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[Customer Name] Technical Assistance Consultant’s Report Project Number: 43237 May 2014 Socialist Republic of Viet Nam: Urban Environment and Climate Change Adaptation (Financed by ADB's Technical Assistance Special Fund [TASF-IV]) Prepared by PM Group and ASEC Consultants For the Provincial ommittees of Quang Binh, Quang Nam, and Thanh Hoa, and People’s C the Asian Development Bank This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents. All the views expressed herein may not be incorporated into the proposed project’s design. VIE: Urban Environment and Climate Change Adaptation Project Final Report Volume 1: Main Report Asian Development Bank VIE: Urban Environment and Climate Change Adaptation Project Issue date: May 2014 Document Sign Off Final Report ADB VIE: Urban Environment and Climate Change Adaptation Project PM Group Project Number: IE1310001410 Document Number: IE131001410-06-RP-103-Issue B Customer Project Number: TA-8171 File No: IE131001410-06-RP-103 CURRENT ISSUE Issue No: B Date: Reason for issue: For Client Approval Sign Off Originator Checker Reviewer Approver Customer Approval (if required) Print Name Dr Gary MOYS Jim McNelis Trevor O‘REGAN Signature Date 28/05/14 28/05/14 28/05/14 28/05/14 PPTA 8171 Vol 1 Main Report Page 2 of 134 Asian Development Bank Urban Environment and Climate Change Adaptation Project IE131001410-06-RP-103, Issue B 28/05/14 Contents Executive Summary & Conclusions 11 1 Introduction 22 1.1 The PPTA Assignment 23 1.2 Organisation of the Draft Final Report 25 1.3 Purpose & Layout of this Report 26 2 Project Rationale 27 2.1 The Project Cities 27 2.2 Hoi An Development Trends 28 2.3 Dong Hoi Development Trends 30 2.4 Climate Change & Climate Proofing of Infrastructure 34 2.5 Urban Water Supply Vietnam 37 2.6 Urban Wastewater in Vietnam 44 2.7 Integrated Coastal City Flood Management 47 2.8 Concluding Remarks & Opportunities 53 3 The Proposed Project 55 3.1 Impact & Outcome 55 3.2 Outputs 55 3.3 Lessons Learned 56 3.4 Project Description 58 3.5 Special Features 62 3.6 Investment and Financing Plan Summary 63 3.7 Implementation Arrangements 65 3.8 Project Implementation Plan 66 3.9 Procurement 68 3.10 Consulting Services 68 3.11 Indicative Disbursement Arrangements 69 3.12 Project Performance Monitoring and Evaluation 69 3.13 Technical Assistance 69 4 Social & Gender Analysis 71 4.1 Background 71 4.2 Methodology and Data Collection 71 PPTA 8171 Vol 1 Main Report Page 3 of 134 Asian Development Bank Urban Environment and Climate Change Adaptation Project IE131001410-06-RP-103, Issue B 28/05/14 4.3 Policy Framework 71 4.4 Poverty Impact 72 4.5 Willingness to Pay and Affordability of Services 74 4.6 Gender Context 76 4.7 Challenges for Urban Managers 79 5 Environmental & Social Safeguards 80 5.1 ADB Environmental Safeguard Requirements 80 5.2 Vietnamese Environmental Safeguards 84 5.3 Environmental Impacts 85 5.4 Environmental Management Plan 88 5.5 Resettlement Plans 91 5.6 Due Diligence Activities 92 5.7 Resettlement Impacts 93 5.8 Resettlement Cost Estimates 94 6 Economic Analysis 96 6.1 Demand Analysis 96 6.2 Economic Rationale 97 6.3 Least Cost Analysis 98 6.4 Major Assumptions and Methodology 98 6.5 Economic Costs and Benefits 99 6.6 Economic Analysis Results 101 6.7 Sensitivity Analysis 104 6.8 Benefit Distribution and Poverty Impact Analysis 105 7 Financial Analysis 107 7.1 Introduction 107 7.2 Project Financial Management Assessment 107 7.3 Some rules regarding fiscal analysis of the PPCs 108 7.4 Quang Nam Province Financing Ability 109 7.5 Financing Ability Quang Binh Components 121 7.6 Quang Binh PPC fiscal analysis 127 PPTA 8171 Vol 1 Main Report Page 4 of 134 Asian Development Bank Urban Environment and Climate Change Adaptation Project IE131001410-06-RP-103, Issue B 28/05/14 Appendices Appendix A References Appendix B Design & Monitoring Framework Appendix C Poverty & Social Assessment Appendix D Institutional Review Appendix E Cost Tables PPTA 8171 Vol 1 Main Report Page 5 of 134 Asian Development Bank Urban Environment and Climate Change Adaptation Project IE131001410-06-RP-103, Issue B 28/05/14 Tables Table 1: Changes in CC Scenarios between 2009 and 2012 ............................................................... 35 Table 2: Benchmarking of Quang Nam WSC and Quang Binh WSC against well performing WSC in the SE Asian Region and Vietnam ........................................................................................................ 39 Table 3: Climate Change Risks for Urban Water Supply in Vietnamese Coastal Cities ...................... 40 Table 4: Climate Change Risks for Urban Waste Water in Vietnamese Coastal Cities ....................... 46 Table 5: Matrix of Structural & Non Structural Flood Risk Management Measures adapted to Coastal Cities ..................................................................................................................................................... 50 Table 6: Water levels Hoi An station -flood management options (VGTB model) ................................ 51 Table 7: Water level reductions Hoi An station - flood management options (VGTB model) ............... 51 Table 8: Matrix of Structural & Non Structural Flood Risk Management Measures proposed for inclusion in the Project .......................................................................................................................... 53 Table 9: Project Investment Plan .......................................................................................................... 64 Table 10: Financing Plan ...................................................................................................................... 65 Table 11: Climate Change Adaptations Currently Practiced in Dong Hoi and Hoi An ........................ 73 Table 12: Demand for Public Services – Business Responses ............................................................ 74 Table 13: Willingness to Pay for Wastewater Connection – Resident Responses ............................... 75 Table 14: Reasons Given for Not Being Willing to Connect to the Water Supply System ................... 75 Table 15: Level of Satisfaction of Water Supply System - Enterprises ................................................ 76 Table 16: Affected Persons in the Four Hoi An Components ............................................................... 93 Table 17: Financial Cost by Output and for the Overall Project by Year .............................................. 99 Table 18: Economic Cost by Output and for the Overall Project by Year ............................................. 99 Table 19: Economic Evaluation of Dong Hoi Urban Environment and Climate Change Adaptation .. 102 Table 20: Economic Evaluation of Hoi An Urban Environment and Climate Change Adaptation ...... 103 Table 21: Economic Evaluation of the Overall Project ........................................................................ 104 Table 22: Summary of Economic Indicators and Sensitivity Analysis ................................................ 105 Table 23: Type of Fiscal Analysis to be undertaken for Quang Binh Components ............................ 110 Table 24: Financial analysis of the Coco UDA project ........................................................................ 112 Table 25: Costs & Phasing of Coco UDA ........................................................................................... 112 Table 26: Financing Plan .................................................................................................................... 112 Table 27: Current Water Supply Tariffs (2013) for Hoi An .................................................................. 113 Table 28: Quang Nam Province (PPC): Fiscal situation 2009-2013................................................... 114 Table 29: Quang Nam Province - Key fiscal ratios 2009-2013 ........................................................... 117 Table 30: Index ................................................................................................................................... 119 Table 31: Fiscal Projections – OPEX and operating margins ............................................................. 119 Table 32: Debt Service & Net Margin ................................................................................................. 120 Table 33: Type of Fiscal Analysis to be undertaken for Quang Binh Components ............................ 121 PPTA 8171 Vol 1 Main Report Page 6 of 134 Asian Development Bank Urban Environment and Climate Change Adaptation Project IE131001410-06-RP-103, Issue B 28/05/14 Table 34: Existing wastewater tariffs in Dong Hoi .............................................................................. 121 Table 35: Physical Assumptions of the Bao Ninh Development ......................................................... 124 Table 36: Cost & Phasing of the Bao Ninh Development .................................................................. 125 Table 37: Financing Plan of the Bao Ninh Development ................................................................... 126 Table 38: Cash Flow of the Bao Ninh Development .......................................................................... 126 Table 39: Quang Binh PPC – Fiscal Situation 2009-13 ...................................................................... 128 Table 40: Quang Binh Province – Key fiscal ratios 2009-2013 .........................................................
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