The World Bank Can Tho Urban Development and Resilience (P152851) REPORT NO.: RES45194 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF CAN THO URBAN DEVELOPMENT AND RESILIENCE APPROVED ON MARCH 24, 2016 TO THE SOCIALIST REPUBLIC OF VIETNAM URBAN, RESILIENCE AND LAND EAST ASIA AND PACIFIC Regional Vice President: Victoria Kwakwa Country Director: Carolyn Turk Regional Director: Benoit Bosquet Practice Manager/Manager: Francis Ghesquiere Task Team Leader(s): Marc S. Forni, Mansha Chen, Vinh Quang Nguyen The World Bank Can Tho Urban Development and Resilience (P152851) I. BASIC DATA Product Information Project ID Financing Instrument P152851 Investment Project Financing Original EA Category Current EA Category Full Assessment (A) Full Assessment (A) Approval Date Current Closing Date 24-Mar-2016 30-Jun-2022 Organizations Borrower Responsible Agency The Socialist Republic of Vietnam Can Tho City People’s Committee,Can Tho ODA PMU Project Development Objective (PDO) Original PDO The Project Development Objective is to reduce flood risk in the urban core area, improve connectivity between the city center and the new low risk urban growth areas, and enhance the capacity of city authorities to manage disaster risk in Can Tho City. Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-85980 24-Mar-2016 11-Jul-2016 30-Nov-2016 30-Jun-2022 125.00 10.15 114.85 IDA-57790 24-Mar-2016 11-Jul-2016 30-Nov-2016 30-Jun-2022 125.00 59.35 70.02 TF-A3723 29-Sep-2017 29-Sep-2017 29-Sep-2017 30-Jun-2021 2.00 1.55 .45 The World Bank Can Tho Urban Development and Resilience (P152851) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No II. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES 1. The objective of the Can Tho Urban Development and Resilience Project (CTUDRP) is to reduce flood risk in the urban core area, improve connectivity between the city center and the new low risk urban growth areas, and enhance the capacity of city authorities to manage disaster risk in Can Tho City. The project is composed of three components: (i) Flood risk management and environmental sanitation, (ii) Urban corridor development, and (iii) Spatial planning platform and financial and social protection instruments. It is financed by a US$125 million IBRD loan, a US$125 million IDA Credit, US$62 million counterpart funds, and a US$4 million Recipient-Executed Trust Fund from the Switzerland State Secretariat for Economic Affairs (SECO, US$2 million of that allocated to date). The SECO grant supports Technical Assistance (TA) activities under the three components that are complementary to the physical investment of components 1 and 2 and aim to enhance the City’s capacity to manage urban development in a risk informed context, thereby reinforcing its physical, financial, and social resilience to climate induced hazards. While the IBRD loan and IDA credits’ closing date is June 30, 2022 (the project’s closing date), the SECO TF’s closing date is June 30, 2021. 2. The key TA activities that the project finances are: (i) development of a Flood Risk Management Information System (FRMIS) for the City; (ii) establishment of a Spatial Data Infrastructure (SDI) platform to serve as a central repository to all relevant geospatial data for the purpose of spatial planning, infrastructure development, and operations and maintenance; (iii) development of a public transport feasibility study and strategy; and (iv) establishment of a Disaster Responsive Safety Net System (DRSN) program to ensure financial resources are available to households recovering from flood events. 3. The project has experienced implementation delays since its effectiveness in September 2017 due to: (i) weak technical and operational capacity of the Project Management Unit (PMU), particularly in project management, coordination, and supervision of contracts; (ii) slow site clearance and compensation processes due to insufficient allocation of counterpart funds, exacerbated by an increased need for land acquisition for resettlement and compensation due to design changes; and (iii) a need to revise and re-approve the Project Investment Policy (PIP), Basic Design, and Feasibility Study (FS) due to changes to the technical design of a limited number of drainage investment packages. As a result, most project results are behind target and the project is rated MU for both PDO Achievement and Overall Implementation Progress. Most of the TA activities are also behind due to the above challenges as well as cumbersome planning, budgeting, and approval procedures of the grant-financed activities. Consequently, the Trust Fund is 38.7% disbursed with lower than planned achievement of measured targets as follows:  PDO Indicator 3: Number of departments utilized Spatial Planning and Risk Information Platform: the target is 7 and the result is presently 0.  Intermediate Result Indicator (IRI) 6: Public Transport feasibility and strategy completed: the feasibility study is completed, and the priority smart transport and traffic management for improvement is underway.  IRI 7: Spatial Planning and Risk Information Platform established: the platform is yet to be established.  IRI 8: Beneficiaries of community-based flood risk management training: training has not yet taken place. The World Bank Can Tho Urban Development and Resilience (P152851)  IRI 9: Participants in consultation activities during project implementation: The target is 2,500 participants, of which 1,250 of female. The implementation of both civil works under Component 1 and 2, and this RETF under component 3 has involved consultations with various cities’ agencies, local authorities, and communities. However, the result has not been updated yet, and will be updated in the next mission in July 2021. 4. In terms of fiduciary performance, environmental and social safeguards compliance is rated Moderately Satisfactory due to the slow pace of land acquisition. Financial management and procurement are rated Moderately Satisfactory; there are no outstanding audit reports or Interim Unaudited Financial Reports; and all the legal covenants of the project are complied with. The overall risk to the PDO is assessed as Substantial due to the risk of incompletion of key drainage works in absence of a project extension. To mitigate this risk, the PMU and CPC are currently processing a 23-month project extension. 5. The objective of this restructuring is to extend the closing date of the SECO-funded Recipient Executed Trust Fund (TF0A3723) by one year, from June 30, 2021 to June 30, 2022 to align its implementation period with that of the IBRD loan and IDA credits and the project’s closing date. The Proposed Deadline for Withdrawal Applications is October 30, 2022. The extension would allow the client to continue implementing the key TA activities until the broader restructuring of the project is processed, including an extension of the project’s closing date and adjustments to the results framework in view of recent downscaling of flood protection investments. 6. This level 2 restructuring is in response to a request for the extension of closing date of the SECO TF grant sent from the Ministry of Finance on June 10, 2021. This will be the first restructuring of the project. The streamlining of TA activities and implementation arrangements into the project’s work plan, procurement plan, and budget for the coming year will be done at the operational level. 7. Both the PDO and TA activities in specific remain highly relevant to, and a priority of the city of Can Tho. As a major actor in the Mekong Delta region, Can Tho has a strategic role in promoting food security in the Delta, and concentration of industries, educational institutions, and health facilities. The recent dynamic growth of the City revealed multiple threats to its sustainable development that are primarily caused by seasonal flooding, sea-level rise, land subsidence, and rapid urbanization. The Mekong Delta Master Plan, which is expected to be approved by Central Government in 2021, calls for sustainable and resilient development of the Mekong Delta as a whole and cities in particular. Moreover, the Central Government has set up an ambitious digital economy program, of which smart cities is the core in the coming years. The TA program is a set of inter-linked activities that aim to build the foundation of a smart city. The project is also relevant to the World Bank Country Partnership Strategy (CPS) for Vietnam (2021–2026) which is under preparation, and contributes directly Resilient and Efficient Urbanization under the Urbanization & Regional Development Pillar, and to Digital Transformation under the Innovation Driven Growth Pillar. 8. In parallel to this restructuring, the Client is committed to prioritizing, streamlining, and increasing the sustainability impact of the TA activities during the extended implementation period. It has been agreed with the Can Tho City Peoples’ Committee (CPC), line departments and the PMU to (i) immediate strengthen the capacity of the PMU in project management, coordination and supervision, as well as provide necessary technical guidance to consultants; (ii) streamline implementation procedures to expedite implementation and disbursements, and (iii) pay increased attention to the sustainability of project activities during the remaining period. III. DETAILED CHANGES The World Bank Can Tho Urban Development and Resilience (P152851) LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications IBRD-85980 Effective 30-Jun-2022 30-Jun-2022 30-Oct-2022 IDA-57790 Effective 30-Jun-2022 30-Jun-2022 30-Oct-2022 TF-A3723 Effective 30-Jun-2021 30-Jun-2022 30-Oct-2022