The World Bank Da Nang-Quang Ngai Expressway Development Project (P106235) REPORT NO.: RES34493 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF DA NANG-QUANG NGAI EXPRESSWAY DEVELOPMENT PROJECT APPROVED ON MAY 24, 2011 TO SOCIALIST REPUBLIC OF VIETNAM TRANSPORT EAST ASIA AND PACIFIC Regional Vice President: Victoria Kwakwa Country Director: Ousmane Dione Senior Global Practice Director: Guangzhe Chen Practice Manager/Manager: Almud Weitz Task Team Leader: Dung Anh Hoang The World Bank Da Nang-Quang Ngai Expressway Development Project (P106235) ABBREVIATIONS AND ACRONYMS The World Bank Da Nang-Quang Ngai Expressway Development Project (P106235) BASIC DATA Product Information Project ID Financing Instrument P106235 Investment Project Financing Original EA Category Current EA Category Full Assessment (A) Full Assessment (A) Approval Date Current Closing Date 24-May-2011 29-Apr-2019 Organizations Borrower Responsible Agency Government of Vietnam Ministry of Transport Project Development Objective (PDO) Original PDO The objectives of the Project are to construct an expressway that will enhance efficiency and safety for road users traveling between Da Nang city and Quang Ngai province and build institutional capacity for expressway development in the Ministry of Transport. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-80490 24-May-2011 12-Jan-2012 23-Feb-2012 29-Apr-2019 470.49 141.16 329.33 IDA-49410 24-May-2011 12-Jan-2012 23-Feb-2012 29-Apr-2019 69.92 55.11 6.30 IDA-49420 24-May-2011 12-Jan-2012 23-Feb-2012 29-Apr-2019 73.09 66.66 2.60 TF-15072 22-Aug-2013 12-Sep-2013 12-Sep-2013 30-Jun-2016 1.87 1.87 0 The World Bank Da Nang-Quang Ngai Expressway Development Project (P106235) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING 1. The project development objectives of the Vietnam Da Nang – Quang Ngai Expressway Development Project (DQEP) are to construct an expressway that will enhance efficiency and safety for road users travelling between Da Nang city and Quang Ngai province and build institutional capacity for expressway development in Vietnam’s Ministry of Transport (MOT). The IDA Credit Nos. 4941-VN/4942-VN, and IBRD Loan No. 8049-VN for the Project were approved for US$613 million equivalent on May 24, 2011 and became effective on January 23, 2012. The project has reached 94% of progress with the mainline of the project’s expressway opened to traffic since September 2nd, 2018. The remaining works, excluding some soft soil treatment works at the Dung Quat interchange, are likely to complete before the revised closing date of April 29th, 2019. All contracts under component 2 have been completed, except for the supervision contract (CS1) that has been extended until December 31, 2019, to cover the Defects Liability Period for works contracts (expenditures for services provided beyond the project closing date will be financed by the Government). Technical assistance (TA) packages under component 2 have been completed. 2. However, the project’s disbursement progress is much slower than expected due to the delays in civil works contract implementation and also due to a considerable amount of likely unused fund that mainly derive from the cost savings of the civil works. It is estimated that a total amount of US$135 million of IBRD loan will not be used by the end of the project. At this point in time when the project closing date is approaching, it will be impossible to implement any additional works using the cost savings. Cancellation of the amount from project funds to reduce the fees and interest is therefore recommended. The restructuring will result in the cancellation of US$135 million corresponding to a reduction of the total loan amount from US$470.49 million to US$335.49 million. In a letter dated January 18th, 2019, the Ministry of Finance (MOF), on behalf of the Borrower, requested for cancelation of US$135 million IBRD loan. On the basis of the said request, partial cancellation of the IBRD loan is required. II. DESCRIPTION OF PROPOSED CHANGES 3. Based on the request from the Borrower in the letter from the MOF dated Jan 18th, 2019, a partial cancellation of the loan amount is required. From the original Loan amount committed of US$470.49 million, the amount of US$135 million is to be canceled effective January 18th, 2019. 4. The project’s closing date, activities and results framework will remain unchanged. The World Bank Da Nang-Quang Ngai Expressway Development Project (P106235) III. SUMMARY OF CHANGES Changed Not Changed Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ Results Framework ✔ Components and Cost ✔ Loan Closing Date(s) ✔ Disbursements Arrangements ✔ Disbursement Estimates ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_CANCELLATIONS_TABLE The World Bank Da Nang-Quang Ngai Expressway Development Project (P106235) CANCELLATIONS Value Reason Current Cancellation New Ln/Cr/Tf Status Currency Date of for Amount Amount Amount Cancellation Cancellation LOAN IBRD- Disburs 470,490,000.0 135,000,000.0 335,490,000.0 RESTRUCTUR USD 18-Jan-2019 80490-001 ing 0 0 0 ING, COST SAVINGS LOAN IDA-49410- Disburs RESTRUCTUR XDR 44,100,000.00 0.00 18-Jan-2019 44,100,000.00 001 ing ING, COST SAVINGS LOAN IDA-49420- Disburs RESTRUCTUR XDR 46,100,000.00 0.00 18-Jan-2019 46,100,000.00 001 ing ING, COST SAVINGS LOAN Fully TF-15072- RESTRUCTUR Disburs AUD 2,495,814.11 0.00 18-Jan-2019 2,495,814.11 001 ING, COST ed SAVINGS OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed IBRD-80490-001 | Currency: USD iLap Category Sequence No: 2 Current Expenditure Category: IBRD8049(VEC)-GD,NON-CS,WO,CS,TR,OC 419,890,000.00 137,257,076.71 284,890,000.00 100.00 100.00 iLap Category Sequence No: 4A Current Expenditure Category: IBRD80490-INT DURING CONST ON LOAN 49,423,775.00 2,727,225.82 49,423,775.00 100 iLap Category Sequence No: 5 Current Expenditure Category: PREMIUM FOR CAPS/COLLARS 0.00 0.00 0.00 The World Bank Da Nang-Quang Ngai Expressway Development Project (P106235) Total 469,313,775.00 139,984,302.53 334,313,775.00 .