JAPAN INTERNATIONAL COOPERATION AGENCY (JICA) MINISTRY OF TRANSPORT, VIETNAM THE COMPREHENSIVE STUDY ON THE SUSTAINABLE DEVELOPMENT OF TRANSPORT SYSTEM IN VIETNAM (VITRANSS 2) Subsector Report No. 06 INSTITUTIONS May 2010 ALMEC CORPORATION ORIENTAL CONSULTANTS CO. LTD. NIPPON KOEI CO. LTD. JAPAN INTERNATIONAL COOPERATION AGENCY (JICA) MINISTRY OF TRANSPORT, VIETNAM THE COMPREHENSIVE STUDY ON THE SUSTAINABLE DEVELOPMENT OF TRANSPORT SYSTEM IN VIETNAM (VITRANSS 2) Subsector Report No. 06 INSTITUTIONS May 2010 ALMEC CORPORATION ORIENTAL CONSULTANTS CO. LTD. NIPPON KOEI CO. LTD. Exchange Rate Used in the Report USD 1 = JPY 110 = VND 17,000 (Average Rate in 2008) PREFACE In response to the request from the Government of the Socialist Republic of Vietnam, the Government of Japan decided to conduct the Comprehensive Study on the Sustainable Development of Transport System in Vietnam (VITRANSS2) and entrusted the program to the Japan International cooperation Agency (JICA) JICA dispatched a team to Vietnam between November 2007 and May 2010, which was headed by Mr. IWATA Shizuo of ALMEC Corporation and consisted of ALMEC Corporation, Oriental Consultants Co., Ltd., and Nippon Koei Co., Ltd. In the cooperation with the Vietnamese Counterpart Team, the JICA Study Team conducted the study. It also held a series of discussions with the relevant officials of the Government of Vietnam. Upon returning to Japan, the Team duly finalized the study and delivered this report. I hope that this report will contribute to the sustainable development of transport system and Vietnam and to the enhancement of friendly relations between the two countries. Finally, I wish to express my sincere appreciation to the officials of the Government of Vietnam for their close cooperation. May 2010 HIROYO SASAKI, Vice President Japan International Cooperation Agency May 2010 HIROYO SASAKI Vice President Japan International Cooperation Agency Tokyo Subject: Letter of Transmittal Dear Sir, We are pleased to formally submit herewith the final report of the Comprehensive Study on the Sustainable Development of Transport System in Vietnam (VITRANSS2). This report compiles the results of the study which was undertaken both in Vietnam and Japan from November 2007 to May 2010 by the Team comprising ALMEC Corporation, Oriental Consultants Co., Ltd., and Nippon Koei Co., Ltd. We owe a lot to many people for the accomplishment of this report. First, we would like to express our sincere appreciation and deep gratitude to all those who extended their extensive assistance and cooperation to the Team, in particular the Ministry of Transport of Vietnam. We also acknowledge the officials of your agency, the JICA Advisory Committee, and the Embassy of Japan in Vietnam for their support and valuable advice in the course of the Study. We hope the report would contribute to the sustainable development of transport system and Vietnam. Very truly yours, IWATA Shizuo Team Leader The Comprehensive Study on the Sustainable Development of Transport System in Vietnam (VITRANSS2) TABLE OF CONTENTS 1 INTRODUCTION 1.1 Purpose and Structure of the Report .................................................................................... 1-1 1.2 Areas of Emphases .............................................................................................................. 1-1 1.3 Rational for Change .............................................................................................................. 1-2 2 BACKGROUND- INSTITUTIONAL FRAMEWORK 2.1 Introduction ........................................................................................................................... 2-1 2.2 Framework- Overview of Institutional Responsibilities ......................................................... 2-1 2.3 Distinction between Transport Services and Transport Infrastructure .................................. 2-5 2.4 Transport Sector Institutional Landscape–Vietnam 2008/9 .................................................. 2-6 2.5 References from Recent Institutional Developments in China’s Transport Sector ............... 2-7 3 CURRENT INSTITUTIONAL ARRANGEMENTS IN THE TRANSPORT SECTOR 3.1 Introduction ........................................................................................................................... 3-1 3.2 MOT and the Public Sector Universe ................................................................................... 3-2 3.3 Organizations by Transport Modes/ sub-sectors .................................................................. 3-5 3.4 Road Sector Institutional Development ................................................................................ 3-5 3.5 Railway Sector Institutional Development ............................................................................ 3-8 3.6 Ports and Shipping Sector Institutional Development ........................................................ 3-11 3.7 Inland Waterways Transport [IWT] Sector Institutional Development ................................ 3-14 3.8 Aviation Sector Institutional Development .......................................................................... 3-16 3.9 Organization of State Owned Transport Enterprises .......................................................... 3-21 3.10 Organization Structure PMU ............................................................................................... 3-21 3.11 Overview of Legislative Aspects ......................................................................................... 3-21 3.12 Further Information on Legislative and Organizational Aspects ......................................... 3-23 3.13 Overview of Existing HRD Facilities ................................................................................... 3-25 3.14 Project Management and ODA ........................................................................................... 3-26 4 CURRENT INSTITUTIONAL ISSUES AND PROBLEMS 4.1 Introduction ........................................................................................................................... 4-1 4.2 Road Sector: Some Institutional and Legislative Issues....................................................... 4-2 4.3 Road Transport Sector: Some Institutional and Legislative Issues ...................................... 4-4 4.4 Rail Sector Institutional and Legislative Issues .................................................................... 4-5 4.5 Ports and Shipping Institutional and Legislative Issues ........................................................ 4-7 4.6 Inland Waterways Transport [IWT] Institutional and Legislative Issues ............................. 4-10 4.7 Aviation Institutional and Legislative Issues and Reforms .................................................. 4-11 4.8 Some Key Issues Urban Transport sub-sector ................................................................... 4-12 4.9 Some Cross-cutting Issues ................................................................................................. 4-13 4.10 Some Key Issues for Development of PSP in the Transport Sector .................................. 4-14 4.11 Some Key institutional and Legislative Issues Multi-modal Transport and Logistics ......... 4-15 4.12 Some Regulatory Issues and Problems ............................................................................. 4-18 4.13 The Problems of Human Resource Development (HRD) ................................................... 4-21 5 ORGANIZING FOR THE FUTURE 5.1 Introduction ........................................................................................................................... 5-1 5.2 Strategy for Capacity Development in Transport Sector ....................................................... 5-2 5.3 General HRD Actions for Future ........................................................................................... 5-4 5.4 Roads Sector Re-organization and Capacity Building .......................................................... 5-5 5.5 Rail Sector Re-organization and Capacity Building .............................................................. 5-6 5.6 Maritime and Shipping Sector Re-organization and Capacity Building ................................ 5-7 5.7 Inland Waterways Transport Sector Re-organization and Capacity Building ....................... 5-7 5.8 Aviation Transport Sector Re-organization and Capacity Building ....................................... 5-8 5.9 Multi-Modal Transport and Logistics Transport Sector Re-organization and Capacity Building .............................................................................................................................................. 5-8 i 5.10 Urban Transport sub-sector .................................................................................................. 5-9 5.11 SOE Reform .......................................................................................................................... 5-9 5.12 Determining an Appropriate Framework for PSP ............................................................... 5-11 5.13 Improvements to the Regulatory Environment ................................................................... 5-13 6 MAIN RECOMMENDATIONS AND LOOK AHEAD 6.1 Introduction ........................................................................................................................... 6-1 6.2 Main Recommendations ......................................................................................................