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Water Supply and Sanitation in Vietnam

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Water Supply and Sanitation in Vietnam Service Delivery Assessment December 2014 Public Disclosure Authorized Water Supply Public Disclosure Authorized and Sanitation in Vietnam Turning Finance into Services for the Future Public Disclosure Authorized Public Disclosure Authorized This report is the product of extensive collaboration and information sharing between many government agencies at national and provincial level, and development partners in Vietnam. A core team drawn from the Ministry of Construction and Ministry of Agriculture and Rural Development has been lead partners with the Water and Sanitation Program in this assessment sector. The authors acknowledge their valuable contribution as well as the information sharing and contributions during workshops by other sector stakeholders, including development partners. The Task Team Leader for the Service Delivery Assessment (SDA) in East Asia and the Pacific is Susanna Smets. The fol- lowing World Bank staff and consultants have provided valuable contributions to the service delivery assessment process and report: Jeremy Colin, U-Prime Rodriguez, Vinh Quang Nguyen, Iain Menzies, Hang Diem Nguyen, Almud Weitz, Sandra Giltner, Nguyen Trong Duong and Nguyen Danh Soan. The report was peer reviewed by the following World Bank staff and sector colleagues: Parameswaran Iyer, Lead Water and Sanitation Specialist, Lilian Pena Pereira Weiss, Sr. Water and Sani- tation Specialist, Sing Cho, Urban Specialist and Lalit Patra, Chief WASH section, UNICEF Vietnam. The SDA was carried out under the guidance of the World Bank’s Water and Sanitation Program and local partners. This re- gional work, implemented through a country-led process, draws on the experience of water and sanitation SDAs conducted in more than 40 countries in Africa, Latin America, and South Asia. An SDA analysis has three main components: a review of past water and sanitation access, a costing model to assess the ad- equacy of future investments, and a scorecard that allows diagnosis of bottlenecks along the service de livery pathways. SDA’s contribution is to answer not only whether past trends and future finance are sufficient to meet sector targets for infrastructure and hardware but also what specific issues need to be addressed to ensure that fi nance is effectively turned into accelerated and sustainable water supply and sanitation service delivery. The Water and Sanitation Program is a multi-donor partnership, part of the World Bank Group’s Water Global Practice, sup- porting poor people in obtaining affordable, safe, and sustainable access to water and sanitation services. WSP’s donors include Australia, Austria, Denmark, Finland, France, the Bill & Melinda Gates Foundation, Luxembourg, Netherlands, Nor- way, Sweden, Switzerland, United Kingdom, United States, and the World Bank. WSP reports are published to communicate the results of WSP’s work to the development community. Some sources cited may be informal documents that are not readily available. The findings, interpretations, and conclusions expressed herein are entirely those of the author and should not be attributed to the World Bank or its affiliated organizations, or to members of the Board of Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The bound- aries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of the World Bank Group concerning the legal status of any territory or the endorsement or acceptance of such boundaries. The material in this publication is copyrighted. Requests for permission to reproduce portions of it should be sent to world- [email protected]. WSP encourages the dissemination of its work and will normally grant permission promptly. For more information, please visit www.wsp.org. © 2014 International Bank for Reconstruction and Development/The World Bank Water Supply and Sanitation in Vietnam Turning Finance into Services for the Future Strategic Overview peri-urban areas. Outside of the major cities, the quality and Subsector 2020 Target reliability of supply is a challenge while in rural areas, in- Urban water supply (access to public piped 85% formal management arrangements rarely result in effective network) operation and maintenance in the long term. There are also Rural water supply (access to ‘clean’ water significant inequalities in access between richer and poorer 75% meeting Ministry of Health (MOH) standards) segments of the population. For example, while 95% of the Urban sanitation (proportion of wastewater treated) 45% richest urban quintile has a piped water connection in the yard, only 35% of the poorest have this level of service. Rural sanitation (use of ‘hygienic’ latrines meeting 85% MOH standards) In rural areas, just 3% of the poorest quintile has a house connection while for the richest quintile the figure is 43%.2 In the last two decades the Government of Vietnam has made Progress in sanitation and hygiene is lagging behind water considerable progress in improving water supply and sani- supply, and in urban areas the general absence of wastewa- tation in both urban and rural areas and rates of access to ter treatment and fecal sludge management is a significant improved services are now significantly higher than those in gap given the population density and the volume of waste- neighboring countries. Both the water supply and sanitation water produced. In rural areas, the sector does not yet have Millennium Development Goal (MDG) targets have been met, a coherent implementation strategy for taking sanitation according to Joint Monitoring Programme (JMP) reports.1 and hygiene promotion to scale, though it benefits from a national target program funded with multi-donor support. These achievements are impressive. The reliability of the data on which JMP figures are based is, however, disputed Although decentralization is quite advanced in Vietnam, and many stakeholders consider the access rates to be there are instances where central control still inhibits the overestimated. Weak monitoring systems and a multiplic- development of locally appropriate solutions, while gaps in ity of official data sources underlie widespread uncertainty the financial and human capacity of local service provid- over actual service coverage and functionality. A further ers are barriers to service improvement and expansion. In complication is that the Government of Vietnam has adopt- recent years, government has promoted the adoption of a ed targets and technical standards which are more ambi- commercial orientation in urban service provision, and some tious than those adopted by the JMP. The targets are sum- progress has been made in relation to water supply services marized below; meeting them will be difficult. but not for sanitation due to the limited scope for revenue generation. Provincial government still exercises significant There are major disparities in water supply access between control over utilities and, despite some promising policy regions and between big cities, smaller urban centers and initiatives, conditions are not yet attractive for large-scale 1 JMP (2013) 2 JMP-UNICEF special tabulation per wealth quintile, using MICS 2010/11 data iv Water Supply and Sanitation in Vietnam private sector participation. A more enabling environment sanitation (a total of estimated amount of 2.5% of GDP). is needed including, amongst other things, the establish- A large proportion of the investment requirements are for ment of a regulator and the introduction of commercially urban areas (around 87%). Furthermore, in the case of wa- viable tariff levels and performance contracts. Recently, the ter supply roughly 60% of the funding required is for the government has also introduced a socialization policy and replacement of existing assets. The anticipated public (do- associated decisions to increase private sector participa- mestic and external) finance for 2012-2014 demonstrates tion in the sector, both for urban and rural.3 This initiative the same direction towards high urban investments, with is in its early stages and, while it could potentially deliver around 90% directed to urban areas for sanitation and significant benefits to the sector, there are obstacles to be around 70% to urban areas for water supply. This highlights overcome in terms of commitment to policy implementa- an urgent need not only to increase overall sector funding tion, comprehensive legal framework, as well as public and but also to use public funding more effectively, by improving private sector capacity for contracting. the implementation of cost recovery policies and manage- ment—and hence sustainability—of existing infrastructure In order to meet the government’s ambitious targets, some and services. Crowding in private sector financing will be an 3.7 million people per year will need to gain access to water important element to reduce the financing gap, and actions supply sources that meet government standards, of which to improve the investment climate as mentioned above de- around half in rural and half in urban areas. In the case of serve priority. sanitation, about 1.6 million people per year will need ac- cess to wastewater treatment (in urban areas) and about In summary, the sector faces the daunting task of expand- 2.0 million to latrines that meet national standards (in rural ing service provision to reach the poorer un-served popula- areas). tion segments; keeping pace with growth; and at
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