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World Bank transport program in Vietnam

Transport Sector

World Bank, Hanoi, Vietnam

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Transport program in Vietnam

• Overview• Changing Program

Objectives• Present status of

program• Future directions

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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

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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.

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5

Projects under Implementation

Project Approved Closing AgeIDA

approved (US$m)

Current Amount (US$m)

Disbursed to date [1]

(US$m)

Percentage disbursed

(%)

Mekong Transport & Flood Protection

FY01 12/10 8.5 110 132 117 86.22

MTFP Addit’l Financing

FY07 12/10 2 25 25 18.3 29.02

Road Network Improvement

FY04 09/10 5.5 225 241 105.8 42.91

Road Safety FY05 06/11 4.3 32 32 5.1 15.44

Rural Transport III FY06 12/11 3.5 106 114 27.8 23.85

Mekong Delta Transport Infrastructure Development

FY07 12/13 2.3 207 211 9.1 4.19

Hanoi Urban Transport

FY08 12/13 2.0 155 156 7.2 4.48

Northern Delta Transport Development Project

FY08 6/14 1.0 170 164 -- --

[1] AS of January15, 2010

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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

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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

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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

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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)

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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

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Thank you!