PROJECT INFORMATION DOCUMENT (PID)
Appraisal Stage
Report No.: AB3389
Project Name
Vietnam GEF Coastal Cities Environmental Sanitation Project
Region
East Asia and Pacific
Public Disclosure Authorized
Sector
Sewerage (100%)
Project ID
P090374
GEF Focal Area
International Waters
Borrower(s)
State Bank Of Vietnam
Implementing Agencies
World Bank
Environment Category
[ X] A [ ] B [ ] C [ ] FI [] TBD (to be determined)
Date PID Prepared
April 30, 2008
Estimated Date of Board
December 2008
Approval
1. Country and Sector Background
Public Disclosure Authorized
Background
The proposed GEF project is part of the IDA-financed Coastal Cities Environmental Sanitation
Project (CCESP), but due to a different schedule for the GEF project, the World Bank proceeded
with the approval of the IDA credit in advance of the GEF approval. The IDA-supported
operation and the GEF-supported project, although technically separated into two projects, are
integral parts of a package of activities that work together to achieve the development objective.
The Global Environment Facility (GEF) will support the demonstration of a new, and
appropriate, treatment technology in Quy Nhon, whilst a PHRD co-financing grant will build the
capacity of service providers and raise public awareness of the project.
Public Disclosure Authorized
On April 18, 2005, the GEF National Focal Point in Vietnam formally endorsed the GEF project
proposal.
Key Development Issues
Sanitation in Vietnam is predominantly a private good with households investing in septic tanks
or latrines, depending on location. Access to hygienic latrines has been estimated at 68% in
urban areas in 2003, but service efficacy is low. There are a limited number of wastewater
treatment plants in the country, all in the major cities. As a result, watercourses, especially in the
big cities, are severely polluted by liquid wastes.
This situation will be exacerbated by urban growth. The proportion of people living in urban
areas in Vietnam is one of the lowest in East Asia, comprising around 23% of the total
Public Disclosure Authorized
population, or 19 million people. This is anticipated to increase to 33% by 2010.
The country's urban sewerage policy is presented in Decree 88/2007/ND-CP. The policy sets up
regulations on drainage/sewerage activities in urban and industrial areas. The decree aims to: a)
define the overall framework of responsibilities for drainage/sewerage services. This includes the
regulation about planning, establishing, operating and managing drainage/sewerage activities; b)
promote market oriented approaches to service provision; c) develop a better awareness of the
impact of sanitation on public health, environmental sustainability and economic development;
and, d) define and introduce the principles of determination of wastewater tariffs and cost
recovery.
There are significant investment needs for urban sanitation to cover the rehabilitation of existing
systems and the expansion of new systems. The Government of Vietnam (GOV) has estimated
these at $3.8 billion over the period 2000 2010. Combined investment in urban water supply
and sanitation has totaled $1billion over the last decade, mostly for water supplies.
The Urban Environmental Companies (URENCOs), normally responsible for drainage,
sewerage, solid waste management and other urban activities, are institutionally and financially
relatively weak, especially compared with water supply companies. Wastewater fees, typically
between VND 400-500/m3, and rising, are charged in cities where sanitation facilities are being
developed.
At the municipal level, the importance of tourism to economic development has increased
attention to improving the environment, through better management of both solid and liquid
wastes. Quy Nhon City, the beneficiary of the proposed GEF grant, and a participant in the IDA
financed Coastal Cities Environmental Sanitation Project (CCESP) understands the need to make
progress on this issue and funded the preparation of initial project pre-feasibility studies using
their own resources. In addition the City has developed an investment plan for the IDA financed
project, under which investments will be made to ensure that secondary and tertiary drainage and
sewer networks are constructed, and that barriers to households connecting to the network are
minimized. This is crucial, as there are examples where lack of attention to this matter has
resulted in treatment plants without an adequate sewer network feeding into them.
2. Objectives
1.
The Project Development Objective is to reduce river pollution in Quy Nhon City in a
financially and environmentally sustainable manner through piloting of a new low cost
wastewater treatment technology and thereby improving the marine and coastal ecosystems
along the coastline of Vietnam.
3. Rationale for Bank Involvement
The Bank is already making a significant contribution to Quy Nhon sustainable development by
financing the wastewater infrastructure investments under the baseline CCESP. The proposed
GEF project further enhances these investments by supporting Quy Nhon's efforts to protect its
river and coastal resources and adopt low-cost and effective wastewater treatment methods. The
Bank, through the GEF can assist Quy Nhon design and implement an innovative project that
would serve as a demonstration model for other coastal cities in Vietnam, and in the greater East
Asia region.
4. Description
GEF funds would support a significant enhancement of the baseline IDA CCESP waste water
treatment component. With GEF funding, the coastal cities would have the opportunity to "try
and test" a pilot chemically enhanced primary waste water treatment plant, with trickling filters.
This technology has been successfully applied in Latin America, for example in Mexico City and
Rio de Janeiro, as well as in Hong Kong, and it is believed that it would be successful under
local conditions in Vietnam. The project comprises three components:
Component 1: Construction of Chemically Enhanced Treatment Plant (CEPT)
This component represents an innovative aspect of the proposed project and has a high
replication value throughout Vietnam and the region. The component consists of the construction
of the Chemically Enhanced Primary Treatment (CEPT) plant with secondary treatment provided
by trickling filters. The capacity of the plant will be 7,000 m3/d and it will serve about 60,000
people. The plant will be connected to a sewerage system financed under the IDA Coastal Cities
Environmental Sanitation Project (CCESP).
This component is an integral part of the Quy Nhon City overall wastewater collection and
treatment system which includes two additional treatment plants with a capacity of about 23,000
m3/day. The IDA project in Quy Nhon will finance the construction of these twp additional
treatment plants as well as sewerage network rehabilitation and extension and households
connections.
Component 2: Public Communication and Replication Strategy
The communication strategy will consist of two main parts: (i) a public communication program
aimed to dialogue between public institutions and citizens and to raise public awareness and
understanding of the key issues related to the project; and (ii) a program of dissemination and
replication of project achievements.
This component will include the following activities with the objective of reaching the largest
possible number of interested parties: (i) organization of workshops for practitioners and
decision-makers on the technical, economic and environmental benefits of the new wastewater
treatment technology; (ii) design and implementation of information campaigns on project goals
and benefits of appropriate waste water treatment, as well as on local communities' role and
responsibilities, including payment of user fees; (iii) design and implementation of an
environmental education program for local communities; (iv) design and implementation of a
promotion/dissemination campaign, including technical presentations at regional and national
conferences, publishing of papers in national and/or international technical publications, and a
project website; (v) technical assistance to develop a replication strategy, including the
identification of methods of information dissemination and of repeatability of projects (e.g.
through GEF IW:LEARN).
Component 3: Project Management, Monitoring and Evaluation
Thus component will finance the additional monitoring and evaluation related to the CEPT plant.
This includes, in particular, monitoring of the water quality in the Ha Thanh River (the discharge
point for the plant); the water quality in the Thi Nai Lagoon into which the Ha Thanh River
flows; and the reductions in pollution delivered by the plant. All other financial and performance
monitoring/reporting, construction supervision, and other project management activities will be
financed under the IDA project.
5. Financing
Source: ($m.)
BORROWER/RECIPIENT 2.10
GLOBAL ENVIRONMENT FACILITY
5.00
Total
7.10
6. Implementation
The same project management arrangements for the baseline IDA CCESP, which is currently
under implementation, would also apply to the GEF Coastal Cities Environmental Sanitation
Project. The CCESP Project Management Unit (PMU) would be responsible for overall
coordination of the project, and the new combined Quy Nhon Municipal Water Supply and
Sanitation Company will be responsible for the operation of the wastewater component.
7. Sustainability
Sustainability of the baseline IDA project is the principal guarantor of sustainability of the GEF
project.
Borrower's Commitment. At the national level the Government has demonstrated commitment
to sector sustainability with its policy of cost recovering tariffs and desire to expand wastewater
coverage. Quy Nhon demonstrated strong commitment to this policy by financing their own Pre-
Feasibility Studies for CCESP, to which the GEF project is attached.
The borrowers understand that extensive capacity building of the service providers, the PMU,
and the communities is essential for long term sustainability. The borrower has committed,
through Component 6 of baseline IDA CCESP, to achieve this.
On the critical area of tariff reform Quy Nhon has agreed to phased increases so that operating
costs and depreciation of short lived assets is fully funded from user fees by the end of the
project. This is included as an IDA CCESP covenant.
Beneficiary' support. Improved drainage, wastewater and solid waste management services will
improve the urban environment in each city and the quality of life of residents. This has been
confirmed by household surveys. However the provision of such services is relatively new in
Vietnam and further support will be built through public awareness campaigns during project
implementation.
8. Lessons learned from past operations in the Country/Sector
The IDA project, of which this GEF project is an integral part, draws on lessons learnt both
nationally and internationally. These include:
(a) Enhancing technical and managerial capacity of service providers - The service providers
will significantly increase the scope and extent of their activities as a result of project
investments. Efficient and effective service providers are essential for long term
sustainability. The project therefore includes extensive capacity building to transform the
service providers to meet these new demands.
(b) Financial sustainability is strongly linked to user fees - Service providers need reliable
sources of revenue to pay for operations and maintenance costs, and replace short lived
assets. The most reliable source of such revenue is user fees. The project will gradually
introduce affordable user fees over the project life to achieve the required levels of cost
recovery. This approach was successfully applied in the Three Cities Sanitation Project.
(c) Physical investments only deliver part of the benefits - The benefits from sanitation
infrastructure are significantly increased when beneficiaries are exposed to Information,
Education and Communication (IEC) on household sanitation practices. Such IEC also
generates demand for household sanitation facilities. The IDA-funded project includes
activities for improving sanitation behavior and facilitating construction of household
facilities.
(d) Laying sewer networks doesn't guarantee connections to households - House owners
have often invested in septic tanks and may not want to connect to the new system. The
IDA-financed project addresses this issues through: i) public awareness campaigns about
system benefits; ii) house connections financed under the project; and iii) wastewater fees
applied to all households with water connections thus reducing disincentives to connect
to the system once available.
(e) Project management capacity at the sub national level is weak - Capacity building of the
PMU is included as part of the PHRD funded preparation activities under the IDA
project, and will be further expanded during implementation. Practical learning is
reinforced by regular meetings of the PMUs, and from visits to the Three Cities
Sanitation Project PMUs.
Project benefits
CEPT is a simple and cost effective first component in a multi stage wastewater treatment
system or as an upgrade for existing conventional primary treatment facilities. The removal of
pollutants by coagulation and precipitation, in addition to achieving a marked increase in the
efficiency of the primary treatment stage, reduces the residence time needed and thereby
increases treatment plant flow capacity. Because of decreased organic loading, the size of any
subsequent secondary biological unit is reduced in terms of space and cost.
CEPT is ideal for a coastal city since the removal of SS is very high and the decrease in BOD is
sufficient so as to not impact oxygen concentrations in the ocean. CEPT is also appropriate for
phosphorus removal. Indeed, while biological secondary treatment removes SS and BOD at a
very high efficiency, it does not effectively remove phosphorus and produces nitrates. If this
effluent does not undergo nutrient removal before it is released into a body of water,
eutrophication may occur. The algal blooms often accompanying this kind of nutrient loading
deprive the water body of oxygen, which is equivalent releasing a high BOD effluent into that
body of water. CEPT effectively removes a high amount of phosphorus, which is usually the
limiting nutrient in fresh water ecosystems.
One of the principal benefits of the project is also in demonstrating and replicating the proposed
project in the entire East Asia region. The project would disseminate the experience of the
chemically enhanced primary treatment and help educate the public about the importance of
protecting the seas and coastal ecosystems. PEMSEA would be instrumental in disseminating
this information.
Project risks
Potential risks to the GEF project, and proposed mitigation measures, are described in the table
below:
Risk
Risk
Risk Mitigation Measure
Rating
From Outputs to Objective
Lack of continuing commitment
M
Regarded as modest because the Government has undertaken
from the Government of Vietnam to
significant commitments in the environmental sector and has
the project
also some economic interest in the project because it deals
with tourist areas. The project team will continue to dialogue
with the Government on the benefits of pollution reduction.
Improved sanitation behavior by
M
Information, Education and Communication program to
beneficiaries
promote changed behaviors. Adoption of a Healthy City
Partnership.
Customers unwilling to pay for
M
Public awareness campaign. Collection of waste-water fees
services
through the water bill. Enhanced services.
Province authorities unwilling to
S
Extensive discussion with authorities during preparation and
charge for services
covenant on cost recovery levels in IDA project.
Inadequate operation of the new
M
Training of operators included in the TA component of IDA
facilities
project.
Lack of financial capacity to supply
S
Supply of chemicals included within project design
chemicals during the early years of
operation
From Components to Outputs
Limited willingness to connect to
M
Public education, access to credit, mandatory universal
the new systems
charging to all customers with water connection and
mandatory house connections required to new sewers.
Collusive and corrupt practices
M
Low prior review thresholds, enhanced PMU procurement
during project implementation
and FM training by IDA prior to effectiveness and hiring of
consultants to assist in the procurement process, enforcing
procurement complaint-handling and disclosure
requirements, enhanced supervision by IDA during early
implementation, and the preparation and implementation of a
fairness and transparency plan.
Capacity of the PMUs in project
M
Extensive training of PMU as part of TA component as well
management
as experience gained under the IDA project
Overall Risk Rating
M
Risk Rating H (High), S (Substantial), M (Modest), N (Negligible or Low)
9. Safeguard policies that might apply
The following safeguards policies might apply.
Safeguard Policy
Applicable?
If Applicable, How Might It Apply?
[X]
Environmental Assessment (OP/BP 4.01)
The project would have overall positive environmental and social impacts by mitigating
pollution caused by untreated wastewater. The investment has limited impacts related to
construction work because the WWTP would be located in an agriculture land at a
reasonable distance to residential areas. The most adverse impacts could be the effluents
on water quality of the Ha Thanh river and Thi Nai lagoon, and air pollution on
residential areas, during the operation phase of the WWTP. Other key environmental
impacts include: earthwork related to land-filling for foundation, sludge disposal from the
WWTP, and potential impacts from application of disinfection (which may be required in
the future).
[X]
Cultural Resources (OP 4.11)
Cultural property exists in the project site including graves and a shrine, which are located
in the buffer zone. However, all the graves and shrine will remain in the site (buffer zone)
as the shrine serve only few festivals in a year and the local people want to keep it there as
it is. The EIA report suggested adequate mitigation for the shrine.
[X]
Involuntary Resettlement (OP/BP 4.12)
About 12 ha of agricultural and aqua-cultural land in the core area and 1.7 ha of
residential land and 2.2 ha of garden land in the buffer zone would be acquired for the
construction of the WWTP. It would cause the relocation of 97 households from the
buffer zone and loss of shrimp ponds of several households, who lease the public land for
shrimp cultivation but the leases expire in 2007 and 2008. As the agricultural land in the
buffer zone will not be acquired, there will not be any households who would be severely
affected by losing more than 20% of their agricultural landholding. A RAP was prepared,
based on the approved Resettlement Policy Framework (RPF) for the CCSEP, which
provides all necessary measures to minimize and mitigate the impact on the people.
Environmental Assessment Category:
[X] A [] B [] C [] FI [ ] TBD (to be determined)
Safeguard Preparation Plan
An EIA and EMP has been prepared by the borrower and found to be satisfactory to the Bank.
10. Contact point
1.
Mr. William Kingdom, Lead Water and Sanitation Specialist
World Bank, Washington D.C.
Tel: (202) 473-9093
Email: wkingdom@worldbank.org
2.
Mr. Claudio Purificato, Water and Sanitation Specialist
World Bank, Washington D.C.
Tel: (202) 473-9093
Fax: (202) 614-1103
Email: cpurificato@worldbank.org