World Bank transport program in Vietnam

1. World Bank transport program in Vietnam Transport Sector World Bank, Hanoi, Vietnam

2. Transport program in Vietnam • Overview • Changing Program Objectives • Present status of program • Future directions

3. Overview • Why transport? • Key issue for foreign investors: Poor Quality and Lack of Capacity of Transport Infrastructure • Poverty Reduction: Improvements to rural infrastructure have directly reduced poverty • Economic Growth: High levels of public investments required to support rapid growth • The Program. • Program is about $1 billion of projects under implementation and $ 1 billion of projects under preparation • The program is growing and Vietnam is the only country in EAP where Bank budgets are increasing • Vietnam is moving from IDA to IBRD status as a result the WB is increasing its support to large scale infrastructure projects

4. Changing Program Objectives • Reconnection • In the ’90s projects supported the need to reinstate the main transport links, particularly national roads. This work is largely completed. • Integration • The focus of projects started to move beyond ‘emergency works’ towards building sustainable transport networks. This work is still ongoing. • Expansion • With over 10 years of high growth, the capacity of the transport network is inadequate.

5. Projects under Implementation [1] AS of January15, 2010

6. Projects under implementation • Issues: • WB program suffers from slow disbursement progress. • Disbursements are low for up to 2 years on approval. There is a need for the identification of funding, and the timely preparation of projects. • Provincial projects are increasingly decentralized which increases the complexity and capacity building is key • According to WB guidelines we cannot use dependent SOE consultants and contractors. Therefore we need to work closely with the emerging private sector and capacity building is key. • Most projects require substantial resettlement activity which is expensive and time consuming

7. Projects under preparation • Road Network Improvement Project (Additional Financing) (FY11) – US$ 230m • Da Nang-Quang Ngai Expressway (FY11) – IBRD US$500m/IDA US$70m: First transport IDA/IBRD blended operation. • Haiphong Urban Transport (FY11) - US$150-175 m • Third Rural Transport AF (FY11) – US$50m • Project Preparation Facility (FY10) – US$75m

8. Projects under preparation • Issues: • WB used to prepare projects using PHRD grant but this is no longer available • All preparation work is government executed typically using government and/or grant finance • Limitations of existing institutional and capacity terms of identifying, planning, and implementing projects. • Institutional arrangements to bring together planning, implementation, and operation of assets needs to be improved • Need to widen sources of funding, possibilities for PPP type arrangements in transport projects

9. Policy and Strategy work Bank Budget • Vietnam Expressway Investment Strategy – implementation to commence in FY10 • Infrastructure finance – Looks at different financing options, in particular PPP, for infrastructure development Infrastructure for Growth Trust Fund (AusAID) • State-Owned Enterprise and Construction Industry Review (US$125,000) • Preparation work for Danang to Quang Ngai Expressway (US$350,000) • Monitoring and evaluation study for two multi-modal transport projects (US$100,000) • International Road Assessment Program (iRAP Vietnam) (US$ 400,000) • Urban Transport in Medium Cities (US$150,000)

10. Policy and strategy work Infrastructure Policy & Sector Support Trust Fund (DFID) • Rural Transport Support – US$250,000 • Transport Sector Support – US$300,000 • Infrastructure policy and research activities – US$275,000

11. Thank you!