Sector Programme Support to Water, Sanitation and Hygiene Promotion Vietnam

Transcription

1 Government of Vietnam Australian Agency for International Development, AusAID Ministry of Foreign Affairs, Denmark, Danida Directorate General for International Cooperation, The Netherlands Sector Programme Support to Water, Sanitation and Hygiene Promotion Vietnam November 2006

2 Cover sheet Country Vietnam Programme Title Multi-donor Sector Programme Support to Water, Sanitation and Hygiene Promotion National Agencies Ministry of Agriculture and Rural Development (MARD) Ministry of Health (MOH) Ministry of Education and Training (MOET) Ministry of Natural Resources and Environment (MONRE) Ministry of Finance (MOF) Ministry of Planning and Investment (MPI) Starting Date December 2006 Duration 5 years Overall Budget USD (M) VND (B) A$ (M) DKK (M) GOV AusAID Danida The Netherlands Sub total donor Total , ,975 4, , Euro (M) Summary The programme will support the National Target Programme (NTP) for Rural Water Supply and Sanitation (RWSS) Phase II based on the National Rural Clean Water Supply and Sanitation Strategy (NRWSSS). The main component of financial support will be delivered through Government of Vietnam s (GoV s) NTPII as Targeted Programme Budget Support (TPBS). This approach represents a major commitment of support through GoV s own financing and implementation structures, consistent with the principles established by the Hanoi Core Statement on Aid Effectiveness 1. This approach simplifies, harmonizes and aligns donor support to a much greater extent than previous support from Denmark, Australia and Netherlands for water supply and sanitation. The programme (through Danida support) also proposes to assist Water Resources Management (WRM), once the division of WRM roles is clarified. The development objective of the assistance is improved health and living conditions of the rural poor including ethnic minorities through provision of clean water, sanitation, hygiene promotion and protection of the environment. This objective corresponds to the development objective of NTPII and also incorporates the possible future support to WRM. Immediate objectives for the TPBS to the NTPII are i) Improved RWSS NTPII performance and effectiveness and ii) Increased coverage of water supply and sanitation facilities and hygiene promotion amongst the poor. A pilot phase of two years will provide TPBS, through government channels, to nine provinces and in so doing identify the necessary safeguards and trial approaches to strengthening NTPII implementation with a view to the donors subsequently providing TPBS on a national scale. During the pilot phase, technical assistance will be provided at both 1 The Hanoi Core Statement is the expression of the mutual commitment between the Government of Vietnam and the Donor Community in Vietnam to increase the impact of aid and enhance its effectiveness. The HCS is based on the principles set out in the Paris Declaration on Aid Effectiveness. These principles were endorsed by donors and partner countries at the High Level Forum on Aid Effectiveness held in Paris in March 2005 and at the Summit Meeting of the UN General Assembly in September i

3 national and provincial level and will focus on strengthening the institutional, management and technical capacities required for effective implementation of RWSS NTPII. A number of clear triggers and benchmarks have been agreed with GoV. These are defined in the programme document and will provide a joint GoV and donor framework for assessing progress in strengthening NTPII service delivery, and for guiding decision-making on rolling-out TPBS support for NTPII from the nine pilot provinces to the country as a whole. According to the RWSS NTPII document, approximately 7.4 million people will be served with water and will have had the opportunity to improve hygiene practices, more than 10,000 school and institutional latrines will have been built and some 1.3 million households will have hygienic latrines as a result of the AusAID/Danida/Netherlands support. The mandated Vietnamese agencies will manage the NTPII, including the funds provided by AusAID/Danida/Netherlands. No additional procedures, reporting, coordination or management structures will be created as a result of the external assistance provided. Signatures: Date: For the Government of Vietnam: Name: Title: Signature: Date: For the Government of Australia Name: Title: Signature: Date: For the Government of Denmark: Name: Title: Signature: Date: For the Government of the Netherlands: Name: Title: Signature: ii

4 ABBREVIATIONS ADB Asian Development Bank AusAID The Australian Agency for International Development BARD Bureau of Agriculture and Rural Development (District Level) BOET Bureau of Education and Training (District Level) BOF Bureau of Finance (District Level) BOH Bureau of Health (District Level) CBO Community Based Organisation CERWASS Centre for Rural Water Supply and Sanitation CPRGS Comprehensive Poverty Reduction and Growth Strategy CU Coordination Unit (for the RWSS Partnership) Danida Danish International Development Assistance DFID Department for International Development (Britain) DKK Danish Krone (approx. equal to 15 cents of a US Dollar) DARD Department of Agriculture and Rural Development (Provincial Level) DGIS Directorate General for International Cooperation, Netherlands DOET Department of Education and Training (Provincial Level) DOF Department of Finance (Provincial Level) DOH Department of Health (Provincial Level) DONRE Department of Natural Resources and Environment DPI Department of Planning and Investment (Provincial Level) DWRM Department of Water Resources Management EIA Environmental Impact Assessment EU European Union GOV Government of Vietnam GSO General Statistics Office HIV/AIDS Human Immune Deficiency Virus/ Acquired Immune Deficiency Syndrome HWI Hand washing Initiative IDE International Development Enterprises (NGO) IEC Information, Education and Communication IWRM Integrated Water Resources Management LWR Law on Water Resources MARD Ministry of Agriculture and Rural Development M&E Monitoring and Evaluation MDG Millennium Development Goals MOET Ministry of Education and Training MOF Ministry of Finance MOH Ministry of Health MOLISA Ministry of Labour, War Invalids and Social Affairs MONRE Ministry of Natural Resources and Environment MOU Memorandum of Understanding MPI Ministry of Planning and Investment NAPA National Academy for Public Administration NGO Non Government Organization NTP National Target Programme NTPII National Target Program for Rural Water Supply and Sanitation ( ) NRWSSS National Rural Clean Water Supply and Sanitation Strategy NWRC National Water Resources Council PAR Public Administration Reform PPC Provincial People s Committee PRSC Poverty Reduction Support Credit PSC Partnership Steering Committee RBMO River Basin Management Organizations RNE Royal Netherlands Embassy RWSS Rural Water Supply and Sanitation SEDP The Five-Year Socio- Economic Development Plan ( ) SBV State Bank of Vietnam SDC Swiss Development Corporation iii

5 SIDA SPB TA TAG TPBS TFG TOR UNDP UNICEF VDG VFM VDG VND VWU WRM Swedish International Development Assistance Social Policy Bank Technical Assistance Technical Advisory Group Targeted Programme Budget Support Task Force Group Terms of Reference United Nations Development Programme United Nations Children s Fund Vietnam Development Goals Value for Money Vietnam Development Goals Vietnam Dong. In January 2006, 1 USD equalled 15,800 VND. Vietnam Women s Union Water Resources Management iv

6 MAP Map showing Provinces of Vietnam and the 9 pilot provinces Lao Cai Lai Chau Dien Bien Phu Yen Dak Lak Ninh Thuan Dak Nong An Giang Tra Vinh v

7 0 EXECUTIVE SUMMARY Background The proposed sector programme support is a continuation of the cooperation between Vietnam, Australia and Denmark in the water sector that commenced in the early 1990s; and is the start of cooperation between Vietnam and the Netherlands in the rural water supply and sanitation sector. Previous assistance from the three donors involved has been provided in parallel with, rather than through- government systems. However, with significant improvements in the national sector frameworks 2, improved donor coordination and greater transparency on financial information; there is now an opportunity to deliver support through government structures and systems. This program document outlines arrangements to deliver support through GoV s National target program (NTP) II on Rural Water Supply and Sanitation (RWSS). Objectives of the support to the RWSS NTPII The development objective of the joint donor support corresponds to the development objective of NTPII (see below) but also incorporates broader environmental management: Improved health and living conditions of the rural poor including ethnic minorities through provision of clean water, sanitation, hygiene promotion and protection of the environment. Immediate objectives for the TPBS to the NTPII are: Improved RWSS NTPII performance and effectiveness; Increased coverage of water supply and sanitation facilities and hygiene promotion amongst the poor including ethnic minorities. The largest part of the programme is support to the NTPII for Rural Water Supply and Sanitation with a minor amount (less than 5%) assigned to Integrated Water Resources Management (IWRM). In terms of budget, most support will be delivered on budget through NTPII, with a much smaller proportion earmarked for off budget support for technical assistance, research and studies. 0.1 The National Sector Framework Sector context Increased coverage of RWSS is a priority for the Government of Vietnam (GOV). The RWSS NTP is one of seven nationally funded targeted programs under phase one ( ), and one of ten NTPs under phase two ( ), established by the GOV to serve areas considered urgent, inter-sectoral, inter-regional and important for national socio-economic development. In 2000, with the support of Danida, the GOV introduced the National Rural Water Supply and Sanitation Strategy (NRWSSS) up to the year 2020 to improve the impact and sustainability of GOV investments. Reviews of the first target program for RWSS NTPI ( ), concluded that the 2 Including the Comprehensive Poverty Reduction and Growth Strategy (CPRGS); the National Socio-Economic Development Plan (SEDP); a National Rural Water Supply and Sanitation Strategy (NRWSSS); and the introduction of National Target Programs (NTPs); vi

8 approach and objectives of the national strategy are relevant but the principles are inconsistently implemented in practice. Design of NTPII ( ), led by CERWASS, has tried to take on board some of the key lessons from NTPII. Poverty context Access to clean water and sanitation is a crucial part of the government s fight against poverty. Lack of water and sanitation and the continuation of poor hygiene practices hold back economic growth and place an unacceptable and preventable health burden on Vietnamese health care systems. Individuals and communities that suffer from inadequate water and sanitation and poor hygiene practices have a very poor quality of life. Access to water and sanitation is mainly a problem of the poor in Vietnam. The poorest 20% only have 22% access to clean water compared to 78% access for the richest 20%. In sanitation the picture is even worse: the poorest 20% only have 2% access compared to an access level for the richest of 20%. NTPII supported by this programme will have a measurable and direct impact by providing funds for pro-poor subsidy of water, sanitation and hygiene; and equally importantly by contributing to increasing the effectiveness of government and private sector investments in the sector. Women will benefit directly since they have the main responsibility for household water use management and family health; children will benefit from long term improvements in the sector; and the environment will be improved through a greater focus on water quality, environmental sanitation and hygiene as well as increased attention given to issues related to water abstraction, livestock waste and trade villages. HIV/AIDS will be integrated into the programme in accordance with national HIV/AIDS initiatives and strategies. Private sector participation will be encouraged through more market-based solutions in accordance with the NWRSSS. The separation of state management and service provision will also tend to improve prospects for the private sector. Civil society NGOs and Community-Based Organizations (CBOs) will, through the information and communication programmes of the NTPII, take an active role in creating demand and promoting informed decision making. Ethnic communities tend to live in the provinces with the lowest access to water supply and sanitation services. Since the focus of NTPII is on people who live in remote areas, ethnic communities will be major beneficiaries. RWSS NTPII goals and objectives The Development Goals of the RWSS NTPII ( ) reflect the poverty reduction goals of the Comprehensive Poverty Reduction and Growth Strategy (CPRGS) and the Socio Economic Development Plan (SEDP): Living conditions of rural people improved by improving rural water supply and sanitation services and raising community awareness of environment protection. vii

9 Negative impacts on rural people s health due to poor water supply and sanitation conditions reduced and environment pollution in the community minimized. The NTPII objectives to be achieved by 2010 are: Water supply 85% of the rural population use hygienic water, among whom 50% use clean water that meets MOH Standard 09/2005/QD-BYT issued on 11/3/2005 with 60 litres/capita/day. 3 Environment sanitation 70% of rural households have hygienic latrines and 70% of rural households have hygienic livestock pens Public facilities All rural primary schools, kindergartens, nurseries, clinics and commune people s committees have access to clean water and hygienic latrines and Minimize environment pollution in trade villages, especially in food processing villages. The NTPII reflects the need for a greater focus on sanitation and hygiene, the need for better targeting of subsidies for the poor, greater emphasis on sustainability, improved operation and maintenance and further decentralisation of implementation. The expected outcome is that some 7.4 million people will be served with water and will have had the opportunity to improve hygiene practices. Some 10,000 school and institutional latrines will have been built and some 1.3 million households will have hygienic latrines. The projected NTPII budget is VND 22,600,000 million, comprising about 40% for water supplies; 21% for sanitation; 30% for livestock waste treatment; and 9% for IEC, management and monitoring. The State budget is projected to account for 14% of expenditure; local government about 10%; community contributions about 36%; preferential loans about 25%; and donor support about 15% (this includes funding channelled through government systems as well as more traditional RWSS project assistance). The projected NTPII budget is based on reaching targets and not on committed and available funds. The analysis in this document indicates that on current estimates available funds will be around half the projected level needed to reach targets. This does not necessarily mean that targets will not be reached but simply that consumers will need to provide a greater proportion of the funding themselves. Thus it is vitally important that the limited subsidies are directed towards the poor. A National Steering Committee is broadly responsible for overall management of the NTPII, supported by a Standing Office (secretariat). A similar structure applies at each province. Integrated Water Resources Management 3 This is even more ambitious than the goal of the SEDP, which is that 75% of the rural population shall have access to clean water in 2010 (up from an estimated 62% in 2005). viii

10 The aim of the assistance for IWRM is to support Vietnam obtain better knowledge, protection, regulation and utilization of water resources in order to prevent water scarcity and pollution, protect the quality of ground and surface water, and strengthen the national and local capacity for IWRM. AusAID and the Netherlands do not intend to co-fund this component. The state responsibility for water resources management was in November 2003 officially transferred from the Ministry of Agriculture and Rural Development (MARD) to the Ministry of Natural Resources and Environment (MONRE). There is however still uncertainty concerning the precise division of roles especially in relation to River Basin Management Organizations (RBMOs). The assistance to IWRM will depend on the clarification of current uncertainties. Triggers for Danida support include a decision on the roles and mandates of MONRE and MARD regarding RBMOs and the establishment of a common programme for cofunding by GOV and key donors. The support to WRM will not start at the beginning of the programme. 0.2 Programme preparation Programme preparation was led by a Task Force Group (TFG) established in November 2004 with members from relevant ministries and the donors. The preparation process included thematic studies on water resources management and sanitation, documentation of lessons learned from the first earlier phase of support and a number of studies undertaken by other partners on assessment of issues such as financial management, procurement, gender mainstreaming, micro financing modalities and poverty targeting mechanisms. An assessment of the suitability of providing Targeted Programme Budget Support (TPBS) took place in November 2005 following the first draft of the NTPII. GoV accepted the findings of this assessment and incorporated most of the suggested amendments into the third draft of the NTPII (December 8, 2005). A workshop was held in March 2006 to discuss the draft programme document and recommend final adjustments prior to submission for appraisal. A joint GoV-Donor appraisal was undertaken in May The appraisal in general terms recommended to go forward with the planned TPBS to NTPII, but also recommended some changes to the Programme Document, which have been included in the present, final version. 0.3 Strategy The new approach The feasibility assessments undertaken as part of program preparation recognised that an improved sector policy framework, financial transparency and donor coordination have provided an opportunity to move towards sector support modalities for RWSS. Provision of sector support is a significant change in approach for the three donors involved in Vietnam. The change in strategy is a recognition of concerns over the institutional sustainability and impact of project based assistance, and a desire to promote donor harmonization and alignment and reduce transaction costs, consistent with the Hanoi Core Statement on Aid Effectiveness (HCS). The feasibility assessments recognized that the principles and strategies outlined in the NTPII are sound but identified risks concerning implementation capacity, particularly the ix

11 capacity to respond to lessons learned from NTPI, to strengthen procurement practices and to minimize fiduciary risks. Phasing of the support Recognizing that TPBS is a learning process for both GoV and donors, and given the inherent risks identified during the preparation process, a phased approach has been adopted. Pre-pilot activities (Box 1) are ongoing and seek to improve understanding of key features of NTP implementation and to improve awareness. Pilot activities will then allow the potential system risks to be further investigated in nine provinces, for safeguards to be identified, and for piloting of options for strengthening NTPII implementation. During this phase, technical assistance will be provided in kind at both provincial and national level, accompanied with substantial additional funds provided on budget through NTPII to enable significant improvements in coverage and sustainability of rural water supply and sanitation facilities to be achieved. From the pilot phase onwards, it will not be possible to distinguish donor funds at provincial level from government funding. Based on a joint assessment of five triggers at the end of the pilot phase, and good progress against a range of benchmarks, the three donors subsequently intend to provide scaled-up support to enable roll-out of TPBS during a national program phase. Box 1. On-going pre-pilot Activities: Establishment of cooperation agreements between MPI/MOF, the bilateral donors and the involved provinces including specific arrangements for the transfer of funds and signing of Memorandums of Understanding with the pilot provinces. Preparatory briefings/awareness raising on NWRSS and NTP II in the pilot provinces. Selection and recruitment of national and international advisers and consultants Provision of technical assistance to MPI in their planned review of performance, guidelines and procedures governing the implementation of all NTPs Support provided to MPI for implementation of the new procurement law passed in November Review of subsidy and credit policies as proposed in the NTP II document. Further development of RWSS Monitoring and Evaluation. Development of the options for use of the research funds. Definition of relationship between the RWSS partnership and the NTPII steering committee. Assistance to MARD and MOF in the development of an inter-ministerial circular to guide the NTP II. Elaboration of a Water Quality Monitoring action plan. Study on technical design for RWSS facilities (low-cost options). A sector specific fiduciary risk assessment for the proposed TPBS to RWSS. Baseline study. The pilot provinces The additional funding for pilot provinces will be complemented with technical and capacity-building support to help identify and address current weaknesses in NTP2 x

12 service delivery, improve the effectiveness of RWSS expenditure and make progress towards achieving the national targets set out in the NTP2 document. Nine provinces (three in the north; four in the central area; and two in the Mekong delta) have agreed to participate in the pilot program. The northern cluster comprises Lao Cai, Lai Chau and Dien Bien. The central cluster comprises Ninh Thuan, Phu Yen, Dak Lak and Dak Nong. The Mekong delta cluster comprises Tra Vinh and An Giang. 0.4 Triggers and benchmarks The expected national program of TPBS to NTPII will last 3 years, commencing in the last quarter 2008, subject to assessment of pilot phase performance against specific triggers and benchmarks. Triggers and benchmarks have been designed to provide a framework for assessing progress in strengthening NTPII service delivery and implementation, to be undertaken by the national RWSS steering committee (assuming the latter includes donor representation). Triggers have been defined from the outset of TPBS support and must be met prior to disbursements being made for the national program phase. There are five triggers for RWSS NTPII performance in the pilot provinces. Triggers relate to: a. Transparency and efficiency of the financial management under the NTPII b. Quality of supervision of NTPII water supply and sanitation works c. Value-for-money of NTPII investments in pilot provinces d. Agreement on management arrangements for the operation and maintenance of piped water supply schemes prior to construction e. Adequate funds allocation to sanitation and hygiene at all levels Benchmarks also provide a framework for assessing progress and will be adjusted on an ongoing basis in response to progress and the emergence of new implementation challenges. Initially, 15 benchmarks have been identified for assessing RWSS performance in the pilot provinces, and some of these will continue to be assessed during the national program phase. Benchmarks relate to a range of issues relevant to effective NTP2 management, ranging from financial information provision, cost norm revision, procurement compliance, budget allocations for sanitation and hygiene, capacity building, poverty targeting and achieving health outcomes. Detailed joint assessment of pilot phase performance against the triggers; and the design of the national program, particularly in relation to provision of TA for capacity building, will be undertaken towards the end of the pilot phase. 0.5 Technical Assistance Technical assistance will play a key role during the pilot phase of TPBS for RWSS, specifically to assist pilot provinces to improve the effectiveness of RWSS expenditure, and to ensure this experience is shared amongst provinces and integrated into plans, policies and guidelines for NTPII prepared at national level. Technical assistance at the national level will comprise: One international adviser based within the standing office in MARD for NTPII tasked with providing technical assistance to the standing office, particularly xi

13 within programme monitoring, management and reporting. The TA will further support the standing office in liasing with provincial TAs. One international adviser placed within the Department of Preventive Medicine, MoH. Tasked with promoting hygiene and sanitation in all aspects of RWSS, including promotion of the use of health data and indicators for targeting NTPII investments in IEC, water supply and sanitation to areas of greatest need. Short term consultants will be mobilised for technical assistance to MOF on needs based requirement Technical assistance at provincial level will comprise: One international adviser in each of the 3 provincial clusters, each of which will work with the provincial governments and the provincial RWSS steering committees. The adviser will support the district and commune agencies responsible for implementation of the NTPII financed projects to develop, test and introduce approaches and conduct training, covering all aspects of the NRWSSS. National consultants will be mobilized on a demand-led basis, for up to 2 person years per cluster throughout the pilot phase. 0.6 Budget The proposed budget for AusAID, Danida and the Netherlands support is USD 125 Million subdivided as shown in the table below: Summary Budget (000 USD) Support to NTP II Programme studies, auditing and research Unallocated funds Total Source of funding Ausaid disbursement Netherlands Danida disbursement Years Total 13,558 14,347 26,732 32,146 24, , ,740 1,217 1,825 3,042 3,042 3,040 12,166 15,291 16,738 30,100 35,404 27, ,000 1,700 2,700 8,600 12,000 9,000 34,000 1,591 2,038 7,500 9,404 4,467 25,000 12,000 12,000 14,000 14,000 14,000 66,000 The Danida commitment will be made in DKK. The AusAID commitment will be made in Australian dollar. The Netherlands commitment will be made in euro. 0.7 Management and organisation of the support The mandated Vietnamese agencies will manage the NTPII including the funds provided by AusAID/Danida/Netherlands. No additional procedures, reporting, coordination or management structures will be created as a result of the external assistance provided. There will however be a need for close dialogue between the donor agencies and the Vietnamese lead agencies in order to adjust plans for cooperation year by year and deepen the sector dialogue. This will take place through the National Steering Committee of NTP II in which the funding partners will be represented. Furthermore, a RWSS partnership has been established by MARD for information sharing, coordination and harmonisation. MARD is the designated lead national agency for the NTPII (standing office) although MOF, MOH and MOET will play a significant role in their respective areas. At provincial level, the Provincial People s Committee (PPCs) will designate lead xii

14 agencies (standing office) and implementing agencies (budget holders) in line with decentralization (down to district or commune level) and the mandate of different departmental line agencies responsible for different areas of the NTP. The WRM component will be managed by the Vietnamese agency that has the mandate for water resources management, once the government clarifies this. 0.8 Monitoring and evaluation Monitoring and evaluation will be based on Government systems. Currently Government systems for monitoring the sustainability of facilities are weak. The intention is to work with the Government to strengthen these systems. In addition, donor supervision missions and a range of reviews will be undertaken during the pilot phase as essential safeguard mechanisms and to confirm the conditions under which TPBS can be provided to the national program following completion of the pilot phase. Annual supervision events will include representation from the national standing office and provide a link to the mid term review proposed in the NTPII work-plan (end 2007). A joint assessment will be undertaken towards the end of the pilot phase to determine if TPBS can be provided on a national scale. 0.9 Assumptions and risks The main risks are that: The constructed facilities (both for water supply and sanitation) will have a too short useful service life, because of: (i) poor design and construction quality, (ii) insufficient emphasis put on IEC, involvement of the users and the setting up and training for O&M. It is found too difficult/complicated to subsidise the poor as they are further from the decision makers, less able to meet the necessary conditions and less aware of the support on offer. There will not be sufficient National and provincial commitment to transparent procurement and anti-corruption measures. The main assumptions are that: There is a political commitment and priority to investing in hygiene promotion The evidence for introducing changes in the pilot provinces is sufficiently compelling in terms of visibly better results, for national and provincial agencies to adopt the changes in the time span allowed. Improved approaches and capacity developed during the pilot phase can be replicated in provinces to ensure that the improvements in water, sanitation and hygiene promotion are sustained. Considerable national funding for NTPII is made available from the GoV and the Provinces, and that the end-users also are willing to make substantial contributions. Decision is taken regarding the lead and supporting agencies for IWRM, particularly for RBMOs. The assumptions, risks, mitigating actions and the monitoring of these are described in Chapter 9. xiii

15 Table of Contents ABBREVIATIONS... III MAP... V 0 EXECUTIVE SUMMARY... VI 1 INTRODUCTION NATIONAL SECTOR FRAMEWORK KEY POLICIES, STRATEGIES AND TARGETS KEY SECTOR INSTITUTIONS Summary of Roles and mandates Institutional Assessment RWSS NTPII DONOR INVOLVEMENT POVERTY REDUCTION IN VIETNAM S NATIONAL SECTOR FRAMEWORK CROSS CUTTING ISSUES IN VIETNAM S NATONAL SECTOR FRAMEWORK AGREED ASSISTANCE OBJECTIVES OF THE AGREED ASSISTANCE STRATEGIC AND METHODOLOGICAL APPROACH OF THE AGREED ASSISTANCE Sector support versus project support The Role of Triggers and Benchmarks Phasing National program of TPBS to NTPII Programme level support STRATEGY FOR TECHNICAL ASSISTANCE The role of technical assistance Contracting and reporting CONTRIBUTION OF THE AGREED ASSISTANCE TO VIETNAM S POVERTY REDUCTION EFFORTS Alignment to Vietnamese policies and strategies for poverty alleviation Contribution to the MDGs Lessons learnt from past cooperation Potential contributions to an enhanced pro-poor focus in the water and sanitation sector CONTRIBUTION TO CROSS CUTTING AND PRIORITY ISSUES TO VIETNAM S EFFORTS IN THESE AREAS COMPONENT LEVEL SUPPORT TO THE NTPI II IMMEDIATE OBJECTIVES OUTPUTS DETAILED STRATEGY INPUTS TPBS TO THE NTPII BUDGET OVERALL BUDGET xiv

16 5.2 BUDGET DETAILS FOR TECHNICAL ASSISTANCE BUDGET FOR SUPERVISION INPUTS PROGRAMME LEVEL BUDGET UNALLOCATED BUDGET MANAGEMENT AND ORGANIZATION PROGRAMME MANAGEMENT PRINCIPLES MANAGEMENT FUNCTIONS AND ROLES NTPII COMPONENT MANAGEMENT FUNCTIONS AND ROLES WRM PARTNERSHIP ARRANGEMENTS AT PROGRAM LEVEL Partnership for rural water supply and sanitation sector Operational coordination between GOV and donors supporting the NTPII FINANCIAL MANAGEMENT BUDGETING FUNDS TRANSFER DISBURSEMENT ACCOUNTING AND REPORTING PROCUREMENT AUDITING MONITORING, REPORTING, REVIEWS AND EVALUATION ORGANISATIONAL SET-UP OF THE MONITORING SYSTEM KEY TARGETS, OUTPUT, OUTCOME AND IMPACT INDICATORS REPORTING SYSTEM OF THE PROGRAMME AND ITS COMPONENTS ASSESSMENT OF KEY RISKS AND ASSUMPTIONS MAIN RISKS Operation and Maintenance Subsidies to the poor Transparent procurement and anti-corruption MAIN ASSUMPTIONS Political commitment and priority assigned to investing in hygiene promotion Changes in the pilot provinces stimulate changes during national rollout Replications during national roll-out The funding for NTPII Responsibilities for IWRM IMPLEMENTATION PLAN Volume 2: Annexes A) TOR for pre-pilot activities B) TOR for Pilot phase evaluation studies C) Job descriptions for long-term technical advisers D) Detailed budget and cash flows E) Strategy considerations and Lessons learnt from NTPI F) NTP management arrangements and diagram of financial flows G) Indicators xv

17 H) Details on Poverty reduction impact. I) Environmental screening note J) MOU for the RWSS partnership K) A possible strategy for the RWSS component L) References M) Public Administration Reform N) Summary of Action Plans for the Nine Provinces xvi

18 1 INTRODUCTION Vietnam has cooperated with Australia and Denmark in the water sector since the early 1990s. The first sector programme with Denmark was launched in 2000 and will draw to a close in mid 2006; current Australian assistance to the water sector will stop in Australian and Danish assistance to the water sector has adopted similar approaches in the past. Netherlands has provided considerable support for water resources management in Vietnam and increasingly seeks to focus delivery through harmonized, sector-support modalities. For the Netherlands, this will be the first support provided for RWSS. The external assistance so far has acted alongside rather than within government structures, partly as a response to the lack of a consolidated national sector framework at the time. The Comprehensive Poverty Reduction and Growth Strategy (CPRGS), the Five-Year Socio- Economic Development Plan ( ) (SEDP), the NRWSSS, introduction of a National Target Program (NTP) and improved donor coordination provide the opportunity in this proposed second phase to simplify, to better align and to harmonise the modalities of cooperation. Rural Water Supply and Sanitation (RWSS) Achieving universal coverage of RWSS is a priority for the Government of Vietnam (GOV). Since 1998, provision of RWSS has been one of seven NTPs established by the GOV to serve areas considered urgent, inter-sectoral, inter-regional and important for national socio-economic development. In 2000, with the support of Danida, the GOV introduced the National Rural Water Supply and Sanitation Strategy (NRWSSS) up to the year 2020 in order to improve the impact and sustainability of GOV investments. The national strategy, which is based on international good practice, is supported by donors active in the sector. Reviews of the first NTP for RWSS concluded that the approach and objectives of the national strategy are relevant but the principles are inconsistently implemented in practice. New opportunities have recently emerged for enhanced sector cooperation including: A GOV, civil society and donor consensus has developed on how the NTP can be improved, which gives a strong departure point for future cooperation between implementing agencies and international donors; Joint approaches are becoming more readily accepted by key donors potentially reducing transactions costs and increasing harmonisation; The new NTPII ( ) allows for introduction of new modalities of cooperation and implementation practices to better follow policy; Information, Education and Communication (IEC) tools and methods are becoming more effective leading to greater sustainability of benefits, Lessons on how to integrate with and mobilise Ministry of Health (MOH) and Ministry of Agriculture and Rural Development (MARD) rural extension networks could bring huge new resources as active partners in RWSS, and The information gaps and uncertainty of demand that have hampered private sector development of the sector could potentially be solved within the next 5 years. 1

19 The GOV has made available much more information on its internal budgets and allocation of funding. Integrated Water Resources Management (IWRM) In November 2003, the state management of water resources management was officially transferred from MARD to the Ministry of Natural Resources and Environment (MONRE), through its Department of Water Resources Management (DWRM) although there is still uncertainty in the precise division of roles. The National Water Resources Council (NWRC) needs to function well so that MONRE is able to ensure that regulation of the sector is supported across the various ministries involved. The Law on Water Resources (LWR) opens up for broader participation in the management of water resources e.g. through participation of water users in the River Basin Management Organizations (RBMOs) and the establishment of the rule of law (registration of water rights, licensing etc.) International donors, including Denmark, could play a catalytic and strategic role in assisting Vietnam to consolidate the significant advances made so far in sustainable water resources management. Advances in sustainable water resources management are necessary for economic growth and also for satisfactory progress in environment, agricultural, fishery and other sectors. Preparatory process A Task Force Group (TFG) for programme preparation was established in November 2004 led by MARD with members from the Ministry of Planning and Investment (MPI), Government s Office, Ministry of Finance (MOF), MARD, MONRE, MOH, and Embassy of Denmark.Denmark and the Australian Agency for International Development (AusAID) (the two major bilateral donors to the RWSS sub-sector) later agreed to join forces in order to prepare a common programme for co-funding. Subsequently, the government of the Netherlands, following talks with the GOV, decided to merge its proposed financing for RWSS with the same programme of support. Thematic studies on water resources management, sanitation and mainstreaming of HIV/AIDS prevention have been undertaken as a part of the preparatory process. A document on lessons learnt from the first phase of support has also been prepared. A number of studies from the World Bank, Asian Development Bank (ADB), Department for International Development (DFID), United Nations Development Programme (UNDP) and others on assessment of issues such as financial management, procurement, gender mainstreaming, micro financing modalities and poverty targeting mechanisms, have been useful. In November 2005 an assessment on the suitability of the NTPII for AusAID/Danida/ Netherlands financing was made. Most of the recommendations were incorporated in the updated NTPII. The detailed formulation of proposed donor support follows closely the agreed recommendations of the Assessment Report. A workshop was held in March 2006 to discuss the draft programme document and recommend final adjustments prior to submission for appraisal. 2

20 2 NATIONAL SECTOR FRAMEWORK 2.1 KEY POLICIES, STRATEGIES AND TARGETS The key framework document for poverty reduction in Vietnam is the Comprehensive Poverty Reduction and Growth Strategy (CPRGS) and the Five-Year Socio- Economic Development Plan ( ) (SEDP). These documents set out goals for poverty reduction in 2005 and 2010 based on the Millennium Development Goals (MDG). Many of the poverty reduction objectives of the CPRGS and the SEDP can be related directly or indirectly to the provision of adequate clean water and sanitation facilities. Access to water and sanitation is essential for the reduction of poverty. Safe water and environmental sanitation are basic needs of people s daily life and they have become urgent requirements for protection and improvement of people s health and living conditions, as well as for the cause of national industrialization and modernization 4. The Party and the Government, through Resolutions adopted by the VIII and IX Party Congress and through commitments contained in the CPRGS gives prominence to the water sector in achieving the Vietnam Development Goals (VDG) and the Millennium Development Goals (MDG). The National Strategy for Rural Clean Water Supply and Sanitation for is designed to improve the impact and sustainability of RWSS investments. It was developed with the assistance of Danida and approved by the GOV in August Key targets of the strategy include: By 2005 all kindergartens, schools, training centres, hospitals, markets and public facilities in rural areas will have adequate clean water and hygienic latrines By % of the rural population will have access to at least 60 litres/capita/day of clean water and 70% of rural households will have hygienic latrines 5 By 2020 full water and sanitation coverage with all rural households adopting good hygiene and sanitation practices. The national strategy is underpinned by the principles of demand responsiveness; managing water as an economic as well as a social good; and basing decision-making and management at the lowest appropriate level. The strategy aims to promote the participation of private service providers and development of community based needs identification and systems of operation and maintenance. As a general principle, users are expected to co-finance construction and pay the full operating costs of water and sanitation facilities. Since 1999 provision of central funding for RWSS has been channelled through a National Target Program 6. The experience and lessons learned from RWSS NTPI 4 National Rural Water Supply and Sanitation Strategy (2000). 5 The target for access to clean water in rural areas in 2010 is in the SEDP somewhat lower (and probably more realistic): 75%, up from an estimated 62% in

21 ( ) were assessed in a Review Report prepared by MARD in late 2004 and again in a Joint Government-Donor Sector Review completed in April The findings of the reviews were similar. The key conclusion of the Joint Government- Donor review was that: Rural water targets for 2010 and 2020 are likely to be met if existing efforts are maintained, but coverage, technologies and trends differ between regions and provinces. While some 62% of rural families had adequate water supplies in 2005, many of those without good water are poorer and live in more remote parts of the country (northern and central highlands) or in the densely settled coastal and delta areas. More locally based approaches and targeting are needed to reach the poor. Sanitation targets for 2010 and 2020 are unlikely to be met without significant changes in approaches to sanitation promotion and development that recognise cultural preferences. Issues and challenges Communicable diseases represent nearly half the visits to health clinics and hospitals in Vietnam. Half of these diseases result directly from water and environmental sanitation problems consuming a high proportion of the health budget on preventable illness. Children and ethnic minority communities are the most vulnerable groups. Over the past years various GOV economic and reform initiatives have contributed to sustained economic growth and poverty reduction in Vietnam. But the GOV also recognizes a need to provide targeted assistance to the poor, in particular, to channel investments and development efforts to rural areas lagging behind the rest of the country. This is true of the water and sanitation sector as it is of other sectors. More than 75% of Vietnam s poor reside in rural areas, but over the past decade, investment in water supply and sanitation infrastructure has focused disproportionately on urban centres. Rural access to safe water supply and sanitation facilities are among the lowest in South-East Asia. Many challenges need to be addressed. In particular, national development policies assign primary responsibility for RWSS development to provincial level. Hence success in targeting poverty reduction in RWSS needs to focus on developing capacity to plan, implement, manage and monitor RWSS facilities at provincial level. The sector reviews identified a number of issues that need to be addressed to improve efficiency of RWSS development and poverty reduction (a more detailed summary is provided in Annex E) Implementation approach there is a strong target driven construction focus at the expense of application of demand responsive approaches through community consultation, health education and establishment of effective institutional and decision making systems enabling rural people to choose the type and level of service they want. Appropriate technologies are often ignored and piped water 6 Seven National Target programs have been established during the 1990 s by the GOV in areas considered important for national socio-economic development. Most have a poverty focus. 4

22 schemes developed where consumption does not warrant it, resulting in high and unsustainable cost recovery rates Operational environment there are gaps in the policy, legal and institutional framework and lack of coordination between different institutions engaged in the sector, including at the national-provincial level, resulting in fragmented and inefficient planning and implementation. Funding priorities insufficient financial and institutional resources have been made available to support IEC strategies to improve awareness of health and environmental issues, promote behavioural change and support community management and cost recovery Water and sanitation management there is a need to balance the roles and responsibilities of different levels of government, the private sector and local communities. Monitoring and evaluation currently monitoring is limited and provides inadequate information for effective planning or decision-making. There is a need for a coherent national system, unifying existing initiatives (especially those being coordinated by United Nations Children s Fund (UNICEF)) and further developing the system to encompass performance measures and feedback mechanisms. Roles and responsibilities need to be clarified. The institutional and capacity constraints and the failure of sector agencies at all levels to follow the principles of the NRWSSS prevented the full potential of user investments in RWSS from being achieved. 2.2 KEY SECTOR INSTITUTIONS Summary of Roles and mandates The institutional structure of the RWSS sector is complex. There are a number of different agencies and programs in addition to the RWSS NTP that are part of national efforts to achieve targets of the NRWSSS, the SEDP and the CPRGS 7. Additionally, under decentralization provinces have substantial autonomy with regard to budgets and responsibility for planning and activity implementation. A National Steering Committee and standing office and similar structure at provincial level provides rudimentary coordination of the RWSS NTP. The provincial steering committees will report to the National Steering Committee. Ministry of Planning and Investment MPI is responsible for the overall management and supervision of NTPs; coordination of budgets and evaluation of effectiveness. MPI in consultation with MOF proposes budget allocations for approval by the Prime Minister and the National Assembly, based on requests submitted by line agencies. Ministry of Finance MOF is responsible for recurrent budget allocations to NTPs, financial controls and the release of funds to provinces. 7 Annex F gives more details on the NTP implementation arrangements 5

23 Ministry of Agriculture and Rural Development MARD is the designated lead agency for the RWSS NTPII and is responsible for coordinating with relevant ministries. MARD has delegated responsibility for the NTP II program document preparation to the Centre for Rural Clean Water and Environmental Sanitation (CERWASS). The national standing office of the NTP II will be based in the Department for Water Resources Management in MARD that will also assume responsibility for the elaboration of the NTP II implementation guidelines. Ministry of Health MOH is responsible for developing awareness on hygiene and health and for setting and monitoring water quality standards. Ministry of Education and Training Ministry of Education and Training (MOET) is responsible for health and hygiene programs in schools including provision of water and sanitation facilities. Ministry of Natural Resources and Environment Ministry of Natural Resources and Environment plays a role in relation to environment, water quality and water resources management. Committee for Ethnic Minorities in Mountainous Areas Committee for Ethnic Minorities in Mountainous Areas is responsible for implementation of Program 135, which has a focus on poor and marginalized communities. Program 135 includes rural water (but little in the way of sanitation). In some provinces Program 135 is a larger source of funding than RWSS NTP. People s Committees The Provincial People s Committee is responsible for managing resources and coordinating the implementation of the RWSS NTP. Typically this is devolved to the provincial office of CERWASS (pcerwass). Various agencies are delegated as budget holders to manage the different components of the NTP Institutional Assessment A detailed institutional assessment of the RWSS sector is provided in the joint donor review (see Annex L). A brief overview is given below: Provincial authorities The provincial authorities are key executing agencies. The main institutional constraints are: lack of familiarity with the NWRSSS and key principles affecting sustainability; a tendency to focus on water and ignore sanitation; lack of technical supervision capacity and unwillingness to engage the private sector to provide technical inputs when needed; a focus on meeting construction rather than functionality targets; the fact that pcerwass only extends to the provincial level; conflict of interest between service provision and state management and, unfamiliarity with the demand managed approach. National standing office for the NTP The national standing office for the NTP II will be based in the Department for Water Resources Management in MARD. In NTP I, CERWASS was the standing office but 6