Haiphong City: Successful in Attracting and Using ODA

Haiphong City: Successful in Attracting and Using ODA

Over the past ten years, Haiphong City has been recognised as one of the leading localities in attracting and effectively utilising official development assistance (ODA) capital. So far, Haiphong has carried out 48 ODA projects with total investment of US$656 million. They include four centrally run projects (upgrade of National Road No. 5 and National Road No. 10, improvement of the electricity grid and upgrade of Haiphong seaport) with gross investment of US$296 million, accounting for 32.08 per cent of total investment. The other 44 projects were locally run with total capital of US$360 million, making up 67.92 per cent of investment.

Of the ODA capital in Haiphong, US$19.86 million was non-refundable aid, six per cent of the total. Some non-government organisations also annually provide aid worth between US$100,000 to US$200,000 to Haiphong.

In the first six months of 2004, attraction of ODA capital was positive. During the period, the World Bank’s directorate ratified a project to upgrade the city’s urban area with capital of US$31.5 million while the Japan Bank for International Co-operation (JBIC) approved a project for drainage of rain and waste water and management of solid waste. The JBIC-funded project, whose pre-feasibility study has been submitted to the government for approval, has total investment of over US$121 million. The city also held talks with the Finnish government for soft loans worth a total of US$2.6 million for the construction of two rain water and waste water drainage stations at May Den and Vinh Niem.

Implementation of major ODA projects in the city continues to go well. The water supply project (fourth phase), which was invested with FM53.1 million in non-refundable aid from the Finnish government, is being carried out. The project of purchasing new equipment for Vietnam-Tiep Hospital with total investment of US$7 million (borrowed from the Finnish government) has had its feasibility study approved by the Vietnamese authorities. The project of building Binh Bridge, which received a soft loan from the Japanese government totalling 8.02 billion-yen or US$64 million, completed 65 per cent of construction works with a disbursed capital ratio of 58 per cent. Meanwhile, the Cau Rao II project in the city is being designed in detail. The Finnish government has pledged in writing to provide Vietnam with loans for the construction phase of the project. There are seven projects relating to environment improvement with total investment capital of US$57.034 million. They include wastewater drainage system No. 1B, a project to close Thuong Ly dumpsite, a S. Korea-invested project on solid matter treatment, a project on improving environmental management, a project to buy 12 garbage trucks, a project set up a fund for environmental purposes and the project to build two water supply stations at May Den and Vinh Niem.

Those ODA projects helped considerably improve the city’s environment, reduce the poverty rate, boost the urbanisation process and improve technical infrastructure, creating favourable conditions for further attracting foreign direct investment.

Policy amendments have had positive effects on the city’s ODA capital attraction and disbursement. The Vietnamese government has released clear regulations for implementation of ODA projects while the Ministry of Planning & Investment created appropriate reporting to help the city more easily manage those projects. However, impediments remain, including a shortage of reciprocal capital from Vietnam for ODA projects and the weak ability of management boards, especially in the field of management of bidding for carrying out those projects. Currently, the city’s Service for Planning & Investment is responsible for ODA projects which are run by the municipal People’s Committee. For centrally-run ODA projects in the city, there are, however, no detailed regulations on supervision of the implementation process of such projects.

To boost the speed of disbursement and reduce misspending of ODA capital, below are some measures: Actively building schemes for projects calling for ODA capital in short and long-term on the basis of socio-economic development master scheme periodically; simplifying payment procedures for contractors. All vouchers that are unnecessary and not international standard practice should not require contractors’ signatures. In the coming time, Haiphong will focus on attracting ODA capital for infrastructure construction with some projects such as development of a deepwater seaport, upgrading Cat Bi Airport, construction of bridges, tunnels, roads, water supply systems, traffic light systems and irrigation and dyke works. Furthermore, the city should focus on attracting ODA capital for the healthcare sector (upgrading the city’s general hospital and construction of an international hospital), and for the education sector (construction of an international university and purchasing equipment for industrial and fishery colleges and universities).