The World Bank URBAN WATER SUPPLY AND WASTEWATER (P119077) REPORT NO.: RES38572 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF URBAN WATER SUPPLY AND WASTEWATER APPROVED ON MAY 24, 2011 AND THE ADDITIONAL FINANCE APPROVED ON JULY 25, 2016 TO SOCIALIST REPUBLIC OF VIETNAM WATER EAST ASIA AND PACIFIC Regional Vice President: Victoria Kwakwa Country Director: Ousmane Dione Regional Director: Benoit Bosquet Practice Manager/Manager: Sudipto Sarkar Task Team Leader(s): Abedalrazq F. Khalil, Vinh Quang Nguyen The World Bank URBAN WATER SUPPLY AND WASTEWATER (P119077) ABBREVIATIONS AND ACRONYMS The World Bank URBAN WATER SUPPLY AND WASTEWATER (P119077) Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. BASIC DATA Product Information Project ID Financing Instrument P119077 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 24-May-2011 31-Dec-2019 Organizations Borrower Responsible Agency Management Board of Urban Infrastructure Project, Socialist Republic of Vietnam Ministry of Constructrion Project Development Objective (PDO) Original PDO To increase access to sustainable water services and environmental sanitation in selected urban areas in the Project Provinces OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-86210 26-May-2016 25-Jul-2016 28-Dec-2016 31-Dec-2019 69.00 60.25 8.75 IDA-58170 26-May-2016 25-Jul-2016 28-Dec-2016 31-Dec-2019 50.00 22.66 26.15 IDA-49480 24-May-2011 13-Jul-2011 07-Oct-2011 31-Dec-2019 200.00 177.02 4.51 TF-56904 08-Mar-2007 08-Mar-2007 08-Mar-2007 02-Oct-2010 .80 .80 0 The World Bank URBAN WATER SUPPLY AND WASTEWATER (P119077) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No Note to Task Teams: End of system generated content, document is editable from here. The World Bank URBAN WATER SUPPLY AND WASTEWATER (P119077) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING The World Bank URBAN WATER SUPPLY AND WASTEWATER (P119077) 1. Context and previous restructuring: The Government of Vietnam (GoV), with support from the World Bank, has been implementing the Vietnam Urban Water Supply and Wastewater Project since October 2012. The project development objective (PDO) is to increase access to sustainable water services and environmental sanitation in selected urban areas in project provinces. This objective is supported by two project components. Component 1, Investments and Project Implementation is being implemented by the provinces for seven sub-projects on water supply (Component 1A) and seven sub-projects on environmental sanitation (Component 1B). Component 2, Technical Assistance, is being implemented by the Ministry of Construction (MOC) for Institutional Strengthening and Project Monitoring (Component 2A) and by the MPI for Improving the Efficiency of Investments and Operations (Component 2B). The 14 sub-projects are distributed over 10 provinces. These activities are covered under IDA 49480. 2. Additional Financing. VUWSPWP Additional Financing were provided for the following: (i) US$ 20 million for the current 14 subprojects (IDA 49480); (ii) US$ 92 million for Binh Duong (Di An Town) wastewater and drainage program; and (iii) US$ 7 million for MOC to expand its TA for the proposed Mekong Water Security Studies (Component 2C). The closing date has been re-established as Dec 31, 2019. Additional finance is broken down as follows: US$ 60M under IBRD 86210 for Binh Duong; US$ 59M under IDA 58170 of which US$ 32M are for Binh Duong and US$ 20M to support original activities and additional work for the participating cities. 3. However, due to delays in ODA allocation to provinces as well as lengthy processing time for approval of additional work, the fund under IDA 49480 and IDA 58170 could not be fully utilized. In light of the challenges, the GoV and the Bank agreed to Project restructuring to cancel the underutilization associated with these two credits. 4. The Project DO and IP ratings are Moderately Satisfactory. The previous restructuring was to extend the project closing date to Dec 2019 to allow the execution of work related to additional finance. 5. Total disbursement to date is USD 177.02 million for IDA 49480 – completed by MOC, MPI and provincial PMUs; USD 22.66 million for IDA 58170 – being implemented by Binh Duong and MOC; and USD 60.25 million for IBRD 86210 – being implemented by Binh Duong. All designated accounts and sub-accounts are in order. 6. Rationale for Restructuring: The project is approaching its closing date which is planned to be on December 31, 2019. With majority of planned activities completed, there is some amount of the committed IDA credits undisbursed and that amount will not be used. The Government of Vietnam, though Ministry of Finance (MOF) has requested a cancellation of an amount of SDR 17,220,000 from the committed credits so the cancelled amount could be recommitted to other projects in Vietnam. The savings are due to: (i) savings from competitive procurement processes resulting in lower actual expenditures compared to initially estimated contract package; and (ii) dropping support to additional minor activities in the original project activities due to lengthy approval processes. Implementation status is as follow: - Water Supply sub-projects: all sub-projects have been fully complete by end of 2017. - Wastewater and Drainage sub-project: seven original sub-projects have been fully complete by end of 2017. The Binh Duong sub-project is ongoing and will be completed on time by December 31, 2019. - MPI has completed its component by end of 2016 - MOC has completed its original component by end of 2017 - MOC is till working on TA component that support preparation of Mekong Regional Water Security Project, but it is obvious that not all planned activities will be fully completed by December 31, 2019. 7. The cancellation of project funds is not expected to impact the project’s achievement of PDO and results mainly because the cancellation amount comes from project savings and does not affect the completion of project activities. Note: Formatting instructions for this document. A. Header 1. [All sub-sections must have a continuous paragraph numbering for the entire main text or for each annex per institutional standard.] (a) This is the sub-para numbering for this level. This is the sub-para numbering for this level. This is the sub-para numbering for this level. The World Bank URBAN WATER SUPPLY AND WASTEWATER (P119077) II. DESCRIPTION OF PROPOSED CHANGES The proposed changes include: (i) a cancellation of unused credit amount of SDR 17,220,000, from which SDR 3,090,000 from Credit No. 4948-Vn and SDR 14,130,000 from Credit No. 5817-VN, and (ii) a reallocation of credit proceeds in the project disbursement categories. Details are provided below. Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. III. SUMMARY OF CHANGES Changed Not Changed Components and Cost ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ Results Framework ✔ Loan Closing Date(s) ✔ Disbursements Arrangements ✔ Disbursement Estimates ✔ The World Bank URBAN WATER SUPPLY AND WASTEWATER (P119077) 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_COMPONENTS_TABLE COMPONENTS Current Current Proposed Proposed Cost Action Component Name Component Name Cost (US$M) (US$M) COMPONENT 1A: Water Supply 118.50 Revised COMPONENT 1A: Water Supply 108.13 COMPONENT 1B: Environmental COMPONENT 1B: 251.60 Revised 237.55 Sanitation Environmental Sanitation COMPONENT 2A: Institutional COMPONENT 2A: Institutional Strengthening and Project 2.30 Strengthening and Project 2.30 Monitoring Monitoring COMPONENT 2B: Improving the COMPONENT 2B: Improving Efficiency of Investments and 1.50 the Efficiency of Investments 1.50 Operations and Operations COMPONENT 2C: Water Sector COMPONENT 2C: Water Sector 7.00 7.00 Priority Investment Plan Priority Investment Plan TOTAL 380.90 356.48 OPS_DETAILEDCHANGES_CANCELLATIONS_TABLE The World Bank URBAN WATER SUPPLY AND WASTEWATER (P119077) CANCELLATIONS Value Reason Current Cancellation New Ln/Cr/Tf Status Currency Date of for Amount Amount Amount Cancellation Cancellation BORROWER' S REQUEST IBRD- Disburs USD 69,000,000.00 0.00 20-Nov-2019 69,000,000.00 FOR 86210-001 ing COUNTRY REASONS BORROWER' S REQUEST IDA-49480- Disburs 126,140,000.0 123,050,000.0 XDR 3,090,000.00 20-Nov-2019 FOR 001 ing 0 0 COUNTRY REASONS BORROWER' S REQUEST IDA-58170- Disburs XDR 35,300,000.00 14,130,000.00 20-Nov-2019 21,170,000.00 FOR 001 ing COUNTRY REASONS BORROWER' Fully S REQUEST TF-56904- Disburs USD 800,501.42 0.00 20-Nov-2019 800,501.42 FOR 001 ed COUNTRY REASONS OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed IDA-49480-001 | Currency: XDR iLap Category Sequence No: 1 Current Expenditure Category: IDA49480 SUB-LOANS PT.1(A) OF PROJ 60,610,000.00 59,089,862.98 59,089,863.00 90 iLap Category Sequence No: 2 Current Expenditure Category: IDA49480 SUB-GRANTS PT.1(B) OF PROJ 63,640,000.00 61,807,275.47 62,070,137.00 90 iLap Category Sequence No: 3 Current Expenditure Category: IDA49480 ELIG EXP PT.2(A) OF PROJ The World Bank URBAN WATER SUPPLY AND WASTEWATER (P119077) 1,135,000.00 958,896.98 1,135,000.00 100.00 100.00 iLap Category Sequence No: 4 Current Expenditure Category: IDA49480 ELIG EXP PT.2(B) OF PROJ 755,000.00 748,883.03 755,000.00 100.00 100.00 Total 126,140,000.00 122,604,918.46 123,050,000.00 IDA-58170-001 | Currency: XDR iLap Category Sequence No: 1 Current Expenditure Category: IDA58170 GD,WK,CS,SubLn PT1(A)(i) 5,800,000.00 0.00 0.00 90 iLap Category Sequence No: 2 Current Expenditure Category: IDA58170 GD,WK,CS,SubGt PT1(B)(i) 8,330,000.00 0.00 0.00 90 iLap Category Sequence No: 3 Current Expenditure Category: IDA58170 GD,WK,CS,SubLn(BD) PT1Bii 16,230,000.00 1,833,168.78 16,230,000.00 100 iLap Category Sequence No: 4 Current Expenditure Category: IDA58170 CS,NonCS,TRNG,WS PT2C 4,940,000.00 1,301,025.07 4,940,000.00 100.00 100.00 Total 35,300,000.00 3,134,193.85 21,170,000.00 .