Preparing the Second Ring Road (Completing the Circle) Project (Financed by the Japan Special Fund)

Technical Assistance Report

Project Number: 40254 December 2007

Socialist Republic of Viet Nam: Preparing the Second Ring Road (Completing the Circle) Project (Financed by the Japan Special Fund)

The views expressed herein are those of the consultant and do not necessarily represent those of ADB’s members, Board of Directors, Management, or staff, and may be preliminary in nature.

CURRENCY EQUIVALENTS (as of 5 November 2007) Currency Unit – dong (D) D1.00 = $0.0001 $1.00 = D16,074

ABBREVIATIONS ADB – Asian Development Bank DTPW – Department of Transport and Urban Public Works EIA – environmental impact assessment EMDP – ethnic minority development plan HCMC – Ho Chi Minh City O&M – operation and maintenance PC-HCMC – People’s Committee of Ho Chi Minh City PPP – public-private partnership PPTA – project preparatory technical assistance TA – technical assistance

TECHNICAL ASSISTANCE CLASSIFICATION Targeting Classification – General intervention Sector – Transport and communications Subsector – Roads and highways Theme – Sustainable economic growth Subtheme – Fostering physical infrastructure development

NOTE In this report, “$” refers to US dollars.

Vice President C. Lawrence Greenwood, Jr., Operations 2 Director General A. Thapan, Southeast Asia Department (SERD) Director J. Cooney, Infrastructure Division, SERD

Team leader P. Vallely, Senior Transport Specialist, SERD Team members Y. Feng, Principal Environment Specialist, SERD S. Kawazu, Counsel, Office of the General Counsel M. Sultana, Social Development/Poverty Reduction Specialist, SERD Y. Tsujiki, Financial Analysis Specialist, SERD L. D. Thang, Programs/Projects Implementation Officer, SERD

105 o 00'E 110 o 00'E PEOPLE'S REPUBLIC OF CHINA HA NOI V I E T N A M Hai Phong o 20 00'N Gulf of 20 o 00'N SECOND RING ROAD (COMPLETING THE CIRCLE) PROJECT Tonkin

Vinh LAO PEOPLE'S Extension from DEMOCRATIC QL 1A to QL 13 REPUBLIC Da Nang QL 13 PR 16 QL 1A QL 1A Quy Nhon Go Dua Intersection CAMBODIA ue en QL 1K Av PROJECT AREA oi Nha Trang an Da Lat H Gulf of Go Dua Thailand Ho Chi Minh City 10o 00'N 10 o 00'N Vung Tau Thu Duc District Binh Thai South China Sea Intersection 105 o 00'E 110 o 00'E

ighway Loi H t-Binh on Nha Tan S Tan Son Nhat Airport Ho Chi Minh- Long Thanh Dau Giay Expressway

Rach Chiec District 9 National Capital Bridge City/Town Ho Chi Minh City PR 25

Ring Road No. 2 (missing sections)

Ring Road No. 2 (existing) e v District 2

Phu My Bridge and Approach Roads i R

(Under construction) n o East-West Highway Project ig QL 10 a (Under construction) S Ho Chi Minh City - Long Thanh - r Phu My Bridge e Dau Giay Expressway (Future project) Hung Vuong iv R Huynh Tan Phat i An Phu - Second Ring Road Extension a N (Future project) g n Primary Road o D Flyover (to be constructed) District 7 PR 15

Flyover (existing) Binh Tan h n N Li N QL 50 National Highway District n g a u V PR 34 y PR 34 Provincial Road n e ye n

0 u 0 River V 1 2 3 4 5

7 g

- N

3 n

0 International Boundary

3 L Kilometers 4 QL 50 i n

Boundaries are not necessarily authoritative. QL 1A R District 8 h M

I. INTRODUCTION

1. During the Country Programming Confirmation Mission for the Asian Development Bank’s (ADB’s) 2007 program for Viet Nam, the Government of Viet Nam requested ADB for technical assistance (TA) for the preparation of the Second Ring Road (Completing the Circle) Project. In the memorandum of understanding for the mission it was agreed that a project preparation technical assistance (PPTA) for the Project would be included in the ADB nonlending program for 2007. A mission visited Viet Nam on 8–17 August 2007 and held initial discussions with the Government on the proposed TA. Agreements were reached on the impact, outcome, outputs, implementation arrangements, cost, financing arrangements, and terms of reference.1 A design and monitoring framework for the TA is in Appendix 1.

II. ISSUES

2. The economy of Viet Nam—one of the world’s fastest-growing economies—grew by about 8.0% in 2006. This performance came on top of average annual growth of 7.5% over 2001–2005. Industry and services contributed more than 90% of the growth in gross domestic product in 2006. Industry’s robust 10.4% growth in 2006 was only slightly below the rate a year earlier. This sustained rapid growth has led to an equally rapid increase in the use of motorized vehicles, and to mounting congestion on the highway network. For industry and services to continue to drive economic growth, Viet Nam must keep developing its highway transport system so that goods and people can be moved efficiently.

3. The transport system in Viet Nam is inefficient and expensive. ADB’s strategy, as set out in its country strategy and program for the country,2 is to support the Government in improving transport infrastructure and reducing transport costs. Investments will be made in urban transport and priority expressway and railway facilities to allow the safe and efficient movement of goods and people around, through, and between major centers of economic activity nationwide.

4. Greater Ho Chi Minh City (HCMC) is the largest city in Viet Nam and the country’s economic hub, with a population forecast to grow by 2.1% yearly from the current 7.9 million3 to 10.3 million by 2020. The volume of trade through HCMC’s port grew by more than 15% in value in 2006. With economic growth expected to continue in the medium term, and households earning higher incomes, many more families will be able to buy cars, and the number of journeys undertaken will significantly increase. Already, the roads within and around HCMC are becoming heavily congested, travel speeds are dropping, and transport costs are rising. There is an urgent need to provide relief to the city roads connecting the center of HCMC and the port area with the suburbs to the north and northeast of the city, and, farther out, to the roads leading north from the city to central and northern Viet Nam. As part of development planning for HCMC, several master plans have been prepared to deal with the needs of specific sectors. The city’s needs are huge. For transport alone, $26 billion is required to fund priority investment projects until 2020 to enable the city’s transport systems to cope with the demands of growth. To implement the required improvements in transport infrastructure, HCMC must (i) begin priority projects as soon as possible, and (ii) maximize its funding leverage in raising money from all sources.

1 The TA first appeared in ADB Business Opportunities on 21 September 2007. 2 ADB. 2006. Country Strategy and Program (2007–2010): Socialist Republic of Viet Nam. Manila. 3 Including both the permanent and the transient population.

5. A transport master plan was prepared in 2004, with assistance from the Japan International Cooperation Agency.4 This plan was later consolidated with a second master plan prepared by the People’s Committee of Ho Chi Minh City (PC-HCMC) and work done by the Ministry of Transport’s Technical, Engineering, and Design Institute. This consolidated transport master plan, approved by the Government in January 2007, sets out a $26 billion investment program up to 2020. The highest priority is to be given to subway and urban rail projects, as well as to the completion by 2010 of the city’s Second Ring Road.

6. The Second Ring Road is one of four concentric ring roads planned for HCMC. Encircling HCMC at a radius of about 5–10 km from the city center, it will decongest the city center and relieve it of large volumes of heavy truck traffic heading to and from the port area south of the city center. Much of the Second Ring Road has already been built and is in use, but a large part of the eastern section and a segment of the western section still have to be completed. Along the southern section, the Phu My Bridge across the Saigon River is being constructed. The construction of the bridge and the approach roads is being undertaken by a private sector consortium under a build-operate-transfer concession.

7. The Department of Transport and Urban Public Works (DTPW) is responsible for planning, constructing, operating, and maintaining the transport system in HCMC. Maintaining the city’s road network, in its view, requires about $3.6 million a year. Until recently the DTPW received only about 50% of the required funds, but the PC-HCMC has committed itself to providing about 75% from the third quarter of 2007. A funding gap remains, however. To bridge this gap the DTPW is trying to reduce operation and maintenance (O&M) costs and has begun contracting out maintenance works to the private sector. Contracting has so far been single-source, although a pilot project using competitive bidding started in September 2007. The DTPW realizes that further cuts in maintenance costs will require more innovative approaches, such as public-private partnership (PPP) arrangements and long-term O&M concessions.

8. The PC-HCMC has established traffic controls in parts of the city with the help of various donors, principally the Government of France and the World Bank. These controls cover only some areas and are not interconnected. Future transport development plans for HCMC will provide for traffic control systems that can monitor and control the movement of traffic throughout the city. Thus far, however, developments have been piecemeal. There are plans for the following: (i) toll systems within HCMC, e.g., on the Phu My Bridge; (ii) toll and traffic control systems for expressways north and south of the city; (iii) a new traffic control center and extensions of existing systems; and (iv) integrated ticketing systems associated with the new subway. To be efficient in managing the HCMC transport system, all of these traffic controls must be interconnected and integrated.

III. THE TECHNICAL ASSISTANCE

A. Impact and Outcome

9. The impact of the proposed TA will be a reduction in the cost and travel times for the movement of passengers and goods around the center of HCMC through the completion of the Second Ring Road. Its outcome will be a project design and feasibility study agreed on by the Government and ADB for the completion of the road.

4 Japan International Cooperation Agency. 2004. The Study on Urban Transport Master Plan and Feasibility Study in Ho Chi Minh Metropolitan Area. Ho Chi Minh City.

B. Methodology and Key Activities

10. The TA will have the following components:

(i) Planning for Second Ring Road. This component will address the construction work required to complete the Second Ring Road around HCMC with connections to all major radial highways. (ii) Management of HCMC urban road network. The PC-HCMC will be assisted in (i) reviewing O&M arrangements for the urban road network and considering O&M cost reduction measures through PPP; (ii) reviewing existing and planned toll and traffic control systems and finding ways of integrating and extending these systems throughout the city; and (iii) identifying an effective and appropriate toll and traffic control system for the Second Ring Road and connecting roads.

11. The activities in the Second Ring Road planning component will be carried out in two stages. In stage 1 the plans for the Second Ring Road will be reviewed and the HCMC transport master plan will be updated to take recent developments into account and to incorporate the latest traffic data into the traffic model for the city. The work in this stage will be done to confirm in principle (i) the advisability of completing the Second Ring Road, given the transport options available; and (ii) the appropriateness of the conceptual designs for the road (available capacity, intersection and interchange design, etc.) in view of the traffic demand. The stage 2 activities will involve (i) analyzing the transport network to confirm the economic and technical feasibility of constructing the missing sections of the Second Ring Road; (ii) assessing the potential environmental and social impact of the road construction and preparing the documents required by ADB under its safeguard policies; (iii) reviewing the scope for toll collection revenue and preparing the preliminary design of the toll facilities; and (iv) reviewing and recommending options for the financial structuring of the Project to ensure that loan debt services can be fully met by the future operator of the Project.

12. The construction of the missing sections of the Second Ring Road will have significant resettlement impact and significant adverse environmental impact. A full resettlement plan and an environmental impact assessment (EIA) will therefore be required. Initial investigations suggest that any impact on the ethnic minorities that may be living within the project area will be limited to involuntary resettlement and can therefore be addressed in the resettlement plan. An initial poverty and social analysis for the investment loan project is in Appendix 2. Detailed assessments will be developed during the implementation of the proposed TA.

13. In the HCMC urban road network management component two studies will be done to assist the PC-HCMC in managing the HCMC urban road network. The first study will review existing O&M arrangements for the urban road network and suggest ways of reducing O&M costs, particularly through PPP. The study will identify PPP opportunities, review the legal and regulatory framework related to the use of PPP in HCMC and identify constraints, and propose appropriate PPP models. The second study will deal with improvements in traffic management. It will review existing and planned toll and traffic control systems and recommend ways of integrating and extending these systems.

C. Cost and Financing

14. The total cost of the TA is estimated at $1.25 million. ADB will finance $1 million. The TA will be financed on a grant basis by the Japan Special Fund, funded by the Government of

Japan. The Government of Viet Nam will finance the remaining $0.25 million through in-kind contributions of the Executing Agency—remuneration for counterpart staff; office furniture and facilities for the counterpart staff; local transport and local communications for counterpart staff; and maps, reports, and other information. Detailed cost estimates are in Appendix 3. The Government of Viet Nam has been informed that approval of the TA does not commit ADB to finance any ensuing project.

D. Implementation Arrangements

15. The Executing Agency for the TA will be the DTPW, and the Implementing Agency will be the Urban Transport Management Department No. 2. The DTPW is responsible for a large number of major infrastructure projects in HCMC, including the ongoing East–West Highway Project funded by the Japan Bank for International Cooperation. Hence, the DTPW is considered to have the capacity and capability to undertake the role of Executing Agency for the TA. The DTPW deputy director will have overall responsibility for supporting the implementation of the TA and for providing guidance, administrative and technical support, counterpart staff, documentation, and other services that may be required. The Implementing Agency will establish a project implementation unit for the TA, headed by a vice director and appropriately staffed for day-to-day coordination.

16. The consulting services for the TA will be undertaken by an international consulting firm in association with national consultants. The consultants will be hired by ADB according to its Guidelines on the Use of Consultants (2007, as amended from time to time) and its quality- and cost-based recruitment procedures. Prequalified international consulting firms must submit simplified technical proposals, which will be assigned a weight of 90% in the calculation of the firms’ total scores; the financial proposals will be given a weight of 10%. This proposed weighting reflects the complexity of the consulting services package. About 147 person-months of consulting inputs will be required (international, 21 person-months and national, 126 person- months). The consulting services will be implemented over 11 months, from 1 May 2008 to 31 March 2009. An outline of the terms of reference for the services, including the reporting requirements, is in Appendix 4. The consultants will have expertise in (i) the design of highway alignments, pavements, bridges, culverts, traffic control and information systems, and road safety systems; (ii) transport economics; (iii) financial analysis and assessment; (iv) structuring of PPP for highway O&M; (v) environmental impact assessment; (vi) preparation of resettlement plans; (vii) assessment of impact on ethnic minorities; and (viii) assessment of gender, HIV/AIDS, trafficking, and other social issues. Equipment financed under the TA will be procured according to ADB’s Procurement Guidelines (2007, as amended from time to time) and will be handed over to the DTPW at the end of the services. All surveys will be commissioned by the consultants and funded through the consulting services contract.

17. The consultants will prepare the following documents and reports, and submit them to DTPW, and ADB: (i) an inception report, to be submitted within 4 weeks after the start of the services; (ii) brief monthly progress reports based on the implementation and the staffing schedules; (iii) brief interim reports, to be submitted before the end of the third and sixth months of the services; (iv) a draft final report (including the EIA and summary EIA reports, resettlement plan, and, if required, an ethnic minorities development plan), to be submitted within 9 months of the start of the services; and (v) a final report incorporating the DTPW’s and ADB’s comments on the draft final report, to be submitted within 11 months of the start of the services. Tripartite meetings will be held after the submission of the inception, interim, and draft final reports. A workshop will be held after the submission of the draft final report to present the results of the Project to the Government, nongovernment organizations, and other stakeholders.

IV. THE PRESIDENT’S DECISION

18. The President, acting under the authority delegated by the Board, has approved the provision of technical assistance not exceeding the equivalent of $1,000,000 on a grant basis to the Government of the Socialist Republic of Viet Nam for preparing the Second Ring Road (Completing the Circle) Project, and hereby reports this action to the Board.

6 Appendix 1

DESIGN AND MONITORING FRAMEWORK

Data Design Performance Sources/Reporting Assumptions Summary Targets/Indicators Mechanisms and Risks Impact Assumptions A reduction in the cost and Construction of the missing Project completion • The development travel times for the movement sections of the Second Ring report master plan for HCMC of passengers and goods Road by mid-2014 is implemented. around the center of HCMC • Economic growth in through the completion of the Increase in travel speeds HCMC, provincial the area around Second Ring Road. between National Highway and national HCMC is sustained. (QL)1 and District 2 by 50% on statistics completion of construction by mid 2014 Customs reports for HCMC Port Reduction of travel costs by 10% compared to the 2007 level Traffic surveys within 2 years of completion of the missing sections of the Second Ring Road

Reduction of HCMC Port related heavy truck traffic on QL1K by 50% by mid 2014

Outcome Assumptions Project design and feasibility By June 2009 a memorandum of Memorandum of • The priorities of the study agreed on by the understanding signed by the understanding Government remain Government and ADB for the Government and ADB during an the same. completion of the Second appraisal mission to prepare a • The Government does Ring Road project to (i) complete the not seek other Second Ring Road, (ii) introduce sources of funding. the use of PPP for O&M, and (iii) integrate existing traffic management systems Outputs Risks 1. Technical assessments Draft final report submitted to Receipt of report by • Availability of and completed, including the Government and ADB by the ADB access to information evaluation of economic and end of the ninth month after the and government technical feasibility, and start of the consulting services Receipt of report by personnel is social and environmental government restricted. acceptability, and required Road maintenance and traffic • Access to project sites reports submitted to complete management improvements is restricted. the Second Ring Road identified through the construction of the missing sections

2. Recommendations proposed for (i) appropriate use of PPP for O&M of the urban transport network, and (ii) integration of existing traffic management system

Appendix 1 7

Activities with Milestonesa Inputs A. Principal Tasks 1.1 Conduct of initial survey; preparation of improvement options and Month 2 • ADB: $1 million data collection questionnaires 1.2 Preparation of economic analysis methodology Month 2 • Government: $0.25 million 1.3 Initial environmental impact assessment Month 3 1.4 Initial social impact assessment Month 3 1.5 Poverty, social, and gender analysis Month 4 1.6 Bridge evaluation Month 4 1.7 Conduct of road safety audits Month 4 1.8 Preparation of preliminary designs for toll and traffic control Month 4 systems 1.9 Engineering design review and revision of cost estimates Month 4 1.10 Economic analysis Month 9 1.11 Environmental impact assessment Month 9 1.12 Financial management assessment of project agencies Month 9 1.13 Preparation of resettlement and ethnic minority development Month 9 plans and gender strategy (including strategy for dealing with HIV/AIDS and human trafficking) 1.14 Design of project performance management system Month 9

2.1 Review of existing O&M arrangements Month 3 2.2 Review of existing traffic control systems Month 3 2.3 Review of legal and regulatory frameworks for use of PPP Month 3 2.4 Identification of opportunities for use of PPP in O&M, and Month 6 appropriate models 2.5 Development of options for integrating traffic control systems and Month 6 extending these systems

B. Progress Reports R.1 Submission of inception report Month 1 R.2 Submission of interim report Month 6 R.3 Submission of draft final report Month 9 R.4 Submission of final report, within 1 month of receipt of comments Month 11 on draft final report ADB = Asian Development Bank, HCMC = Ho Chi Minh City, O&M = operation and maintenance, PPP = public-private partnership. a In number of months from the start of the consulting services. The due date is the end of the stated month.

8 Appendix 2

INITIAL POVERTY AND SOCIAL ANALYSIS

Country/Project Title: Viet Nam: Second Ring Road (Completing the Circle) Project

Lending/Financing Project Department/ Southeast Asia Department Modality: Division: Infrastructure Division

I. POVERTY ISSUES A. Linkages to the National Poverty Reduction Strategy and Country Partnership Strategy 1. Based on the country poverty assessment, the country partnership strategy and the sector analysis describe how the project would directly or indirectly contribute to poverty reduction and how it is linked to the poverty reduction strategy of the partner country.

Viet Nam has made impressive gains in poverty reduction over the last decade. The proportion of the population below the poverty line has declined, from around 59% in 1993 to 25% in 2005. The Five-Year Socio-Economic Development Plan 2006–2010 proposes to reduce poor households to 15–16% by 2010. While significant in magnitude, however, progress in poverty reduction remains fragile, with a significant number of “near poor” clustered just above the poverty line. Sustained development requires modernized and improved physical infrastructure and associated services.

The proposed Second Ring Road is in Ho Chi Minh City, one of the least-poor areas of Viet Nam with a poverty incidence of 10.33% (Viet Nam Household Living Standard Survey 2002). In view of the low rate of poverty in the project area, the Project will have limited impact on poverty reduction in the area. However, improved transport infrastructure is critical to sustained rapid economic growth and overall poverty reduction, and can also contribute to regionally balanced and equitable economic growth by stimulating industrial development, increasing access to employment opportunities, and facilitating better access to social services. Isolation and disconnection are often seen as factors behind the inability of poor people to benefit from economic growth. Road connectivity under the Project will contribute to the ability of poor people to benefit from economic growth in the long run.

B. Targeting Classification 1. Select the targeting classification of the project:

General Intervention Individual or Household (TI-H); Geographic (TI-G); Non-Income MDGs TI-M1, M2, etc.)

2. Explain the basis for the targeting classification: The Project will address the construction of a ring road to HCMC and the improvement of urban traffic management.

C. Poverty Analysis 1. If the project is classified as TI-H, or if it is policy-based, what type of poverty impact analysis is needed? Not applicable. 2. What resources are allocated in the PPTA/due diligence? Not applicable. 3. If GI, is there any opportunity for pro-poor design (e.g., social inclusion subcomponents, cross subsidy, pro-poor governance, and pro-poor growth)? The design of the Second Ring Road will include measures to ensure that the construction of the road will not disadvantage local populations within the project area through loss of access. The social analysis will further examine the extent to which the Second Ring Road will help reduce transport costs for the poor and speed up the movement of goods for small producers, petty vendors, and other small businesses. The proposed road is expected to facilitate economic growth in the urban area, benefiting the poor and low-income groups. II. SOCIAL DEVELOPMENT ISSUES A. Initial Social Analysis Based on existing information: 1. Who are the potential primary beneficiaries of the project? How do the poor and the socially excluded benefit from the project? The potential beneficiaries of the project will be the city residents, traders, and travelers both within and outside HCMC. Initial observations suggest that lower transport costs and faster movement of goods will benefit small-scale

Appendix 2 9 traders, producers, and manufacturers by increasing incomes.

2. What are the potential needs of beneficiaries in relation to the proposed project? Increased transport cost, traffic congestion, and longer traveling times have made business and personal travel increasingly difficult for city dwellers and travelers in and out of the city. There is an urgent need to decongest the city roads connecting the center of HCMC and the port area with the suburbs to the north and northeast of the city and, farther out, to the roads leading north from the city to central and northern Viet Nam.

3. What are the potential constraints in accessing the proposed benefits and services, and how will the project address them? The PPTA social analysis will examine the present constraints imposed on the poor in gaining access to services in the city (cost of transport, traffic congestion, traveling time, etc.). The impact of the Project in reducing the cost of transport and improving the efficiency of access to services, specifically social services, in the city will be examined.

B. Consultation and Participation 1. Indicate the potential initial stakeholders. The Project stakeholder groups include, among others, government agencies, traders, investors, small traders (men and women), manufacturers (men and women), producer groups (men and women), and city residents. The preparation of an initial stakeholder analysis is a task of the PPTA consultants. A consultation and participatory process will be followed during the preparation of the engineering designs, social analysis, resettlement plan, and ethnic minority development plan (if required). 2. What type of consultation and participation (C&P) is required during the PPTA or project processing (e.g., workshops, community mobilization, involvement of nongovernment organizations and community-based organizations, etc.)? Focus group discussions and workshops will be conducted with various stakeholders groups. 3. What level of participation is envisaged for project design? Information sharing Consultation Collaborative decision making Empowerment

4. Will a C&P plan be prepared? Yes No Please explain. A separate C&P plan is not required. Consultation and participatory processes will be mainstreamed in relevant project components and documents such as the resettlement plan, ethnic minority development plan (if required), environmental impact assessment (EIA), gender strategy, and program for the prevention of HIV/AIDS and human trafficking. The resettlement plan and the EIA report will include appendixes on the consultation process.

C. Gender and Development 1. What are the key gender issues in the sector/subsector that are likely to be relevant to this project/program?

Increased access to transport by women is relevant to the Project.

2. Does the proposed project/program have the potential to promote gender equality and/or women’s empowerment by improving women’s access to and use of opportunities, services, resources, assets, and participation in decision making? Yes No Please explain.

Reductions in transport costs and travel time are expected to benefit women producers, traders, and travelers. Women are likely to have better access to services as a result of the Project. The potential benefits of the Project on women will be examined during the PPTA study. Access to information on HIV/AIDS and human trafficking through awareness programs will increase women’s knowledge of this issue and allow women to make informed decisions.

3. Could the proposed project have an adverse impact on women and/or girls or to widen gender inequality? Yes No Please explain

The negative impact of the Project on women is expected to be related to resettlement activities. To address this impacts a gender strategy will be included in the resettlement plan. A gender strategy relevant to the Project will also be included in the ethnic minority development plan, if required, and in the HIV/AIDS and human trafficking awareness program.

10 Appendix 2

III. SOCIAL SAFEGUARD ISSUES AND OTHER SOCIAL RISKS Plan or Other Significant/Limited/ Action Issue Nature of Social Issue No Impact/Not Known Required Involuntary Resettlement Will affect people’s Significant Full Plan residences and access to Short Plan places of work, markets, and Resettlement schools Framework No Action Uncertain

Indigenous Peoples The Second Ring Road will The PPTA study will include Plan run through mainly urban surveys to find out if ethnic Other Action and semi-urban areas. The minorities live within the Indigenous preliminary assessment of project area and, if so, what Peoples the project area indicates their socioeconomic Framework that there could be ethnic conditions are. If found No Action groups in the project area. necessary, either an ethnic Uncertain minority development plan or special actions will be prepared and included in the resettlement plan to meet the requirements of ADB’s Policy on Indigenous Peoples (1998).

Labor The Project will include In the construction camp Plan Employment Opportunities road construction work. sites, labor standards will be Other Action Labor Retrenchment maintained and basic No Action Core Labor Standards facilities (water and Uncertain sanitation) will be provided for the workers. No trafficked person or child labor will be used in road construction and maintenance.

Affordability The Project will promote Action economic growth in the No Action HCMC area. Affordability Uncertain will increase through improved economic opportunities.

Other Risks and/or The highway could become An HIV/AIDS awareness and Vulnerabilities a new pathway for human trafficking program Plan HIV/AIDS diseases. Mobile groups will be included in the Other Action Human Trafficking (such as tour bus drivers Project. During and after the No Action Others (conflict, political and guides, truck drivers, completion of the highway, a Uncertain instability, etc.), please and workers) are road safety education specify particularly vulnerable to campaign will be conducted sexually transmitted among local people to diseases and HIV/AIDS. reduce the risk of traffic During and after the accidents. The Second Ring construction, risks of Road could increase the HIV/AIDS and human value of land and property, trafficking could increase and commercial around the construction development, but it could camps and in the project also displace middle- and area. low-income and poor people.

Appendix 2 11

IV. PPTA/DUE DILIGENCE RESOURCE REQUIREMENT 1. Do the TOR for the PPTA (or other due diligence) include poverty, social and gender analysis and the relevant specialist/s? Yes No If no, please explain why.

2. Are resources (consultants, survey budget, and workshop) allocated for conducting poverty, social and/or gender analysis, and C&P during the PPTA/due diligence? Yes No If no, please explain why.

ADB = Asian Development Bank, C&P = consultation and participation, EIA = environmental impact assessment, HCMC = Ho Chi Minh City, HIV/AIDS = human immunodeficiency virus/acquired immunodeficiency syndrome, PPTA = project preparatory technical assistance.

12 Appendix 3

COST ESTIMATES AND FINANCING PLAN ($’000)

Total Item Cost A. Asian Development Bank Financinga 1. Consultants a. Remuneration and Per Diem i. International Consultants 474 ii. National Consultants 218 b. International and Local Travel 66 c. Reports and Communications 9 2. Equipmentb 6 3. Training, Seminars, and Conferences 12 4. Surveysc 96 5. Miscellaneous Administration and 23 Support Costsd 6. Representative for Contract Negotiations 5 7. Contingencies 91 Subtotal (A) 1,000

B. Government of Viet Nam Financinge 1. Office Accommodation and Transport 120 2. Remuneration and Per Diem of Counterpart Staff 100 3. Others 30 Subtotal (B) 250 Total 1,250 a Financed by the Japan Special Fund, funded by the Government of Japan. b 3 desktop computers, including standard office software; 2 printers; 1 scanner; 1 wireless LAN system; 2 photocopiers; 2 fax machines; and 2 digital cameras. c Traffic, socioeconomic, topographic, bridge, and pavement investigations, and geological and geotechnical surveys and tests. d Office rental, office supplies, administrative staff, and utilities. e In-kind contribution. Source: Asian Development Bank estimates.

Appendix 4 13

OUTLINE TERMS OF REFERENCE FOR CONSULTANTS

A. Scope of Work

1. The consulting services under the project preparatory technical assistance (PPTA) will have the following components:

(i) Planning for the Second Ring Road. This component will address the construction work required to complete the Second Ring Road around Ho Chi Minh City (HCMC) with connections to all major radial highways. (ii) Management of HCMC urban road network. This component will assist the People’s Committee of HCMC (PC-HCMC) in (i) reviewing the arrangements for the operation and maintenance (O&M) of the urban road network and finding ways of reducing O&M costs through public-private partnership (PPP) arrangements, (ii) reviewing existing and planned toll and traffic control systems and determining how these systems can be integrated and extended throughout the city, and (iii) identifying an effective and appropriate toll and traffic control system for the Second Ring Road and connecting roads.

B. Terms of Reference

2. The detailed terms of reference for each of the above components are set out below.

1. Second Ring Road Planning

3. The activities in this component will be carried out in two stages. In stage 1 the plans for the Second Ring Road will be reviewed and the HCMC transport master plan will be updated to take recent developments into account and to incorporate the latest traffic data into the traffic model for the city. This work will confirm in principle (i) the continued advisability of completing the Second Ring Road, given the available transport options; and (ii) the appropriateness of the conceptual designs for the Second Ring Road (available capacity, intersection and interchange design, etc.) in view of the traffic demand. The stage 2 activities will include (i) analyzing the transport network to confirm the economic and technical feasibility of constructing the missing sections of the Second Ring Road, and (ii) assessing the potential environmental and social impact of construction and preparing the documents needed to meet the safeguard policies of the Asian Development Bank (ADB).

a. Technical Review

4. A preliminary design of the expressway has been prepared for PC-HCMC. Although preliminary, this design is expected to be sufficiently detailed to allow an assessment of the Project at the feasibility study level. The consultants will undertake the following tasks:

(i) Review existing topographical, hydrological, and geotechnical investigations, Undertake additional surveys, as appropriate, to confirm the survey data. Review (a) the proposed cross sections, and horizontal and vertical alignments, of the Second Ring Road; and (b) the designs of bridges, culverts, and viaducts. This review will confirm compliance with technical standards and good practice for a major urban highway. Adjust the preliminary design, as appropriate, to meet required standards, and to ensure that the proposed design is technically feasible. Develop cost-effective pavement designs on the basis of the traffic and

14 Appendix 4

geotechnical conditions in the project area. Develop road traffic safety improvement measures and undertake a road safety audit. Develop preliminary designs for a road traffic control and toll system for the Second Ring Road. Determine the extent of unexploded ordnance contamination in the project site. Determine appropriate measures to survey and clear the project site before the start of construction. (ii) Prepare preliminary cost estimates for the construction of the Project, taking into account works undertaken for other, similar projects in Viet Nam and elsewhere.

b. Economic Assessment

5. The consultants will undertake the economic evaluation of the Project, according to ADB’s Guidelines for the Economic Analysis of Projects (1997), by comparing with- and without- Project scenarios. The consultants’ tasks will include but not be limited to the following:

(i) Review the basis for the selection of the proposed Project and provide the rationale for the Second Ring Road. This review will (a) consider the project alternatives in terms of their location, scale, and timing; (b) consider the basis for the selection of the best alternative; and (c) confirm that the selected option is indeed the most cost-effective alternative for the Project. (ii) Calculate economic vehicle operating costs for use in the economic analyses of with- and without-Project cases. Quantify the benefits (using shadow prices) that will arise from the Project, including the time savings generated from improved road conditions, road maintenance savings, and minimized traffic accidents. Assess the economic internal rate of return (EIRR) and net present value by homogeneous road section according to ADB’s Guidelines for the Economic Analysis of Projects. Derive appropriate sensitivity and switching values by varying the major parameters affecting project viability. The economic analysis will evaluate the alternatives and assess costs over the total life cycle by using HDM-4. 1 The analysis will identify risks and undertake appropriate risk and sensitivity analysis with respect to EIRR according to ADB’s Handbook for Integrating Risk Analysis in the Economic Analysis of Projects (2002). (iii) Carry out a distribution analysis of project benefits according to Appendixes 25– 26 of ADB’s Guidelines for the Economic Analysis of Projects and Handbook for Integrating Poverty Impact Assessment in the Economic Analysis of Projects (2001).

c. Financial Viability and Capacity

6. The consultants will make a detailed financial analysis of the Project and of the Executing Agency. The consultants’ tasks and outputs will conform to ADB’s Financial Management and Analysis of Projects (2005) and Loan Disbursement Handbook (2007, as amended from time to time), as follows:

(i) Financial analysis of the Project. Conduct a financial analysis of the Project— its financial internal rate of return and debt service coverage ratio—on the basis of the anticipated traffic and the proposed toll rates, and compute the weighted average cost of capital. Identify project revenue and cost risks. Propose and

1 Highway development and management software, version 4.

Appendix 4 15

justify appropriate toll rates by type of vehicle. Prepare detailed financial projections for the proposed highway. (ii) Design of funds flow mechanism. Submit the proposed design and disbursement arrangements for the project funds flow mechanism to ADB for review and comments. (iii) Financial management assessment. Undertake a financial management assessment of PC-HCMC and the Department of Transport and Urban Public Works (DTPW), including their planning and budgetary controls, financial and management accounting practices and procedures, internal controls, and auditing. Identify potential accounting, reporting, and auditing issues and propose workable options. Work reporting formats in English and reporting timetables with the DTPW.

d. Environmental Assessment

7. The Project is categorized as environmental category A, as it is likely to have significant adverse environmental impact that is sensitive, diverse, or unprecedented, and affects an area broader than the sites or facilities where the physical works will be carried out. The consultants will prepare a full environmental impact assessment (EIA), according to ADB’s Environment Policy (2002) and Environmental Assessment Guidelines (2003), and the Government’s environment regulations. In preparing the EIA the consultants will carry out the following tasks:

(i) Review the environmental documentation prepared by the DTPW and the Government’s related laws, regulations, and environmental and vehicle standards. Identify the updating needs and gaps that must be filled to comply with existing regulations and ADB’s environmental safeguard requirements. (ii) Prepare a public consultation plan and materials, assist the DTPW in conducting at least two public consultations, and document the consultation process and results. Carry out air quality and noise simulations on the basis of the predicted traffic flow, vehicle types, and emission factors to assess the potential impact of the Project, and prepare mitigation measures and an environmental management plan. Assess other potential environmental impact—direct, indirect, and cumulative—including but not limited to impact on water quality and hydrology, solid wastes, soil, flora and fauna, public health, and road safety; propose mitigation measures and environmental management activities to be included in the environmental management plan. Assess the potential impact of alternatives to the Project. Estimate the cost of the mitigation measures and the environmental management plan. Discuss these matters with the Executing Agency and obtain consensus. Conduct an economic assessment of the potential environmental impact of the Project. (iii) Review the institutional capacity of the Executing Agency for environmental management and propose an institutional framework and capacity-building plan.

e. Resettlement

8. The consultants will undertake the following resettlement tasks in accordance with ADB’s Involuntary Resettlement Policy (1995) and other relevant policies and guidelines of ADB, i.e., the Policy on Gender and Development (1998), the Policy on Indigenous Peoples (1998), the Accountability Mechanism (2003), and the Public Communications Policy (2005):

16 Appendix 4

(i) Assess the capacity of the responsible institutions in HCMC to plan and implement the resettlement plan and to design and implement training and capacity-building interventions. Design and implement a consultation and disclosure program. Carry out a full census of the affected people and an inventory of the assets and access they stand to lose, in full or in part, permanently or temporarily, regardless of tenure; conduct a baseline socioeconomic and perception survey of at least 10% of the people who will be affected by the Project, and 20% of those who will be severely affected; and determine the replacement costs of all categories of losses. (ii) Prepare a full resettlement plan that covers the essential elements stated in ADB’s Involuntary Resettlement Policy. The resettlement plan will become the property of the Executing Agency and must therefore be written in full consultation with the Executing Agency, which must deem it capable of implementation in Viet Nam, as appropriate, while still meeting ADB’s policy requirements.

f. Poverty and Social Impact Assessments

9. The consultants will undertake the following tasks to assess the potential impact of the Project on poverty and social conditions. The objective will be to minimize the negative impact of the Project through appropriate mitigation measures and to maximize its positive impact by including appropriate measures that are consistent with a major transport infrastructure project. These tasks will be guided by ADB’s Handbook on Social Analysis (2007) and Core Labor Standards Handbook (2006).

(i) Poverty impact. Collect macroeconomic data on the transport sector and assess how the sector and the Project can contribute to poverty reduction. Undertake a poverty impact assessment for the project area. This assessment will include the potential benefits from the Project and the potential impact on the poor. Through field surveys and focus groups interviews in the project area, collect and collate data on (i) occupation and employment; (ii) sources of household income; (iii) consumption and expenditure; (iv) assets (physical, natural, human, social networks, financial and savings, access to formal or informal credit, pensions, etc.); (v) access to goods; and (vi) access to social and other services. (ii) Social development and gender. Using census and secondary data, prepare demographic, social, and economic profiles of the population within the project area, including the districts and communes, e.g., profiles of primary and secondary beneficiaries, the poor, and the vulnerable (disaggregated by gender and ethnicity)—their needs, demands, constraints, and capacity, as well as access to social (education and health facilities) services (disaggregated by gender and ethnicity). Identify key gender issues in the project area and prepare a gender analysis. Assess the impact of land acquisition and resettlement on (a) women (by ethnic group) from the affected households, and (b) women-headed households. Develop mitigation strategies to address any negative impact. Prepare a resettlement-related gender strategy for incorporation in resettlement plans. Identify the capacity-building training needs of provincial, district, and commune resettlement committees. Identify groups, such as women’s unions, that can provide inputs to gender issues during the preparation and implementation of resettlement activities and activities related to ethnic minorities. Prepare social monitoring indicators for the Project and the resettled communities.

Appendix 4 17

(iii) Ethnic minorities. If the social analysis indicates that ethnic minority people are likely to be affected significantly by the Project because of land acquisition and resettlement, or that ethnic minority people will be disadvantaged or vulnerable because of their social or cultural identity, an ethnic minority development plan (EMDP) or ethnic minority specific actions will be prepared to address the concerns of the ethnic minorities in accordance with ADB’s Policy on Indigenous Peoples. The EMDP will be prepared in full consultation with the Executing Agency. Identify areas for the institutional strengthening of the Executing Agency to enable it to implement the EMDP, and recommend capacity-building training for Executing Agency staff. Develop monitoring indicators for the implementation of measures for ethnic groups under the resettlement plans. (iv) HIV/AIDS awareness campaign and prevention of human trafficking. Review existing government programs in the project area for the prevention of HIV/AIDS and human trafficking, as well as programs implemented by donors and nongovernment organizations. Assess the capacity-building training needs of the city and district committees responsible for implementing programs intended to increase HIV/AIDS awareness and prevent human trafficking. In coordination with existing programs, recommend an HIV/AIDS and human trafficking awareness and prevention program for the Project (during and after construction).

g. Implementation Documents

10. The following documents will be prepared: (i) a subsector profile of the road sector in HCMC; (ii) in conjunction with the DTPW, realistic construction schedules and a detailed implementation schedule for the Project; (iii) a procurement plan for all contracts to be procured under the Project; (iv) an indicative scope of works for a construction supervision consultant to be hired during the implementation of the Project; (v) a project performance monitoring system; and (vi) on the basis of the foregoing work, updated feasibility reports for submission to the Government of Viet Nam.

2. Management of HCMC Urban Road Network

11. Two studies will be done in this component to assist the PC-HCMC in managing the HCMC urban road network. The first study will review existing O&M arrangements for the urban road network to identify means by which O&M costs can be reduced, particularly through PPP. The study will identify PPP opportunities, review the legal and regulatory framework in HCMC for the use of PPP and identify constraints, and propose appropriate PPP models. The outputs will be as follows: (i) a framework for considering private sector participation in O&M of urban roads in HCMC; (ii) a value-for-money analysis of implementation approaches that involve varying degrees of private sector participation; and (iii) stakeholder feedback and a description of the necessary institutional and contractual arrangements, given the preferred implementation approach.

12. The second study will address improvements in traffic management. The study will review existing and planned toll and traffic control systems and recommend ways in which these systems can be integrated and extended.