Viet Nam - Rural Transport Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. P-6888-VN MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT OF SDR 37.8 MILLION TO THE SOCIALIST REPUBLIC OF VIETNAM FOR A RURAL TRANSPORT PROJECT October 1, 1996 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (as of January 31, 1996) Currency Unit = Vietnamese Dong US$1.00 = Dong 11,018 WEIGHTS AND MEASURES Metric System ABBREVIATIONS AND ACRONYMS CAS Country Assistance Strategy IDA International Development Association MOT Ministry of Transport OM Operational Manual PDOTs Provincial Department of Transport PID Project Implementation Division under PMU18 PMU1 8 Project Management Unit 18 under the Ministry of Transport PPMU Provincial Project Management Unit FISCAL YEAR OF BORROWER January 1 - December 31 FOR OFFICIAL USE ONLY THE SOCIALIST REPUBLIC OF VIETNAM RURAL TRANSPORT PROJECT CREDIT AND PROJECT SUMMARY Borrower The Socialist Republic of Vietnam Implementing Agency: The Ministry of Transport Beneficiary Not applicable Poverty: Program of Targeted Interventions. The project will benefit 15 poor provinces with per capita income that are about half the country's average. About 5 million people will benefit directly or indirectly from the project. Investment in the least-cost rural transport infrastructure is most needed and will have the greatest impact on market integration and poverty reduction. Amount: SDR 37.8 million (US$55.0 million equivalent) Terms: Standard IDA terms, with 40 years' maturity Commitment Fee: 0.5% on undisbursed credit balances, beginning 60 days after signing, less any waiver. Financing Plan: See Schedule A Economic Rate of Return: 32 percent Staff Appraisal Report: Report No. 15537-VN MaP: IBRD No. 27315 Project Identification No.: 39021 Vice President: Javad Khalilzadeh-Shirazi, Acting Vice President, EAP Director: Javad Khalilzadeh-Shirazi, EA1 Division Chief: Jeffrey Gutman, EA1AE Task Manager: Supee Teravaninthorn, Sr. Economist, EA 1 AE This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed wiLhout World Bank authorization.  MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE SOCIALIST REPUBLIC OF VIETNAM FOR A RURAL TRANSPORT PROJECT 1. I submit for your approval the following memorandum and recommendation on a proposed development credit to the Socialist Republic of Vietnam for SDR 37.8 million (US$55.0 million equivalent) to help finance a Rural Transport Project that will benefit 15 of the country's poorest provinces. The proposed credit would be on standard IDA terms with 40 years' maturity. 2. Background. Although Vietnam has undergone a period of successful macroeconomic reform, its overall economic indicators still show a high incidence of poverty. Its 72 million people have an average per capita income of $250 with marked differences in living standards between urban and rural areas. The Vietnam Poverty Assessment and Strategy Report (Report No. 13442-VN) estimates that 26 percent of the urban population falls below the poverty line, while 57 percent of the rural population cannot achieve minimum levels of subsistence. Moreover, urban areas are growing more quickly than rural areas, so poverty reduction will occur there more quickly. Exacerbating the poverty problem, the poorest regions of the country have particularly low growth rates. So prospects for significant poverty reduction -without additional efforts- appear slim. Although some parts of Vietnam may be difficult to develop economically, many other areas could be highly productive if they received appropriate investments to encourage more dynamic participation in the market economy. 3. The Government has placed rural development at the forefront of its poverty alleviation effort, with a particular emphasis on potential areas of solid growth within the poorest regions. This approach is consistent with the analysis from the Living Standards Survey for Vietnam in 1995, which indicates that people who live near an all-weather road have higher living standards than others. Rural roads improve access to better agricultural technology, allow for more efficient marketing of agricultural surplus, and provide greater opportunities in other economic activities. Thus rehabilitation of the wide network of rural roads that exists throughout Vietnam - and that over decades of war and economic hardship has deteriorated badly - has become one of the Government's investment priorities. 4. Vietnam's more than 105,000 kilometers of classified road network compares favorably with neighboring countries, although its state is generally poorer with respect to surface condition, width, water crossing structures, and drainage systems. Of the 105,000 km, only 11,350 kilometers (11 percent) are national roads, 14,000 kilometers (13 percent) are provincial roads and the rest (76 percent) are rural roads (district and communal roads). Most rural roads are in poor condition - drainage is inadequate, many bridges are missing or poorly maintained, and shoulders are not stable. About 30 percent -2- of the country's 25,000 kilometers of district roads and more than half of its 46,000 kilometers of communal roads are impassable during the rainy season. 5. In the past, central government budgets for transport covered only national and provincial transport networks, with an insignificant amount allocated to the district and communal networks. Because of the limited budgets of most local governments, efforts to rehabilitate their local infrastructure are done on a piecemeal basis. The results are often of low quality and therefore short-lived. However, with the Government's recent focus on rural development it has set an ambitious target to connect the six isolated districts and at least 400 isolated communes by 2000. It also plans a large-scale rehabilitation program to upgrade the level of access of the existing rural networks to nearly all-weather roads. This plan calls for substantial allocations from the central budget -about US$60 million a year- earmarked for rural transport development. This amount is still relatively small compared with the rural transport network's actual needs. 6. The Project Provinces. The Government has selected 15 poor provinces to benefit from the project. Ten of these 15 provinces are among the country's poorest. They also represent the country's three distinctive terrains. Their combined population of 20 million people, 131,000 square kilometers of land, and 37,000 kilometers of rural roads represent about 27 percent of the country's total population, 39 percent of land area, and 30 percent of the rural road network. 7. Transfers from central government have been essential to the economies of these provinces. The ratio of the budget transfer to total revenue in the provinces varies from 31 percent for Minh Hai, a moderately poor province, to more than 80 percent for Ha Giang, one of the country's poorest provinces. However, the provincial ratios of investments in transport to total provincial expenditures have been minimal, at 2-5 percent. Most transport investment has gone for capital improvement and maintenance of provincial roads. The proposed project will, for the first time, enable the selected provinces to tackle their rural infrastructure needs in a more systematic manner. 8. Lessons from Previous IDA/Bank Experience. Only one IDA project has been completed in Vietnam, the Dau Tieng Irrigation Project (Cr. 845-VN), which was approved in 1978 and closed in 1986. The project's Implementation Completion Report highlighted the following lessons: (i) a project's major works must be adequately designed prior to project implementation to ensure smooth implementation; and (ii) external technical assistance in procurement and construction supervision is essential to overcome the problems of inexperience with international procedures faced by a new borrower. The first road sector project in Vietnam, the Highway Rehabilitation Project (Credit 2549-VN) became effective in June 1994 and has experienced problems in implementation of the agreed Resettlement Action Plan. These problems can be attributed to a lack of experience in dealing with the Bank and to the difficulty in applying a new standard of compensation for resettlement. -3- 9. A few other lessons from IDA experience in rural roads come from Rural Roads Maintenance - Review of Completed World Bank Operations (Report 10794): (i) routine and periodic maintenance should be an integral part of project components, including physical definitions, cost, financing plan, procurement, and disbursement; and (ii) monitoring, evaluation, and reporting procedures should be upgraded. 10. The proposed project would be the first IDA-assisted project to support rural infrastructure in Vietnam. The above lessons were incorporated in the project design by: (i) developing technical design, procurement procedures, and tender documentation prior to project approval; (ii) providing for adequate technical assistance to support project implementation; (iii) setting up an effective maintenance system to ensure that the investment under the project is properly and sustainably maintained after the project is completed; (iv) discussing with the Government early on the policy framework for compensation to be applied to any resettlement and land acquisition under the project, and obtaining Government approval before the project becomes effective; and (v) ensuring that a monitoring and evaluation system is developed at an early stage of project implementation. 11. Rationale for IDA Involvement. It is against this background that the Government has requested Bank assistance to start a rural transport development campaign. This project is consistent with the Poverty Assessment and Strategy Report and with IDA's Country Assistance Strategy for Vietnam discussed at the Board on November 21, 1995, and with the progress report which is scheduled for discussion at the Board on the same day as this report. The goal set forth in the Country Assistance Strategy is to promote broadly based economic development and to combat poverty. Two of five areas of the strategy are: (a) to take the lead among donors in helping the Government plan and finance infrastructure development, and (b) to help the Government develop and implement a poverty alleviation strategy. Since most Vietnamese live in agricultural households with a high incidence of poverty, antipoverty interventions must focus on agricultural households in order to achieve any significant impacts. The poverty reduction strategy includes rural infrastructure investments that will benefit the rural economy through improved access and lower transport costs -precisely what the proposed project is designed to do. These investments will be complemented by others in the education and health sectors as well as projects in rural finance and agricultural diversification, essential for improving the efficiency of rural labor and the welfare of Vietnamese families. 12. Project Objectives. In line with IDA's Country Assistance Strategy and the concern voiced by local governments during the joint Ministry of Planning and Investment/LUNDP/IDA poverty workshop in September 1995, the overall objectives of the project are to: (i) improve and upgrade access to rural communities and link them to the district and provincial networks; (ii) develop local capacity to improve the level of service of low-volume roads and to maintain them on a sustainable basis; and (iii) encourage the development of local contractors. It was agreed with the Government on key indicators to measure achievements of project objectives and implementation -4- progress; these indicators include length of rehabilitated roads, the increase of number of trips to economic and social infrastructure, and the increase in household income from off- farm work. 13. Project Description. To achieve the above objectives, the proposed project will help finance the following main components: (i) rural access roads rehabilitation and maintenance; (ii) institutional strengthening and training; and (iii) studies. 14. The rural access roads rehabilitation and maintenance component (US$59.2 m) will finance improvements for about 5,000 kilometers of roads and bridges in 15 poor provinces, of which about 80 percent will be district roads and 20 percent will be communal roads, tracks, or trails. Road improvements will benefit about 25 percent of the population in these provinces. Road maintenance is considered an integral part of this component. The project will support the development of effective procedures for routine road maintenance by helping the Government set up a maintenance management program and introducing the practice of maintenance by contract. The institutional strengthening component (US$1. 2 m) will provide technical assistance and support to both public and private sector entities. It will help the Government to plan, manage, and implement the project at the provincial level, and to coordinate, supervise, monitor, and evaluate the project at the central level. The project will also support the training of local contractors in bid preparation, cost accounting, and contract management. Finally, the project will finance a study (US$0.5 m) to identify issues relating to demand and investment in the rural transport sector aiming to establish guidelines for future investment in the sector. 15. Project Costs and Financing Plan. Estimates of project costs are VND 816.5 billion, or US$60.9 million equivalent, including physical and price contingencies (US$9.4 million). The foreign exchange component is estimated to be US$15.1 million, or 25 percent of the total project cost. All base costs are estimated in January 1996 prices. IDA will finance US$55 million equivalent or 90.3 percent of total project cost. The Government will finance US$5.9 million or 9.7 percent of total project cost. A summary of cost by project component is shown in Schedule A. Amounts and method of procurement and disbursement, and the disbursement schedule are shown in Schedule B. A timetable of key project processing events is given in Schedule C, the status of Bank Group operations in Vietnam is presented in Schedule D, and Vietnam at a glance table is presented in Schedule E. A map showing the project areas is also attached. The Staff Appraisal Report, No. 15537-VN, dated September 24, 1996 is being distributed separately. 16. Project Implementation. A Project Implementation Division (PID) will be set up in Project Management Unit 18 of the Ministry of Transport to monitor and guide project implementation. The role of PID will be limited to coordination and support functions and the implementation of components procured through international competitive bidding. The detailed project implementation will be decentralized to each project province. At the provincial level, a Provincial Project Management Unit (PPMU) *ill be established in each -5- provincial department of transport (PDOT). Each PPMU will prepare annual work plans, procure engineering and civil works, evaluate bids and submit evaluation reports to the selection committee for contract award. In addition, the PPMUs will coordinate contract maintenance activities for lengthman, small-scale contractors, and community-organized labor through district offices. 17. Project Sustainability. The project's sustainability will be enhanced by at least three actions. First, the project will support the development of institutional and human resource capacity that will continue road rehabilitation and maintenance after project completion. Second, since the rural road maintenance management program will be set up under the project it will help ensure that essential maintenance tasks are properly carried out after project completion. During the early period when the maintenance management program is not fully in place, a one-year maintenance requirement will be included in the road rehabilitation contracts financed under the project. Third, the Rural Infrastructure Investment Strategic Study will form the basis for future investment in the sector. 18. Program Objective Categories. The project will have direct poverty alleviation impacts. Up to 20 percent of the credit earmarked for rural access road rehabilitation may be used for investment and rehabilitation of access roads in mountainous areas that are among the poorest parts of the country. These areas are sparsely populated and have limited economic potential, and therefore would not be qualified for inclusion in the project if economic and population density were the only selection criteria. To ensure that ethnic minorities are consulted during project planning and that they benefit from the road construction, guidelines for preparing a development plan for ethnic minorities will be included in the project's Operational Manual (OM). During project negotiations agreement was reached that an ethnic minorities development plan be prepared and submitted to IDA for approval prior to disbursements for works on road links in areas inhabited by ethnic minorities. The project will also benefit women who, in Vietnam, are usually responsible for transporting agricultural products to the market on bicycles. 19. Environmental Impact. Works under the project are limited to the rehabilitation and maintenance of selected district feeder roads and communal access roads. Thus the project is not expected to compromise the project area's environmental quality, cause social displacement, or destroy natural habitats. In fact, the project will have positive environmental impacts since road improvements will ensure proper drainage and enhance soil stability, as well as provide greater vehicular and pedestrian safety by improving road surfaces and embankments and constructing bridges. To ensure that contractors employ appropriate techniques to protect the environment during construction, instructions, prototype designs, and guidelines are being prepared and included in the project's OM. Progress reports will indicate any problems encountered and solutions adopted during implementation. During project negotiations agreement was reached with the Government that no roads will be financed in any protected areas. Environmental Impact Assessments will be prepared and submitted to IDA for approval prior to disbursement for works in forest buffer zones. -6- 20. Resettlement and Social Issues. Although no widening of roads is envisaged, minor land acquisition may be needed in exceptional cases, such as for elevating part of a road to prevent flooding. Any adverse social impact caused by land acquisition will be addressed through a "Policy Framework for Land Acquisition, Compensation, and Rehabilitation" prepared by the Government, which is satisfactory to IDA. A survey of the land acquisition required and the number of people affected by road works proposed for the first-year program has been prepared. The survey indicates that no extra land will be acquired and no resettlement will be needed in the first-year program. During negotiations agreement was reached that the Government will implement the agreed policy framework. In addition, agreement was reached during project negotiations that when 150 or more people are affected by a road link, a specific Resettlement Action Plan satisfactory to IDA will be prepared. If fewer than 150 people are affected, a time-bound action plan for compensation and resettlement will be prepared in accordance with the agreed policy framework. The submission to and approval by IDA of either the specific Resettlement Action Plan or the time-bound action plan will be a condition of disbursement for the related road links. 21. Participation of Provincial Governments and Local Communities. The staff of the Ministry of Transport and the provincial departments of transportation were actively involved in project preparation, collecting data, consulting with other agencies, taking road inventories, mapping the entire rural roads network, prioritizing the first-year program, and developing and refining various components of the project. Government officials were provided with training during project preparation. Three workshops were organized to discuss the project concept and draft project design, drawing participation from national and provincial agencies involved in rural road construction and maintenance. During project implementation some works will be carried out by community-organized labor, which will require the active involvement of beneficiaries in both the planning and implementation stages. 22. Actions Agreed. Actions agreed during negotiations include: (i) activities in the first-year program and beyond: the full list of roads to be included in the first-year program, the setting up of the Project Implementation Division and the Provincial Project Management Units, and other technical assistance activities required to start up the project were reviewed and agreed with IDA during negotiations. It was further agreed that the list of roads to be selected for the following year will be ready for review by IDA at least 3 months before commencement of works on those roads; (ii) the Operational Manual: a manual acceptable to IDA comprising road selection criteria, implementation arrangements, procurement formats and procedures, reporting formats, project performance monitoring indicators, environmental standards, maintenance provisions, and subproject selection criteria, will be adopted by MOT and apply to all implementation aspects of the project; (iii) the flow of funds mechanism: the arrangement for the flow of funds and related paper work between the central and provincial governments and methods of payments; and (iv) the application of the agreed Policy Framework for -7- Compensation, Resettlement and Rehabilitation of Project Affected Persons: the framework provides guidelines for compensating negatively affected people. 23. Project Benefits and Risks. The population of the 15 project provinces totals some 20 million, 25 percent of which will benefit directly or indirectly from improved access to market and other social infrastructure. The assets to be built under the project are expected to have a high rate of return - about 32 percent - since these relatively small investments will enable access to market and other social services during the rainy season. Moreover, since labor costs constitute more than 30 percent of the total cost for the road rehabilitation and maintenance, the project is estimated to generate about US$14 million of wage income to local labor in addition to building economically viable infrastructure. The improved access from rural communities to communes and from communes to district centers will support the Government's economic integration objectives by allowing for the movement of goods and people to expanding markets. 24. Since the project supports the rehabilitation and spot improvements of existing rural roads, it does not face major risks. The main risks relating to implementation include: (i) Vietnam's lack of experience with implementation of externally financed projects and competitive bidding, which might delay contracting for and execution of project works; (ii) private contractors' lack of experience with bidding processes and work execution; (iii) failure to provide adequate funding for routine maintenance, which would result in early deterioration of the rehabilitated roads. Consulting services provided during project preparation and technical assistance during project implementation will minimize the technical risks. Independent monitoring, audits, and supervision should also help identify problems and take early corrective action. Training provided to local contractors will minimize the risks in contracting works. The project will provide assistance in setting up routine maintenance, emphasizing prompt maintenance on critical sections. Maintenance funds will be provided for one year after the rehabilitation work is completed on each road link under the project. Further incentives for promoting routine maintenance will be developed during the first year of the project. 25. Recommendation. I am satisfied that the proposed credit complies with the Articles of Agreement of the Association and recommend that the Executive Directors approve it. Attachments James D. Wolfensohn Washington D.C. President October 1, 1996 by Gautam Kaji  -8- Schedule A The Socialist Republic of Vietnam Rural Transport Project Estimated Costs and Financing Plan (US$ Million) Local Foreign Total Estimated Project Cost Roads Rehabilitation and Maintenance 38.21 11.76 49.97 Institutional Strengthening and Training 0.34 0.68 1.02 Studies 0.13 0.37 0.50 Total Base Cost 38.68 12.81 51.49 Physical Contingencies (10%) 3.87 1.28 5.15 Price Contingencies 3.21 1.04 4.25 Total Project Cost 45.76 15.13 60.89 Financing Plan Government 5.89 0 5.89 IDA 39.87 15.13 55.00 Total 45.76 15.13 60.89  Schedule B Page 1 of 2 The Socialist Republic Of Vietnam Rural Transport Project Summary of Proposed Procurement Arrangements (US$ Million) ICB NCB Otherl/ Total Costs 1. Civil Works for Road Rehabilitation and - 34.5 19.3 53.8 Maintenance (31.4) (18.0) (49.4) 2. Goods 2.1 Equipment 0.6 - 0.4 1.0 (0.6) (0.4) (1.0) 2.2 Vehicles and Motorbikes - 0.9 0.9 (0.9) (0.9) 2.3 Furniture - - 0.3 0.3 2.4 Office Supplies - - 0.3 0.3 3. Services Contracts 3.1 Rural Roads Information - - 0.3 0.3 Systems (0.3) (0.3) 4. Consultant Services 4.1 TA & Overseas Training - - 1.6 1.6 (1.6) (1.6) 4.2 Technical Advisory and - - 1.8 1.8 Supervision (1.8) (1.8) 4.3 Studies - - 0.5 0.5 5. Miscellaneous 5.1 Local Training - - 0.4 0.4 Total 0.6 34.5 25.8 60.9 (0.6) (31.4) (23.0) (55.0) Note: Figures in parentheses are amounts financed by IDA. 1/ Include shopping, direct contracting, community organized labor and consultants services. -10- Schedule B Page 2 of 2 The Socialist Republic Of Vietnam Rural Transport Project Disbursement Categories Categories Amount of the Credit Allocated (Expressed in SDR) % of Expenditures to be Financed 1. Civil Works for Roads Rehabilitation and 30.6 95% of cost of civil works Maintenance 2. Goods 2.1 Equipment 0.9 100% of foreign expenditures; 100% of local expenditures (ex- 2.2 Vehicles/Motorbike 0.8 factory cost); and 65% of local expenditures for other items 2.3 Furniture - procured locally 2.4 Material - 3. Consultant's Services and Training 3.1 TA & Overseas Training 1.0 100% 3.2 Project Coordination 1.2 100% 3.3 Rural Roads Information 0.2 100% System 5. Unallocated 3.1 TOTAL 37.8 Estimated IDA and Cofinancing Disbursements (US$ Million): FY97 FY98 FY99 FY00 FY01 FY02 Annual 4 6 14 16 11 4 Cumulative 4 10 24 40 51 55 -11- Schedule C The Socialist Republic Of Vietnam Rural Transport Project Timetable of Key Project Processing Events (a) Time taken to prepare the project: 12 months (January 1995 - January 1996) (b) Prepared by: Government of Vietnam with assistance of IDA and consultants funded under Japan PHRD fund (c) First IDA mission: January 1995 (d) Appraisal mission departure: January 19961 (e) Negotiations: August 1996 (d) Planned Date of effectiveness: January 1997 (g) List of relevant PCRs and PPARs: None The project was appraised by a Task Team consisting of Messrs./Mmes. Supee Teravaninthorn (Team Leader/Task Manager), Wael Zakout (Civil Engineer), Jean-Claude Sallier (Infrastructure Engineer, Consultant), Cuong Hung Pham (Civil Engineer), Lars Lund (Resettlement Specialist), and Rob Crooks (Environmental Specialist). Bernard Peccoud (AF4IN) and Jacques Cellier (LAlIU) were peer reviewers. The Division Chief is Jeffrey Gutman (EAIAE), and the Department Director is Javad Khalilzadeh-Shirazi (EA1). Task support was provided by Sarian Wilkinson.  - 12 - Schedule D Page 1 of 2 THE SOCIALIST REPUBLIC OF VIETNAM RURAL TRANSPORT PROJECT STATUS OF BANK GROUP OPERATIONS IN VIETNAM A. STATEMENT OF BANK LOANS AND IDA CREDITS la (As of September 30,1996) Amount (US$ million)/b Loan or (less cancellations) Credit Fiscal Number Year Borrower Purpose IDA/b Undisbursed Two Credits closed. 209.70 59.75 of which SAL's, SECALS and Program Loans 2657 1995 Vietnam SAC 1 150.00 59.75 2548 1994 Vietnam Primary Education 70.00 64.67 2549 1994 Vietnam Highway Rehabilitation 158.50 135.56 2561 1994 Vietnam Agriculture Rehabilitation 96.00 28.74 2711 1995 Vietnam Irrigation Rehabilitation 100.00 91.68 2724 1995 Vietnam Power Sector Rehabilitation 165.00 154.63 2785 1996 Vietnam Payment System & Bank Modernization 49.00 47.48 2807 1996 Vietnam Population & Family Health 50.00 47.70 2808 1996 Vietnam National Health Support 101.20 98.14 2820 1996 Vietnam Power Development 180.00 124.91 2855* 1996 Vietnam Rural Finance 122.00 119.35 Total 1,301.40 913.87 of which has been repaid 4.78 Total Now Held By Bank and IDA 1-296i Amount sold 0.00 Total Undisbursed 973-61 9111 /a The status of the projects listed in Part A is described in a separate report on all IBRD/IDA-financed projects in execution, which is updated twice yearly and circulated to the Executive Directors on April 30 and October 31. /b Principal amounts in US$ equivalent at date of negotiations, and undisbursed amounts in US$ equivalent are valued at exchange rate applicable on the date of this statement. * Not yet effective. ** Indicates SAL\SECAL loans and credits. - 13 - Schedule D Page 2 of 2 B. STATEMENT OF IFC INVESTMENTS (As of September 30, 1996) Undisbursed Original Gross Commitments Including IFC IFC Parti- Held partici- Fiscal Loan Equity cipant Total by pants' Year Obligor Type of Business -------- US$ million --------- IFC portion 1994 Hanoi Sofitel Metropole Hotels and Tourism 8.50 - 17.50 26.00 8.50 1.54 1995 Baria Fertilizer & Agriculture Infrastructure 3.00 - 2.00 5.00 3.00 - 1996 Morning Star Cement Limited Cement & Construction 30.00 - 66.60 96.60 30.00 91.60 1996 Tosac International Hotel Hotels and Tourism 3.39 - 2.78 6.17 3.39 3.39 1996 Tourane Hotel Hotels and Tourism 8.30 - 6.00 14.30 8.30 8.30 1996 Vina Kyoei Steel Limited Mining and Extraction 15.00 - - 15.00 15.00 - 1997 Foremost Dairy Co. Ltd. Food and Agribusiness 8.00 - 6.50 14.50 8.00 14.50 1997 Vietnam Intl. Leasing Financial Services - 0.75 - 0.75 0.75 0.75 1997 Vimaflour Co. Ltd. Food and Agribusiness 8.00 - 3.00 11.00 8.00 11.00 Total Gross Commitments g/ 84.19 0.75 104.38 189.32 Less Cancellations, Terminations, Repayments & Sales - - 2.78 2.78 Total Commitments Now Held b/ A,1 IN i ILU A 1L Pending Commitments Groupe Societes 22.00 - 20.00 42.00 SMH Glass Co. 10.00 - 4.50 14.50 Kia Huy Hoang 6.20 1.42 6.20 13.82 Sem Hotel 13.00 4.50 30.00 47.50 Total Pending Commitments 51.20 5.92 60.70 117.82 Total Commitments Held and Pending Commitments 135.39 6.67 162.30 304.36 Total Undisbursed Commitments 5fi"1 QZ5 a 1 lQ a/ Gross commitments consist of approved and signed projects. b/ Held commitments consist of disbursed and undisbursed investments. c/ Held commitments consist of disbursed and undisbursed investments. - 14 - THE SOCIALIST REPUBLIC OF VIETNAM RURAL TRANSPORT PROJECT Schedule E Page 1 of 2 Vietnam at a glance POVERTY and SOCIAL East Low- Vietnam Asia income Development diamond- Population mid-1996 (millions) 73.5 1,709 3,188 Life expectancy GNP per capita 1995 (US$) 250 840 460 GNP 1995 (billions US$) 18.4 1,436 1,466 Average annual growth, 1990-95 Population (%) 2.1 1.3 1.8 Laborforce(%) 2.1 1.4 1.9 GNP Gross per primary Most recent estimate (latest year available since 1989) capita enrollment Poverty: headcount index (% of population) 51 - Urban population (% of total population) 21 32 28 Life expectancy at birth (years) 67 68 63 Infant mortality (per 1,000 live births) 44 35 68 Child malnutrition (% of children under 5) 45 17 38 Access to safe water Access to safe water (% of population) .. 67 66 Illiteracy (% of population age 15+) 12 16 35 Gross primary enrollment (% of school-age population) 111 116 105 - Vietnam Male 101 119 112 Low-income group Female 103 115 98 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1975 1985 1994 '199 Economic ratios* GDP (billions US$) .. .. 15.5 20.3 Gross domestic investment/GDP .. .. 25.6 27.1 Openness of economy Exports of goods and non-factor services/GDP .. .. 31.5 35.2 Gross domestic savings/GDP .. Gross national savings/GDP .. .. 19.0 20.1 Current account balance/GDP .. -2.8 -7.6 -8.0 Savings Investment Interest payments/GDP .. 0.0 0.5 Total debt/GDP .. 0.4 161.3 Total debt servicelexports .. .. 6.1 Present value of debt/GDP .. .. 152.2 . Present value of debtl/exports .. .. 482.0 Indebtedness 1975-84 1985-95 1994 1995 199-04 (average annual growth) - Vietnam GDP .. 6.5 8.8 9.5 9.5 Viotncm GNP per capita .. 3.8 6.4 .. 5.9 Low-income group Exports of goods and nfs .. .. 30.7 34.7 12.7 STRUCTURE of the ECONOMY (% of GDP) 1975 1985 1994 1995 Growth rates of output and investment (%) 50 Agriculture .. 27.7 29.4 Industry . .. 29.6 29.0 2 Manufacturing 22.0 25 Services .. 42.7 41.6 BT 9 92 93 94 95 Private consumption ._. .. .. 25 General government consumption .. .. 9.1 Imports of goods and non-factor services .. .. 37.6 43.6 -GI -a-GDP (average annual growth) 1975-84 1985-95 1994 1995 Growth rates of exports and Imports (%) Agriculture .. 4.7 3.9 4.5 so Industry .. 11.6 14.0 13.9 Manufacturing .. .. 12.9 25 Services .. 8.6 10.0 10.9 Private consumption .. .. .. General govemment consumption .. .. .. .. Gross domestic investment .. 24.2 33.7 .. 2 Imports of goods and non-factor services 34.9 45.1 Gross national product 6 2 8.8 9.5 - Exports -5-Imports Note: 1995 data are preliminary eatimates. Figures in Italics are for years other than those specified. The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond will be incomplete. - 15 - THE SOCIALIST REPUBLIC OF VIETNAM Schedule E RURAL TRANSPORT PROJECT Page 2 of 2 Vietnam PRICES and GOVERNMENT FINANCE 1975 1985 1994 1995 Inflation (%) Domestic prices (% change) 1 Consumer prices 9.3 16.8 7 Implicit GDP deflator 94.2 14.5 19.5 5 Government finance (% of GDP) 25 Current revenue . 24.3 23.9 Current budget balance 5.0 5.2 Overall surplus/deficit -1.6 -0.5 -GDPdef. --CPI TRADE 1975 1985 1994 1995 Export and import levels (mill. US$) (millions US$) 6.000 Total exports (fob) .. 507 3,602 5,026 Rice 425 537 I Fuel 866 1,024 6.000 Manufactures Total imports (cif) 930 4.875 7,277 4000 Food 101 Fuel and energy 799 . 2.000 Capital goods Export price index (1987=100) a Import price index (1987=100) .as Terms of trade (1987= 100) .[ Exports IImports BALANCE of PAYMENTS (millions US$) 1975 1985 1994 1995 Current account balance to GDP ratio (%) Exports of goods and non-factor services .. .. 4,892 7,122 o 91 as 9 s Imports of goods and non-factor services . .. 5,832 8,830 62 Resource balance -940 -1,709 Net factor income . -90 -409 -366 4 Net current transfers . 32 170 450 Current account balance, e before official transfers . -473 -1,179 -1,626 Financing items (net) 204 924 1,229 Changes in net reserves .. 269 255 397 .10 Memo: Reserves including gold (mill. US$) 41 225 876 1,363 Conversion rate (local/US$) .. 8.3 10,935.0 11,000.0 EXTERNAL DEBT and RESOURCE FLOWS (millions US$) 1975 1985 1994 1995 Composition of total debt, 1994 (mill. US$) Total debt outstanding and disbursed .. 61 25,115 B C IBRD .. 0 0 .. Ga CD IDA 54 1812807 181 282 5 IDA .. 54 181 .. F Total debt service . 2 300 .9 IBRD . 0 IDA 0 1 Composition of net resource flows Official grants 249 38 449 Official creditors .. 7 292 Private creditors .. 0 -111 Foreign direct investment . 100 . Portfolio equity 0 283 . 2107 World Bank program Commitments .. 0 246 A - IBRD E - Bilateral Disbursements .. 7 126 . B- IDA D - Other multilateral F - Private Principal repayments 0 1 C- IMF G - Short-term Net flows .. 7 125 Interest payments .. 1 Net transfers .. 7 125 International Economics DepartmentlEA1CO 7/13/96 Note: Debt includes non-convertible currency debt. CHINA MYANM c.. 1 CHINA THAILAND ETNAM C.i 3 Ty- 9 1 o-_ CAMBODIA I. n.o 1 n Il, <cc i.n 4 A N ,n RURAL TRANSPORT " LAO PEOPLE'S Ini PROJECT PROVINCES: DEMOCRATIC 20 PROJECT PROVINCES Lai Chau REPUBLIC 2 P T" o PROVINCE CAPITALS 3 Lao Cai NATIONAL CAPITALS 4 Vinh Phu "h ROADS 5 l . ... 6 Ha Giang VIENTIANE E22-n RAILROADS 7 ', 0 RIVERS 8 PROVINCE BOUNDARIES 9 Bac Thai 10 in Oco - - INTERNATIONAL BOUNDARIES 23 12 13 1 I Døg14 H.n 15 ho He 16 h 17 I 258 THAILAND 9 1 20 Thainh Hoa 26 21 Nghe An 22 Ha Tinh s ~~~23(Jngmb s 28 27 24 <)- g h KonTCmM-.. 25Bha h 26 Onuik ea 29 27 uaN 30 28 Kon Tumn Play c. uy Nhon 29 (, 1, 3101 lb)hd, 13 1 Ph Yin 732 Dak Lak 32 31 33 Khanhi 1loi Sap Toyo :35 Nihhn "0 39 Binh Thuon C1 36 35 R 40 b RuVuntq PHNOM PENH 37n 41. Ilo h Minl a Thu 8 42 Tnh.^ PHy PENH TO ty 42 l A ,n g M.r 9 Vmb 1 nGeno lhr.nr p d Loch Gio 49 Be 1,0 Con SB 5TraVinh Co onq tem us od rhe WB enaneb o 5 o Tra n n°b. 52 0 50 100 150 200 250 52 Minh Hai ot The W orl op, i u Ynysryo ayc. KILOMETERS ,ndø- -fficn:. D. 1_h___h __n ___ __- lier   I MAGING Report No: F- 6,288 VN Type: MOP