Irrigation and Flood Protection Rehabilitation Project in the Socialist Republic of Viet Nam

8/2/2019 Irrigation and Flood Protection Rehabilitation Project in the Socialist Republic of Viet Nam

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P

roject Performance Audit Report

PPA:VIE 25019

Irrigation and Flood ProtectionRehabilitation Project(Loan 1259-VIE[SF])in Viet Nam

September 2005

Operations Evaluation Department

Asian Development Bank


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CURRENCY EQUIVALENTS

Currency Unit dong (D)

At Appraisal At Project Completion At Operations Evaluation(August 1993) (December 2001) (April 2005)

D1,000 = $0.0943 $0.0662 $0.06317$1.00 = D10,600 D15,104 D15,830

ABBREVIATIONS

ADB Asian Development BankADTA advisory technical assistanceBME benefit monitoring and evaluationCPO Central Project OfficeDDMFC Department of Dike Management and Flood ControlDWR Department of Water ResourcesEA executing agencyEIRR economic internal rate of return

ha hectareIMC irrigation management companyISF irrigation service feekm kilometerkWh kilowatt-hourm meterm3 cubic meterMARD Ministry of Agriculture and Rural DevelopmentNNAIC North Nghe An Irrigation CompanyO&M operation and maintenanceOEM operations evaluation missionPCR project completion report

PIM participatory irrigation managementPPAR project performance audit reportPPTA project preparatory technical assistanceSCIC Song Chu Irrigation CompanySDR special drawing rightsSPO subproject officeTA technical assistanceVRM Viet Nam Resident Mission of ADBVSL value of statistical lifeWUA/C water user association/cooperativeWUO water user organization

NOTES(i) The fiscal year (FY) of the Government ends on 31 December.

(ii) In this report, "$" refers to US dollars.

Director General, Operations Evaluation Department : Bruce MurrayDirector, Operations Evaluation Division 1 : R. Keith LeonardEvaluation Team Leader : Toshio Kondo

Operations Evaluation Department, PE-666


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CONTENTSPage

BASIC DATA iii

EXECUTIVE SUMMARY v

MAP ix

I. BACKGROUND 1A. Rationale, Formulation, Purpose, and Outputs 1B. Cost, Financing, and Executing Arrangements 1C. Completion and Self-Evaluation 1D. OED Evaluation 2

II. PLANNING AND IMPLEMENTATION PERFORMANCE 2A. Formulation and Design 2B. Cost and Scheduling 3C. Consultants Performance, Procurement, and Construction 3D. Organization and Management 4

III. ACHIEVEMENT OF PROJECT PURPOSES 5A. Operational Performance 5B. Performance of Operating Entities 8C. Economic Reevaluation 8D. Sustainability 9

IV. ACHIEVEMENT OF OTHER DEVELOPMENT IMPACTS 9A. Socioeconomic and Poverty Reduction Impacts 9B. Environmental Impact 10C. Impact on Institutions and Policy 11

V. OVERALL ASSESSMENT 11A. Relevance 11B. Efficacy 12C. Efficiency 12D. Sustainability 13E. Institutional Development and Other Impacts 13F. Overall Project Rating 14G. Assessment of ADB and Borrower Performance 14

Toshio Kondo, senior evaluation specialist (team leader), was responsible for the preparation ofthis report; conducted document reviews and key informant interviews; and guided fieldworkundertaken by Jonathan Cook, Tran van Phuc, and Bui Quoc Tuan (staff consultants).

This report observed the guidelines formally adopted by the operations evaluation departmenton avoiding conflict of interest in independent evaluations. To the knowledge of the operationsevaluation department management, there were no conflicts of interest of the people preparing,reviewing, or approving this report.


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VI. ISSUES, LESSONS, AND FOLLOW-UP ACTIONS 14A. Key Issues for the Future 14B. Lessons Identified 16C. Follow-Up Actions 17

APPENDIXES1. Project-Related Data and Statistics 182. Irrigation and Dike Infrastructure 213. Socioeconomics, Poverty, and Participatory Irrigation Management 304. Crop Area Production and Yield 345. Economic Reevaluation 386. Other Statistics 59

SUPPLEMENTARY APPENDIX (available upon request)

Floods Since 1900

Attachment(s): Management Response on the Project Performance Audit Report for theIrrigation and Flood Protection Rehabilitation Project (Loan 1259-VIE[SF])


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BASIC DATAIrrigation and Flood Protection Rehabilitation Project (Loan 1259-VIE[SF])

Project Preparation/Institution Building

TA No. TA Project Name Type Person-Months Amount

($000)

Approval Date

1968 Operation and MaintenanceStrengthening

ADTA 57 1,800 26 Oct 1993

2869 Operation and Maintenance ADTA 33 150 16 Sep 1997Development in the IrrigationSector

3064 Strengthening of ResettlementManagement Capacity in theMinistry of Agriculture andRural Development

ADTA 12 150 4 Sep 1998

Key Project Data ($ million)

As per ADB LoanDocuments Actual

Total Project Cost 95.6 87.5Foreign Currency Cost 37.5 29.5Local Currency Cost 58.1 58.0

ADB Loan Amount/Utilization1

76.5 66.2ADB Loan Amount/Cancellation

17.1

Key Dates Expected ActualFact-finding 726 Sep 1992Appraisal 28 Feb21 Mar 1993Loan Negotiations 5 Oct 1993Board Approval 26 Oct 1993Loan Agreement 30 Oct 1993Loan Effectiveness 28 Jan 1994 28 Mar 1994Project Completion 30 Jun 1998 30 Jun 2001Loan Closing 31 Dec 1998 8 Apr 2003Months (Effectiveness to Completion) 53 87

Economic Internal Rates of Return (%) Appraisal PCR2

PPAROverall 39.9 36.8 22.7Hanoi 53.5 62.6 35.7Song Chu 13.9 6.4 12.9North Nghe An 22.0 8.4 11.8

Borrower Socialist Republic of Viet Nam

Executing Agency Ministry of Water Resources3

ADB = Asian Development Bank, ADTA = advisory technical assistance, PCR = project completion report, PPAR =project performance audit report, TA = technical assistance.1

The loan was equivalent to special drawing rights (SDR) 54,370,000 at the time of approval. Net loan amount wasequivalent to SDR49,011,502.92 at the time of loan closing. Total cancellations amounted to SDR5,358,497.

2Reflects case B analysis which did not consider the probable failure of the two irrigation systems. In comparison,case A benefits included avoided production losses caused by the possible failure of the two irrigation subprojects.Under case A, the overall economic internal rate of return was estimated at 37.4% at project completion(compared with 41.5% at appraisal), Song Chu at 7.3% (15.9% at appraisal), and North Nghe An at 9.5% (25.9%at appraisal).

3Restructured in December 1995 to form the Ministry of Agriculture and Rural Development.


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Mission Data

Type of Mission No. of Missions Person-DaysFact-Finding 1 120Appraisal 1 169Inception 1 21

Project AdministrationReview

4 77Special Project Administration

7 91

Midterm Review

1 36Project Completion 1 58

Operations Evaluation4

1 52

4The Operations Evaluation Mission comprised Toshio Kondo, Senior Evaluation Specialist (Mission Leader);Jonathan Cook (international consultant); and Tran Van Phuc and Bui Quoc Tuan (domestic consultants).


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EXECUTIVE SUMMARY

Irrigation and flood protection infrastructure in northern Viet Nam was old and oftendilapidated when the project was formulated in the early 1990s. The Hanoi dike and the twomain irrigation schemes proposed for rehabilitation risked failure of major structures, whichwould cause significant economic and social disruption. Government policies at the time

including the major economic renovation program, doi moi, initiated between 1986 and 1989supported increased agricultural production. The Asian Development Banks (ADB) 1993 interimoperational strategy concentrated on four areas, including the rehabilitation and development ofphysical infrastructure, which became the main focus of the Project.

The Projects objective was to rehabilitate 45 kilometers of the Hanoi dike and twoirrigation systems (Song Chu and North Nghe An) with an irrigated area of 80,000 hectares (ha)in North Central region. The Projects purpose was to avoid loss of life and mitigate economicloss in case of flooding caused by dike failure. Project investment would result in sustainedpaddy (unhusked rice) production of 440,000 tons (t) on 80,000 ha for the Song Chu and NorthNghe An irrigation schemes. Project objectives were not well defined, partly reflecting lack ofdetailed project preparation.

Project cost was estimated at $96 million. In addition, grant-funded advisory technicalassistance of $1.8 million was planned to strengthen operation and maintenance (O&M). TheProject was executed by the Ministry of Water Resources, the predecessor of the Ministry ofAgriculture and Rural Development. The Project was approved in October 1993 and completedin June 2001.

The irrigation subprojects focused on restoring damaged infrastructure to its originalstate. The emergency irrigation rehabilitation was designed from an engineering perspectiveonly, i.e., without assessment of institutional factors, in part due to the perceived need tocomplete the subprojects quickly without project preparatory technical assistance.

Rehabilitation of the Hanoi dike improved it substantially and it is now well maintained.While dike rehabilitation had neutral to positive environmental impact, the environment is a keyfactor in the dikes performance and long-term stability. In particular, this relates to likely floodlevels, and the level of construction that occurs in the floodplain. Both irrigation schemes wererehabilitated as planned. All rehabilitated structures are performing as expected with littledeterioration.

Crop yields increased over the project period by an average of 5% per year. Averagespring paddy yields now exceed 6 tons per hectare (t/ha), up from around 4 t/ha in 1994. TheProject has contributed to these gains, but only as one of many factors, which include improvedland security, varieties, and input availability. Average household cash income is estimated tohave increased by 145% over the project period, and 97% of respondents considered improved

water supplies to be an important contributing factor.1

The direct socioeconomic benefits of the Hanoi dike rehabilitation are threefold:

(i) increased sense of security and well-being derived from a sound dike system, (ii) stimulationof investment due to improved flood security, and (iii) transport benefits resulting from concreteddike road systems. The main impacts of the irrigation systems are increased water supply at theheadworks and distribution through secondary canals. This has allowed a significant increase in

1Small-scale Operations Evaluation Mission (OEM) survey.


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the areas fully irrigated, though less than anticipated at appraisal. The Projectsupported by atertiary canal upgrading programhas reduced time spent on manual water lifting and releasedtime for other activities.

The Project is assessed as relevant. The technical solution for Hanoi dike rehabilitationhas become a model for dike systems on many other rivers. The Project contributed to this but

did not adequately plan for road needsalmost all the road length has been rebuilt or is likely tobe rebuilt in the near futureresulting in waste of resources. Rehabilitation of the two coreirrigation subprojects was relevant at the time of design, in accordance with the GovernmentsThird Five-Year Plan (19911995), which placed emphasis on expanding irrigated agriculturalproduction. The Project would have been more relevant if it had taken a broader andparticipatory approach to irrigation development, even under the urgent project preparationsituation in 1993. However, it achieved its purposethe Hanoi dike rehabilitation increasedHanois security and is likely to prevent future dike breaches and ensuing damage and loss oflife, in almost all flood conditions.

The purpose of the irrigation subprojects was to provide reliable and increased irrigationwater to the two schemes, and achieve sustained paddy production of 440,000 t per year. This

target has been substantially exceeded, with production from the schemes reaching about730,000 t in 2004 based on irrigation company data. Household cash income in 2004 averagedD15 million in Song Chu and D13 million in North Nghe An, an average increase of 145% in realterms over the project period. In addition to project investments, the lining of tertiary canalsunder local budget has made a significant contribution to improved water management andscheme performance. The Project is assessed as efficacious.

Efficiency of implementation was satisfactory. All targets were met, despite delays due tolack of familiarity with ADB procedures and the limited construction period dictated by theirrigation calendar. Economic internal rate of return (EIRR) for the Hanoi dike subproject isestimated at around 35% (based on updated appraisal estimates of damage, but assuming thatno break in the dike would have occurred during floods of 12 meters or less, and making

allowance for reduction in deaths). This level does not include benefits resulting from inducedinvestment inside the dike or time savings by Hanoi residents due to road upgrading. EIRR forthe core irrigation subprojects is estimated at around 12%. EIRR is higher than estimated by theproject completion report due to the inclusion of labor savings resulting from the Project,reduced O&M costs, and post-project investment in tertiary canal upgrading (also taken intoaccount in economic assessment). Overall, the Project is rated efficient.

The Hanoi dike subproject is expected to be sustainable as the dike is too important toHanoi for the peoples committees to allow it to deteriorate and threaten its integrity. However,further support is needed to clean up and maintain the northern Ha Tay section, and care isrequired in the further development of the Red River floodplain. The irrigation schemes havesome problems because of the loss of tertiary gates and underfunded maintenance on

unrehabilitated secondary canals. However, irrigation management companies, irrigationenterprises/clusters, agricultural cooperatives, irrigation groups, and farmers are trying tomaintain their irrigation infrastructure. The rapid expansion of the rehabilitated secondary andtertiary canal network under local budget is notable. Overall, project sustainability is rated aslikely. Institutional impact has been moderate due to the Projects focus on urgent physicalrehabilitation.


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Overall the Project is rated successful. This is higher than the project completion reportrating of partly successful mainly to improved irrigation scheme economic performance, basedon O&M time and cost savings identified in post-completion surveys.

Key issues for the future include (i) the need for improved environmental managementon irrigation schemes, and (ii) defining systems to extend participatory irrigation management

(PIM). The irrigation schemes main environmental problem is the use of canals as a convenientrubbish disposal system. This is particularly severe where canals pass through villages withoutalternative disposal options. Regular rubbish removal by irrigation companies encouragesvillagers to continue to dispose of their rubbish in the canal. The Song Chu Irrigation Companyis aware of the problem and is seeking ways to address it.

Following a long assessment period, the Government is now moving to promote PIM.Ways need to be found to manage secondary or intercommune tertiary level canals asintegrated hydraulic systems rather than on the current political (commune boundary) basis.

The main lesson that can be drawn from the project experience is the desirability of aholistic approach to irrigation scheme upgrading and development. This would assess the need

for lower level irrigation and drainage system upgrading as well as headworks and main systemwork often financed by multilateral lending institutions. Thus, the approach should define lower-level requirements at the outset and outline a program to address the most critical constraints.This would allow irrigation scheme upgrading to proceed in an ordered and participatorymanner, rather than the ad hoc, top-down approach dictated by the project design.

This study suggests that (i) rehabilitation of secondary structures should be completedby the irrigation management companies, (ii) guidelines for tertiary canal upgrading should bedeveloped, (iii) systems should be defined to encourage ownership of irrigation assets byfarmers/villagers and thus reduce theft of gates, and (iv) PIM on hydraulic boundaries should beextended to all canals.

Bruce MurrayDirector GeneralOperations Evaluation Department


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I. BACKGROUND

A. Rationale, Formulation, Purpose, and Outputs

1. Irrigation and flood protection infrastructure in northern Viet Nam was old and oftendilapidated when the project was formulated in the early 1990s. The Hanoi dike and the two

main irrigation schemes proposed for rehabilitation risked major structural failure, which wouldcause significant economic and social disruption and, for Hanoi dike, loss of life. Governmentpolicies at the timeincluding the major economic renovation program, doi moi, initiatedbetween 1986 and 1989supported increased agricultural production. The Asian DevelopmentBanks (ADB) 1993 interim operational strategy concentrated on four areas, including therehabilitation and development of physical infrastructure, which became the main focus of theProject.

2. The Projects objective was to rehabilitate 45 kilometers (km) of the Hanoi dike and twoirrigation systems (Song Chu and North Nghe An) with an irrigated area of 80,000 hectares (ha)in North Central region. The Projects purpose was not specified but, for the Hanoi dike, it was toavoid loss of life and mitigate economic loss in case of flooding caused by dike failure. For the

Song Chu and North Nghe An irrigation schemes, project investment was intended to sustainagricultural production and other economic activities of the population (Report andRecommendation of the President [RRP] para. 28).1 It was expected that the Project would resultin sustained paddy (unhusked rice) production of 440,000 tons (t) on 80,000 ha compared with apre-project level of 370,000 t. Project objectives were not well defined, partly reflecting lack ofdetailed project preparation.2 Cost savings under the Project were applied to extending theHanoi dike rehabilitation by 16 km, and rehabilitating four small to medium irrigation schemesdamaged by severe floods in 1999 in Quang Binh and Quang Tri provinces.

B. Cost, Financing, and Executing Arrangements

3. Project cost was budgeted at $96 million of which $31 million was for Hanoi dike civil

works, the main project investment (Appendix 1, Table A1.1). The ADB loan of $76.5 millionwould cover foreign exchange costs of $38 million and part of local costs. In addition, grant-funded advisory technical assistance (ADTA) of $1.8 million was planned to strengthen irrigationoperation and maintenance (O&M).3 The Project was executed by the Ministry of WaterResources, the predecessor of the Ministry of Agriculture and Rural Development (MARD),through its Central Project Office (CPO) established for the purpose, and three sub-projectoffices (SPOs) responsible for monitoring and construction supervision of the three maincomponents. The loan was approved in October 1993 and became effective in March 1994.

C. Completion and Self-Evaluation

4. The Project was completed in June 2001, 3 years behind schedule. A project completion

report (PCR) was prepared by the Loan Consultants in November 2001, providing informationdrawn from the final benefit monitoring and evaluation (BME) report. The Projects self

1ADB. 1993. Report and Recommendation of the President to the Board of Directors on a Proposed Loan andTechnical Assistance Grant to the Socialist Republic of Viet Nam for the Irrigation and Flood ProtectionRehabilitation Project. Manila

2The Project was prepared without a project preparation technical assistance (PPTA) on the assumption that theExecuting Agency (EA) was ready to undertake the Project.

3ADB. 1993. Technical Assistance to the Socialist Republic of Viet Nam for Operation and MaintenanceStrengthening. Manila. (TA 1968-VIE, for $1.8 million, approved on 26 October 1993).


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assessment was conducted by Mekong Department in September 2003 and the ADB PCR waspublished in July 2004. The PCR concluded that the Hanoi dike subproject was highlysuccessful, whereas the irrigation subprojects were less successful due to the partial approachto rehabilitation adopted. The PCR was comprehensive and analytical, Overall, the Project wasrated partly successful.

D. OED Evaluation

5. This project performance audit report (PPAR) presents the findings of an operationsevaluation mission (OEM) that visited Viet Nam AprilMay 2005. It is based on a review of thePCR, Report and Recommendation of the President, BME reports, project records, discussionswith farmers and farmers leaders, as well as discussions with implementing agencies,, ADBstaff, and relevant government agencies. The PPAR assesses the Project's efficiency andeffectiveness in achieving its objectives and generating sustainable benefits. This reportincorporates comments received from reviewers on an earlier draft.

II. PLANNING AND IMPLEMENTATION PERFORMANCE

A. Formulation and Design

6. Formulation was based on French consultants studies of the irrigation schemes, followedby local engineers feasibility studies. Preliminary work on the Hanoi dike was undertaken byAustralian consultants in 1992 and early 1993. The irrigation subprojects focused on restoringdamaged infrastructure to its original design operating performance. The engineeringassessments were considered adequate for design. The loan project was designed by a 10-person, 3-week appraisal mission in March 1993. The lack of a project preparatory technicalassistance (PPTA) may have limited a holistic design approach. As stated in PCR (para. 77), thelargely engineering approach was partly due to the perceived need to complete the subprojectsquickly and failed to address key constraints facing irrigators. The lack of a PPTA reflectedMARDs belief in the urgency of rehabilitation combined with ADBs wish to be the first

multilateral agency to commence a project in Viet Nam following the resumption of lending.

7. Engineering design was mainly undertaken by Hydraulic Engineering Consultants, apartfrom the Bai Thuong Diversion and design of treatment for the Hanoi dike foundation, whichwere undertaken by international consultants. In other areas, technical design was generallystraightforward, since it focused on rehabilitating existing infrastructure. In some cases,innovative solutions were developed, such as the bypass tunnel in the North Nghe An maincanal, which improved maintainability and provided increased irrigation water supply.4 Asignificant design issue was the failure to develop access roads along the canals, preventingvehicle access to many sections of primary and secondary canals. Design of the Hanoi dike wassound, and has led to a significantly stronger dike with less encroachment than before theProject. However, the relief well component5 was poorly planned, as design failed to allow for a

permanent water discharge solution. Inadequate provision was made for the access needed forrelief well monitoring. A discussion of subproject design, construction and O&M is in Appendix 2.

4However, once the new canal had been built, it was found that the original French tunnel was in reasonablecondition, and probably could have been operated for many years with minor work. This highlights the problem ofinadequate study prior to project approval.

5Pressure

relief wells, designed to reduce under-dike pressure and prevent sand boils and piping.


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B. Cost and Scheduling

8. Actual project cost was $87.5 million, $8.1 million less than the appraisal estimate(Appendix 1, Table A1.1). Of the loan amount of $76.5 million, potential savings of $15.9 millionwere identified in 1999, which were used to extend the Hanoi dike rehabilitation from km 86 tokm 101 ($9 million) and conduct emergency repairs to irrigation systems damaged by floods in

19996 in Quang Binh and Quang Tri provinces ($6 million). North Nghe An main canal lining wasextended from the planned 6 km to 22 km and substantial work was undertaken on the Bau Rusluice and associated drainage works. A follow-on technical assistance (TA) project for O&Mdevelopment was provided in 1997 to help apply ADTA results.7 Cost savings were due to (i)overestimation of costs at appraisal; (ii) devaluation of the dong, which reduced the dollarequivalent of local costs; and (iii) overestimation of contingencies and service charges. Costsavings were mainly in the areas of materials ($7.7 million) and administration ($0.8 million).Land acquisition costs were nearly $5 million compared with the $1.1 million appraisal estimate,due to greater than anticipated resettlement needs relating to the Hanoi dike. An opportunity toapply loan savings ($7.1 million) to extend rehabilitation of main and secondary canals was notapproved because some MARD staff believed lower level canal upgrading was local authoritiesresponsibility and should not be funded from multilateral agency loans.

9. The Project was completed in June 2001, 3 years later than expected. Loan closing wasdelayed until April 2003 to enable the executing agency (EA) to liquidate advances to the imprestaccount. Delays were initially caused by unfamiliarity with ADB procedures of the new CPO andthree SPOs. Other delays were caused by (i) the short period available each year forconstruction, due to the need to avoid disruption to cropping patterns; (ii) lengthy procedures forland acquisition, resettlement, and compensation; (iii) flooding in 1999 also caused constructiondelays; and (iv) lack of a resettlement plan for Hanoi dike. Land acquisition and resettlementwere complicated where canals ran through communes and villages. This preventedconstruction of adequate access roads along the Song Chu main canal and secondary canals onboth schemes.

C. Consultants Performance, Procurement, and Construction

10. Most of the international consultants performed well under the loan and TAs. However,one international loan consultant proved to be too inexperienced to make much contribution tothe Project. One local consultant was criticized by the implementing agency in relation tosupervision of the pressure relief well contracts. However, the consultants performance wasadequate, as the problem was mainly due to contractors lack of capacity to meet technicalrequirements for tubewell construction and development. CPO reports that its relationship withconsultants was generally positive.

11. Most contractors performed satisfactorily. However, several contractors for constructionof Hanoi dike relief wells lacked the necessary experience and, as a result, many wells were

ineffective. Only half the contractors met targets for under-dike pressure relief4 out of 10contracts achieved less than 30% efficiency in terms of drawdown in upstream monitoring wells(Appendix 1, Table A1.3). The problem appears to have resulted mainly from ineffectivedevelopment of the wells but it may be possible to further develop some wells. The relief wells

6The 1,600 ha Rao Nam system in Quang Binh province and the Bau Nhum, Khe May, and Nam Thach Hansystems in Quang Tri province with a total area of 17,000 ha.

7ADB. 1997. Small-Scale Technical Assistance to the Socialist Republic of Viet Nam for the Operation and Mainten-ance Development in the Irrigation Sector. Manila.(TA 2869-VIE, for $150,000, approved on 16 September 1997.)


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were handed over by 401 Company/SPO to the Hanoi Sub-Department of Dyke Management inJune 2005.

12. For the irrigation schemes, the short period for implementing the headworks and canallining (with around 60 days of empty canals each year) limited the work that could beaccomplished and delayed project completion. Given this tight annual time constraint, the

appraisal design was highly ambitious and, overall, both supervisors and contractors performedwell. Importation of equipment and materials by the contractor for Bai Thuong weir wascomplicated and time-consuming, leading to about 6 months delay. Technical problems wereexperienced with the flow control gate designed to channel water through the silt-flushing gate atthe Do Luong Weir (the diversion structure on the Ma River for the North Nghe An scheme).

D. Organization and Management

13. The Project was the first ADB project implemented by Viet Nam and Ministry of WaterResources/MARD since the resumption of lending. The concept of establishing a CPO hadmerit, as it should have promoted expertise development, inter-project support, continuity, andlesson transfer. However, in practice, CPO had an engineering focus and limited resources.

Difficulties arose with the interposition of CPO between the SPOs and MARDto whom theyhad traditionally reportedresulting in lack of clarity in reporting and responsibility. The irrigationschemes are managed by their irrigation management companies (IMCs), fully funded byirrigation service fees. The IMCs remain traditional top-down government institutions, althoughthey have increased their consultative aspect through regular meetings with farmerorganizations. At the field level, management is through irrigation enterprises (Song Chu) andclusters (North Nghe An). All farmers interviewed by OEM considered irrigation service to begood or moderate, compared with 53% before the Project (Appendix 3). However, furtherimprovement in water management is required to reduce operational and conveyance losses,and improve service to the tail-end of canals and irrigation schemes. The planned transfer of atleast tertiary canal management to water users organizations (WUOs) under current MARDpolicies should have a positive impact.

14. Hanoi dike management is the responsibility of Hanoi city and Ha Tay province peoplescommittees. Management and O&M are generally satisfactory in Hanoi city but Ha Tay hasfewer resources and is not managing the dike to a high standard. The provinces are makingmajor commitments to improve the dike from their own, national and development assistanceresources. The operation of dike management clusterswith offices every kilometer along thedike, constructed under the Projectappears to be effective in both dry and flood seasons.

15. Limited technology transfer occurred under the Project. The main new technology relatedto the Hanoi dike relief wells, which had not been used previously in Viet Nam. The system isone of the largest in the world. While Vietnamese engineers are now familiar with thetechnology, it has not yet been used elsewhere in the country. Other new techniques introduced

under the Project include concrete road construction on the dike crest, the use of gabions (rock-filled wire cages) for dike protection, and devolution of responsibility for resettlement to localgovernment. The planned use of roller compacted concrete in the Bai Thuong weir was new inViet Nam but was not used in the end by the contractor who preferred conventional concretingtechniques. This was unfortunate since roller compacted concrete is cheaper and quicker to lay.

16. BME was reasonably comprehensive, with surveys conducted in 1995, 1997, 1998, anda final report in late 2001. The reports provide substantial information on the Project and its


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performance. BME closely followed design and met ADB requirements. However, a number ofcriticisms can be made:

(i) BME reports only considered performance within the irrigation schemesmeasuring before and after rather than the with and without projectperformance required for economic assessment. Benchmarking against

control/non-project areas was not attempted.(ii) BME should provide valuable information to project management as well as assist

in project evaluation. However, reports were not translated into Vietnamese andwere thus of little use to management.

(iii) There was limited monitoring of the Hanoi dike subproject, restricting the potentialto reassess the impact of rehabilitation at completion or postevaluation.

(iv) There has been little ongoing recording of information on the dike or irrigationsystems.

III. ACHIEVEMENT OF PROJECT PURPOSES

A. Operational Performance

1. Hanoi Dike

17. Since the start of the main Hanoi dike works, there have been two significant floods in theRed River: 1996 (12.34 meter [m]) and 2001 (12.01 m). These floods were lower than the 1:150250 year flood8 in 1971, which reached 14.13 m at the Long Bien bridge with a flow of 38,700cubic meters (m3) per second at Son Tay, upstream of Hanoi. This flood caused problems in theDuong River (which exits the Red River just north of Hanoi) and extensive flooding in themidsections of the Day and Duong/Thai Binh river systems. However, no flood since 1945 hascaused significant problems for Hanoi and failures reported by the RRP (para. 33) appear torefer to problems such as sand boils or bank slips, rather than breaches of the dike. No floodshave tested the dike since rehabilitation. Most sand boils have been cured, though problems

remain in some areas and continuous monitoring is required in flood seasons.

18. The completion of the 9.5 billion m3 Hoa Binh reservoir upstream of Hanoi in 1989 hasreduced the potential flood height by an estimated 1.21.4 m. However, this has been partlyoffset by urban development in the floodplain, which has reduced its impact to around 0.6 m.The dam has also reduced silt load in the Red River system, which causes accelerated erosionin some areas, thus increasing the value of project protection works. Son La dam (underconstruction) with storage of 27 billion m3 will further reduce flood risk.

19. Hanoi dike O&M is the responsibility of the Hanoi and Ha Tay Departments of DikeManagement and Flood Control (DDMFC). Total O&M costsincluding salaries for the 151 kmof dike managed by Hanoi DDMFC including 37 km of Red River right bank dike rehabilitated by

the Projectwere reported at about D10 billion per year. Capital construction costs are arounddong (D) 60 billion per year. Ha Tay Dike Management Department reports that 140 dragons(steel gabion cages) were stolen from Xam Thuy and An Canh revetments, causing concern forrevetment stability. To date, Ha Tay province has not provided a maintenance budget for theHanoi dike.

8A flood level likely to be reached with a return interval of between 150 and 250 years.


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20. The Hanoi dike has now become a major thoroughfare between Thang Long Bridge inthe north and Vinh Tuy in the south.9 The Project made a major contribution to the developmentof this road, through sealing the gravel surface and widening the road by several meters byreplacing the earth top dike with a masonry wall. Removal of buildings, construction of interiorand exterior access roads on the berm, and reshaping of the dike profile improved the dikesappearance as well as security. However, development has occurred over much of the lower

dike, to within 5 m of the access road on the berm shoulder. This reduces the risk of toe erosionand wave impacts, but limits maintenance access and may prevent identification and correctionof problems such as termite damage.

2. Irrigation Schemes

21. Both irrigation schemes were rehabilitated as planned. The Song Chu scheme extends toaround 42,000 ha irrigated out of a gross command area of 70,000 ha.10 The schemereconstructed its diversion weir, main canal, primary (north and south) canals, and generally 12km at the head of secondary canals serving over 500 ha. Minor secondary and tertiary canalsand the drainage system were not upgraded. In 2001, BME reported 68% fully irrigated and 32%partly irrigateddrought-affected gravity irrigation and pumped irrigation from drainage channels

and watercourses. The rainfed cropping area within the irrigation scheme was reduced from 7%of the irrigable area to zero. By 2004, the fully irrigated proportion had reached 75%, accordingto the Song Chu Irrigation Company (SCIC). In 2001, around 70% of the tertiary system hadbeen upgraded through concrete lining.

22. North Nghe Ans irrigable area is currently 29,500 ha. North Nghe An Irrigation Company(NNAIC) classifies 19,744 ha as fully irrigatedan increase from the final BME report estimateof 18,763 ha in 2001. A rehabilitation program similar to the Song Chu scheme was undertakenin North Nghe An, with a greater proportion by length (60%) of major canals upgradedin partbecause there are fewer canals serving over 500 ha. While the Project did not undertake tertiarycanal upgrading, the province and NNAIC have made a major effort to help communes upgradetheir tertiary canals. NNAIC estimates that around 90% of tertiary canals have been upgraded,

compared with 60% in 2001. This has facilitated improved water management. However there isnow a significant disconnect between the rehabilitated parts of the main system and the tertiarysystem, as many of the smaller secondaries and unrehabilitated parts of major secondaries arein poor condition.

23. All rehabilitated structures are performing approximately as expected. However,operational performance of the two schemes is less than anticipated at appraisal due to (i) partialupgrading of each system, and (ii) adoption of continuous irrigation in many areas for much ofthe year. In each scheme, the irrigation company and communes operate a complex network ofpumping stations, mainly electric powered. Despite the significant electricity subsidy,11 the costof owning and operating pumping stations is substantial and adds around D400,000/ha/year tofarmers irrigation costs. Irrigation companies are trying to extend rehabilitation of their canal

networks and communes are expanding the lined tertiary network, which should make it possible9

An Overseas Economic Cooperation Fund design for the Urban Infrastructure Development Project (1998) indicatesthat the dike road should become a major connector between Thang Long bridge and the new Thanh Tri bridge(under construction) on Ring Road 3. Total cost of the five subprojects was estimated at $56 million.

10PCR and BME estimated irrigable area at 50,933 ha. In practice, the area controlled by SCIC is now around 42,000ha, due to the exclusion of 3,000 ha which has passed on to local authorities, and significant loss of irrigation landto urban development in the project area.

11Electricity for irrigation pumping is charged at an average of D600 per kilowatt-hour (kWh) day rate (05001700),D950/kWh peak (17002200), and D240/kWh off-peak (22000500). Other economic sectors and domestic sectorspay D860, D1,430, and D480 for day, peak and off-peak electricity, suggesting a subsidy of 30%50%.


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to at least maintain and probably improve theschemes operational performance over time.There has been little deterioration in the fouryears since most construction was completed.

24. Crop yields have increased rapidly over

the project period (Figure 1) by an average of5% per year. Spring paddy yields now exceed 6t/ha, up from around 4 t/ha in 1994. Summerpaddy production has reached almost 5 t/haand maize between 3 t/ha (North Nghe An) and4.7 t/ha (Song Chu). Crop yields are generallyhigher in Song Chu than North Nghe An. TheProject has contributed to these impressiveyield gains, among other factors, includingimproved land security, improved varieties, andinput availability (Appendix 4).

25. OEM confirmed the PCRs conclusionson the emergency flood rehabilitation subprojects: (i) 60% increase in cropping but high cost ofpump operation on Roa Nan; (ii) doubled cropping intensity but low construction quality andsignificant drainage constraints on Bau Nhum; (iii) high investment cost ($4,000/ha) and use offunds for office building construction on Khe May; and (iv) doubled cropping intensity on NamThach Han, although works did not relate to flood damage repair.

Figure 1: Trends in Crop Yields in ProjectDistricts (19942004)

SC = Song Chu, NNA = North Nghe An.Sou overnment Statistics Office.rce: G

0

1

2

3

4

5

6

7

94 95 96 97 98 99 00 01 02 03 04

Yield

(tons/

ha)

SC spring paddy NNA spring paddySC summer paddy NNA summer paddySC maize NNA maize

3. Technical Assistance

26. Three TAs were conducted fully or partly under the Project:

(i) TA 1968-VIE Operation and Maintenance Strengthening (footnote 3) supported

effective and sustained water resources development and management, includingthe introduction of the concept of secondary (or inter-commune tertiary) canal andwater management by farmer groups on a hydraulic boundary basis. Only onewater user group (on canal B6/9 in Song Chu) was established under the TA butsystems were developed which will assist in defining management systems basedon hydraulic (rather than administrative) boundaries in future. The TA completionreport considered the TA successful, though lack of replication limited its impact.OEM confirms this rating.

(ii) Small-scale TA 2869 Operation and Maintenance Development in the IrrigationSector (footnote 7), successfully strengthened water users participation inirrigation management at four locations within the Song Chu and North Nghe Anschemes. Assessment of the performance of farms operating within the water

user groups12

suggests that farm performance was significantly improved by acombination of participatory irrigation management (PIM) and tertiary canalupgrading. Further discussion of PIM development in Viet Nam is in Appendix 3.OEM rates the TA successful.

12Janaiah, A. 2004. Poverty Reduction Impact of Public Spending on Large-Scale Irrigation Systems in Viet Nam.ADB: Hanoi.


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(iii) TA 3064-VIE13 Strengthening of Resettlement Management Capacity in theMinistry of Agriculture and Rural Developmentstrengthened CPOs resettlementmanagement capacity, for both the Project and Red River Delta Water ResourcesSector Project.14 The TA made a significant contribution to the reasonably timelyand effective resettlement of persons affected by the Hanoi dike rehabilitation. Italso contributed to the establishment of effective resettlement systems within the

Government and particularly to the decentralization of resettlement activities tothe district level, with positive impacts on responsiveness and linkages. OEMrates the TA successful.

B. Performance of Operating Entities

27. Several entities are involved in operating project facilities. Hanoi dike is operated by theDDMFCs of the Hanoi and Ha Tay peoples committees. Dike inspection and discussions withthe director of the departments suggested that management was generally adequate for dikeneeds. Maintenance and development budget is provided from central and provincial/city levels,which management considers adequate for O&M. BME considered that the dike was significantlybetter managed than prior to the Project, with a reduction in illegal activities. However,

regulations and enforcement vary between districts. Problems continue with rapid urbanization ofthe floodplaindamage to the dike from sand mining trucks and poor access to several reliefwells, some of which are now inside houses. Considerable work has been undertaken on thedike since project completion, including a large road development program that has made thedike into one of Hanois main trunk routes with dual carriageway over much of its length. Overall,the dike is so important to Hanoi that continued management and operation at an adequate levelis likely.

28. The main irrigation schemes are operated by IMCs. Most IMC revenues are fromirrigation service fees (ISF) paid by irrigators and collected by the commune peoplescommittees or agricultural service cooperatives. The ISF concept is well accepted (though thelevel is resented by farmers) and collection is close to 100% in project communes. The annual

ISF for full irrigation is around D1 million/ha/year ($70/ha)a high level by internationalstandardsand covers the cost of operating and maintaining the irrigation schemes, though witha limited maintenance budget. Both SCIC and NNAIC have been profitable for the last 3 years,though NNAICs margin was low in 2002/03 (Appendix 1, Table A1.4). O&M is adequate,although maintenance problems should be addressed more quickly. Both IMCs are improvingsystem efficiency by continuing to rehabilitate secondary canal systems.

C. Economic Reevaluation

29. Economic reevaluation was carried out following PCR methodology, which reflectedappraisal methodology reasonably closely. For the Hanoi dike, PCR estimated the economicinternal rate of return (EIRR) at 62.6%, compared with 53.5% at appraisal, with lower than

expected construction costs more than compensating for a lower estimated cost of damage inthe event of a dike breach. OEM considers that the likelihood of a breach would have beenrelatively low compared with appraisal estimates, even without dike rehabilitation. It is acceptedby OEM that dike management was poor in the early 1990s, with uncontrolled encroachment

13ADB. 1998. Technical Assistance to the Socialist Republic of Viet Nam for Strengthening of ResettlementManagement Capacity in the Ministry of Agriculture and Rural Development. Manila (TA 3064-VIE, for $150,000,approved on 4 September 1998).

14ADB. 2002. Project Completion Report on the Red River Delta Water Resources Sector Project to the SocialistRepublic of Viet Nam. Manila.


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and poor maintenance. However, there have been no dike breaches in Hanoi since before 1945.Reduced flood height due to upstream dam construction has further reduced flood risk.However, benefits did not include allowance for reduced loss of life, which (based on a value ofstatistical life of around $190,000 in Hanoi) might have doubled benefits. Other factors thatimprove dike economic performance include its development as a major Hanoi thoroughfare,with significant transport benefits. The rapid increase in the value of housing, and

commercial/industrial investment further increase damage avoided values. Overall, it isconsidered unlikely that an uncontrollable dike breach would have occurred at a flood height lessthan about 12 m, reducing EIRR to around 40%. If critical flood height is taken as 13 m, andbenefits from life savings are added, subproject EIRR would be around 35%, the level assumedfor overall project assessment. Economic performance is analyzed in Appendix 5.

30. The irrigation schemes increased the fully irrigated area, though by less than appraisalestimates. Allocation of O&M cost savings and labor cost savings due to improved irrigationefficiency resulted in an increase in EIRR for Song Chu to 12.9% (PCR 6.4%), despite the lowerirrigated area based on SCIC data. EIRR is estimated at 11.4% for the North Nghe Ansubproject, compared to 8.4% at PCR.

D. Sustainability

31. A number of factors are promoting or restraining sustainability of the subprojectoutcomes. The main factors supporting sustainability include (i) ongoing improvements to theHanoi City section of the Hanoi dike (such as new revetments and roadworks) and generallysatisfactory maintenance of structures apart from the relief wells; (ii) high ISF levels sufficient tomaintain the irrigation schemes at an adequate level; (iii) MARD is committed to introducingparticipatory management in all irrigation schemes; (iv) moderate to strong performance by mostcooperatives and WUOs leading to an adequate level of tertiary and field system maintenanceon most canals; (v) ongoing canal and ditch stabilization program with a farmer contribution of60%an estimated 90% of the tertiary canals on North Nghe An and 60% on Song Chu havebeen concrete lined under this program; and (vi) commitment of provincial and district agriculture

departments, commune leaders, and farmers to increase agricultural productivity, supported by astrong extension system. However, several factors are limiting sustainability: (i) limitedmaintenance of Ha Tay sections of the dike, continued encroachment, theft of dragons, and useof the dike for storing materials and other functions; (ii) rapid development in the Red Riverfloodplain, leading to increased flood heights; (iii) theft of tertiary sluice gates in both irrigationschemes, preventing regulated water flow; and (iv) lack of ownership of the schemesdemonstrated by many farmers and local residents, leading to misuse of irrigation infrastructure.

IV. ACHIEVEMENT OF OTHER DEVELOPMENT IMPACTS

A. Socioeconomic and Poverty Reduction Impacts

32. The direct socioeconomic benefits of the Hanoi dike rehabilitation are threefold:(i) increased sense of security and well-being derived from a sound dike system, (ii) stimulationof investment due to improved flood security, and (iii) transport benefits resulting from concreteddike road systems. The main impacts of the irrigation systems are increased water supply at theheadworks and distribution through secondary canals. This has allowed a significant increase inthe areas fully irrigated, though less than anticipated at appraisal. The increased use of fullgravity irrigation has reduced pumping costs, particularly in terms of labor needed to raise waterinto the field canals or onto the paddies. Based on work undertaken in a recent World Bank/ADBstudy (footnote 12), this amounted to up to 28% of family labor inputs for with-project schemes


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with full tertiary canal rehabilitation. The effect was due to a combination of canal upgrading andparticipatory management, which improved water flow to the canal tails. Women are oftenresponsible for manual water lifting. The Project, supported by the tertiary canal upgradingprogram, has greatly reduced the time required for this task, releasing time for other income-earning, household or leisure activities. Benefits have been highlighted by the absence of manymen who leave their villages to undertake off-farm work in the irrigation season, returning for

harvest. Aspects relating to household income and poverty reduction under the Project arediscussed in Appendix 3.

33. Hanoi dike rehabilitation had little direct impact on poverty reduction, given Hanoisrelative affluence. However, many rural workers visit Hanoi on a seasonal or long-term basis forconstruction or other jobs and they have benefited from the economic activity induced by greatersecurity from flooding following dike rehabilitation. While Viet Nams lowland irrigation areas arenot among the poorest, poverty levels on the six PIM pilot areas exceeded 30% in the mid-1990s, but have now fallen to an average of 5% in Song Chu and 10% in North Nghe An.

34. The Hanoi dike component required substantial resettlement, involving 1,616 householdsaffected, 307 households relocated, and compensation of D25.6 billion. Resettlement was

assisted by TA 3064-VIE Strengthening of Resettlement Management Capacity (footnote 13)and was generally completed satisfactorily, despite frequent long delays in relocating resettlersand addressing grievances. Some cases are pending settlement in the Thuong Cat area north ofThanh Long bridge. In this area, owners of houses built on the main dike have yet to berelocated, since they are not satisfied with the compensation offered. Resettlement issues werediscussed in detail in Appendix 8 of the PCR, which concluded that the activity was mainlycompleted satisfactorily despite problems such as the lack of a resettlement action plan atproject inception, which delayed implementation. Resettlers interviewed by OEM were satisfiedwith the program, while one resident who lived just outside the resettled area, expressed regretat not having been resettled.

B. Environmental Impact

35. Overall, the environmental impact of the Project has been neutral. Activities focused onupgrading existing structures and few significant new works were constructed. The irrigationsystems were restored to approximately their design diversion volumes, and irrigation methodswere not changed significantly. Water is consequently wasted (though in many cases it is reuseddownstream or pumped from drainage channels), less water is available for river flow, while thetail-end canals and areas are undersupplied by gravity, requiring expensive pumping bycooperatives or irrigation companies. Despite the relative inefficiency of watering, no particulardownstream issues were encountered, such as salinization or changes to the coastal orestuarine environments. New or replacement irrigation structures were constructed fromconcrete, and were less aesthetically attractive than the French masonry structures.

36. The key environmental problem on the irrigation schemes is the use of Song Chuscanals as a convenient rubbish disposal system. This is particularly severe where canals passthrough villages. Where no alternative disposal options exist, it is perhaps not surprising thatvillagers use an apparently simple disposal option, since rubbish either sinks or is carrieddownstream to the next village, commune, or district, thus removing part of the problem fromview. The problem is much less significant in North Nghe An.

37. The Hanoi dike rehabilitation cleaned up the dike substantially. It is now an attractive,well-maintained structure. Encroachment onto the dike and its berms has been largely


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eliminated, though the building setback is 5 m from the access road on top of the bermbothinside and outsiderather than from the dike toe. Current setback is inadequate, but would bedifficult or impossible to change at this stage. While dike rehabilitation was neutral to positive inenvironmental impact, the environment is a key factor in the dikes performance and long-termstabilitylikely flood levels, siltation rates in Red River, and the level of construction that occursin the floodplain.

C. Impact on Institutions and Policy

38. The Project and associated TAs impact on institutions and policy has been significant,but less than anticipated. However, the contributions to resettlement policy made by TA 3064(Strengthening of Resettlement Management Capacity footnote 13) and the Project werenotable. The irrigation management TAs, though successful within their pilot areas, did not resultin the adoption of PIM on other canals. However, 2004/05 has seen a rapid increase in the levelof PIM activity and it is now planned that all provinces will introduce PIM at the secondary canallevel of large schemes by around 2010. CPO has become the implementing agency for MARDslarger projects and implemented the Project effectively. However, it continues to have anengineering bias, and lacks capacity in system management, use of consultants, and

sociocultural and economic assessment. The Project failed to enhance CPOs capacity in theseareas, which would have helped it respond more effectively to financing agency agendas. MARDhas recently confirmed CPOs role in managing foreign assistance funded water resourcesprojects. However, the provinces are expected to implement future ADB irrigation projects, withCPO focusing on major procurement.

V. OVERALL ASSESSMENT

A. Relevance

39. The Project is assessed as relevant.15 The Hanoi Dike rehabilitation component isclassified as relevant, since peoples safety, particularly in a major city such as Hanoi, must be

paramount. The technical solution for the Hanoi dike rehabilitation has become a model for dikesystems on many other rivers. Hanoi dike road has become a key component of the Hanoitransport network. The Project contributed to this, but did not adequately plan for road needs,with almost all the road length rebuilt or likely to be rebuilt in the near future, resulting in wastedresources. Rehabilitation of the two core irrigation subprojects was relevant at the time of design,according to the Governments Third Five-Year Plan (19911995), which emphasized expansionof irrigated agricultural production. Rehabilitation of water resources and flood protectioninfrastructure was supported by the World Banks 1996 Water Resources Sector Review, thoughspecific schemes are not identified and by ADBs 1993 interim operational strategy. However,relevance at the time was reduced by the focus on main system works, without formallyaddressing constraints to irrigation and drainage in the lower sections of the schemes.

40. By completion in 2001, the Project remained relevant to national economic goals such asthe maintenance of rapid Gross Domestic Product growth. The irrigation schemes were alsorelevant to ADBs geographic concentration on the central region. North central coast is VietNams poorest coastal region, with high rural poverty ratios (Appendix 6, Table A6.1) and isfalling further behind other regions, according to ADBs Country Strategy and Program Update20052006. Overall, the Project is rated as relevant although it did not directly address key

15Using a four category system of highly relevant, relevant, partly relevant, or irrelevant.


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constraints to efficient water distribution and failed to meet desired gains in the fully irrigatedarea.

B. Efficacy

41. The Project is assessed as efficacious.16 In general, the Project achieved its purpose.

The Hanoi dike rehabilitation increased the citys security, and is likely to prevent dike breacheswith consequent damage and loss of life, in almost all flood conditions. The relief wells have notbeen entirely effective, with only half achieving their goal of reducing pressure under the dike.However, most sand boils that used to occur during floods have been cured. Although PCRconsidered MARDs resources to be limited, Hanoi and Ha Tay peoples committees areresponsible for dike O&M. They are continuing to upgrade the dike with their own and centralgovernment resources and are considered to be able to manage the dike effectivelyparticularlythrough the dike clusters that manage and monitor each kilometer of dike, based in offices builtunder the Project.

42. The purpose of the irrigation subprojects was to provide reliable and increased irrigationwater to the two schemes, resulting in sustained paddy production of 440,000 t annually (RRP

para. 28) In practice, paddy production increased to 730,000 t (according to irrigation companydata) or by an average of 3.8% per year, compared with 1.2% per year outside the scheme inthe same districts. Interviews with 12 commune peoples committees indicated that (i) theproportion of gravity irrigation in 2004 had risen to 80% compared with 55% in 1996, (ii) the timerequired to take water in SCIC had declined by 38%, and (iii) water could be supplied to 89% ofcanal tails compared with 60% in 1996. The proportion of manual irrigation has declined greatly,liberating time for other income- and non-income-generating activities. In 36 householdinterviews, 97% of respondents considered that improved irrigation water supply had led toincreased household income. Other factors included improved seeds (56%), integrated newtechnologies (33%), and off-farm income (6%). According to the survey, household cashincomes in 2004 averaged D15 million in Song Chu and D13 million in North Nghe An, anaverage increase in real terms of 145% since before the Project. All respondents except one

considered that their family income had increased. Average cash income per capita in 2004 wasD3.1 million in Song Chu and D2.0 million in North Nghe An. While the lining of tertiary canalsunder local budget has also contributed to these gains, the subprojects are rated as efficaciousagainst the rather vague purpose level objectives set during project formulation.

43. The irrigation extension subprojects were not inspected by OEM. However, discussionwith the provincial Department of Agriculture in Quang Tri indicates that satisfactory performancehas been achieved. For example, the rubber dam on the Nam Thach Han scheme has led to theprovision of about 30 million m3 of irrigation water annually. As a result, the third crop rice areaincreased from 4,500 ha to 5,000 ha with stable yield while, prior to rehabilitation, an average of1,250 ha had limited yields and up to 3,000 ha could be lost to drought. Annual maintenancecost was reported to have declined by about 35%.

C. Efficiency

44. The Project is assessed as efficient.17 Given the context at the time of earlyimplementation, implementation efficiency was satisfactory. All targets were met, despite delaysdue to lack of familiarity with ADB procedures. Although final loan closing was delayed by more

16Using a four category system of highly efficacious, efficacious, less efficacious, or inefficacious.

17Using a four category system of highly efficient, efficient, less efficient, or inefficient.


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than 4 years, the overall delay for core subproject construction was only 18 months. For theirrigation schemes, the construction period was limited to 2 months a year to minimize disruptionto cropping. Meeting this target was a major achievement, but prevented realization of canalrehabilitation targets in the early years. Economic efficiency, assessed through the subprojectsEIRR, is rated efficient. EIRR for the Hanoi dike subproject is estimated at around 35%, basedon updated appraisal estimates of damage, but assuming that no break in the dike would have

occurred for floods of 12 m or less, and making allowance for reduction in deaths. Actual EIRRcould be higher due to induced investment inside the dike and time saving benefits by Hanoiresidents due to road upgrading. The core irrigation projects are estimated to average 11.8%EIRR, higher than at PCR, due to inclusion of labor savings resulting from the Project, reducedO&M costs, and post-project investment in tertiary canal upgrading (also taken into account ineconomic assessment).

D. Sustainability

45. Overall, project sustainability is assessed as likely.18 The Hanoi dike subproject is likelyto be sustainable as the dike is too important to Hanoi for the peoples committees to allow it todeteriorate and threaten its integrity. However, further support is needed to clean up and

maintain the northern Ha Tay section, and care is required in the further development of the RedRiver floodplain. The irrigation schemes have some problems because of the loss of tertiarygates and underfunded maintenance on unrehabilitated secondary canals. However, IMCs,irrigation enterprises/clusters, agricultural cooperatives, irrigation groups, and farmers are tryingto maintain and develop their irrigation infrastructureevidenced by the ongoing rehabilitation ofsecondary and tertiary canals. The likely sustainability rating will be underpinned through theintroduction of PIM, and engendering ownership among farmers and residents, thus reducing theproblem of destruction of irrigation assets.

E. Institutional Development and Other Impacts

46. Overall institutional, socioeconomic, and environmental impacts are considered to have

been moderate.19

The Projects institutional impact has been limited, due to its emphasis onurgent physical rehabilitation. It supported the establishment of CPO, which, despite making asignificant contribution to project implementation, still has limited capacity and capability in thenon-engineering aspects of irrigation project design and implementation. In future, CPOs rolewill change as implementation becomes more decentralized. The resettlement TA had positiveinstitutional outcomes, in relation to resettlement approaches and decentralization ofresponsibility. The irrigation management TAs demonstrated that PIM could work, and lead toimproved O&M and a significant rise in irrigation efficiency. To date, the system has not beenwidely replicated, though this may change in the future with MARDs promotion of PIM. Manyirrigation companies are preparing PIM action programs for 20062010 (Appendix 3).

47. Environmental impact has generally been neutral. While Song Chus rubbish disposal

problem cannot be directly attributed to the Project, this is one aspect that requires managementattention and new, innovative approaches. Initially, North Nghe Ans successful systems shouldbe studied. Socioeconomic impact has been universally positive. While it is not possible to fullysegregate the factors that have led to increasing crop yields, it is clear that farmers consider theimproved availability and reliability of irrigation water to be one of the key factors. One aspect ofparticular note has been the increase in the extent of gravity irrigation (though less than

18Using a four category system of most likely, likely, less likely, or unlikely.

19Using a four category system of substantial, significant, moderate, or negligible.


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planned), which has reduced irrigation labor inputs and released time for other activities.Increasingly, irrigated cropping is seen as a source of subsistence, with cash earned throughlivestock, fish farming, handicrafts, small business, or off-farm work.

F. Overall Project Rating

48. The Project is rated as successful based on the assessments in paras. 41 to 49.20G. Assessment of ADB and Borrower Performance

49. ADBs performance is assessed as satisfactory.21 However, some deficiencies are noted:(i) lack of response to EAs request for capacity building assistance to apply the systemsrequired by ADB, (ii) failure to allow loan savings to be spent on extending the upgrading of theirrigation systems,22 and (iii) limited pre-investment assessment of the 1999 flood-damagedirrigation scheme rehabilitation.

50. Performance by government agencies at all levels is assessed as satisfactory. CPO andSPO performance in relation to tendering and construction supervision was generally adequate.

The relief wells were an exception, with inappropriate prequalification of some contractors, andinadequate supervision of construction and well development under some contracts, leading toineffective well operation. The EAs complex and time-consuming review and approvalprocedures exacerbated implementation delays. CPOs capacity was strengthened under theProject in a number of areas (e.g., resettlement), which has benefited other projects. However,the Projects lessons have yet to be adopted in areas such as taking a holistic approach toirrigation scheme development and involving farmers in scheme design, construction, andoperation. Nonetheless, MARDs promotion of PIM since 2004 is a positive outcome, largelyattributable to the Project and subsequent project-related activities such as the PIM workshopsheld in 2004. Some problems were experienced in the relationships between MARD, CPO, andthe SPOs. The responsibilities of MARD and CPO were unclear, with SPOs often reportingdirectly to MARD, leading to coordination problems.

VI. ISSUES, LESSONS, AND FOLLOW-UP ACTIONS

A. Key Issues for the Future

1. Environmental Management on Irrigation Schemes

51. Environmental management on the Song Chu scheme is poor, in relation to the use ofcanals for waste disposal. SCICs current policy of identifying key locations, removing rubbishfrom the canal, and disposing of the rubbish to landfillusing their own resources or oncontractis not an appropriate long-term solution. The removal of rubbish in this wayencourages villagers to continue to use the canal as a dumping site. SCIC is aware of this issue

and is seeking ways to address it. In practice, a multi-pronged approach is considerednecessary, which might include:

20Based on a four category system of highly successful, successful, partly successful, or unsuccessful. The PCRrated the Project partly successful under the assessment of relevant, less efficacious, efficient, less likelysustainability, and moderate environmental, sociocultural, and other impacts.

21Using a four category system of highly satisfactory, satisfactory, less than satisfactory, or unsatisfactory.

22This decision may also have been influenced by the Ministry of Finances requirements to limit foreign currencyborrowings.


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(i) working with Thanh Hoa province to create new well-designed landfill sites and acommune collection system;

(ii) promoting the establishment of a recycling industry (as in northern Nghe Anprovince), possibly including plastic bag recycling/extruding/pelleting cooperativesand composting enterprises;

(iii) working with districts and communes to develop regulations prohibiting waste

disposal in canals, and establishing a penalty system for such disposal;(iv) conducting a public awareness campaign about the regulations and littering in

general;(v) introducing a bonus system (similar to the North Nghe An approach) within the

SCIC system for irrigation enterprises and canal workers to work with theircommunities to keep canals clean;

(vi) introducing annual clean up Song Chu days with participation from schools andcommunities; and

(vii) establishing a well-publicized clean village competition with prizes for cleanvillages and canals.

52. A study could be undertaken or commissioned by SCIC in collaboration with Thanh Hoa

province peoples committee to assess these and other options, and develop a 5-year programto eliminate rubbish from the Song Chu irrigation system. While North Nghe An still considersthat it has a rubbish problem, it is much less than Song Chus. Thus, a useful beginning could beevaluation of North Nghe Ans program and analysis of its relevance to Song Chu. Other aspectsof pollution which need to be addressed are (i) use of canals and canal banks by livestock; (ii)cleaning of vehicles in areas that drain into canals; and (iii) the poorly maintained dredging unitin the North Nghe An main canal, which is releasing diesel and oil into the irrigation system. TheSong Chu north primary canal needs to be maintained at a particularly high level of hygiene as itsupplies around 70% of Thanh Hoa Citys water.

2. Participatory Irrigation Management

53. Following a long assessment period, dating from Decision 126/1998 of the Minister ofAgriculture and Rural Development, the Government is now moving to promote PIM. Based ontheir experience under the Project, both SCIC and NNAIC now support PIM. The key issue nowis to define how to implement PIM. The main benefits of PIM include (i) improved maintenanceresponsibility, (ii) improved water management and distribution, and (iii) reduced IMCmanagement costs. The problems facing its introduction at the secondary or inter-communetertiary level relate to the need to manage each canal as an integrated hydraulic system. Thiswill require the establishment of WUOs from several communes and agricultural servicecooperatives, resulting in some loss of power and control by the communes and cooperativesand a need to share ISFs with another organization. Since the farmers own the cooperatives, theproblem should not be insuperable, but a major education and awareness raising campaign willbe needed. These demarcation problems would also be overcome if farmers owned the entire

scheme, and it is desirable that such a solution is attempted. Under this option, the farmerswould own and direct the irrigation company, which would subcontract secondary canal O&M toWUOs. PIM will need to be carefully managed to avoid capture by more articulate groups anddecision making that is overly influenced by groups with limited legitimacy. It requiresmechanisms to facilitate active involvement of stakeholders, including women. A TA planned topromote PIM under the Second Red River Basin Sector Project23 will provide an opportunity to

23ADB. 1998. Technical Assistance to the Socialist Republic of Viet Nam for the Second Red River Basin WaterResources Sector Project. Manila. (TA 3050-VIE, for $600,000, approved on 22 July 1998.)


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analyze gender roles and develop structures and operating protocols that maximize equity anddeepen the involvement of women in irrigation management.

3. Canal Upgrading Program

54. The canal upgrading program achieved on both schemes subsequent to the Project has

been impressive, particularly on North Nghe An. The program should be continued and extendedto the non-rehabilitated parts of secondary canals, since there is currently a disconnect betweenupgraded sections and the new concrete-lined tertiary canal network. Drainage systems need tobe assessed and, where necessary, upgraded. System upgrading is a necessary component ofsuccessful PIM introduction. Ways must be found to apply part of the ISF to secondary anddrainage system upgrading, as well as the tertiary system, and to apply the 40% subsidyavailable under the governments canal and ditch stabilization program.

55. Most tertiary canal upgrading has involved concrete lining, which is perceived as havingseveral benefits by irrigators. However, while concrete lining is beneficial in sandy soils, a well-constructed and maintained earth canal can be equally efficient in suitable soils. Moreover,concreting is expensive and should thus be applied to canals or canal sections where it is most

beneficial, not used as a panacea. MARD could initially undertake a study of the costs andbenefits of lined and compacted earth canals, and develop a set of criteria and guidelines to helpcommunes and systems define the optimal development approach for their tertiary andsecondary canal upgrading programs. A comparison of positive and negative features ofconcrete and earth canals is in Appendix 2, section E.

B. Lessons Identified

56. The main lesson that can be drawn from project experience is the desirability of taking aholistic approach to irrigation scheme upgrading and development. This lesson is similar to thatobserved by the Red River Delta Water Resources Sector Project PCR (footnote 14) and isbeing applied in ongoing ADB and World Bank irrigation projects. Such an approach would

assess the need for lower level irrigation and drainage system upgrading as well as theheadworks and main system work often financed by multilateral lending institutions. Thus, theapproach should define lower level requirements at the outset and outline a program to addressthe most critical constraints. This would allow irrigation scheme upgrading to proceed in anordered and participatory manner, rather than the ad hoc and top-down approach dictated by theproject design. Other lessons include:

(i) Adequate setting and collecting of ISFs provides a major contribution to effectivescheme operation, maintenance, and development.

(ii) A firm approach must be taken from the start in relation to canal damage, illegaluse, and canal rubbish disposalperhaps by establishing contracts withparticipating communes, developing commune regulations, and establishing

appropriate incentive systems.(iii) BME should provide useful data to irrigation system management.24 This requiresthe evaluation system to be defined in consultation with potential data users, andreports to be translated and made widely available. This should make evaluationoutputs more useful to local stakeholders and increase the prospects for theevaluation to continue after the end of the Project.

24ADB no longer uses BME for the reasons outlined in this study. Its successor, the project performance managementsystem, is expected to be much more integrated into management decision-making.


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17

(iv) Secondary data can provide useful information for evaluation, particularly tofacilitate comparison between project investments and control areas. Viet Namssystem for collecting and processing rural statistics is now reliable and evaluationshould maximize the use of such data. This could reduce the need for survey datacollection and improve the coverage and statistical reliability of evaluationoutputs.

(v) Schemes should be mapped adequately. System maps were not readily availablein Song Chu or North Nghe An. Maps are an essential part of project planningand management, and should be available readily in the IMCs, irrigationenterprises, and clusters. Projects now have the capacity to develop sophisticatedmapping systems to allow geographic information system development and mapsto be prepared at the range of scales required by management.

(vi) Project-related documents should be stored permanently in an accessiblelocation. This has been difficult, given the limited storage space available.However, cheap data storage now means that all records can be storedpermanently in on-site systems, and backed up off-site.

(vii) Construction of assets such as relief wells must be accompanied by adequateand enforceable land use planning to ensure long-term access for O&M.

C. Follow-Up Actions

57. A number of issues raised invite follow-up action by the Government to promote thefurther achievement of project benefits and their sustainability. Suggested actions werediscussed and agreed in principle during OEM.

Suggested ActionInstitutionsResponsible

SuggestedTiming

Monitoring

A. Complete rehabilitation of secondary structures. SCIC/NNAIC by 2010 MARD/DWR/ADB

(MKAE/VRM)B. Prepare and distribute guidelines for tertiary canal upgrading. MARD end 2007 ADB

(MKAE/VRM)

C. Define systems to encourage ownership of irrigation assetsby farmers/villagers, and thus reduce theft of gates. Developdesign for theft-resistant gate.

SCIC end 2006 MARD/ADB(MKAE/VRM)

D. Extend PIM on hydraulic boundaries to all canals. SCIC/NNAIC by 2010 MARD/DWR/ADB

(MKAE/VRM)

ADB = Asian Development Bank,DWR = Department of Water Resources,MARD = Ministry of Agriculture and RuralDevelopment, MKAE = Agriculture, Environment and Natural Resources Division of the Asian Development BanksMekong Department, NNAIC = North Nghe An Irrigation Company,PIM = Participatory Irrigation Management, SCIC =

Song Chu Irrigation Company, VRM = Asian Development Bank Viet Nam Resident Mission.


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Appendix 118

PROJECT-RELATED DATA AND STATISTICS

Table A1.1: Cost Breakdown by Project Component($ million)

Cost Appraisal Estimate Actual

Civil Works 68.2 66.1Materials 13.9 6.2

Equipment 1.1 1.0Survey, Investigation, and Design 1.7 3.6Consultant Services 3.1 3.0Land Acquisition 1.1 4.8Administration 2.2 1.4Tax and Duties 1.7 Service Charge 2.6 1.3

Total 95.6 87.4 not available.Source: ADB PCR.

Table A1.2: Actual Cost Breakdown by Project Component(D billion)

1994 1995 1996 1997 1998 1999 2000 2001 Total

A. Hanoi Dyke1. Foreign Civil Works 3.7 2.7 2.2 11.1 6.9 18.9 25.0 11.7 82.2 Material/Equipment 0.6 0.3 0.8 7.7 0.5 9.8 Survey/Design 0.6 0.2 0.2 0.5 0.2 0.4 2.1 Subtotal (A1) 4.3 3.2 2.7 12.1 14.6 19.9 25.2 12.2 94.22. Local Civil Works 7.2 7.5 7.4 26.8 21.3 55.5 62.8 33.0 221.6 Material/equipment 2.2 0.4 14.9 17.5 Survey/Design 0.7 1.9 0.8 1.9 1.4 0.3 0.5 7.6 Incremental Operating 0.3 0.2 0.4 0.3 0.3 0.4 2.0 Land Acquisition 1.1 10.1 13.3 23.7 7.9 56.1 Other 0.1 0.1 1.7 2.4 2.2 6.5 Subtotal (A2) 10.1 7.5 11.3 37.9 51.9 82.7 65.7 44.0 311.2

B. Song Chu

1. Foreign Civil Works 2.1 1.3 7.1 8.4 16.3 11.9 6.0 2.1 55.2 Material 1.0 0.5 2.4 2.3 1.8 7.9 Equipment 0.3 0.7 0.0 1.0 2.0 Survey/Design 0.2 0.5 0.0 0.2 0.1 0.1 0.1 1.2

Subtotal (B1) 3.7 2.4 10.0 8.4 18.7 13.8 6.1 3.1 66.22. Local Civil Works 4.2 2.7 17.5 22.8 40.3 35.7 18.7 6.5 148.3 Material 1.9 0.9 4.6 4.4 3.5 15.2 Survey/Design 0.3 0.9 3.4 0.3 1.2 1.0 0.2 0.1 7.5 Incremental Operating 0.2 0.3 0.2 0.3 0.4 0.4 1.7 Land Acquisition 1.1 0.1 0.4 0.4 0.0 0.1 2.1 Other 0.9 0.6 0.8 0.4 0.4 0.3 3.5

Subtotal (B2) 6.5 4.5 27.8 24.1 47.3 41.4 19.7 7.0 178.3

C. North Nghe An1. Foreign Civil Works 1.8 0.4 4.2 7.1 10.7 13.4 9.0 1.0 47.6

Material 0.1 0.0 0.2 Equipment 0.3 0.7 0.0 1.0 2.0 Survey/Design 0.2 0.1 0.0 0.6 0.1 0.4 0.0 0.0 1.4

Subtotal (C1) 2.4 1.1 4.3 7.8 10.8 13.7 9.1 2.0 51.22. Local Civil Works 3.5 3.4 11.8 16.1 30.4 33.2 26.0 4.0 128.5 Material 0.3 0.0 0.3 Survey/Design 0.3 0.6 2.2 1.2 1.9 2.1 0.8 0.3 9.4 Incremental Operating 0.0 0.3 0.1 0.2 0.1 0.1 0.1 1.0 Land Acquisition 0.1 0.3 1.1 0.5 0.3 0.1 2.4

Subtotal (C2) 3.8 4.1 14.4 17.9 33.7 35.9 27.2 4.6 141.6


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Appendix 1 19

1994 1995 1996 1997 1998 1999 2000 2001 Total

D. Quang Tri Quang Binh1. Foreign Civil Works 38.2 13.8 52.0 Material 9.0 1.5 10.4 Equipment 0.4 1.4 1.8 Survey/Design 1.4 0.4 1.8

Subtotal (D1) 49.0 17.1 66.02. Local Civil Works 98.8 41.1 139.9 Material 17.4 2.9 20.3 Survey/Design 5.7 2.0 7.7 Incremental Operating 0.8 0.7 1.5

Subtotal (D2) 122.7 46.6 169.3

E. CPO1. Foreign Equipment 0.4 1.1 0.4 0.2 0.4 2.6 Survey/Design 0.4 0.1 0.0 0.2 0.7 Consulting Services 3.8 8.9 5.1 5.3 2.9 0.7 3.8 30.6 Service Charge 0.2 0.7 1.1 2.5 4.5 5.8 3.6 18.2

Subtotal (E1) 0.4 5.5 10.0 6.5 7.8 7.5 6.5 8.0 52.22. Local Survey/Design 0.5 0.5 0.1 0.1 0.2 1.4 Consulting Services 0.7 1.6 0.9 0.9 0.5 0.1 0.7 5.4 Incremental Operating 0.3 0.3 0.1 0.1 0.2 0.3 1.3

Subtotal (E2) 1.5 2.3 1.0 1.0 0.9 0.5 0.9 8.1F. Total Costs1. Foreign Civil Works 7.7 4.3 13.6 26.6 33.9 44.2 78.2 28.7 237.1 Material 1.0 0.5 2.4 0.1 9.9 1.8 9.0 1.5 26.1 Equipment 1.1 3.0 0.8 1.0 0.5 0.4 3.8 10.6 Survey/Design 1.1 0.5 0.7 0.8 0.3 1.1 1.8 1.0 7.3 Service Charge 0.2 0.7 1.1 2.5 4.5 5.8 3.6 18.2 Consulting Services 3.8 8.9 5.1 5.3 2.9 0.7 3.8 30.6 Subtotal (F1) 10.8 12.2 27.0 34.8 51.9 54.9 95.9 42.4 329.92. Local Civil works 14.9 13.5 36.8 65.7 92.0 124.4 206.3 84.6 638.2 Material/Equipment 4.1 0.9 4.6 0.3 19.3 3.5 17.4 2.9 52.9 Equipment 0.4 0.4 Survey/Design 1.3 2.1 8.0 2.3 5.0 4.7 7.1 3.1 33.6 Incremental Operating 0.2 0.0 0.8 0.6 1.0 0.9 1.5 1.2 6.2 Land Acquisition 2.3 10.5 14.7 24.6 0.3 8.1 60.6 Consulting Services 0.7 1.6 0.9 0.9 0.5 0.1 0.7 5.4 Other 0.3 1.3 0.7 1.0 2.3 3.1 2.5 11.2 Subtotal (F2) 20 17 56 81 134 161 236 103 808 Total 31 30 83 116 186 216 332 145 1,138

CPO = Central Project Office, D = Vietnamese Dong.Source: ADBPCR files.


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Appendix 120

Table A1.3: Relief Well Contracts and Well Effectiveness

Contract Number and LengthNumber of

WellsBuilt Effective Percent

Effective1. From km 48+000 to km 52.5 31 31 7 23

2. From km 72+500 to km 73+500 36 36 26 723. From km 81+500 to km 82+500 25 25 25 1004. From km 48+000 to km 53+000 24 24 12 505. From km 72+000 to km 72+500 15 15 5 336. From km 74+000 to km 75+000 39 39 11 287. From km 80+500 to km 82+000 30 30 14 478. At km 44 17 9 0 09. At km 82 7 7 9 100km = kilometer.Source: BME Final Report.

Table A1.4: Revenue and Costs of Song Chu and North Nghe An Irrigation Companies(D million)

1996 1998 1999 2000 2001 2002 2003 2004

A. Fee Collection

1. SCIC 17,388 18,551 19,594 20,803 29,640 33,910 35,634

2. NNAIC 10,324 11,463 12,432 13,645 12,214 12,357 12,152

B. O&M costs

1. SCIC 11,340 11,314 10,594 12,999 13,675 13,352 15,412

2. NNAIC 9,920 5,666 6,586 7,352 6,831 7,627 7,506

B. Other costs1. SCIC 14,824 18,680 18,440

2. NNAIC 4,292 4,488 4,458

Margin3. SCIC 1,141 1,878 1,782

4. NNAIC 1,091 242 188

D = Vietnamese Dong, NNAIC = North Nghe An Irrigation Company, O&M = operation and maintenance, SCIC= Song Chu Irrigation Company.Source: SCIC and NNAIC.


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Appendix 2 21

IRRIGATION AND DIKE INFRASTRUCTURE

A. Hanoi Dike

1. Rehabilitation of 45 kilometers (km) of Hanoi main dike (km 40 to km 85), plus anextension of 16 km (km 85 to km 101).

2. All dike rehabilitation items under the Project were generally completed as designed.

(i) Quality of rehabilitation was generally acceptable.(ii) All revetments have been covered by several meters of deposited silt, which are

now vegetated. Revetments have provided substantial protection, as they wereconstructed in erosion prone areas. However, to some degree, the erosionproblem has moved downstream, with major protection works completed andongoing using local funds.

(iii) Since completion in June 2001, the Red River water level at Hanoi has notreached a critical level and the practical effectiveness of the dike cannot beevaluated. However, operations evaluation mission (OEM) surveys and interviews

with implementation, construction, and management offices, including CentralProject Office, subproject office (SPO) 401, Department of Dike Management andFlood Control (DDMFC) of the Ministry of Agriculture and Rural Development,Hanoi DDFMC as well as interviews with people living close to the dike lead anumber of conclusions, outlined below.

1. Design

3. A number of issues were identified in relation to di

Irrigation and Flood Protection Rehabilitation Project in the Socialist Republic of Viet Nam

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