Plan for Urban Development in Vietnam to 2020’ developed by the Ministry of Construction (MoC) in 1998. In 2009, this plan was updated to ‘Adjustment of the Orientation Master Plan for Urban Development in Vietnam to 2025 and Vision to 2050’. The master plan set targets for coverage of piped water and sewerage, transportation, power, housing, and the provision of open space and recognized the importance of providing security of tenure. During 2004–2014, the World Bank financed the Vietnam Urban Upgrading Project (VUUP) in Ho Chi Minh, Can Tho, Hai Phong, and Nam Dinh, which benefitted over 700,000 people. As part of the VUUP, the World Bank supported the formulation of a ‘National Urban Upgrading Program and the Overall Investment Plan for Urban Upgrading up to 2020’ which was approved by the Prime Minister in 2009. Having identified the MDR as one of the priority regions under the program, the GoV requested the World Bank’s financing for the Mekong Delta Region Urban Upgrading Project (MDR-UUP) with an aim to replicate lessons from the VUUP to cities in the MDR and further define the operational framework for the National Urban Upgrading Program (NUUP). Page 5 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) 4. Project contribution to higher-level objectives. In addition to supporting the GoV’s implementation of the ‘NUUP’, the MDR-UUP was also aligned with the GoV’s national economic development and poverty reduction strategies. The project contributed to the Comprehensive Poverty Reduction and Growth Strategy of 2003, in particular the objectives of ‘Provision of Basic Infrastructure to Urban Poor People’ and ‘Environmental Sustainability Protection’. It was also aligned with Vietnam’s Socioeconomic Development Strategy 2011–2020 and its Socioeconomic Development Plan 2011–2016 that aimed to identify measures to achieve high-quality and sustainable economic growth, in particular the objectives of urban development and environmental protection. From the World Bank’s perspective, the project supported three themes of the Country Partnership Strategy (CPS 65200) 2012–2016: (a) strengthening Vietnam’s competitiveness in the regional and global economy, (b) increasing the sustainability of its development, and (c) broadening access to economic and social opportunity. The project was also in line with the pillars of core and transformational engagements outlined in the World Bank Group Infrastructure Strategy Update FY12–15. Theory of Change (Results Chain) 5. The Theory of Change is illustrated in figure 1. Page 6 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) Figure 1. Theory of Change Outcomes Activities Outputs High Lower Medium • Consultations held Community • Community planning groups and Improve Beneficiaries LIAs’ residents have participation supervision groups set up infrastructure of improved improved living • CUPs prepared services in infrastructure conditions, • Construction supervision carried out LIAs use services increased economic by community and social opportunities, and • Km of alleys, drains, public sewers, better quality of life water supply, and public lighting Construction of completed tertiary • Number of metered house infrastructure connections for electricity and in LIAs water completed • Number of social infrastructure facilities such as schools, markets, community halls, and green spaces completed Assumptions: • PMU staff trained in project 1. Land acquisition and TA to PMUs for management, community campaign, resettlement plots project and O&M completed on time implementatio • Consultants reports on M&E, 2. CUPs accurately reflect n support independent safeguard monitoring, beneficiaries’ desired and construction supervision infrastructure investments 3. Local authorities and communities maintain constructed assets for Construction • Km of roads, water supply lines, continued use of primary and drains and sewers, electrical power 4. Services are affordable secondary lines completed (water and wastewater, • Km of river and canal embankments infrastructure electricity, and solid waste) completed • Number of social infrastructure facilities completed Provision of resettlement • Number of resettlement plots sites completed and occupied Note: CUPs = Community Upgrading Plans; M&E= monitoring and evaluation; PMUs = Project Management Units; O&M = operation and maintenance; TA = Technical Assistance. Project Development Objectives (PDOs) 6. The PDO was to improve infrastructure services in Low Income Areas in the Project Cities (Can Tho, My Tho, Cao Lanh, Ca Mau, Rach Gia, and Tra Vinh) (see maps in PAD, annex 7). The PDO was identical in the Project Appraisal Document (PAD) and the Financing Agreement. Page 7 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) Key Expected Outcomes and Outcome Indicators 7. The key outcome indicators measured include (a) people with access to improved infrastructure services in the project low income areas developed through the project, (b) user satisfaction with infrastructure services developed through the project, and (c) percentage of low income areas s with Community Upgrading Plans prepared and implemented in accordance with the participatory process. The intermediate outcome indicators measured the physical progress and coverage of the tertiary infrastructure upgraded in LIAs, primary and secondary infrastructure, and resettlement sites, as well as progress of TA to the MoC (see annex 1). Components 8. The project included five components. The first four components were implemented by the PMUs in the six project cities: Can Tho, My Tho, Cao Lanh, Ca Mau, Rach Gia, and Tra Vinh; the fifth component was implemented by the Project Coordination Unit (PCU) from the MoC. Component 1: Tertiary Infrastructure Upgrading in Low Income Areas (US$140.4 million, of which IDA US$104.7 million) 9. This included provision of support to upgrade tertiary infrastructure in LIAs including (a) construction, rehabilitation, and upgrading of roads and lanes; (b) construction and rehabilitation of drains; (c) improvements to environmental sanitation by rehabilitating or constructing public sewers, providing access to septic management services and house connections to public sewers, and providing solid waste collection equipment; (d) improvement of water supply including the installation of meter connections; (e) provision of metered house connections for electricity and public lighting in residential areas; and (f) construction and rehabilitation of social infrastructure facilities such as schools, markets, community halls, and green spaces. These investments were identified through a process of developing CUPs for each LIA in consultation and agreement with the communities. Component 2: Supporting Primary and Secondary Infrastructure (US$116.5 million, of which IDA US$91.6 million) 10. This included provision of support to improve primary and secondary infrastructure serving and benefiting LIAs including (a) roads; (b) water supply lines; (c) drains and sewers; (d) electrical power lines; (e) river and canal embankments; and (e) social infrastructure facilities such as schools, markets, community halls, and green spaces. Component 3: Resettlement Sites (US$63.7 million, of which IDA US$40.1 million) 11. This component provided support to prepare resettlement areas for affected persons, including construction of tertiary, primary, and secondary infrastructure. Page 8 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) Component 4: Implementation Support and Project Management (US$71.4 million, of which IDA US$50.4 million) 12. This component provided support for project implementation, management, supervision, M&E, and community engagement. Component 5: Technical Assistance to the Ministry of Construction to Implement NUUP (US$6.0 million, of which IDA US$5.2 million) 13. This included provision of support to the MoC for (a) developing an NUUP; (b) designing an operational national urban database on key urban indicators; (c) formulating climate change adaptation strategies for coastal cities, particularly in the MDR; and (e) other support for project coordination and implementation. B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) Revised PDOs and Outcome Targets 14. There was no revision to the PDOs or outcome indicators throughout the project. 15. The Results Framework (RF) was removed from the Financing Agreement through a Level 2 restructuring in May 2016 and integrated into the Project Operations Manual. Based on findings from the midterm review (MTR) in January 2016, some targets in the RF were updated to better reflect the changes in the scope and implementation schedule for the remaining period of the project. In particular, because of substantial procurement savings, the PMUs were able to identify complementary investments that were aligned with the project principles to expand coverage of infrastructure services. As a result, all targets related to Components 1 (tertiary infrastructure in LIAs), 2 (primary and secondary infrastructure), and 3 (resettlement sites), with the exception for the indicator of ‘length of new or rehabilitated canals’, were increased to reflect the expanded scope of works. Target for the indicator ‘length of new or rehabilitated canals’ under Component 2 was reduced as data related to small canals located in LIAs was moved from this indicator to the indicator ‘length of new or improved drains’ under Component 1 to more appropriately reflect the scale of the infrastructure (see annex 1). Revised PDO Indicators Not applicable Revised Components Not applicable Other Changes 16. The credit closing date was extended twice for six months each time from December 31, 2017, to June 30, 2018, and then to December 28, 2018. The extension was requested because of insufficient funding allocations from the GoV, as well as delays in most of the river embankment works. Page 9 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) Rationale for Changes and Their Implication on the Original Theory of Change 17. As mentioned earlier, most targets of outcome indicators related to Components 1, 2, and 3 were modified to reflect the expanded scope of works funded by the procurement savings, which would result in an increase of physical coverage and a number of beneficiaries of the infrastructure services, positively contributing to the project outcomes. II. OUTCOME A. RELEVANCE OF PDOs Assessment of Relevance of PDOs and Rating Rating: High 18. At appraisal, the project was fully consistent with the CPS for 2012–2016, and at closing, it supported the objectives of the Country Partnership Framework (CPF 111771) 2018–2022. At completion, the PDO remained highly relevant and supported two of the three areas in the CPF: ‘Enable Inclusive Growth and Private Sector Participation’ (Focus Area 1) and ‘Ensure Environmental Sustainability and Resilience’ (Focus Area 3). It also supported the following three priorities highlighted in the 2016 Systematic Country Diagnostic: (a) build productive infrastructure and competitive cities, (b) augment resilience to climate change and benefits from mitigation and (c) adapt service delivery to new expectations and to an aging population, through improved municipal infrastructure services for the urban poor, better attention to sustainable urban development of secondary cities, and greater citizen participation in the local planning process. The project was also consistent with the recommendations made under the Vietnam 2035 Towards Prosperity, Creativity, Equity, and Democracy (World Bank 2016) to promote the development of secondary cities in an environmentally sustainable manner as well as enhance equity and social inclusion in urban areas. 19. More broadly, the project was closely aligned with the World Bank’s twin goals of eliminating extreme poverty and boosting shared prosperity through economic growth among the bottom two quintiles. The project specifically targeted LIAs with high concentrations of the urban poor who are vulnerable to external shocks, such as natural disasters, that may push them back below the poverty line. Other residents who are located in the LIAs and along primary and secondary infrastructure and largely fall within the bottom 40 percent also benefited from the improved living conditions and connectivity. B. ACHIEVEMENT OF PDOs (EFFICACY) Assessment of Achievement of Each Objective/Outcome Rating: High 20. Achievement of the PDO. The project fully achieved its PDO of improving infrastructure services in the LIAs of project cities in the MDR. The outcomes of all three PDO indicators met or exceeded the original and revised targets. At completion, the number of people with access to improved infrastructure services in the project LIAs reached 355,277, more than double the planned target of 146,200 in the RF. The total number of direct beneficiaries of the entire project, that is, people living in the targeted LIAs and Page 10 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) near the project-financed primary and secondary infrastructure, reached about 625,000, which is also more than double the estimate of 275,900 in the PAD. The project’s total number of indirect beneficiaries, the residents who are living outside of the LIAs would benefit from the citywide infrastructure improvements and the new social facilities, was about 2 million. 21. Activities to facilitate participation of communities in the LIAs were carried out throughout the project, in the form of setting up community planning groups, carrying out consultations to seek community’s inputs and agreement on the CUPs, setting up community supervision groups to monitor construction activities, as well as encouraging voluntary land donations and cash contribution from communities. All the 114 LIAs had CUPs prepared and implemented in accordance with the participatory processes, which required a minimum participation ratio of 60 percent from communities. These participatory processes contributed to a very high level of user satisfaction. The end of project survey conducted in November 2018 showed that 97.7 percent of the project beneficiaries (97.2 percent female and 98.1 percent male) were satisfied with the quality of basic urban infrastructure facilities and services in the targeted LIAs, exceeding the end target of 90 percent. 22. This project was the only one active in the selected LIAs in the six cities. Infrastructure investments under the project focused on upgrading basic infrastructure in LIAs, including (a) expanding, paving, and elevating alleys; (b) drainage and sewage system and dredging of canals and ditches; (c) water supply systems for the LIAs without safe water; (d) public lighting; (e) provision of solid waste collection equipment; and (f) social facilities such as schools, community houses, clinics, and public spaces. The project also invested in some primary and secondary infrastructure including main roads, canals, and lake embankments, which improved connectivity and the environment. The following section examines the outcomes related to different types of infrastructure services provided by the project. 23. Access to improved alleys and roads. The project upgraded more than 261 km alleys in the LIAs, about 150 percent of the revised target of 180 km. Residents in the project LIAs now have access to wider and better quality alleys. Before the project, about 50 percent of the surveyed households lived next to unpaved alleys less than 2 m wide which frequently flooded during the rainy season. After the project, all alleys were cemented and elevated. Now, more than 98 percent of the surveyed households live in front of alleys more than 2 m wide, and a large proportion of the alleys have been expanded to at least 4 m wide to allow for car access (see images in annex 9). The project also constructed or improved 248 km of primary and secondary roads and drainage to improve connectivity of the LIAs (150 percent of the revised target of 164 km). For example, many previously isolated LIAs along canals now have access to all-season roads and bridges connecting them to the rest of the city, shortening travel time for residents (see maps in PAD, annex 7). “Travel is now much more convenient. In the past, when the rain came, going to school was very miserable for parents and students because of the flooded and dirty road. After the new road was constructed, there is no need to take a detour like before for parents to send their children to school, and the travel time saves about 5 minutes.” (Household Interview in Vinh Lac ward, Rach Gia City). 24. In addition, streetlighting was provided along the upgraded alleys to improve safety and visibility. No data on crime reduction were collected, but according to feedback from beneficiaries, better illuminated alleys enabled residents to travel more safely at night and reduced crimes such as thefts and drug use, thereby creating a sense of security for the residents. Page 11 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) 25. Access to drainage and sewage. The project invested in more than 480 km tertiary drains in the LIAs (135 percent of revised target of 354 km), improved household connections to septic tanks or sewer lines for over 48,373 households (120 percent of revised target of 39,210), and invested in primary and secondary drainage to connect the tertiary systems in the LIAs to the city network. Before the project, households in the LIAs without connections to the city’s drainage and sewage networks used to discharge their domestic wastewater directly into canals or open drains. After the project, the proportion of households in the LIAs connected to the city’s drainage system increased from 15.2 percent to 95.9 percent, and the proportion of households connected to septic tank or sewage system increased from 80.6 percent to 97.9 percent. 26. Access to water supply. The project provided 43,350 households with new or improved metered water supply connections (110 percent of revised target of 39,509). Before the project, an average of 21.4 percent of households in the LIAs did not have access to clean water but used water from canals or neighbors. At completion, 99.4 percent of households in the LIAs were connected to water supply systems. The end-of-project survey showed that more than 98 percent of respondents were satisfied with the quality of water supply systems in terms of 24/7 access and higher water pressure. 27. Solid waste collection. Before the project, 23.9 percent of the surveyed households did not have solid waste collection service, often because garbage collection vehicles could not access these areas. As a result, most households dumped their waste directly in to the canals or open drains, blocking and polluting the canals and drainage systems (see before photo of Alley 239 of D1 road in annex 9). After the project, 97.9 percent of the surveyed households had their domestic waste collected daily. 28. Social facilities and public spaces. The project invested in the development of public parks in Rach Gia, Tra Vinh, Cao Lanh and Can Tho, creating popular spaces for the public to exercise, socialize with others, and participate in community events (see photos of parks in annex 9). The project built 57 community facilities for local communities to hold meetings, training, and other events and for local residents, especially the elderly, to socialize and exercise. The project also upgraded and/or built 57 educational facilities including kindergartens, primary, and secondary schools in six cities, accommodating about 35,000 teachers and students (see photos of schools in annex 9). Interviews with teachers and parents indicated that these new or upgraded schools provided a better environment for teachers and students and better sanitation facilities that are crucial for improving health, helped ease existing schools' overcapacity issues in populated areas, and improved access to education by extending schooling hours. For example, according to some parents, before the upgrade, they were reluctant to send their children to kindergartens because of concern about the quality of sanitation facilities. Now they are happy to send their children to schools with improved facilities. In many upgraded schools, students who used to attend only half day because of the schools’ limited capacity, now have the option of attending full time (see annex 8 box 8.1) 29. Resettlement sites. The project built 3,558 resettlement plots in six cities, equivalent to 94 percent of the revised target of 3,774. By project completion, all the resettlement sites had completed site clearance and infrastructure construction (see photos of resettlement sites in annex 9). All the resettlement sites are fully serviced with basic infrastructure and social facilities, and are located not far from the city center. 1 To maintain the social network and cultural preference of the Khmer ethnic group, 1 Resettlement sites are located in general 3–6 km from the city center. Page 12 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) Ca Mau city built several on-site resettlement areas in the upgraded LIAs to accommodate relocated households, through utilization of public land and an innovative land exchange scheme similar to the concept of land pooling. 2 By closing, the project had allocated 3,137 land plots to all the project-affected households (PAHs) who opted to be resettled in the resettlement sites. This is equivalent to 88 percent of the revised target of 3,550. The main reasons for this discrepancy were that additional 322 land plots from cities’ existing sites were allocated to PAHs according to their preferences when the project resettlement sites were not ready. In other cases, some households who were entitled to receive resettlement plots ended up choosing cash compensation. At completion, there were 1,895 households living in the resettlement areas. According to the independent social monitoring and assessment, households who settled in resettlement sites enjoy a better living environment and better access to business opportunities. 30. Component 5. The project also supported the MoC as the PCU in completing the following TA activities: (a) conducted assessment of poverty status in Vietnam and investment needs for the NUUP and facilitated the preparation of the Scaling up Urban Upgrading Project (Cr. 60550, FY17) in seven MDR cities; (b) developed a web-based database with 91 indicators for monitoring and evaluating urban development, which was piloted in 20 cities; (c) conducted assessment of climate change risks in the MDR; and (d) organized 52 training sessions for the PMUs and managed TA packages to support project cities in the areas of construction quality management, O&M, M&E, independent environmental and resettlement monitoring, financial audit, and internal audit. This component consumed only 0.7 percent of the total project cost. Long-term Socioeconomic-Environmental Outcomes 31. Improved community participation and socialization. One key principle of the project was community participation and contribution. During project preparation, a CUP was prepared for each targeted LIA through consultations with a minimum participation requirement of 60 percent of LIA residents. Many community meetings and discussions were organized to mobilize people’s ideas and contributions, and where possible, such feedback was reflected in the project design and implementation. People learned how to participate in the project and that experience was carried on to the implementation stage of the project, such as participating in monitoring of construction. Based on discussions with the cities, community supervision significantly contributed to improving the quality of construction. Moreover, new roads, alleys, parks, and streetlighting facilitated socialization through more frequent use of public space for exercises or gathering. “The monitoring team is composed of representatives from the households and the leader. Surveillance in the alley is well done. Once the monitoring team found out that the quality of the stones used by the contractor was not as good as those used initially, they requested a replacement of the material from the 2Land pooling or land readjustment is a means of assembling land for urban expansion or redevelopment which allows PAHs to contribute some portion of their land to make space for urban infrastructure, to remain in situ and benefit from the improvements brought about by the project. It is widely considered to be more efficient and inclusive than land acquisition with compensation and off-site resettlement. In Ca Mau, the authorities used 1 ha public land to build serviced plots to resettle 10 Khmer households within LIA1; in several other LIAs, the authorities developed on-site resettlement areas through a land exchange scheme, where households contributed a certain portion of their unserviced agriculture and residential land in exchange for multiple-serviced resettlement plots. Page 13 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) contractor. That is one of the reasons why the road of Alley 51 is of good quality. Participation structure remains after the project.” “Also drugs and theft occurred in Alley 51 in the past. People and police contributed money to install security cameras after the alley was upgraded and better illuminated. Now theft and drugs in the alley have disappeared.” (Focus group discussion with households in Alley 51, Ward Xuan Khanh Can Tho City). 32. The project also set aside US$2.8 million for an Innovation Fund for the Green-Clean-Beautiful campaign in collaboration with community-level organizations (youth, elderly, women’s unions, and so on). The campaign attracted the interest of many communities and successfully supported implementation of over 30 initiatives, such as tree planting, garbage collection, limiting use of plastic bags, and so on, and raising people’s awareness in protecting environment and public spaces. In particular, some initiatives in schools have changed the attitudes and behaviors of students. "At school, the phenomenon of picking flower, breaking branches is almost gone, many students voluntarily pick up garbage, water plants without being requested by teachers”. (Interview with one teacher participating in the campaign). 33. Improved environmental sustainability and reduced flooding. Before the project, around one- fifth of households in the LIAs directly discharged their domestic wastewater and solid waste to canals and open drains, resulting in serious environmental pollution and high health risks, especially during flooding. With about 98 percent of households connected to septic tanks or public sewers and provided with daily solid waste collection service, coupled with project investments in dredging canals and drains, the final environmental monitoring report by the independent environment monitoring consultant (IEMC) shows that pollution has been greatly reduced and this is likely to have contributed to reduction of waterborne diseases. 34. Owing to improved drainage and elevation of alleys, flooding in the rainy season or during high tides in the project LIAs has significantly declined according to the baseline and midterm surveys. As shown in figure 2, the percentage of surveyed residents who reported that flooding in their alleys sharply decreased from 83 percent and 87 percent in 2012 in Tra Vinh and Can Tho, respectively, to 3 percent and 12 percent in 2016. Similarly, the flooding duration was reduced by half in Can Tho and by two-thirds in Tra Vinh. Page 14 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) Figure 2. Changes in Flooding Situations in the Project Areas Flooding hours per year Flooding alleys (%) 60 100 87.2 50 52.0 80 82.7 40 41.2 60 30 40 24.5 20 14.7 20 10 11.6 0 3.3 0 2012 2016 2012 2016 Can Tho Tra Vinh Can Tho Tra Vinh Source: Consolidated from the feasibility studies and midterm surveys. 35. In the surveys, the project beneficiaries reported better health conditions owing to less flooding and a cleaner environment. About 92.6 percent surveyed households reported that waterborne diseases have declined since the completion of infrastructure works. “If there was no new road, the life of the people would have been very hard. The environment is not healthy especially there were so many mosquitoes that carried disease. Previously, this alley lay next to the ditch, people planted many trees where mosquitoes and snakes lived. Some households raised pigs and discharged pig manure directly into the ditch. Now those malpractices no longer exist.” (Household interview in Alley 42, Tran Viet Chau Road, Can Tho). 36. Improved incomes and livelihoods. Survey data revealed notable increases in household incomes, both generally for city/province (based on Vietnam Household Living Standard Survey) and specifically for project LIAs (based on project surveys) where the project was the major, if not only, public investment. For example, during 2012 and 2016, in Can Tho and Ca Mau, the average household income in the project LIAs grew 1.36 times and 1.76 times, respectively, higher than the city/province general increase rate of 1.14 times and 1.33 times. 37. According to interviews, incomes have been improved mostly for the following groups: (a) Households facing upgraded (and expanded) primary roads have been able to increase their incomes from renting their houses/lands to other businesses or growing their own business. For instance, in Alley 42 in Tran Viet Chau Road, Can Tho City, 30 percent of households sold or rented their land to newcomers who have started businesses such as coffee shops, hardware stores, or automotive repairs. Some original households improved their livelihoods by starting their own small business. In particular, a few interviewed women who opened new coffee shops reported that they are happier because they no longer need to leave their children at home to work and can now take care of their children while conducting business at the same time (see annex 8 box 8.2). Page 15 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) (b) Business households benefited from better access to customers and/or suppliers and lower transportation costs. Those who have expanded their household businesses also helped create jobs for local people. Agro-product traders along the Võ Tanh Road, near the floating market in Cai Rang, Can Tho, are examples (see annex 8 boxes 8.3 and 8.4). (c) Owners of houses for rent. Many households living in the LIAs obtain their main income from renting parts of their houses. The scale of their business varies: some owners have 2 or 3 small rooms for rent, while others have 10 to 12 rooms, but the average number is 7 or 8. With rent ranging from VND 800,000 to VND 1.2 million per month for a 12–16 m2 room, the household’s average rental income reaches VND 4.2–9.6 million (US$200–400 per month). Interviews with those households revealed that upgrading alleys helped increase the occupation rate, as students or workers seeking to rent rooms value the improved flooding and safety of the areas. Even though 60–70 percent owners have upgraded the houses for rent, the rent has only increased slightly as the supply is now higher. Nevertheless, owing to a higher occupation rate, owners’ income has increased. This also increased the cities’ rental housing stock for their transient population who are often the poorest. “I have 9 rooms for rent. Before the alley was upgraded, it was very difficult to attract tenants as they were afraid of the flooding and the unsafe situation of the alley. Before the project I had to offer low prices but still didn’t get enough tenants. Now I can rent out all 9 rooms so the revenue is higher and much more stable.” (Interview with an owner in Alley 42 Tran Viet Chau Road Can Tho City). Justification of Overall Efficacy Rating 38. The overall efficacy rating is assessed as High. The project fully achieved and, in most cases, exceeded its three PDO indicators and eight out of ten intermediate results indicators. In addition to fully achieving the PDO of improving infrastructure services in the LIAs, the project also generated positive long-term socioeconomic and environmental outcomes. C. EFFICIENCY Assessment of Efficiency and Rating Rating: High 39. Economic analysis. At appraisal, an economic and financial analysis was conducted for physical investments in a sample of 24 LIAs out of 110 LIAs under Component 1, plus one investment (Bun Xang Lake in Can Tho) under Component 2. The economic benefits of a subproject were assumed to consist of (a) financial benefits, which consisted of incremental tariff revenue during the economic lifetime of two types of subprojects: installation of piped water connections and expansion of the solid waste collection system, and (b) nonmonetary benefits, which consisted of expected increases of land prices caused by the investment. The evaluation indicated that while none of the representative subprojects were financially feasible, all the selected subprojects were economically feasible with the return rates ranging from 13.9 percent to 187.1 percent. 40. At completion, a comprehensive analysis was performed to update economic viability of the project based on actual costs, numbers of beneficiaries, and a broader set of estimated benefits, focusing Page 16 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) on Components 1 and 2. In addition to land value appreciation, economic benefits also considered other quantifiable benefits such as health benefits or/and reduced flooding damages. The main nonmonetary benefits from investments under Components 1 and 2 include the following: (a) Improved public health. This is the most important economic benefit of the project. Before the project, a majority of the population in the project LIAs lived in poor sanitary conditions. Waterborne and respiratory diseases were substantially higher than in areas with well- functioning drainage and sewage systems. Better sanitation improved public health, resulting in reduction of health-related expenditures and increases in productivity because of reduced illness time. (b) Avoided flood damage. Before the project, most of the LIAs were frequently flooded, not only in the rainy reason, but throughout the year, because of poor drainage systems and impact of high tides. Construction of drains and sewers under Components 1 and 2, and rehabilitation of the canals, rivers, and lakes under Component 2 reduced flooding and associated damage. (c) Increased land prices. Over the course of the project, land prices in the project areas rose remarkably as result of better living conditions from the improved environment, accessibility, security, and amenities. There has been substantial variation in land prices within the project areas. Land prices are substantially higher along roads, rivers, canals, and waterfronts with embankments improved by the project. 41. The evaluation thus considers the following four types of quantifiable benefits. Among those, increased land value and improved public health are the two major benefits of the project. The total whole-life quantifiable benefits of the project are estimated at approximately US$1.164 billion. (a) Savings in health care costs. These savings ranged from US$23.1 per beneficiary per year in Tra Vinh to US$30.5 in My Tho. Savings in direct health care costs were lowest in cities with the lowest household incomes. (b) Savings in productive time. It was assumed that beneficiaries would save three working days per year because of project investments. As a result, savings in productive time ranged from US$14.6 per beneficiary per year in Tra Vinh to US$19.3 per beneficiary per year in My Tho. (c) Savings in flood control damage. The investments reduced flood damage from US$6.7 per affected person per year in Tra Vinh to US$9.8 per affected person per year in Can Tho and My Tho. (d) Increase in land prices. End line data revealed that land prices after the project increased on average about 2.5 to 5 times compared to before the project. 42. The updated economic analysis confirms that all the components are economically viable with the economic internal rate of return (EIRR) higher than the discount rate of 10 percent, in the range of 17.4 percent to 44.7 percent. The EIRR is highest in Tra Vinh and Cao Lanh, which are relatively poor cities and Page 17 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) lowest in Ca Mau and Can Tho, which are relatively better off (see annex 4 for more detailed efficiency analysis). 43. Financial analysis. The financial analysis was not fully repeated as investments in the revenue- generating services, such as water supply and solid waste collection, were less than 1.5 percent of the project cost. The financial analysis at appraisal concluded that incremental revenue from these services was very small—in some cases only enough to recover O&M costs—but was hardly able to pay back investments. At completion, it was not feasible to separate O&M costs for project items from overall activities of utility companies in the six project cities. Nevertheless, the audited financial reports of these companies showed that revenues from these services were in general able to cover O&M costs. The common assessment among the project cities was that project investments in clean water connection not only resulted in incremental revenue from newly connected households but also reduced leakages, which made water supply operations more efficient. Similarly, waste bins and trucks provided by the project helped ease the job of waste collectors and increased labor productivity. Interviews with beneficiaries in the project LIAs suggested that the current water tariffs and solid waste collection fees were affordable. It costs a household VND 150,000–230,000 per month for clean water and solid waste services, about 1.7 percent of a household’s income. This was substantially lower than the affordability limit of 5 percent normally used by the World Bank. 44. Efficiency of implementation. The project was extended by one year, mainly because of insufficient funding allocations from the GoV, as well as delays in most of the river embankment works because of significant price increases of certain construction materials and extreme weather events, especially heavy rainfalls. The project was able to expand its scope of works using substantial savings from procurement (final bid prices were about 30 percent less than estimated cost based on Vietnamese cost norms), as well as project contingency funds, resulting in a doubling of the number of beneficiaries beyond the appraisal target. At appraisal, the total project cost was estimated at US$398 million; at completion, the total project cost was US$334 million. As the number of direct beneficiaries increased from 275,900 to 625,000, the per capita investment was reduced by over 60 percent, from US$1,442 at appraisal to US$534 at completion. Therefore, efficiency of implementation is considered High. D. JUSTIFICATION OF OVERALL OUTCOME RATING Rating: Satisfactory 45. The relevance of the PDO was High at appraisal and throughout implementation, the efficacy in achieving the PDO was High, and the efficiency was also High. The only minor issue was the 12-month extension because of delay in funding allocations and implementation of certain subprojects, but these did not affect the operation’s achievement of its objectives, its efficiency, or its relevance; in fact, both efficacy and efficiency exceeded expectations. However, in view of the moderate achievements of one activity under Component 5, TA to the MoC for the NUUP, the overall project outcome is rated Satisfactory. E. OTHER OUTCOMES AND IMPACTS (IF ANY) 46. Gender. There were no specific gender-targeted activities in the project, but the approach ensured equal rights for both men and women to participate in project preparation and implementation. During preparation, all cities met the project requirement of having at least 45 percent female Page 18 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) participation in consultations of the CUPs. Many gender-segregated consultations were organized, and women’s preferences were considered to rebalance the portfolio of investments (that is, women expressed more demand for water and sanitation). During implementation, women also participated in community supervision groups. For example, survey data showed that 23.9 percent of members in the community supervision group of Cao Lanh city and 32.8 percent in My Tho were women. The Women’s Union 3 at the ward/community level were actively engaged in disseminating project information, providing feedback, and serving as liaisons between the community and PMU. Women also had equal opportunities to access and benefit from services supported by the project. Among the 355,277 direct beneficiaries in the LIAs, about 49 percent were women. Improvement of the road network, environment, and flooding increased women’s convenience in accessing markets and sending children to school, reduced their housework related to cleaning up during/after flooding, and enabled some women to open cafés or other home-based businesses while attending to their families. 47. Institutional strengthening. Five of the six project cities had no prior experience implementing World Bank-financed projects and had very low technical and managerial capacity when the project started. The project strengthened these cities’ capacity mainly in three areas: (a) Through the training and hands-on support provided by the World Bank team and MoC, and learning by doing, these cities greatly improved their capacity and performance in project management, which was considered satisfactory to the World Bank. One example is that the duration of National Competitive Bidding was reduced by 25–60 percent, with very competitive responses from bidders that resulted in price savings of about 20 percent. (b) Before the project, because of budget constraints, most cities’ investments focused on trunk infrastructure and upgrading efforts had been piecemeal, that is, alley by alley, that required substantial capital contributions from residents, and so it was difficult to target the poor. This project introduced an area-based and multisectoral approach targeting poor neighborhoods that resulted in much closer interdepartmental coordination. The project also ensured that proper institutional arrangements for O&M were put in place to improve the sustainability of project investments. Community contributions for O&M of tertiary infrastructure were discussed with communities as part of the CUP consultations, and a guideline on O&M was developed and discussed at two workshops with the PMUs and all relevant provincial/city departments. (c) The project supported cities in operationalizing the participatory planning approach with clearly defined roles for the various community organizations and process of engaging the communities, changing local governments’ perception about local communities from passive recipients of government support to partners in development. It also enhanced the communities’ capacity in community organizing and joint decision making. 48. Mobilizing community contribution and inducing housing investments. To increase the communities’ sense of ownership and responsibility for the improved infrastructure services, the project, following the practices of the VUUP and based on consultation with the communities, tried to mobilize 3The Women’s Union is a sociopolitical organization that represents and defends the legal and legitimate rights and interests of women in Vietnam and has representatives at the grassroots level of wards or communes. Page 19 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) contributions from residents in the LIAs through (a) cash contributions equivalent to 3 percent of alley construction cost, to be set aside for O&M of the tertiary infrastructure (however, due to various reasons, this amount was only partially collected 4), and (b) voluntary donation of up to 10 percent of landholding by households living along the upgraded alleys for alley expansion, according to the approved Resettlement Plans (RPs). At completion, around 166,941 m2 of land area was voluntarily donated by 10,292 households in the LIAs in six cities, amounting to a total value of about VND 170.7 billion (US$7.37 million). In addition, indirectly, the project also induced residents’ investment in housing in upgraded LIAs. The end-of-project survey revealed that 41.9 percent of the surveyed households had upgraded their house in the last six years and the proportion of houses built with temporary materials had decreased from 29.2 percent (based on a feasibility study) to 4.9 percent. 49. Poverty reduction and shared prosperity. The project upgraded infrastructure services in 114 LIAs across six cities that had high concentration of the urban poor, directly benefiting 355,277 people in the LIAs. The improved primary and secondary infrastructure and overall environment also directly benefited another 270,000 people and indirectly benefited 2 million people. Although poverty reduction was not part of the PDO, the project did contribute to improvement of incomes and livelihoods as shown in the efficacy section. 50. Increased land values and related local revenues. As mentioned in the efficiency section, after the project land prices increased on average about 2.5 to 5 times compared to before project. A more detailed land market assessment, conducted in March 2018 in Can Tho and Tra Vinh, 5 revealed that project investments in primary infrastructure (that is, major roads) caused significant increases in land values, while land prices in the LIAs increased modestly. For land plots (mostly outside the LIAs) along upgraded primary infrastructure, market prices increased 5 to 11 times for residential and nonagricultural lands in project areas between 2012 and 2018 (increases in reference out-of-project areas were 2 to 3 times more). Within the LIAs, land prices increased from 2.1 to 4.3 times (compared to 1.5 to2 times in reference areas). Although systematic data are not available, interviews suggested that most poor households in the LIAs did not sell their houses after the project, and instead many upgraded/expanded their housing or business as shown in the efficacy section. The Government listed prices 6 also increased in most areas, and the highest increases were along the primary infrastructure in the project areas (three times more in Tra Vinh and five times more in Can Tho). Increases in listed prices implied a potential increase of cities’ land-related revenues because most taxes and fees are based on listed prices. 51. Other unintended outcomes and impacts. Although the infrastructure upgrades in the LIAs greatly mitigated the area-wide flooding, some interviewed households located in branch-alleys (not 4 About VND 1 billion was collected at completion, which was about one-fourth of the estimated amount to be collected. Rach Gia and Tra Vinh did not intend to collect the cash contributions mainly because most people in the LIAs had already donated land. 5 A rapid land market assessment was conducted in March 2018 by the World Bank to estimate land values of the selected project areas in Can Tho and Tra Vinh and compared with those of the reference areas outside the project. Each selected project area was matched with an area that had similar conditions in 2012 but was not included in the project. These ‘reference’ areas were proposed based on project locations and demographic variables, with advice from local authorities and real estate agencies. In most cases, the referenced areas were in the same wards and were close to project areas. 6 Prices listed by the Provincial People’s Committee (PPC). Every five years, the PPC issued a list of prices for land of different types and locations, mainly for the purpose of calculating land use tax. The types of land include agricultural, residential, and nonagricultural lands. Locations are determined by the positions of the land plots relative to major roads. Page 20 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) upgraded) connected to the upgraded alleys still complained about suffering more serious flooding, especially when heavy rains coincided with high tides, as their elevation was lower than that of the upgraded alleys. As a result, some households had to raise their house foundations to align with higher elevations of the upgraded alleys to further mitigate flooding, but such house upgrades were often too costly for the poorest and ethnic people, such as Khmer ethnic minority in Tra Vinh. Unlike the VUUP, this project did not include a microfinance component to support housing upgrades, so some poor households had to seek other financing means, such as microcredits from the Vietnam Social Policy Bank or support from local authorities. 52. As mentioned earlier, survey data showed notable increases in household incomes for project LIAs, at a rate higher than the overall provincial trend in some cities. Poor households along the newly upgraded roads also experienced substantial improvement in their livelihoods (as illustrated in annex 8 box 8.2). Nevertheless, interviews in Can Tho and Tra Vinh with a few ethnic minorities and poor households located in small alleys expressed that their incomes had not improved significantly. In most cases, these people were not able to change their livelihoods which commonly are part-time, low-skilled works or agricultural production. Most cities have policies to help poor households access low interest credit from the Vietnam Social Policy Bank through the Women’s Union. Still, few of the interviewed households were able to benefit from such policies. They explained several reasons that prevented them from fully taking advantage of the upgraded alleys to improve their economic status. For example, some households are headed by elderly people who cannot work, do not know how to set up and run a small business, or do not see any business opportunities. However, given the limited number of households who raised this issue, these comments may not represent the overall situation of the project cities. In fact, during interviews these households all recognized the benefits brought by the project, including reduced costs incurred because of flooding as discussed in the efficiency section. III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME A. KEY FACTORS DURING PREPARATION 53. Strategic approach and government commitment. The World Bank actively engaged the GoV in policy dialogue and development during preparation. Urban upgrading was well aligned with the GoV’s National Urban Development Master Plan Framework and various national economic development and poverty reduction strategies (see section I.A). The National Urban Upgrading Program and the Overall Investment Plan for Urban Upgrading up to 2020, approved by the GoV in 2009, aimed to institutionalize comprehensive pro-poor planning measures that were piloted in the VUUP and set an ambitious target of upgrading 156 urban centers by 2020. The MDR-UUP became a key operation for the GoV to implement the NUUP, and the GoV, through the MoC acting as the PCU, was actively involved in the preparation of the project. It was expected that a detailed implementation framework of the NUUP would be developed as part of the project to support scaling up of the approach to other parts of Vietnam. All local governments participating in the project also demonstrated strong commitment and a high level of readiness for implementation, including securing the required counterpart financing. 7 7At appraisal, all cities had obtained indicative commitments from the central government for between 40 percent and 90 percent of the required counterpart financing, and the remaining funds were committed by the respective provinces. Page 21 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) 54. Project design. The project incorporated the following lessons learned from the VUUP and various background studies 8 of the NUUP. (a) In terms of approach, the project built on several key principles that underlined the success of the VUUP, including a focus on community participation throughout the project cycle, targeting improving the LIAs and their connectivity with the overall city at the same time, and limiting resettlement impacts by adopting flexible and functional technical standards, especially regarding the tertiary infrastructure in the LIAs. (b) In terms of scope, the project design was less complex, with two fewer components related to microfinance and land management compared to the VUUP. It adopted a region-based approach with project cities being geographically clustered to strengthen the community of practice and coordination between cities. In addition, the project introduced a PCU, a role played by the MoC at the central government level, to be in charge of coordination, monitoring, quality assurance, and training, to improve the overall efficiency and quality of implementation and supervision. (c) The PDO, RF, and M&E framework were also greatly simplified and improved compared to the VUUP. The PDO, ‘improving infrastructure services in LIAs’, was realistic, closely linked to project’s interventions, and much easier to measure compared to the VUUP’s ambitious PDO of alleviating poverty. The indicators were based on IDA core indicators and had baselines and appropriate targets. 55. Risk assessment and mitigation measures. The overall risk rating at appraisal was appropriately assessed as Substantial, mostly resulting from risks related to stakeholders, project implementing agency, project design, and delivery quality. This was in line with the experience of implementing the VUUP for such a multi-city, multisector project. In addition to reducing the complexity of project design, appropriate mitigation measures were included to enhance the community participation process and support the PMUs with community consultation, safeguards, financial management (FM), procurement, and infrastructure asset management through adequate consultant support and training provided by the World Bank. In addition, each city was required to set up a Steering Committee headed by the Chairman/Vice Chairman of each PPC to provide overall policy guidance and oversight for project implementation and improve coordination of multiple government departments. However, the risks related to the MoC’s capacity of procurement and contract management, and challenges of multi-ministry coordination in developing the NUUP, were not sufficiently assessed. This resulted in delays in mobilizing several quality assurance and implementation support consultants and technical advisory packages. B. KEY FACTORS DURING IMPLEMENTATION 56. Institutional and project management capacity. The capacity of the project cities to prepare and implement a still complex multisectoral World Bank project was relatively low. Five out of six project cities had new PMUs and did not have prior experience with World Bank projects. As a result, the project was 8These include the study on ‘Housing and Infrastructure - Constraints Faced by the Urban Poor’ funded by Cities Alliance (CA) in 2002 and the ‘Guidelines for Management and Implementation of Urban Upgrading Projects in Poor Urban Areas with Community Participation in Cities of Vietnam’ by the MoC funded under the VUUP. Page 22 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) delayed in the first two years because (a) some PMUs lacked staffing in procurement, project management, and social safeguards and mobilization of support consultants was delayed; (b) the process of preparing and approving a detailed design was prolonged due to low quality of basic design in feasibility studies, multiple changes, and cumbersome government procedures; (c) delayed site clearance due to lack of experience of government agencies dealing with large-scale land acquisition and resettlement; and (d) inexperience in mobilizing community participation and delayed approval of regulations related to community contributions. 57. Insufficient allocation of IDA funds. Starting in 2016, all World Bank’s ongoing projects faced severe shortages of finance because of insufficient allocation of IDA funds in the Medium-term Investment Plan (MTIP), resulting from changes of the GoV’s procedures on official development assistance disbursement. This project was no exception, and this issue led to stalled disbursements in 2016. For both 2015 and 2016, the allocated annual amount for required official development assistance fund was only about 30 percent of the actual needs, and it rose only to 47 percent for 2017. At closing, it was reported that the project cities still needed an additional US$29 million from the GoV for 2018, creating the PMUs’ liability to contractors and the risk of not fully using the project funds for completed works. The World Bank team noted this issue in the 2015 May mission and requested the PCU and PMUs to take proactive actions to request additional allocation from the GoV as well as explore the possibility of reallocating funds from non-disbursing projects in their respective provinces to this project. In the same mission, in view of the limited MTIP budget allocation, as well as the slow bidding process and delay in mobilizing some larger embankment contracts, the need for a credit closing date extension arose. 58. Commitment, leadership and coordination. The project enjoyed a high degree of support from the GoV, as it was aligned with the GoV’s priorities for developing and implementing a coherent urban development agenda. After a slow start , strong commitment and leadership at the PMU, city, and provincial levels, coupled with intensified support and supervision by the MoC and the World Bank, resulted in the project’s uptick in disbursements in January 2016. During the MTR, the PMUs attributed their progress to frequent in-person meetings with relevant departments and high-level meetings chaired by leaders of the city/PPC to resolve major issues. One major challenge in many projects in Vietnam is related to compensation and resettlement. This project saw high commitment of local authorities in implementing the agreed resettlement policies, particularly in hiring independent land appraisal consultants to identify closer-to-market land compensation prices. Counterpart funds in all the participating cities in general were provided on time, leading to steady resettlement progress. Good land compensation prices coupled with subsidized land prices in the resettlement sites substantially improved the living standards for most of the PAHs. 59. In terms of coordination, having a PCU at the MoC was beneficial, with the PCU fulfilling its mandate of supervision, training, and quality assurance and monitoring, despite a few delays. Participating cities appreciated having a ‘go to’ unit in the MoC which helped navigate policies and procedures, and the PCU in turn demonstrated high-level ownership of the project. The PCU also organized training for the PMUs in the early stages of the project focusing on compliance with the World Bank policies and government regulations. 60. Strong focus on community participation. During implementation, community participation was carried out in the form of information dissemination, community supervision, contributions, and voluntary land donations. Project information was widely disseminated to local residents through various Page 23 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) means (for example, leaflets, signs, public announcements, and in-person meetings). Consultations were carried out on civil works according to the project safeguards management plans. Community supervision groups were established at the ward level to monitor construction activities. The PMUs and local authorities conducted continuous consultations and information disseminations to the project-affected people on the project resettlement policies, including land voluntary donation, compensation prices, and relocation options. Special efforts were made to consult with vulnerable groups such as ethnic minorities, the poor, and women. For cities having affected ethnic minorities, separate consultations were held with ethnic minorities to develop the Ethnic Minority Development Plans (EMDPs) to ensure that their needs were considered. 61. Procurement savings. The March 2014 mission found that the project would have potentially US$80 million in cost savings because of greater accuracy of costing following completion of detailed designs, lower inflation, and strong competition among contractors that resulted in the final bid prices being 20 to 30 percent less than estimates. Guidelines for the use of these funds were discussed in detail, and draft proposals from each city for further investments using the saving were discussed. Realization of savings allowed the timely identification of additional investments to expand the scope of works and enhance achievement of PDO. 62. Operationalization of the NUUP. A TA to support operationalization of the NUUP was planned under Component 5 of the project. However, this was only partially achieved due to the GoV’s lack of clarity on the scope of the NUUP and its relationship with other programs. Initially, the scope of this activity included development of an M&E framework and plan for the NUUP and drafting an implementation action plan for the NUUP, including timing and budget. These outputs initially planned to use the MoC’s grant from the CA and were transferred to this project according to the 2013 June mission. Later, it was agreed that this activity would be split into two phases, with the first phase focusing on better assessing urban poverty and the real demand for urban upgrading; this study was completed in August 2016. During the MTR in January 2016, it was agreed that remaining funds for this activity would support preparation of future urban upgrading investments, given that a financing framework was already developed under the CA grant. The scope of the second phase was finally revised and approved by the MoC in January 2017. Although this adjustment helped accelerate preparation of the follow-on project, the Scaling up Urban Upgrading Project (Cr. 6055-VN/6056-VN) targeting the remaining seven cities in the MDR, the long-pending decision from the MoC regarding the NUUP caused confusion and delays in fund utilization and left insufficient time for implementing alternative support to advance the MoC’s policy development. The GoV now intends to merge the NUUP into the National Urban Development Program (NUDP) as endorsed by the Prime Minister in 2012 (Decision 1659). IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME A. QUALITY OF MONITORING AND EVALUATION (M&E) Rating: Substantial M&E Design 63. The project’s RF indicators established clear links between the PDO and the project interventions, with clearly identified baselines and targets, and were in line with the capacity, availability of data, and costs of M&E. The RF also paid special attention to gender with most targets disaggregated by gender. Page 24 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) The project also put in place appropriate arrangements for data collection and reporting: PMUs were responsible for collecting and compiling data to assess progress according to the M&E framework in each city and the PCU at the MoC, with support from consultants, was responsible for consolidating data from PMUs, conducting periodic monitoring of implementation progress and compliance of World Bank policies and procedures, and reporting the progress of project implementation and outcomes, including the indicators for the key outcome results and the intermediate results, to the World Bank on a quarterly and annual basis. The PCU would have a strong field presence and would conduct roving spot checks of construction practices, safeguards compliance, and other issues for immediate feedback to the cities and the World Bank. M&E Implementation 64. Each PMU had a dedicated officer in charge of M&E to monitor and collect data on indicators according to the M&E framework. The MoC recruited M&E consultants to assist the MoC and PMUs monitor the overall progress of the project. The M&E consultants developed an M&E Framework Implementation Manual, conducted training for key PMU officers, reviewed the PMUs’ data, and prepared periodic reports. In addition, the MoC also recruited independent consultants on environmental monitoring, resettlement, construction supervision, and auditing to monitor compliance with the World Bank policies and procedures. Progress of implementation in various aspects and results indicators was reported on a semiannual basis, and additional data were provided on time. The M&E consultants conducted a midline survey before the MTR, and an end line survey at project completion, along with focus group discussions and in-depth interviews with beneficiaries and project management personnel. These data, combined with baseline survey in feasibility studies conducted by each city, allowed a meaningful assessment of project outcomes and attribution for the MTR and Implementation Completion and Results Report (ICR). 65. One minor shortcoming is related to an indicator under Component 5, which aimed to develop an operating framework for the NUUP. The MTR indicated that part of this work was done by other projects, the results-based NUDP in the Northern Mountains and the CA-funded TA to the MoC, which produced a financing framework for the NUUP. Therefore, it was proposed that the funding be reallocated for preparation of future urban upgrading investments. Despite this expected adjustment, the indicator under Component 5 remained unchanged, and the extent to which this indicator captures outcomes of project interventions was compromised. M&E Utilization 66. The quality of periodic reports and data from the M&E consultants and independent monitoring consultants was generally good and the reports were used by the World Bank, MoC, and PMUs to track overall implementation progress and identify issues and potential risks, particularly those related to adequacy of IDA funds and counterpart fund allocations, delays in site clearance, and contract management issues. After the MTR, the M&E data were used to revise the targets of several PDO indicators and intermediate results indicators to reflect the expanded scope of works funded by the procurement savings, more accurately capture the outcomes related to embankment improvement, 9 and better align expected outcomes with actual implementation progress. In addition, based on the M&E 9 Initially this indicator was only collected under Component 2 and was revised to be collected for both Components 1 and 2. Page 25 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) reports, the PCU at the MoC also compiled monthly/quarterly/annual reports to update the central ministries and project Steering Committees and highlighted critical issues for their coordination and support. This timely reporting was particularly useful in obtaining the GoV’s agreement to extend the closing date twice. Justification of Overall Rating of Quality of M&E Rating: Substantial 67. In consideration of the three aspects of design, implementation, and utilization and the fact that the RF was timely revised to better capture project outcomes because of the change of scope and that the reporting contributed to the timely extension of the project, the overall rating of M&E quality is Substantial. B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE 68. Environment safeguards. The project was classified as Category B and five policies were triggered: Environmental Assessment (OP/BP 4.01), Physical Cultural Resources (OP/BP 4.11), Involuntary Resettlement (OP/BP4.12), Indigenous Peoples (OP/BP 4.10), and Projects on International Waterways (OP/BP 7.50). A consolidated Environmental Impact Assessment (EIA) was prepared based on the comprehensive EIAs prepared by each city and was used as a basis for assessing project-wide impacts and preparing Environmental Management Plans (EMPs) in the project cities. The EIA and EMPs were publicly disclosed in Vietnamese locally on January 6, 2012, and in English in Washington, DC on January 17, 2012. 69. The environmental monitoring reports from the IEMC indicated that good environmental compliance was observed in most cities. In all cities, the environmental monitoring systems were in place with the participation of contractors, construction supervision consultants (CSCs), IEMC, and PMU staff. For construction packages, site-specific EMPs were prepared by majority of the contractors; however, their content needed improvement to be more effective for safeguard implementation and monitoring. Corrective actions were taken to address lack of dedicated staff responsible for environmental management in Can Tho PMU in the early stages of project implementation, as well as issues related to environmental sanitation, construction camp management, and safety during construction activities throughout project implementation. In Can Tho, on December 12, 2018, an unexploded ordnance exploded at a site near Can Tho University because of workers carrying out excavation outside the unexploded ordnance clearance boundary, but no injuries resulted from the incident. This was noted as a noncompliance issue and the World Bank strongly requested the PMU and CSC to strictly follow policies. This was the only reported accident. 70. Social safeguards. The project involved land acquisition and construction of resettlement sites in all six project cities. Moreover, a Resettlement Policy Framework (RPF) for the whole project and six RPs for all subcomponents that required land acquisition were prepared for each city to ensure that all affected people would be able to improve or at least restore the lost assets and livelihoods to the pre- project level. The RPF and RPs were publicly disclosed in Vietnamese locally on January 6, 2012, and in English in Washington, DC on January 17, 2012. During project preparation, a thorough screening of non- World Bank-financed and potentially linked projects along with due diligence reviews carried out in all six cities confirmed that compensation and livelihood restoration were consistent with the World Bank’s Page 26 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) policy and that there were no legacy issues. The Project Implementation Manual was updated to take into account the new Land Law that came into effect on July 1, 2014. 71. By closing, the project cities had completed almost all land acquisition activities with 17,221 out of 17,295 (99.6 percent) PAHs receiving the total compensation of VND 2,353.8 billion for about 1,221 ha of acquired land. About 2,825 PAHs were relocated on 3,137 land plots from the project resettlement sites. In addition, 322 land plots from nine different sites of Can Tho, Cao Lanh, and Ca Mau were allocated to the PAHs. 72. Grievance redress mechanisms (GRMs) were established in each city, and the PMUs received and responded to complaints, as recorded in their progress reports. By closing, the GRM system collected and solved 934 out of 948 (99 percent) complaints. There were still outstanding cases with 74 PAHs in three cities. For the remaining PAHs who had not accepted compensation by credit closing, the cities will either transfer the compensation amount to interest-bearing accounts or leave the cases open for the cities’ future projects. 73. Reports from the independent social safeguard monitoring consultant showed that the number of PAHs increased by 33 percent compared to RPs, mostly because of the partially and marginally affected households, as a result of additional civil works using project savings as well as due to the household changes/splitting out and more accurate loss inventories in the implementation phase. Although the number of PAHs was large, land acquisition activities generally complied with the approved RPF/RAPs and most of the PAHs have improved livelihoods noticeably. 74. Four cities Ca Mau, Can Tho, Tra Vinh, and Rach Gia developed EMDPs to mitigate adverse impacts on Khmer ethnic minority and enhance project benefits in a culturally appropriate manner. There were some delays in the EMDP implementation, leading to changes in some EMDP activities to reflect the latest status and demands of Khmer people and local conditions. By the credit closing, all the EMDPs were satisfactorily implemented in all four cities. 75. Procurement. By project closing, the PMUs had awarded all contracts. While most civil works contracts were substantially completed by the credit closing date, there were five contracts in Can Tho and two in Cao Lanh that were only 95 percent completed because of difficulties in resettlement and the large volume of remaining works. In addition, there may be contract payment delays because of insufficient allocation of IDA funds by the GoV. In terms of compliance, procurement transactions reviewed by the World Bank were found to be Satisfactory according to the World Bank’s prior and post reviews. 76. FM. The project’s FM arrangements, including FM staff, planning and budgeting, and internal control procedures were properly maintained throughout. All the PMUs had adequate FM staff with accounting and internal control systems in place. A contract management system was properly maintained at all six cities. Interim financial reports were consolidated and regularly submitted to the World Bank with acceptable quality. All the opinions in the project audit reports were unqualified (clean). However, the project’s FY16 and FY17 external audit reports were submitted late to the World Bank. In addition, there were no internal audit activities carried out for the last year (2018) to support the project accounting and finance finalization processes. The 2018 December mission noted that a shortage of both annual and medium-term investment plan budget was found in several cities and acknowledged PMUs’ Page 27 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) efforts in timely mobilizing all resources to complete all project activities and fully disburse all allocated funds by the end of the extended grace period, which is June 28, 2019 and expected to be extended further to December 28, 2019. C. BANK PERFORMANCE Rating: Satisfactory Quality at Entry 77. The team took the project from Project Concept Note/Identification to Board Approval in about two years, spent US$481,550 of the World Bank budget, and involved 69.9 staff weeks. Such duration and cost are in line with other projects in Vietnam. The task team leaders and most World Bank team members were involved in the implementation of the predecessor VUUP and therefore were familiar with the project approach, risks, and implementation challenges. 78. The PDO was highly relevant to both the national agenda and the World Bank's CPS. The project design adopted an integrated approach and incorporated lessons from previous projects and international experiences. Socioeconomic surveys, social impact assessments, and poverty mapping exercises were conducted in all six cities during the project preparation as a part of the project’s feasibility studies. The recommendations were taken into account in the technical designs and in developing social safeguards. The project allocated sufficient funding for TA, training, capacity building, and implementation support to the PMUs and PCU. Finally, the World Bank obtained trust fund resources of US$500,000 from CA, including a US$445,000 Recipient-executed Trust Fund to the MoC and US$55,000 World Bank-executed Trust Fund to support two initiatives: the reestablishment of the Vietnam Urban Forum and the operationalization of the NUUP. The latter produced two studies, including a rapid assessment of current approaches to urban upgrading in the context of Vietnam and a financing framework including investment mechanisms and feasible options for implementing the NUUP. 79. The team’s desire to reduce project complexity resulted in cutting down activities, particularly the revolving fund for housing improvements, which limited opportunities for poor households to access affordable finance to fully address flooding issues. Adding this component may have led to better outcomes, but then the project would have been made more complex, which was a trade-off that the team had to carefully consider. Quality of Supervision 80. Adequacy of supervision. During the six and half years of implementation, the World Bank undertook regular supervision with a total of 11 full implementation support missions and many short technical missions and produced 14 candid and comprehensive Implementation Status and Results Reports (ISRs). The average annual supervision cost was about US$111,830 and an average of 34 staff weeks per year. The task team leader and most team members were located in Hanoi and were able to interact with the PMUs and PCU on a day-to-day basis. The World Bank team also mobilized a lead water and sanitation specialist to participate in the MTR in January 2016. 81. Supervision of fiduciary, environmental, and social safeguards aspects was sufficient. These specialists consistently participated in the supervision missions and carried out just-in-time technical Page 28 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) missions. Site visits to monitor implementation progress and quality of works were carried out during each mission, and compliance issues were closely followed up by the World Bank to ensure that they were addressed. The World Bank continuously organized hands-on training and experience-sharing workshops that helped significantly strengthen the PMUs’ capacity. The World Bank also seriously responded to all complaints received related to procurement and safeguards and worked with the PMUs to identify appropriate actions to resolve those issues. 82. Considering the slow implementation in the first two years, the team downgraded the project to ‘Moderately Satisfactory’ status in November 2014. In June 2015, the risk rating for technical, institution, and fiduciary aspects was increased from Low to Moderate in view of low disbursement and contract management issues. The World Bank team closely monitored these risks and timely supported the client in improving these issues. By October 2017, progress toward achievement of the PDO was upgraded from Moderate Satisfactory to Satisfactory which remained till closing. 83. Proactive actions. The World Bank mission in March 2014 found that contracts were signed at a cost on average 30 percent lower than the estimates in the PAD/feasibility study, mainly because of reduced inflation and lower prices of construction materials. The mission estimated the potential cost savings for the project and agreed with the city and provincial authorities on the principles for the use of the cost savings. By the 2015 May mission, all the participating cities had almost finalized their proposals to use savings/unallocated funds. This ensured that the additional investments were prepared and implemented on time, greatly improving the project outcomes. The targets in the RF were increased to reflect the expanded scope. 84. The World Bank also proactively addressed issues related to fiduciary and safeguards. The World Bank provided timely guidance on contract management that helped the PMUs successfully overcome bottlenecks, especially for the largest and most complex contracts. The World Bank conducted a joint technical/fiduciary review on complaints about an embankment contract in My Tho and provided appropriate recommendations. To address delays in mobilization of an IEMC, the World Bank proactively provided hands-on training for the PMUs and CSCs on environmental safeguard requirements, as well as social safeguard polices to address the gaps between the project and government policies. 85. Climate change considerations. The World Bank team coordinated with all line departments in each city to ensure that climate change considerations from the provincial/cities climate change action plans were taken into account in the detailed technical designs. In Can Tho, the World Bank requested the detailed designs of drainage/sewerage systems to incorporate findings from the World Bank study ‘Comprehensive Resilience Planning for Integrated Flood Risk Management in Can Tho’ (separate from this project). To promote green cities, the World Bank encouraged the PMUs to apply eco-friendly solutions in relevant detailed designs, including planting trees wherever possible. Justification of Overall Rating of Bank Performance Rating: Satisfactory 86. The World Bank designed the project based on lessons learned from previous projects, followed implementation progress closely to address institutional and technical challenges, and took proactive measures to ensure that procurement savings were used and the project met conditions for extension. The overall rating is Satisfactory. Page 29 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) D. RISK TO DEVELOPMENT OUTCOME Natural disaster and climate change Rating: Substantial 87. Natural disasters especially flooding could have a detrimental impact on project assets. The project cities are located in low-lying river deltas and are highly susceptible to extreme weather events as well as other adverse impacts of climate change. These risks have been mitigated to a degree. The project design carefully considered various climate change scenarios to minimize the impacts of flooding, as well as solutions to cope with localized flooding risks, such as lowering the elevation of drainage/sewage pipes to the extent possible, adjusting the design of the sewage system along the alleys to allow connections between the houses’ septic tanks and the sewer pipes, instructing households to create temporary water retention areas in their gardens, and so on. However, it will take time for the authorities to upgrade the remaining alleys and for households to upgrade their houses to comprehensively address the residual flooding issues. O&M Rating: Moderate 88. The project developed an O&M Manual and cities received training on developing mechanisms for O&M. It was agreed that funds for O&M in the future would be taken from the Government’s annual budget, proposed by the designated O&M agencies: for primary and secondary infrastructure, O&M is the responsibility of relevant line departments under the City People’s Committee and for tertiary infrastructure, it is the Urban Management Units at the ward level, and some maintenance costs would also be taken from the 3 percent cash contribution from the communities. In addition, under Component 5, the MoC hired independent consultants who conducted regular spot checks of construction quality and the overall quality was assessed as satisfactory, thus contributing positively toward sustainability of the investments. However, given the limited budget of many project cities, there is a risk that these cities may not have the budgetary capacity to carry out proper O&M, especially for those infrastructure assets that do not generate user fees. As discussed in the efficacy section, if the local authorities are able to capture the land value increase through the various land-related taxes and fees, they could expect to see their local revenues increase, which could be used toward the O&M. V. LESSONS AND RECOMMENDATIONS 89. In situ upgrading yields many benefits compared to demolition and rebuilt. In addition to improving access to infrastructure, environment, public health, and employment opportunities for individual households, at the community level, in situ upgrading preserves the strong social networks commonly found in poor neighborhoods and creates less disruption to people’s way of living, especially for ethnic minority groups in the project cities who have strong attachment to their existing neighborhoods. For cities as a whole, in situ upgrading not only improves the overall environment and cityscape, but also incentivizes housing investments and creates an affordable and well-located housing stock (including rental) crucial for the cities’ poorest residents and migrants. A key design aspect of in situ upgrading is to adopt flexible and functional standards (that is, 2–4 m alleys enough to allow circulation of small fire trucks and maintenance vehicles, as opposed to a minimum of 6 m according to the cities’ Page 30 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) master plans). This helps optimize coverage of investments, greatly reduce resettlement needs and project costs, and better reflect community preferences and therefore has fewer negative environmental and social impacts. To make sure that such flexibility is aligned with local regulations and can be scaled up, the project worked closely with local governments and the MoC to develop appropriate guidelines for tertiary infrastructure design and revise cities’ planning accordingly. 90. Sufficient time and resources for community participation should be incorporated throughout the project cycle. Using participatory methods can deliver small-scale infrastructure that better meets the needs of communities than infrastructure projects planned in a traditional ‘top-down’ fashion. Ownership and active support from communities are necessary for sustainability. Under this project, the CUPs were developed in close consultations with the local people to discuss the width of alleys and the land areas that the LIA residents were willing to contribute for alley expansion, and consultations targeting women and ethnic minorities were conducted separately to balance the diverse preferences of beneficiaries in terms of project investment scope. This ensured that the design met the actual needs of the communities and increased people’s ownership during implementation of works and future maintenance. However, organizing meaningful community engagement was time-consuming and required substantial efforts in building the capacity of local authorities, developing communication strategies, mobilizing community groups, and conducting community workshops and campaigns. The added time and resources required for intensive consultations and capacity building for local authorities should be incorporated throughout the project cycle. 91. Innovative solutions to mobilize different sources of funds can help expand the reach of standard operations. Obviously, this project could not upgrade all the LIAs. The local authorities selected the LIAs to be included in the MDR-UUP based on pre-agreed criteria, leaving other LIAs for the future. With constraints in the state budget, innovative solutions that mobilize different sources of funding can be considered to expand the reach of ongoing operations and strengthen the role and accountability of local communities. Both the VUUP and MDR-UUP explored mobilization of community contributions in cash or land. While voluntary land donation worked well, cash contribution was not fully collected in this project, mostly due to lack of proactivity of local authorities and community organizations in fund collection. Land pooling is another approach that could be further explored, and experience from the World Bank’s TA to the land pooling pilot in Tra Vinh City in Vietnam 10 shows that although this approach gained a very high level of support from communities, lack of clarity on appropriate legal procedure and guidelines at the national level made implementation of projects at the local level very difficult. 92. Institutionalization of project approaches paves the way for scaling up. Local authorities gained experience through working closely with the World Bank in piloting an area-based, multisectoral, participatory in situ upgrading approach, and this facilitated much closer interdepartmental coordination as well as working relationships between local authorities and communities. The recommendations proposed by the project in terms of creating more greenery and public spaces and lowering the overly grand design standards were reflected in the cities’ revised master plans. Experiences from the urban upgrading projects were codified into a guideline issued by the MoC that detailed principles, institutional arrangements, process and lessons related to development of CUP, adoption of functional standards, 10Chen, Mansha, and Hoa Thi Mong Pham,.2017. “Rethinking Land Readjustment from a Governance-centered Perspective: The Case of a Land Readjustment Pilot in Tra Vinh, Vietnam.” Annual World Bank Conference on Land and Poverty, Washington, DC. Page 31 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) community participation, O&M, and so on, which would serve as a guide for the cities to follow when scaling up such an approach in the future. 93. A regional clustering approach facilitates coordination and reduces transaction costs. The project targeted a cluster of cities in the same region that share similar characteristics and challenges, and this supported frequent interactions between the PMUs and key stakeholders, facilitated coordination and support efforts, and encouraged peer-to-peer learning. Additionally, bundling of TA packages into bigger contracts to support a group of cities and provision of capacity support by the World Bank is easier when working in the same region, which helped reduce transaction costs for the cities as well as the World Bank. This is particularly useful for smaller and less experienced PMUs. 94. The trade-off between complexity and outcomes should be considered when designing a project. The project design did not include a revolving fund for housing improvements in the upgraded LIAs, which was a successful feature in the VUUP. The decision not to include the microfinance component was made by the team during project preparation, mainly because of concerns about the complexity that was experienced under the VUUP and a change in the World Bank policy at that time toward more stringent requirements for projects involving financial intermediaries. The team also expected that some of the financial institutions supported by the VUUP would continue to offer the microfinance product on their own. Adding this component would have greatly increased the complexity in an already complex project covering multiple sectors in six cities. Reduced project scope reduced the complexity but may also result in reduced impacts and is therefore a trade-off that needs to be considered carefully. . Page 32 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS A. RESULTS INDICATORS A.1 PDO Indicators Objective/Outcome: To improve infrastructure services in Low Income Areas in the Project Cities Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion People with access to improved Number 0.00 146200.00 162011.00 355227.00 infrastructure services in the Project Low Income Areas 27-Feb-2012 31-Dec-2017 31-Dec-2017 28-Dec-2018 developed through the project (men/women) Men Number 0.00 74000.00 83625.00 180742.00 27-Feb-2012 31-Dec-2017 31-Dec-2017 28-Dec-2018 Women Number 0.00 72200.00 78386.00 174485.00 27-Feb-2012 31-Dec-2017 31-Dec-2017 28-Dec-2018 Comments (achievements against targets): Page 33 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion User satisfaction with Percentage 0.00 90.00 97.70 infrastructure services developed through the Project 27-Feb-2012 31-Dec-2017 28-Dec-2018 (men/women) Men Percentage 0.00 90.00 98.10 27-Feb-2012 31-Dec-2017 28-Dec-2018 Women Percentage 0.00 90.00 97.20 27-Feb-2012 31-Dec-2017 28-Dec-2018 Comments (achievements against targets): Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Percentage of Low Income Percentage 0.00 100.00 100.00 Areas with Community Upgrading Plans prepared and 27-Feb-2012 31-Dec-2017 28-Dec-2018 implemented in accordance with the participatory process. Comments (achievements against targets): Page 34 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) A.2 Intermediate Results Indicators Component: Component 1 – Tertiary Infrastructure Upgrading in Low Income Areas Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Length of new or improved Meter(m) 0.00 146535.00 180059.00 261000.00 lanes 27-Feb-2012 31-Dec-2017 31-Dec-2017 28-Dec-2018 Comments (achievements against targets): Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Persons provided with access Number 0.00 139500.00 291574.00 to an upgraded lane/road 27-Feb-2012 31-Dec-2017 28-Dec-2018 Comments (achievements against targets): Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Length of new or improved Meter(m) 0.00 239300.00 354639.00 480897.00 drains 27-Feb-2012 31-Dec-2017 31-Dec-2017 28-Dec-2018 Comments (achievements against targets): Page 35 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Households served by new or Number 0.00 25900.00 39509.00 43350.00 improved metered water supply connections 27-Feb-2012 31-Dec-2017 31-Dec-2017 28-Dec-2018 Comments (achievements against targets): Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Households served by new or Number 0.00 18900.00 39210.00 48373.00 improved household connections to septic tanks or 27-Feb-2012 31-Dec-2017 31-Dec-2017 28-Dec-2018 sewer lines Comments (achievements against targets): Component: Component 2 – Supporting Primary and Secondary Infrastructure Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Length of new or improved (a) Meter(m) 0.00 29300.00 164263.00 248911.00 roads and (b) drainage 27-Feb-2012 31-Dec-2017 31-Dec-2017 28-Dec-2018 Comments (achievements against targets): Page 36 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Length of new or rehabilitated Meter(m) 0.00 34300.00 26473.00 34415.00 canals 27-Feb-2012 31-Dec-2017 31-Dec-2017 28-Dec-2018 Comments (achievements against targets): Component: Component 3 - Resettlement Sites Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion New serviced plots constructed Number 0.00 3410.00 3774.00 3558.00 27-Feb-2012 31-Dec-2017 31-Dec-2017 28-Dec-2018 Comments (achievements against targets): Main reasons for the discrepancy between actual achieved and target were that additional 322 land plots from cities’ existing sites were allocated to project affected households as per their preferences when the project resettlement sites were not ready; in other cases, some households who were entitled to receive resettlement plots ended up choosing cash compensation. Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion New serviced plots provided to Number 0.00 3410.00 3550.00 3137.00 Page 37 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) affected households 27-Feb-2012 31-Dec-2017 31-Dec-2017 28-Dec-2018 Comments (achievements against targets): Main reasons for the discrepancy between actual achieved and target were that additional 322 land plots from cities’ existing sites were allocated to project affected households as per their preferences when the project resettlement sites were not ready; in other cases, some households who were entitled to receive resettlement plots ended up choosing cash compensation. Component: Component 5 – Technical Assistance to the Ministry of Construction to Implement NUUP Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Operating framework for a Yes/No N Y Y National Urban Upgrading Program finalized 27-Feb-2012 31-Dec-2017 28-Dec-2018 Comments (achievements against targets): Page 38 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) A. KEY OUTPUTS BY COMPONENT Objective/Outcome 1 Improve infrastructure services in Low Income Areas in the Project Cities in the Mekong Delta Region 1. People with access to improved infrastructure services in the project low income areas developed through the project (men/women) 2. User satisfaction with infrastructure services developed through the Outcome Indicators project (men/women) 3. Percentage of low income areas with Community Upgrading Plans prepared and implemented in accordance with the participatory process. 1. Length of new or improved lanes 2. Length of new or improved drains 3. Households served by new or improved metered water supply connections 4. Length of new or improved (a) roads and (b) drainage (under Intermediate Results Indicators Component 2) 5. Length of new or rehabilitated canals 6. New serviced plots constructed 7. New serviced plots provided to affected households 8. Operating framework for a National Urban Upgrading Program finalized Component 1: Tertiary Infrastructure Upgrading in Low Income Areas Key Outputs by Component 1. Community Upgrading Plans prepared and implemented in (linked to the achievement of the Objective/Outcome 1) accordance with the participatory process in 114 LIAs 2. 261,000 m new or improved lanes 3. 480,897 m new or improved drains Page 39 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) 4. 43,350 households served by new or improved metered water supply connections Component 2: Supporting Primary and Secondary Infrastructure 1. 34,193 m new or improved roads 2. 70,309 m new or improved drainage 3. 34,415 m new or rehabilitated canals Component 3: Resettlement Sites 1. 3,558 new serviced plots constructed 2. 3,137 new serviced plots provided to affected households Component 4: Implementation Support and Project Management 1. PMUs staff trained Component 5: Technical Assistance to the Ministry of Construction to Implement NUUP 1. Operating framework for a National Urban Upgrading Program finalized Page 40 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION A. TASK TEAM MEMBERS Name Role Preparation Supervision/ICR Hoa Thi Hoang Task Team Leader(s) Kien Trung Tran Procurement Specialist(s) Ha Thuy Tran Financial Management Specialist Hoa Thi Mong Pham Social Specialist Hang Diem Nguyen Team Member Mansha Chen ICR Author Thuy Cam Duong Environmental Specialist Hai Yen Tran Team Member Hung Sy Pham Team Member A. STAFF TIME AND COST Staff Time and Cost Stage of Project Cycle No. of staff weeks US$ (including travel and consultant costs) Preparation FY09 9.281 49,570.93 FY10 17.954 119,968.31 FY11 19.951 122,169.37 FY12 22.767 189,841.64 FY13 0 0.00 Total 69.95 481,550.25 Supervision/ICR FY12 1.400 17,591.14 Page 41 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) FY13 38.650 128,171.45 FY14 45.138 152,385.04 FY15 34.840 102,715.98 FY16 42.680 120,226.63 FY17 38.725 109,265.16 FY18 36.250 150,526.38 FY19 32.838 172,855.69 Total 270.52 953,737.47 Page 42 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) ANNEX 3. PROJECT COST BY COMPONENT Actual at Project Amount at Approval Components Closing (US$, Percentage of Approval (US$, millions) millions) Component 1: Tertiary Infrastructure Upgrading in 140.4 131.06 93 Low Income Areas Component 2: Supporting Primary and Secondary 116.5 124.94 107 Infrastructure Component 3: 63.7 42.24 66 Resettlement Sites Component 4: Implementation Support 71.4 33.41 47 and Project Management Component 5: Technical Assistance to the Ministry 6.0 2.30 38 of Construction to Implement NUUP Total 398.00 333.95 84 Page 43 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) ANNEX 4. EFFICIENCY ANALYSIS 1. At appraisal, an economic and financial analysis was conducted for physical investments in a sample of 24 LIAs out of 110 proposed LIAs under Component 1, plus one investment (Bun Xang Lake in Can Tho) under Component 2. The evaluation indicated that while none of the representative subprojects were financially feasible, all the selected subprojects were economically feasible with the return rates ranging from 13.9 percent to 187.1 percent. 2. At completion, a comprehensive analysis was performed to update economic viability of the project. However, the financial analysis was not fully repeated as investments in the revenue-generating services, namely, water supply and solid waste collection, were small (less than 1.5 percent of project cost), and it was not feasible to separate O&M costs of project items from overall activities of utility companies in the six project cities. Economic Analysis 3. The conventional method was applied for the cost-benefit analysis of the project, where discounted costs and benefits of the ‘with project’ scenario were compared with those of the ‘without project’ scenario and the viability was reflected through the net present value (NPV) and internal rate of return (IRR). The annual costs and benefits were calculated up to 2038. 4. At appraisal, the economic analysis was done for 24 out of 110 proposed LIAs, so coverage of the analysis was only 26.5 percent. With all investments completed, the analysis was updated with actual costs, numbers of beneficiaries, and estimated benefits. Because costs of Components 1 and 2 included compensation costs paid to project-affected people and those people in turn used this compensation to pay for plots in the resettlement sites built under Component 3, the updated economic analysis was carried out for investments under Components 1 and 2 only. The coverage of the updated analysis is, therefore, more than 80 percent. 5. The discount rate applied at appraisal of the project was 12 percent. However, pursuant to the latest World Bank Guidelines in 2016, 11 the discount rate in the updated analysis was reduced to 10 percent based on the current financial market and economy. Project Costs 6. Similar to analysis at appraisal, the updated analysis took into account whole-life costs, including investments and O&M costs. While costs at appraisal were initially estimated in late 2011 for primary designs plus 10 percent of contingencies, at completion, the investment costs were updated with actual preparation, consulting, and construction costs of the subprojects. 11Discounting Costs and Benefits in Economic Analysis of World Bank Projects, Operations Policy and Quality Department, 2016. Page 44 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) 7. The unit prices of the updated project costs and benefits were based on prices in Vietnam in 2018. The evaluation was in U.S. dollar using the actual exchange rates at the time of disbursements, which were close to the market rate and so no shadow foreign exchange rate was considered necessary. 8. The economic costs were updated with the actual disbursements adjusted by conversion of 0.95 for investment costs and 0.95 for O&M costs to eliminate market factors. Table 4.1Updated Economic Costs of Investments (US$, millions) City/Component Appraisal Completion Ca Mau Component 1 22.59 27.59 Component 2 9.21 5.12 Can Tho Component 1 24.27 22.83 Component 2 8.15 38.16 Cao Lanh Component 1 22.69 22.52 Component 2 19.95 18.47 My Tho Component 1 22.25 22.04 Component 2 12.28 12.37 Rach Gia Component 1 8.44 7.53 Component 2 5.08 22.46 Tra Vinh Component 1 24.36 19.39 Component 2 7.19 7.79 Total 186.46 226.27 9. The updated analysis counted the actual annual disbursements shown in table 4.2. Table 4.2. Actual Annual Economic Costs of Investments (US$, millions) City/Component Total 2013 2014 2015 2016 2017 2018 Ca Mau Component 1 27.59 1.05 3.80 5.89 8.42 6.20 2.22 Component 2 5.12 0.40 0.31 1.35 0.30 1.85 0.89 Can Tho Component 1 22.83 1.86 4.20 7.88 2.61 3.05 3.21 Component 2 38.16 2.80 0.67 14.47 0.89 14.59 4.72 Cao Lanh Component 1 22.52 2.35 3.69 1.24 7.79 3.47 1.94 Component 2 18.47 — 0.43 1.10 8.72 6.45 1.75 My Tho Component 1 22.04 0.38 0.99 9.00 2.99 4.95 3.69 Component 2 12.37 0.35 1.03 1.54 4.84 2.50 1.57 Rach Gia Component 1 7.53 — 2.40 1.80 1.64 1.53 0.14 Page 45 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) City/Component Total 2013 2014 2015 2016 2017 2018 Component 2 22.46 — 0.55 11.24 6.19 4.05 0.41 Tra Vinh Component 1 19.39 1.79 2.11 5.02 3.59 5.89 0.96 Component 2 7.79 — 1.87 3.02 1.74 0.76 0.39 Source: 2013–2017 data are audited disbursements. 2018 data are estimated. Project Benefits 10. At appraisal, the economic benefits of a subproject were assumed to consist of (a) financial benefits, which consisted of incremental tariff revenue during the economic lifetime of two types of subprojects, installation of piped water connections, and expansion of the solid waste collection system and (b) nonmonetary benefits, which consisted of expected increases of land prices caused by the investment. The analysis showed that the latter accounted for most of the benefits of the subprojects. 11. At completion, in addition to land value appreciation, economic benefits also considered other quantifiable benefits such as health benefits or/and reduced flooding damages. Main nonmonetary benefits from investments under Components 1 and 2 include the following: (a) Improved public health. This is the most important economic benefit of the project. Before the project, a majority of the population in the project LIAs lived in poor sanitary conditions. Waterborne and respiratory diseases were substantially higher than in areas with well- functioning drainage and sewage systems. Better sanitation improved public health, resulting in reduction of health-related expenditures and increases in productivity because of reduced illness time. (b) Avoided flood damage. Before the project, most of the LIAs were frequently flooded, not only in the rainy reason, but throughout the year, because of poor drainage systems and impact of high tides. Construction of drains and sewers under Components 1 and 2, and rehabilitation of the canals, rivers, and lakes under Component 2 reduced flooding and associated damage. (c) Increased land prices. Over the course of the project, land prices in the project areas rose remarkably as result of better living conditions from the improved environment, accessibility, security, and amenities. There has been substantial variation in land prices within project areas. Land prices are substantially higher along roads, rivers, canals, and waterfronts with embankments improved by the project. The average price increases of land in project areas are as shown in table 4.3. Page 46 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) Table 4.3. Average Land Prices in Project Areas (VND, millions per m2) Component 1 Component 2 City Appraisal Completion Increase (%) Appraisal Completion Increase (%) Ca Mau 2.5 6.5 260 3.5 8.0 228 Can Tho 4.0 14.6 365 10.0 35.0 350 Cao Lanh 3.5 15.0 428 3.5 17.0 485 My Tho 4.0 13.5 337 4.0 13.5 337 Rach Gia 3.5 9.5 271 3.5 9.5 271 Tra Vinh 2.5 6.0 240 2.5 6.0 240 Source: Based on interviews of local residents during the project end line survey conducted in November 2018, cross-checking with the Government listed prices, real estate websites, and news articles in a limited sample of land transactions along the improved infrastructure in project areas. 12. Tertiary infrastructure under Component 1 brought benefits directly to those living within the project LIAs and indirectly to other residents of the wards. Direct beneficiaries of the primary and secondary infrastructures under Component 2 consist of people within 1km on both sides of the roads and embankments (excluding those counted as direct beneficiaries of Component 1). Further, the population of the rest of the project cities would more or less benefit from major infrastructures, hence, were counted as indirect beneficiaries of Component 2. Table 4.4. Number of Project Beneficiaries (Persons) Direct Beneficiaries City Indirect Beneficiaries Component 1 Component 2 Ca Mau 53,953 42,679 216.000 Can Tho 81,375 47,529 1,260,000 Cao Lanh 56,425 75,924 36,500 My Tho 55,378 30,979 194,000 Rach Gia 62,413 38,962 118,000 Tra Vinh 45,682 26,470 93,000 13. Referring to the impact analysis of improved public health from upgraded urban infrastructures of recent similar projects in Vietnam, as well as statistics, reports, and surveys of project cities on living standards, 12 flooding damages and land prices, people from different cities have a slightly variation in benefits as shown in table 4.5. Table 4.5. Unit Benefits of the Project Ca Mau Can Tho Cao Lanh My Tho Rach Gia Tra Vinh 1. Health care expenditure 29.7 29.8 28.1 30.5 28.3 23.1 savings (US$/person/year) 2. Productive time savings 18.8 18.8 17.7 19.3 17.8 14.6 (US$/person/year) 3. Flooding damage savings 9.4 9.8 9.3 9.8 8.6 6.7 (US$/person/year) 4. Increased land value (US$/m2) 181–205 481–1,136 522–613 432 273 159 12 From Vietnam Household Living Standard Survey and project surveys. Page 47 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) 14. The updated evaluation showed that increased land value and improved public health are the two major benefits of the project. 15. Savings in health care costs. 13 These savings ranged from US$23.1 per beneficiary per year in Tra Vinh to US$30.5 in My Tho. Savings in direct health care costs were lowest in cities with the lowest household incomes. 16. Savings in productive time. It was assumed that beneficiaries would save three working days per year because of project investments. 14 As a result, savings in productive time ranged from US$14.6 per beneficiary per year in Tra Vinh to US$19.3 in My Tho. 17. Savings in flood control damage. 15 The investments reduced flood damage from US$6.7 per affected person per year in Tra Vinh to US$9.8 in Can Tho and My Tho. 18. Increase in land prices. End line data revealed that land prices after the project increased on average about 2.5 to 5 times compared to before the project. 19. In total, the whole-life quantifiable benefits of the project are approximately US$1.164 billion, distributed to the cities as shown in table 4.6 Table 4.6. Whole-life Project Benefits (US$, millions) City Type of Benefits Component 1 Component 2 1.Health care savings 38.44 30.41 2. Productive time savings 24.27 19.2 Ca Mau 3. Flooding damage savings 12.13 9.6 4. Increased land value 30.50 8.09 Total Ca Mau 105.34 67.3 1.Health care savings 58.07 33.92 2. Productive time savings 36.66 21.41 Can Tho 3. Flooding damage savings 19.03 11.13 4. Increased land value 32.22 57.12 Total Can Tho 145.98 123.58 1.Health care savings 37.99 51.11 2. Productive time savings 23.98 32.27 Cao Lanh 3. Flooding damage savings 12.65 17.02 4. Increased land Value 27.31 34.96 Total Cao Lanh 101.93 135.36 1.Health care savings 40.52 22.67 2. Productive time savings 25.58 14.31 My Tho 3. Flooding damage savings 12.86 7.2 4. Increased land value 23.33 28.19 Total My Tho 102.29 72.37 13 Assuming that health care cost takes up 6 percent of household income and 30 percent health care cost saving because of infrastructure improvement (Asian Development Bank sanitation research). 14 Based on data about flooding duration in the project feasibility study and midterm survey, see section B in this ICR. 15 Flood damage before project and damage saving after project were based on end-of-project survey and interviews with local residents. Page 48 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) City Type of Benefits Component 1 Component 2 1.Health care savings 42.29 26.39 2. Productive time savings 26.69 16.66 Rach Gia 3. Flooding damage savings 12.9 8.06 4. Increased land value 14.53 28.43 Total Rach Gia 96.41 79.54 1.Health care savings 25.32 14.67 2. Productive time savings 15.99 9.26 Tra Vinh 3. Flooding damage savings 7.37 4.27 4. Increased land value 33.75 23.52 Total Tra Vinh 82.43 51.72 All Cities 1.Health care savings 242.63 179.17 2. Productive time savings 153.17 113.11 3. Flooding damage savings 76.94 57.28 4. Increased land value 161.64 180.31 Total all cites 634.38 529.87 Economic Analysis Results 20. The updated economic analysis confirms that all the components are economically viable with the EIRR higher than the discount rate of 10 percent, in the range of 17.4 percent to 44.7 percent. The EIRR is highest in Tra Vinh and Cao Lanh, which are relatively poor cities and lowest in Ca Mau and Can Tho, which are relatively better off. Table 4.7. Updated Cost-benefit Analysis Result Component 1 Component 2 City NPV (US$, millions) IRR (%) NPV (US$, millions) IRR (%) Ca Mau 10.33 17.7 14.30 44.7 Can Tho 24.07 25.9 12.76 18.7 Cao Lanh 14.17 22.1 29.60 41.4 My Tho 12.75 21.4 12.25 33.0 Rach Gia 20.67 40.6 7.51 17.4 Tra Vinh 11.85 22.7 12.57 34.9 21. The economic analysis at completion did not simply repeat the appraisal analysis which was based on a limited sample of representative subprojects, but rather conducted a more comprehensive assessment for the entire project. The updated results are, therefore, not fully comparable to appraisal estimates. Table 4.8 summarizes the economic returns expected at appraisal and at completion of the project with three fundamental notes: (a) Discount rate was 12 percent at appraisal and down to 10 percent at completion. (b) Coverage of assessment at appraisal was only 24 percent and at completion was more than 80 percent. Page 49 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) (c) Benefits at appraisal included very minor incremental tariff revenue and increases in land prices, while at completion quantified benefits from improved public health, reduced flooding damage, and increased land value are included. 22. Despite these critical differences, both analyses confirm the economic viability of the project. Table 4.8. Cost-benefit Analysis Results at Appraisal and Completion Appraisal Completion City NPV (US$, millions at NPV (US$, millions IRR (%) IRR (%) 12%) at10%) Ca Mau 3.53–14.07 43.0–52.6 24.64 23.5 Can Tho 0.33–76.17 13.9–73.7 36.83 22.2 Cao Lanh 0.42–4.62 16.6–42.2 41.08 29.5 My Tho 6.36–17.72 39.1–187.1 24.99 25.4 Rach Gia 0.41–6.00 13.2–32.0 28.13 26.0 Tra Vinh 2.00–18.10 23.3–126.0 23.28 26.7 Financial Analysis 23. The project included investments in water supply and solid waste collection in the LIAs; however, the investments were very small. 16 The assets are being maintained and operated by the existing water supply companies and urban environment companies in cities. The financial analysis at appraisal concluded that incremental revenue from these services was very small—in some cases only enough to recover O&M costs—but was hardly able to pay back investments. 24. At completion, it was not feasible to separate O&M costs for project items from overall activities of utility companies in six project cities. Nevertheless, the audited financial reports of these companies showed that revenues from these services were in general able to cover O&M costs. The common assessment among project cities is that project investment in clean water connection not only resulted in incremental revenue from newly connected households but also reduced leakages, which made water supply operations more efficient. Similarly, waste bins and trucks provided by the project helped ease the job of waste collectors and increased labor productivity. 25. The end line surveys and interviews with beneficiaries in the project LIAs suggested that current water tariffs and solid waste collection fees are affordable. It costs a household VND 150,000–230,000 per month for clean water and solid waste services, about 1.7 percent of a household’s income. This was substantially lower than the affordability limit of 5 percent normally used by the World Bank. Table 4.9. Affordability Analysis Average Monthly Bill (VND) Average Household Solid Waste % bill/income City Water Supply Monthly Income Collection (VND) Ca Mau 143,783 27,300 12,015,000 1.42 16Total investments in water supply and solid waste collection were only 1.22 percent of project cost, with water supply accounting for 0.71 percent and solid waste collection 0.52 percent. Page 50 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) Average Monthly Bill (VND) Average Household Solid Waste % bill/income City Water Supply Monthly Income Collection (VND) Can Tho 197,000 29,730 12,064,615 1.88 Cao Lanh 160,750 20,683 10,638,333 1.71 My Tho 167,900 15,590 11,811,445 1.55 Rach Gia 131,000 25,818 11,739,727 1.34 Tra Vinh 158,636 34,454 9,161,000 2.11 Page 51 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS 1. The following comments on the draft ICR were received from the Ministry of Construction (MOC) on behalf of the Borrower via email on June 14, 2019. Location of text As in the original draft Suggest changing to the following Note from MOC Page 8/67, under Part B. The extension was requested due to The extension was requested due to Significant changes insufficient funding allocations from GoV, as insufficient funding allocations from GoV, as during implementation - well as delays in most of the river well as delays in most of the river embankment ‘Other changes” embankment works. works. Page 11/67 under Part As a side activity, the Project also support As one of the main activities, the Project also B. Achievement of PDOs MoC as the PCU in completing the following support MoC as the PCU in completing the – “Component 5” TA activities: following TA activities: Page 15/67 under Part The total whole-life quantifiable benefits of Need to clarify more about C. Efficiency - “Economic the project are estimated at approximately how to calculate this data analysis” US$1164 million. Page 52 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) Page 16/67 under Part The only minor issue was the 12-month The only minor issue was the 12-month 12-month extension mainly D. Justification of overall extension due to delay of funding extension due to delay of funding due to delay of funding outcome rating allocations and implementation of allocations and implementation of certain allocations. certain subprojects, but these did not subprojects, but these did not impact the The next comment on MOC impact the operation’s achievement of operation’s achievement of its objectives, performance is not its objectives, its efficiency, or its its efficiency, or its relevance; in fact, both accurate, the writer may relevance; in fact, both efficacy and efficacy and efficiency exceeded refer to opinion of efficiency exceeded expectations. expectations. However, in view of the independent consultants. However, in view of the moderate moderate achievements of one activity achievements of one activity under under components 5, namely the TA to components 5, namely the TA to MoC MoC for NUUP, the overall project for NUUP, the overall project outcome outcome is rated satisfactory. is rated satisfactory. Page 18/67 under Part E. As a result, most households had to As a result, some households had to raise The upgrading must Other Outcomes and raise their house foundations to align their house foundations to align with comply with the elevation Impacts – “Other with higher elevations of the upgraded higher elevations of the upgraded alleys in of the ground in the unintended outcomes alleys in order to further mitigate order to further mitigate flooding, but general planning of the and impacts” flooding, but such house upgrades are such house upgrades are often too costly city, which leads to the low often too costly for the poorest and for the poorest and ethnic people, such as level of some household. ethnic people, such as Khmer ethnic Khmer ethnic minority in Tra Vinh. Localities also have minority in Tra Vinh. technical solutions on drainage connection and financial solutions to overcome this part of the situation. Page 53 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) Page 20/67 under B. Key Starting in 2015, all WB ongoing Starting in 2016, all WB ongoing projects factors during projects faced severe shortages of faced severe shortages of finance due to implementation – finance due to insufficient allocation of insufficient allocation of IDA funds in the “Insufficient allocation IDA funds in the Medium-Term Medium-Term Investment Plan (MTIP), of IDA funds” Investment Plan (MTIP), resulting from resulting from changes of GoV’s changes of GoV’s procedures on ODA procedures on ODA disbursement. disbursement. Page 20/67 under B. Key In terms of coordination, having a PCU In terms of coordination, having a PCU at factors during at MOC was beneficial, with the PCU MOC was beneficial, with the PCU fulfilling implementation – fulfilling its mandate of supervision, its mandate of supervision, training, and “Commitment, training, and quality assurance and quality assurance and monitoring, despite leadership and monitoring, despite a few delays. a few delays. coordination” Page 21/67 under B. Key The March 2014 mission found that the The March 2014 mission found that the factors during project would have potentially US$80 project would have potentially US$80 million implementation – million in cost savings due to greater in cost savings due to greater accuracy of “Procurement Savings” accuracy of costing following completion of costing following completion of detailed detailed designs, lower inflation, and designs, lower inflation, and strong strong competition among contractors that competition among contractors that resulted resulted in final bid prices being 30% less in final bid prices being 20% - 30% less than than estimates estimates Page 54 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) Page 21/67 under B. Key A TA to support operationalization of A TA to support operationalization of This is not entirely true factors during NUUP was planned under Component 5 NUUP was planned under Component 5 of implementation – of the Project. However, this was only the Project. However, this was only “Operationalization of partially achieved due to GoV’s lack of partially achieved due to GoV’s lack of the National Urban clarity on the scope of NUUP and its clarity on the scope of NUUP and its Upgrading Program” relation with other programs…. relation with other programs ……. Although this adjustment helped Although this adjustment helped accelerate preparation of the follow-on accelerate preparation of the follow-on project, the Scaling up Urban project, the Scaling up Urban Upgrading Upgrading Project (Cr. 6055-VN/6056- Project (Cr. 6055-VN/6056-VN) targeting VN) targeting the remaining seven the remaining seven cities in MDR, the cities in MDR, the long pending long pending decision from MOC decision from MOC regarding the NUUP regarding the NUUP caused confusion and caused confusion and delays in fund delays in fund utilization, and left little utilization, and left little room for room for implementing alternative implementing alternative support to support to advance MoC’s policy advance MoC’s policy development. development. GoV now intends to merge GoV now intends to merge NUUP into NUUP into the National Urban the National Urban Development Development Program (NUDP) as Program (NUDP) as endorsed by the endorsed by the Prime Minister in 2012 Prime Minister in 2012 (Decision 1659). (Decision 1659). Page 22/67 under A. One minor shortcoming is related to Suggest removing, please Quality of monitoring indicator under Component 5, which see explanation in and evaluation (M&E) - aimed to develop an operating attachment about activities M&E Implementation framework for NUUP. implemented under NUUP Page 55 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) An Operating framework for NUUP Activities implemented: - Evaluated and review all indicators of NUUP in 2008 and provided report on poverty status and proposed urban upgrading priorities (via Package MOC 01A); based on that, MOC has supported the provinces to propose the Scaling Up Urban Upgrading Project with WB loans. The Project has been approved and currently being implemented in 7 provinces in Mekong Delta. In addition, the MOC and the provinces have also developed proposal and approved the Northern Mountains Urban Development Program (NMUP) project based on results-based disbursement (PforR). These are considered as important results, reflecting the role of MOC in the process of implementing NUUP program. - Priority framework includes indicators to assist the localities to identify and select urban areas to prioritize investment in urban upgrading and development that have been built and integrated into the National Urban Database System through indicators and roadmap of implementation. - The Steering Committee of the National Urban Development Program has been established to enhance the implementation of the objectives of the National Urban Development Program. The MOC plays an consolidated role in the needs of urban upgrading on the basis of the proposals of localities (Decision 220/QD-TTg of the Prime Minister dated Feb 4, 2016 on the establishment of the Steering Committee). The financial/ fund mobilization framework for national urban upgrading needs has been initially researched within the framework of CA project’s package and via MOC 01A of MDRUUP; the financial framework has also been studied within the National urban upgrading program, report has also submitted to the WB in 2017. - Capacity building activities to support the cities to screen and identify priority projects to invest in urban development and upgrading that have been carried out through 2 national conferences in Hanoi and HCMC (within the framework of the package MOC 01A) To conclude, the MOC with the role of implementing NUUP and coordinating MDRUUP has implemented and promoted most of the NUUP implementation activities, the results have been proved in 13 provinces in the Mekong Delta and 7 provinces in Northern Mountains through the two mentioned projects. Page 56 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) 2. The following response from the Bank task team was sent to the Borrower via email on June 18, 2019: Related MOC comments Bank task team response (Refer to table above) Page 8/67, under Part B. Delay in implementation was noted as one of the reasons for project extension in the AM of September 2017 and Significant changes AM of March 2018 (see sections on implementation progress). during implementation - ‘Other changes” Page 11/67 under Part B. Achievement of PDOs – We will revise to “Component 5: The project also supported the MoC as the PCU in completing the following TA “Component 5” activities:” Page 15/67 under Part C. Efficiency - “Economic Please see Annex 4 for detailed methodologies. analysis” Page 16/67 under Part Delay of implementation was responded above. D. Justification of overall outcome rating The statement related to Component 5 refers to the TA of operationalizing the NUUP only; all other achievements related to MOC support were summarized in the paragraph of “Component 5” under Section I-B. For statements about TA on NUUP please refer to paragraph ‘Operationalization of NUUP’ under section III-B. Also see response below. Page 18/67 under Part E. Other Outcomes and We will revise as suggested. Impacts – “Other unintended outcomes and impacts” Page 57 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) Page 20/67 under B. Key factors during We will revise as suggested. implementation– “Insufficient allocation of IDA funds” Page 20/67 under B. Key factors during The delay in setting up Can Tho office was noted in AM of May 2013; delay in mobilizing consultants such M&E implementation – and IEMC etc. by MOC was noted in the AM of Sept 2014 (see procurement section) and reflected in the “Commitment, leadership procurement plans. and coordination” Page 21/67 under B. Key factors during We will revise as suggested. implementation – “Procurement Savings” Page 21/67 under B. Key This information was based on AMs/ISRs. The last statement about GOV intending to merge NUUP to NUDP was factors during based on interview with MOC officials during the ICR mission. implementation– “Operationalization of According to PAD, page 22, under Component 5, “The Component will develop the National Urban Upgrading the National Urban Strategy (prepared under VUUP and endorsed by the Prime Minister) into an operational National Urban Upgrading Program” Upgrading Program (NUUP). This TA will build on complementary support provided to the UDA through the Cities Alliance.” The AM of May 2013 indicated that two activities will be developed, including “a) development of a monitoring and evaluation framework and plan for NUUP; and b) drafting an implementation action plan for NUUP, including timing and budget.” The draft financing framework developed under CA grant dated Sept 2013 was a desk review and the project intended to develop that further into an operating framework. The delay in obtaining clarity and decision from MOC about this TA package, as well as delay in implementation were documented in AMs/ISRs, including the AM of May 2015, AM of MTR in Feb, 2016. Page 22/67 under A. Quality of monitoring and See response above. evaluation (M&E) - M&E Implementation Page 58 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) ANNEX 6. SUPPORTING DOCUMENTS (IF ANY) • Project Appraisal Document. World Bank. February 2012. • Financing Agreement. World Bank. May 2012. • Country Partnership Strategy for Vietnam 2007–2011. World Bank. February 2007. • Country Partnership Strategy for Vietnam 2012–2016. World Bank. November 2011. • Country Partnership Framework for Vietnam 2018-2022. World Bank. May 2017. • Aide Memoires (various). World Bank. 2012–2018. • Implementation Status Reports (various). World Bank. 2012–2018. • Restructuring Papers, 2017, 2018. • Vietnam 2035: Towards Prosperity, Creativity, Equity, and Democracy. World Bank and Ministry of Investment and Planning of Vietnam. 2016. • Borrower’s Project Completion Report - Mekong Delta Region Urban Upgrading Project. Adcom Consultant and Development Limited Company. December 2018. • Assessment of Urban Upgrading Interventions in Mekong Delta Region in Vietnam. World Bank. July 2018 • Semi-annual Monitoring and Evaluation report (various). Adcom Consultant and Development Limited Company. 2015–2018 • Independent Monitoring on Resettlement Action Plans and Ethnic Minorities Development Plan of Subproject in Can Tho, Rach Gia and Ca Mau. EPC Co., LTD and Invest Consult Group (various). 2015– 2018. • Independent Monitoring on Resettlement Action Plans and Ethnic Minorities Development Plan of Subproject in Cao Lanh, My Tho and Tra Vinh. EPC Co., LTD and Invest Consult Group (various). 2015– 2018 • Final Report of Independent Environmental Monitoring. Association of Investment and Environmental Protection Consultation Company EPC (EPC) and Investment Consultancy and Technology Transfer Company Limited (InvestConsult Group). December 2018. • Midterm Review for Mekong Delta Region Urban Upgrading Project. Adcom Consultant and Development Limited Company. March 2016 Page 59 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) • Final Report on Consultancy service for assistance in construction quality management. Thudo Water Environment and Infrastructure Joint Stock Company (Thudo Weico)—CEEN—Construction and Environmental Engineering Joint Stock Company. June 2018 Page 60 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) ANNEX 7. LAND ACQUISITION AND RESETTLEMENT 1. In all six participating cities, the project triggered safeguards related to involuntary resettlement (OP/BP 4.12). To address potential adverse impacts, the borrower developed an RPF for the project as a whole. Based on the RPF, RPs were prepared for each city. For each city, the RP was made publicly available in Vietnamese in all project-affected sites and the websites of participating cities on January 6, 2012. The English versions were sent to InfoShop in Washington, DC on January 17, 2012. 2. Resettlement implementation. All adversely affected persons, including informal settlers, were financially compensated for their losses at replacement cost and supported to maintain (or improve) the living standards and income-earning capacity that they enjoyed before the start of subproject construction. The project also provided special in-kind support to relocated households and vulnerable groups, such as providing vehicles to relocated households for moving to resettlement areas and assisting in arranging permits for housing construction and issuance of land and house certificates. The project conducted a large number of public consultations about land acquisition and resettlement, and the compensation plans were publicly disclosed in communal areas. Where involuntary resettlement was unavoidable, affected persons received an appropriate cash compensation with an option to buy a plot of land. In all six cities, resettlement sites were constructed in the early stages of project implementation, so that affected households could be relocated on time. If some sites were not ready to receive PAHs, the cities used their available sites to accommodate the PAHs’ needs or paid allowance for the PAHs to rent housing temporarily. This helped avoid delays in construction due to land clearance. During project implementation, about 3,558 serviced plots were developed for resettled households. Basic infrastructure services consisted of roads, drains, electricity supplies, public lighting, schools, and markets. In addition, all resettled households were supported with income restoration measures with the aim of enabling them to return to the living standards they enjoyed before resettlement. 3. Voluntary land donation. Land donations were carried out in all six cities with 10,213 PAHs donating about 16.7 ha of land. Independent monitoring consultants also confirmed that land donations were indeed voluntary and did not affect the PAHs’ livelihoods as most of the donated land was vacant or with yard and trees in front of the houses. 4. In each project city, a grievance system was established to address complaints of PAHs regarding all aspects of the land acquisition process, including compensation payments and resettlement issues. In total, the system collected and solved 934 out of 948 (99 percent) complaints as of December 18, 2018. 5. Resettlement impacts and the project policy objectives. At appraisal, it was anticipated that over 16,605 households would be affected. However, the total actual number of PAHs was 22,216 and the number of households that needed to be relocated was 2,825. Surveys undertaken by independent resettlement monitoring consultants confirmed that most of the PAHs were able to maintain or improve their pre-project living standards, so the project policy objectives were achieved. Page 61 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) Table 7.1. Resettlement Impact and Actual Land Acquisition and Resettlement Implementation Affected Actual Affected Actual Actual Area of Subproje Households Households (including Relocated Land Donated Resettlem ct According to RPs donated land Households Acquisition Area (m2) b ent Site b at Appraisala households)b b Area (ha) b Can Tho 2,916 5,719 308 5.56 23.25 17,919 Ca Mau 3,111 4,879 591 19.88 25.04 35,177 Cao Lanh 2,333 4,813 836 27.33 58.65 80,040 My Tho 2,077 3,004 269 7.52 9.6 7,477 Rach Gia 4,347 2,143 707 21.9 26.68 3,184 Tra Vinh 1,821 1,501 114 6.02 10.79 23,144 Total 16,605 22,216 2,825 88.2 154.01 166,941 Note: a. Independent Resettlement Monitoring Report August 2018. b. Aide Memoire December 2018. Table 7.2. Appraisal and Actual Costs of Land Acquisition and Resettlement Estimated Cost at Appraisal City Actual cost (VND, billions) (VND, billions) Can Tho 398.9 577.0 Ca Mau 311.6 339.6 Cao Lanh 335.9 499.2 My Tho 269.3 438.6 Rach Gia 323.7 385.2 Tra Vinh 134.2 114.1 Total 1,773.6 2,353.7 Page 62 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) ANNEX 8. RESULTS STORIES 1. To capture the project results, two field works were carried out in the last year of project implementation in 2018 (a) a qualitative assessment conducted by the World Bank in Tra Vinh and Can Tho in March 2018, including 10 focus group discussions with beneficiaries in six project LIAs and one nonproject LIA, 26 in-depth interviews with beneficiaries and 16 interviews with nonproject LIA residents, and interviews with local authorities and real estate agents, and (b) an end line survey conducted by the MoC’s M&E consultants in six project cities in November 2018, including 85 in-depth interviews, 42 focus group discussions, and 700 questionnaires for beneficiaries in 29 LIAs. Boxes 8.1–8.4 highlight some of the results stories that emerged from these field works. Box 8.1. New School in Tra Vinh City Playground, Classroom, Library and English The Tran Quoc Tuan Secondary School (Tra Vinh City) Classroom of Tran Quoc Tuan School was built with a total investment of VND 20 billion (US$0.86 million). The school conforms to national standards, with 12 classrooms and functional rooms (library; canteen; classrooms for physics, chemistry, English, and computer science; and so on). The English rooms are well equipped with advanced facilities. The school opened in 2017-/18 school year with 20 classes (from grade 6 to 9) with 779 students. The school helped resolve the ‘overload’ situation for Ly Tu Trong Secondary School in the neighboring area. Beneficiaries are both LIA and non-LIA families, and the operation of Tran Quoc Tuan school has generated a great social impact. Source: Interview with the school management. Box 8.2. Poor Households with Newly Upgraded Roads See Improved Livelihoods in Can Tho City Motorbike repair shop. This family has two members—a 70-year-old father and a disabled son. The father used to be a motorbike rider who provided transportation services; the income was very low (VND 40,000–50,000 per day, equivalent to US$2 per day) and unstable. The family sometimes relied on material and financial support from their neighbors. When Alley 42 was upgraded to a 20 m road, he invested VND 10 million (US$450) to open a motorbike repair shop right at his doorstep. Now, his average income is VND 120,000 per day (US$5 per day) and is much more stable. The family no longer needs financial support from the neighbors. Construction materials shop. After Alley 42 was upgraded to a 20-meter-wide road, a new business selling construction materials was started by a man who used to ride a three-wheeled motorbike as the main livelihood. The picture is his storage and business place on Alley 42 that large trucks can access easily to deliver supplies. Page 63 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) Source: Interview with the owner. Box 8.3. Thanh Loi Private Enterprise in Tra Vinh City Expanded its Business Owing to Better Transportation Resulting from Alley Upgrading This business has been operating for over 25 years. The main products include chili, spicy condiments, and bottled syrup. Its main markets are in Tra Vinh Province and five neighboring provinces in Mekong Delta. Significant growth of Thanh Loi’s business started in 2013, when Alley 51 was upgraded. With regard to the means of transportation, Thanh Loi used to hire employees to ride motorcycles to carry raw materials and final products to main roads as the trucks were not able to access their workshop. Now trucks can be used to deliver goods directly to and from the workshop. As a result, the volume of raw materials used has doubled and Thanh Loi invested VND 500 million to install new machines and expanded production line to increase production capacity in 2017. In addition, Thanh Loi successfully raised VND 150 million provided by Tra Vinh City Industry Extension Center. Recently, Thanh Loi invested over VND 1 billion to build a new warehouse and workshop with a total area of 500 m2 and hired seven to eight employees to work on a full-time basis. Its revenue has doubled since Alley 51 was upgraded. Pictures show their products, new machines installed in 2017, and a newly constructed workshop for seven to eight workers. Source: Interview with the owner. Page 64 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) Box 8.4. Phat Trang Private Enterprise in Can Tho City Located on Võ Tanh Road are dozens of agro-product traders, among which Phat Trang is one of the biggest. Võ Tanh Road was upgraded under the MDR-UUP and became a main road critical to economic activities. In the past, traders transported agro-products by small trucks through Võ Tanh Road (and other main roads in the neighboring area). Before the project’s intervention, Võ Tanh Road was seriously degraded. At the end of the road, there was a serious landslide, which resulted in very slow transportation. Many traders reported a downward trend in doing business, and hence their employees, who were mostly local people, were affected in terms of employment and income. Once the road was upgraded, large trucks could access Võ Tanh Road easily. This has enabled traders to expand their businesses and create more jobs. Table 8.1 summarizes some positive changes of Phat Trang Private Enterprise. Table 8.1. Positive Changes of Phat Trang Private Enterprise Significant Changes Before Võ Tanh Road was After Upgraded Volume (per day) 10 tons of fruits 14–15 tons of fruits (increased by 40 percent to 50 percent) Labor 10–12 workers (100 percent were 20 workers (100 percent are male; 70 male; 70 percent were the local percent are local); salary/worker: VND 12 people) million/month, increased gradually Means of Smaller trucks and fewer vehicles per Larger trucks which are easier to load thus transportation trading partners (corresponding to attracting more trading daily transaction volume) partners/wholesalers Tax Contribution 5 years ago, quarterly tax was around Quarterly tax in 2018 is around VND 2 VND 0.5 million million Source: Interview with the owner. Page 65 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) ANNEX 9. PHOTOS OF PROJECT RESULTS Component 1: Tertiary Infrastructure Upgrading in Low Income Areas Alley 51, 3/2 Road in Can Tho Before After Alley 42, LIA 27 in Can Tho Before After Alley in LIA 6 in Cao Lanh Before After Page 66 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) Alley 239 of D1 Road of LIA 1 in Ca Mau Before After D3 road of LIA 1 in Ca Mau Before After Alley in Ward 8 after Upgrading in My Tho Page 67 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) Upgraded Alley in LIA 16 and 17 in My Tho Alley in LIA 2 in Rach Gia Before After Alley in Tra Vinh Before After Page 68 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) Component 2: Supporting Primary and Secondary Infrastructure Vanh Dai B Road in Can Tho Before After Road and Hoa Dong Bride in Cao Lanh Before After Page 69 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) Cao Lanh River Embankment Before After Thien An Bridge in Rach Gia Before After Tran Hung Dao Embankment in Rach Gia Before After Page 70 of 71 The World Bank Mekong Delta Region Urban Upgrading Project (P113904) Kindergarten in Tra Vinh (left) and Elementary school in My Tho (right) Parks in Cao Lanh (left) and Rach Gia (right) Component 3: Resettlement Sites Resettlement Area in Rach Gia Page 71 of 71