ASSESSEMENT OF CTF COMPLIANCE

Sustainable Urban Transport for Ho Chi Minh City Mass Line 2 Project

Introduction The Asian Development Bank is administering the “Sustainable Urban Transport for Ho Chi Minh City Mass Rapid Transit Line 2 Project,” co-financed by Clean Technology Fund (CTF) to support the effective sustainable utilization of a mass rapid transit line in HCMC. As part of the funding approval process for CTF, an independent review of the proposed project must be undertaken by a technical expert. This review evaluates whether the project is within the scope, meets the objectives, and falls within the framework of CTF requirements1. This review is based primarily on the draft Report and Recommendation of the President (RRP) including the Supplementary Appendix covering CTF eligibility.

Project Scope and Objectives The project is the final part of a series of three project loans comprising the HCMC Urban Mass Rapid Transit Line 2 (MRT2) Investment Program which will finance MRT2 station accessibility measures, information systems and sector development implementation support. This component of the project will facilitate the challenges of urban transport including changing public behavior. If the MRT2 system is not user friendly in terms of access, convenience and security, the envisioned connectivity between transport modes (walking, biking, paratransit, buses and private motorized transport) will not be realized and this will negatively impact the potential ridership.

Overall Compliance with CTF Results Framework The proposed project complies with the CTF Results Framework (A, B1, B2 and B4) as it addresses:

 The creation of a replicable demonstration toward a transformed low carbon economy by promoting access to public transport. While the overall project has replicability in other lines of HCMC metros and future Hanoi projects, the CTF-funded components are also replicable in many secondary cities in Vietnam (A).  Through such access to public transport there is measurable avoided GHG emissions

estimated in the proposal of 586,500 tCO2e over the project lifetime. The replicability

estimates for this project are 3.8 mil tCO2e according to the draft project documents. While the GHG emissions from both estimates use Transport Emissions Evaluation Models for Projects (TEEMP2) the replicability of avoided GHG emissions will have a larger degree of uncertainty (B1).

1 Clean Investment Fund Revised CTF Results Framework, December 6, 2012; and CTF Investment Criteria for Public Sector Operations, February 9, 2009. 2 Asian Development Bank. 2010. Methodology for Transport Emissions Evaluation Model for Projects. Reference Number: EKB: REG 2010-16 Evaluation Knowledge Brief. Asian Development Bank, Manila; 2010, 25.  Increased finance for low carbon development is mobilized by CTF partnering with the Asian Development Bank, KfW, European Investment Bank and the Government of Vietnam in providing a significant portion of the final part of a series of three project loans comprising the HCMC MRT2 investment program (B2).3  The only way to realize the proposed increase in public transport trips is through (i) a quality public transportation alternative which the MRT will provide and (ii) through the increased access to public transport provided by the CTF investment into this project. The CTF investment is estimated to increase ridership by over 10% (B4).

Project level output intermediate indicators are clearly addressed through the improved facilities for pedestrian and non-motorized transport (NMT) which will improve the access to MRT Line 2 stations and connectivity with other modes of public transport. The indicator is further broken down into (i) improved MRT Line 2 station accessibility, (ii) establishment of public transport information systems and (iii) relevant public transport policy development. The indicators will be monitored through both government statistics and ADB reporting requirements included in the loan framework.

Co-benefits at the transformative impact level include:

 The improvement of the enabling policy and regulatory environment for low carbon technologies and practices. Specifically identified are the institutional capacity building of the Urban Transport Management Department (UTMD) in street management, parking policy, the pricing model of public and private transport in HCMC, and incorporation of gender and accessibility in accordance with ADB’s Effective Gender Mainstreaming guidance. It is important to note that the improvements in the capacity of the UTMD and associated transport agencies will have replication affects across other planned public transport projects in HCMC and Vietnam.

Co-benefits at the outcome level are highlighted through the indicator:

 Increasing the accessibility to stations has the obvious benefit of savings on travel time for public transit users.  Reduced local pollution of black carbon by more than 9 million tCO2e during the project lifetime will be realized through modal switch from private transport modes. While this could be argued as an indirect benefit as the CTF investment is focused towards the access to stations (connectivity) rather than the MRT2 line proper, access to and the use of the MRT are directly linked.

Conclusion and Recommendations In reviewing the Sustainable Urban Transport for Ho Chi Minh city Mass Rapid Transit Line 2 Project against the CIF Results Framework it is concluded that the project meets and in some areas exceeds the requirements. The project complies with the framework outcomes using

3 CTF investment is 75% of the third project loan, and 3.4% of the total investment in the three project loans. justifiable indicators to measure success. The details presented in the Supplementary Appendix to the draft RRP clearly demonstrate compliance with the 6 major CTF eligibility criteria.4

This reviewer does have recommendations on improving the project within the CTF Results Framework. Although the project is at an advanced stage of development, to the extent possible these recommendations may be considered when finalizing the project components.

1. The difficulty of pedestrians crossing the street is a very significant issue in HCMC. Directly addressing pedestrian crossings and giving priority to at-grade crossings compared to overpasses or underpasses is both more financially viable and leads to a more universally accessible public transportation system. This can be coupled with including speed control measures in the technical due diligence section. This would add the co-benefit of reduced number of road accidents. 2. Prioritizing measures to promote connectivity would be beneficial. Such a list could be: (i) pedestrian infrastructure; (ii) bicycle infrastructure; (iii) bus and paratransit; (iv) motorbike parking; and (iv) car parking. It should be noted that this recommendation adds paratransit (motorcycle taxis known locally as “xe oms”) which is not explicitly included in the draft RRP and differentiates between motorbike and car parking. 3. The project should set a minimum target of 500 meters around each MRT station as complying with universal accessibility and quality pedestrian access. Anything less than 500 meters would greatly discount the impacts on station access. 4. ‘Station access management system’ is not clearly defined. A clear emphasis on real- time information, connectivity between modes of transport, ticket integration, fare structuring would ensure such systems were implemented. 5. While gender design aspects are emphasized, a larger emphasis on universal accessibility would increase the benefit on gender and local community co-benefit. 6. While it is mentioned that integration between metro lines and bus services is a priority, more of an emphasis on the existing and planned public transport projects (other metro lines, proposed BRT) could do with some emphasis.

Technical Reviewer

Bradley D. Schroeder, Independent International NMT Consultant

15 August 2013

[NOTE: ADB project team response is presented on the following page.]

4 The primary investment criteria are: (i) potential for GHG emissions savings, (ii) cost-effectiveness, (iii) demonstration potential at scale, (iv) development impact, (v) implementation potential, and (vi) additional costs and risk premium. Response from ADB Project Team

The project team appreciates the concise review and the recommendations on project design, with which we are in general agreement. Recommendations 1, 2, and 6 are consistent with the project design objectives of improved connectivity and access to mobility services, and are covered in more detail in the Project Administration Manual and other appendixes to the draft RRP. Recommendations 4 and 5 can be further elucidated going forward. We agree with Recommendation 3 in principle. However, establishing a 500 meter radius of accessibility around each MRT station will be extremely difficult given the dense development in HCMC and the fact that the MRT2 system is a “retrofit” into the urban area.