Completion Report

Project Numbers: 30513 / 30316 Loan Numbers: 1659(SF) and 1660(SF) December 2007

Kingdom of Cambodia and Socialist Republic of Viet Nam: Greater Mekong Subregion: Phnom Penh to Ho Chi Minh City Highway Project

CURRENCY EQUIVALENTS

CAMBODIA Currency Unit – Riel (KR)

At Appraisal At Project Completion (11 November 1998) (13 November 2006)

KR1.00 = $0.000026 $0.00023 $1.00 = KR3,700 KR4,286.30

SDR1.00 = $1.346 $1.490

VIET NAM Currency Unit – Dong (D)

At Appraisal At Project Completion (11 November 1998) (27 October 2006)

D1.00 = $0.000072 $0.000060 $1.00 = D13,880 D16,578.70

SDR1.00 = $1.346 $1.485

ABBREVIATIONS ADB

EA EFRP EIRR FY GDP GMS HCM City HDM-4 ICB IEE IRI MOT MPWT PMU PMU-MT RRMU TA UXO VRA VOC vpd

– – – – – – – – – – – – – – – – – – – – – –

Asian Development Bank executing agency Emergency Flood Rehabilitation Project economic internal rate of return fiscal year gross domestic product Greater Mekong Subregion Ho Chi Minh City Highway Design and Maintenance Standards Model - 4 international competitive bidding initial environmental examination international road roughness index Ministry of Transport Ministry of Public Works and Transport project management unit project management unit – My Thuan regional road maintenance units technical assistance unexploded ordnance Viet Nam Road Administration vehicle operating cost vehicles per day

NOTES

(i) The fiscal year (FY) of the governments is from 1 January to 31 December. FY before a calendar year denotes the year in which the fiscal year ends, e.g., FY2000 ends on 31 December 2000.

(ii) In this report, "$" refers to US dollars.

Vice President C. Lawrence Greenwood, Jr., Operations Group 2 Director General A. Thapan, Southeast Asia Department (SERD) Director J. Cooney, Infrastructure Division, Southeast Asia Infrastructure Division

(SEID), SERD Country Director A. Goswami, Cambodia Resident Mission (CARM); A. Konishi, Viet Nam

Resident Mission (VRM), SERD

Team leaders Nida Ouk, Senior Project Implementation Officer, CARM Le Dinh Thang, Program and Project Implementation Officer, VRM

Team members San Sophana, Assistant Project Analyst, CARM Nguyen Thi Phuong Hoa, Assistant Project Analyst, VRM

CONTENTS

Page

BASIC DATA i

MAP

I. PROJECT DESCRIPTION 1 II. EVALUATION OF DESIGN AND IMPLEMENTATION 2

A. Relevance of Design and Formulation 2 B. Project Outputs 2 C. Project Costs 4 D. Disbursements 6 E. Project Schedule 6 F. Implementation Arrangements 8 G. Conditions and Covenants 9 H. Related Technical Assistance 10 I. Consultant Recruitment and Procurement 10 J. Performance of Consultants, Contractors, and Suppliers 12 K. Performance of the Borrower and the Executing Agency 13 L. Performance of the Asian Development Bank 14

III. EVALUATION OF PERFORMANCE 14 A. Relevance 14 B. Effectiveness in Achieving Outcome 15 C. Efficiency in Achieving Outcome and Outputs 16 D. Preliminary Assessment of Sustainability 16 E. Impact 17

IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 19 A. Overall Assessment 19 B. Lessons Learned 19 C. Recommendations 20

APPENDIXES 1. Project Framework 21 2. Appraisal and Actual Project Costs 24 3. Currency Equivalents 27 4. Summary of Contracts Funded by the Asian Development Bank 28 5. Projected and Actual Disbursements 31 6. Chronology of Major Events 33 7. Project Implementation Schedule 38 8. Organization Charts 39 9. Status of Compliance with Loan Covenants 41 10. Economic Reevaluation 52 11. Resettlement Activities 61 12. Quantitative Assessment of Overall Project Performance 68

i

BASIC DATA (Loan No. 1659-CAM)

A. Loan Identification 1. Country 2. Loan Number 3. Project Title 4. Borrower 5. Executing Agency 6. Amount of Loan 7. Project Completion Report Number

Kingdom of Cambodia 1659-CAM(SF) Phnom Penh to Ho Chi Minh City Highway Kingdom of Cambodia Ministry of Public Works and Transport SDR28,402,000 ($40 million equivalent) PCR: 971

B. Loan Data 1. Appraisal – Date Started – Date Completed 2. Loan Negotiations – Date Started – Date Completed 3. Date of Board Approval 4. Date of Loan Agreement 5. Date of Loan Effectiveness – In Loan Agreement – Actual – Number of Extensions 6. Closing Date – In Loan Agreement – Actual – Number of Extensions 7. Terms of Loan – Interest Rate – Maturity (number of years) – Grace Period (number of years)

20 April 1998 9 May 1998 5 November 1998 6 November 1998 15 December 1998 20 March 1999 18 June 1999 9 November 1999 1 30 June 2003 20 July 2006 3 1% per annum 40 10

8. Disbursements a. Dates Initial Disbursement

20 January 2000

Final Disbursement

20 July 2006

Time Interval

79 months

Effective Date

9 November 1999

Original Closing Date

30 June 2003

Time Interval

43 months

ii

b. Amount ($) Categorya

Original Allocationb

Last Revised Allocation

Net Amount Available

Amount Disbursed

Undisbursed Balancec

01 30,139,515 24,439,358 24,439,358 24,372,643 66,715 01A - 7,754,201 7,754,201 7,754,171 30 02 400,225 531,169 531,169 520,277 10,892 03 3,001,691 3,518,835 3,518,835 3,486,338 32,497 04 1,400,789 1,801,072 1,801,072 1,157,039 644,033 05 5,057,780 2,971 2,971 2,971 06 - 876,473 876,473 857,588 18,885 Total 40,000,000 38,924,079 38,924,079 38,148,056 776,023 a 01 = civil works (road improvement), 01A = civil works (emergency flood rehabilitation), 02 = government

management (incremental), 03 = consulting services, 04 = service charge, 05 = unallocated, and 06 = equipment b The difference between the original allocation and the revised total amount was due to the exchange rate variation

between the special drawing rights (SDR) and the US dollar. c An undisbursed loan amount of SDR 528,874.47 ($776,023.00 equivalent) was cancelled at loan closing date of 20

July 2006. A previous cancellation of SDR 370,000.00 was made on 31 August 2004. In total, an amount of SDR 898,874.47 ($1,317,599.20 equivalent) was cancelled from the loan.

9. Local Costs (Financed) Appraisal Actual

- Amount ($ million) 3.90 2.50 - Percent of Local Cost 26.71 26.04 - Percent of Total Cost 7.69 5.52

C. Project Data

1. Project Cost ($ million) Cost Appraisal Estimate Actual

Foreign Exchange Cost 36.10 35.65 Local Currency Cost 14.60 9.60 Total 50.70 45.25

2. Financing Plan ($ million) Appraisal Estimate Actual Cost Foreign Local Total Foreign Local Total Implementation Costs ADB Financed 34.70 3.90 38.60 34.49 2.50 36.99 Government Financed 0.00 10.70 10.70 0.00 7.10 7.10 Total 34.70 14.60 49.30 34.49 9.60 44.09 IDC Costs ADB Financed 1.40 0.00 1.40 1.16 0.00 1.16 Government Financed 0.00 0.00 0.00 0.00 0.00 0.00 Total 36.10 14.60 50.70 35.65 9.60 45.25

ADB = Asian Development Bank, IDC = interest during construction.

iii

3. Cost Breakdown by Project Component ($ million)

Component Appraisal Estimate Actual Foreign Local Total Foreign Local Total

A. Base Cost 1. Land / RAP / UXO 0.00 5.00 5.00 0.00 2.40 2.40 2. Civil Works 28.00 6.80 34.80 22.39 5.96 28.36 3. Construction Supervision 2.33 0.69 3.02 3.49 0.00 3.49 4. Government Management 0.00 0.40 0.40 0.00 0.52 0.52 Subtotal (A) 30.33 12.89 43.22 25.88 8.88 34.76 B. Contingencies 1. Physical 3.03 0.79 3.82 - - - 2. Price 1.37 0.94 2.31 - - - Subtotal (B) 4.40 1.73 6.13 - - - C. Service Charge during Construction 1.35 0.00 1.35 1.16 0.00 1.16

Total Original Scope (A+B+C) 36.08 14.62 50.70 27.04 8.88 35.92 D. Extended Scope

1. Civil Works (Emergency Flood Rehabilitation)

7.75 0.70 8.45

2. Equipment 0.86 0.02 0.88 Subtotal (D) 8.61 0.72 9.33

Total Cost (A)+(B)+(C)+(D) 36.08 14.62 50.70 35.65 9.60 45.25Note: estimated by Ministry of Economy and Finance – final figure to be supplied UXO = unexploded ordnance, RAP = resettlement action plan 4. Project Schedule

Item Appraisal Estimate Actual A. Construction Supervision Consultant 1. Contract Date March 1999 3 December 1999 2. Completion August 2002 1999 31 December 2005 B. Civil Works Components . 1. Start of Construction June 1999 8 December 1999 2. Completion of Construction June 2002 31 December 2005 C. Other Milestones:

1. 27 June 2003: Approval of first extension of loan closing date to 30 June 2003 2. 9 July 2004: Approval of second extension of loan closing date to 30 June 2005 3. 10 September 2004: Approval of cancellation of SDR 370,000.00, effective 31 August 2004 4. 30 May 2005: Approval of third extension of loan closing date to 31 December 2005 5. 20 July 2006: Closing of loan account

iv

5. Project Performance Report Ratings

Ratings Implementation Period

Development Objectives

Implementation Progress

From 1 Jan 1999 to 31 Dec 1999 Satisfactory Satisfactory From 1 Jan 2000 to 31 Dec 2000 Satisfactory Satisfactory From 1 Jan 2001 to 31 Dec 2001 Satisfactory Satisfactory From 1 Jan 2002 to 31 Dec 2002 Satisfactory Satisfactory From 1 Jan 2003 to 31 Dec 2003 Satisfactory Satisfactory From 1 Jan 2004 to 31 Dec 2004 Satisfactory Satisfactory From 1 Jan 2005 to 31 Dec 2005 Satisfactory Satisfactory From 1 Jan 2005 to 20 July 2006 Satisfactory Satisfactory D. Data on Asian Development Bank Missions

Name of Missiona

Date

No. of Persons

No. of Person-Days

Specialization of Membersb

Fact Finding 21 April−9 May 1997 3 30 a,b,c Appraisal 29 April−9 May 1998 4 44 a,b,c,e Special Loan Administration Mission 13 – 22 July 2000 4 40 f, f, f, b, Review Mission 1 17–18 July 2000 1 1 B Review Mission 2 14–26 June 2001 2 26 g, j Review Mission 3 10-18 December 2001 2 18 g, h Review Mission 4 14–26 June 2001 1 5 e, f Mid-Term Review Mission 05-14 Nov 2001 1 10 G Review Mission 5 22 Mar–04 Apr 2002 3 42 k, i, j Review Mission 6 30 Mar–01 Apr 2002 2 6 d, j Review Mission 7 (Resettlement) 01 – 04 June 2002 3 12 b, l, m Review Mission 8 (Resettlement) 15 – 17 August 2002 3 9 i, j, l Review Mission 9 07 Feb – 04 Mar 2003 2 52 i, j Review Mission 10 06–15 Oct 2003 2 20 i, j Review Mission 11 (Environment) 03 – 06 Dec 2003 1 4 N Review Mission 12 06–24 May 2004 2 38 i, j Review Mission 13 (Resettlement) 27 Oct – 12 Nov 2004 2 34 q, i Review Mission 14 14–22 Mar 2005 2 18 o, j Review Mission 15 (Resettlement) 10 –12 May 2005 5 15 l, k, o, j, p Review Mission 16 (Resettlement) 08 –11 Aug 2005 2 8 l, o Review Mission 17 (Resettlement) 01 Sept 2005 5 5 l, k, o, j, p Review Mission 18 (Resettlement) 03 –23 Nov 2005 1 21 Q Project Completion Review 7-24 Nov 2006 2 36 j, q a Fielded concurrently with other missions. b/ a – senior project engineer, b- social development specialist, c- project economist, d-project engineer, e-counsel, f-

project specialist, g-transport economist, h- programs officer, i-portfolio management specialist, j-program/project implementation officer, k-country director (CARM), l-resettlement specialist, m – associate social development analyst, n – environmental specialist, o – project implementation specialist, p – director, MKID, q-consultant

v

BASIC DATA (Loan No. 1660-VIE)

A. Loan Identification 1. Country 2. Loan Number 3. Project Title 4. Borrower 5. Executing Agency 6. Amount of Loan 7. Project Completion Report Number

Viet Nam 1660-VIE(SF) Phnom Penh to Ho Chi Minh City Highway The Socialist Republic of Viet Nam Ministry of Transport SDR71,005,000 ($100 million equivalent) PCR: 971

B. Loan Data 1. Appraisal – Date Started – Date Completed 2. Loan Negotiations – Date Started – Date Completed 3. Date of Board Approval 4. Date of Loan Agreement 5. Date of Loan Effectiveness – In Loan Agreement – Actual – Number of Extensions 6. Closing Date – In Loan Agreement – Actual – Number of Extensions 7. Terms of Loan – Interest Rate – Maturity (number of years) – Grace Period (number of years)

20 April 1998 9 May 1998 5 November 1998 6 November 1998 15 December 1998 20 March 1999 18 June 1999 9 November 1999 1 30 June 2003 12 May 2006 2 1% per annum 40 10

8. Disbursements a. Dates Initial Disbursement

27 December 1999

Final Disbursement

12 May 2006

Time Interval

76.5 months

Effective Date

09 November 1999

Original Closing Date

30 June 2003

Time Interval

43 months

vi

b. Amount ($) Categorya

Original Allocationb

Last Revised Allocation

Net Amount Available

Amount Disbursed

Undisbursed Balancec

01 78,739,535 81,461,286 81,461,286 81,461,286 0 02 499,965 232,605 232,605 232,605 0 03 5,750,300 7,046,371 7,046,371 7,046,371 0 04 2,119,569 2,152,373 2,152,373 2,152,373 0 05 12,890,641 6,194,502 6,194,502 0 6,194,502 Total 100,000,000 97,087,137 97,087,137 90,892,635 6,194,502

a 01 = civil works), 02 = government management (incremental), 03 = consulting services, 04 = service charges, 05 = unallocated.

b The difference between the original allocation and the revised total amount was due to the exchange rate variation between the special drawing rights (SDR) and the US dollar.

c An undisbursed loan amount of SDR4,172,168.72 (equivalent to $6,194,502) was canceled at the loan closing date of 12 May 2006.

9. Local Costs (Financed) Appraisal Actual

- Amount ($ million) 25.40 21.16 - Percent of Local Cost 36.18 21.86 - Percent of Total Cost 17.54 12.71

C. Project Data

1. Project Cost ($ million) Cost Appraisal Estimate Actual

Foreign Exchange Cost 74.60 69.73 Local Currency Cost 70.20 96.80 Total 144.80 166.53

2. Financing Plan ($ million) Appraisal Estimate Actual Cost Foreign Local Total Foreign Local Total Implementation Costs ADB Financed 72.50 25.40 97.90 67.58 21.16 88.74 Government Financed 0.00 44.80 44.80 0.00 75.64 75.64 Total 72.50 70.20 142.70 67.58 96.80 164.38 IDC Costs ADB Financed 2.10 0.00 2.10 2.15 0.00 2.15 Government Financed 0.00 0.00 0.00 0.00 0.00 0.00 Total 74.60 70.20 144.80 69.73 96.80 166.53 ADB = Asian Development Bank, IDC = interest during construction..

vii

3. Cost Breakdown by Project Component ($ million)

Component Appraisal Estimate Actual Foreign Local Total Foreign Local Total

A. Base Cost 1. Land / RAP / UXO 0.00 31.50 31.50 0.00 32.37 32.37 2. Civil Works 58.42 28.78 87.20 35.98 17.41 53.39 3. Construction Supervision 4.66 1.09 5.75 5.11 0.24 5.35 4. Government Management 0.00 0.50 0.50 0.00 0.23 0.23 Subtotal (A) 63.08 61.87 124.95 41.09 50.25 91.34 B. Contingencies 1. Physical 6.31 3.04 9.34 - - - 2. Price 3.11 5.25 8.36 - - - Subtotal (B) 9.42 8.29 17.70 - - - C. Service Charge during Construction 2.12 0.00 2.12 2.15 0.00 2.15

Total Original Scope (A+B+C) 74.62 70.16 144.78 43.24 50.25 93.49 D. Extended Scope Additional Work 1. Land/ RAP / UXO 0.00 31.96 31.96 2. Civil Works 24.88 14.50 39.38 3. Construction Supervision 1.61 0.09 1.70 Subtotal (D) 26.49 46.55 73.04

Total Cost (A)+(B)+(C)+(D) 74.62 70.16 144.78 69.73 96.80 166.53UXO = unexploded ordnance, RAP = resettlement action plan 4. Project Schedule Item Appraisal Estimate Actual A. Construction Supervision Consultant 1. Contract Date March 1999 19 August 1999 2. Completion August 2002 31 December 2005 B. Civil Works Components 1. Start of Construction June 1999 15 November 1999 2. Completion of Construction June 2002 31 December 2005 C. Other Milestones:

1. 5 November 2002: Approval of first extension of loan closing date to 30 June 2005 2. 8 August 2005: Approval of second extension of loan closing date to 31 December 2005 3. 12 May 2006: Closing of loan accounts

viii

5. Project Performance Report Ratings

Ratings Implementation Period

Development Objectives

Implementation Progress

From 1 January 1999 to 31 December 1999 Satisfactory Satisfactory From 1 January 2000 to 31 December 2000 Satisfactory Satisfactory From 1 January 2001 to 31 December 2001 Satisfactory Satisfactory From 1 January 2002 to 31 December 2002 Satisfactory Satisfactory From 1 January 2003 to 31 December 2003 Satisfactory Satisfactory From 1 January 2004 to 31 December 2004 Satisfactory Satisfactory From 1 January 2005 to 31 December 2005 Satisfactory Satisfactory From 1 January 2006 to 12 May 2006 Satisfactory Satisfactory D. Data on Asian Development Bank Missions

Name of Missiona

Date

No. of Persons

No. of Person-Days

Specialization of Membersb

Fact Finding 21 April−9 May 1997 3 30 a,b,c Appraisal 29 April−9 May 1998 4 44 a,b,c,e Special Loan Administration Mission 1 14-24 Jan. 2000 2 22 f,g Review Mission b 2 18 Dec. 2000 1 1 d Review Mission 3 19-24 Mar. 2001 2 12 d Mid Term Review Mission 4 5-14 Nov.2001 2 16 d,h Special Loan Review Mission b 5 18 Apr. 2002 2 2 k,h Review Mission 6 12-15 Jun. 2002 3 6 a,k,l Loan Take-Over Review Mission 7 24-26 Feb. 2003 2 6 I,l Review Mission 8 26 Jun.-1 Jul. 2003 2 12 i,j Review Mission 9 29 Oct.-1 Nov. 2003 2 6 i,j Review Mission 10 12 -13 Feb. 2004 2 4 i,j Review Mission 11 28-29 Jun. 2004 2 4 i,j Review Mission 12 29 Sept- 1 Oct. 2004 2 8 i,j Review Mission 13 14-15 Apr. 2005 2 4 i,j Review Mission 14 7-8 Jul. 2005 2 4 i,j Review Mission 15 29-30 Sept. 2005 2 4 i,j Review Mission 16 13-14 Dec. 2005 2 4 i,j Review Mission 17 20 Feb. 2006 2 2 i,j Project Completion Review 17 Oct-5 Nov 2006 2 40 j, m a/ Missions were fielded to review progress of Projects under several loans. Person-days shown are actual days spent on the Project. b/ a-senior project engineer, b-social development specialist, c-project economist, d-project engineer, e-cunsel, f-

financial management specialist, g-operations analyst, h- transport specialist, i-principal project implementation officer, j-program/project implementation officer, k-principal project specialist, l-assistant project analyst, m - consultant

Gulf of Tonkin

Gulf of Thailand

ANDAMAN

SEA

Gulf ofMartaban

SOUTH CHINA SEA

Tonle Sap

Mek

ong

Riv

er

Mekong R

iver

Chiang Mai

Chiang Rai

Chiang Kong

Nong Khai

Udon Thani

Nakhon Phanom

Ubon Ratchathani

Bua Yai

ChongmekNakhon

Ratchasima

BannetNarongNakhon Sawan

Phitsanoulok

SuphanburiAyuttaya

Nam Tok

Chonburi

PhanomSarakham

Sattahip

Petchaburi

Hua Hin Trat

Siem Reap

SisophonAranyaprathet

Surin

Poipet

Kompong Cham

Kratie

Pursat

Thu Dau Mot

Svay RiengKampot

Ha Tien

Noek Loeung

Ca Mau

SihanoukvilleHo Chi Minh City

Vung Tau

Nha Trang

Quy NhonPleiku

Surat Thani

Phuket

Songkhla

Hat Yai

Ban Lao

Pakxan

Thakhek

Phin

Dansavanh

Lao Bao HueMukdahan

Da Nang

Dong Ha

Vinh

Quang Ngai

Samakkhixai

Pakxe

Laman

Stung Treng

Banlung

Lao Cai

Yen Bai

Lang SonThai Nguyen

Ha Long

Hai PhongHoa Binh

Bac Giang

Ninh Binh

Nambak

Xam-Nua

Louangphrabang

LouangnamthaSing

Houayxay

HA NOI

BANGKOK

PHNOM PENH

VIENTIANE

Khanthabouri

VIET NAM

T HAI L AND

CAM BO DI A

LAO PEOPLE'SDEMOCRATIC

REPUBLIC

National Capital

City/Town

Main Road

Project Road

Minor Improvement Road

Railway

River

International Boundary

Boundaries are not necessarily authoritative.

GREATER MEKONG SUBREGION

PHNOM PENH TO HO CHI MINH CITYHIGHWAY PROJECT

(as completed)

0 50 100 200

Kilometers

N

GMS 07-3808a HR

Map 1

108 00'Eo

108 00'Eo

98 00'Eo

98 00'Eo

10 00'No 10 00'No

19 00'No 19 00'No

S o u t h

C h i n a S e a

Mouth of Mekong

G u l f o f T h a i l a n d

TonleSap

Mekong River

Ha Tien

Hon Chong

Sihanoukville Kampot

Takeo

Rach Gia

Chau Phu

My Tho

Svay Rieng

Kompong Cham

Prey Veng

PHNOM PENH

Pursat

Kompong Thom

Kompong Chhang

Kratie

Tay Ninh

Cho Lon

Thu Duc

Bien Hoa

HO CHI MINH CITY

Vung Tau

Vinh Long

Can Tho

Long Xuyen

Quan Long

Khanh Hung

Vinh Loi

Nam Can

Ba Dong

Phuoc Leo

Gia Rai

Tan An

Chon Thanh

Snoul

Kompong Speu

Veal Renh

Duong Dong

Bao Loc

An Loc

Kompong Trabec

Bavet

Moc Bai

An Suong

Go DauSre Umbell

Noek Loeung

C A M B O D I A

V I E T N A M

National Capital

City/Town

Airport

Project Road

Minor Improvement Road

Main Road

Secondary Road

Railway

River

International Boundary

Boundaries are not necessarily authoritative.

GREATER MEKONG SUBREGION

PHNOM PENH TO HO CHI MINH CITY HIGHWAY PROJECT(as completed)

0 10 20 30 40 50 100

Kilometers

N

GMS 07-3808b HR

Map 2

104 00'Eo

104 00'Eo

107 00'Eo

107 00'Eo

9 00'No 9 00'No

12 30'No12 30'No

I. PROJECT DESCRIPTION

1. The Asian Development Bank (ADB) launched a strategy in 1992 to strengthen cooperation and economic links in the Greater Mekong Subregion (GMS) countries.1 Facilitation of the cross-border movement of goods, vehicles, and people between and among the countries of the GMS is a priority under the GMS economic cooperation program (GMS program) and supports its aims of enhancing connectivity, promoting competitiveness, and engendering a greater sense of community. Improved efficiency resulting from the easier flow of goods and people across borders promotes the competitiveness of participating countries, individually and as a subregion. Improving the Bangkok–Phnom Penh–Ho Chi Minh City (HCM City)–Vung Tau highway was assigned the highest priority by the governments of the GMS countries during the ADB-sponsored Second Conference on Subregional Economic Cooperation in August 1993. The road between Bangkok and Phnom Penh was already completed or being improved through other ADB assistance. The road between HCM City and Vung Tau was also being improved with ADB assistance. The road between Phnom Penh and HCM City (the Project) was the remaining section of the highway needing improvement. 2. The Project2 has two country components, one for Cambodia and the other for Viet Nam. The main objectives of the Project were to encourage traffic and trade flows between Cambodia and Viet Nam by improving the highway link between Phnom Penh and HCM City; improving facilities at the border crossing; and facilitating Government efforts to reduce bureaucratic and procedural constraints to cross-border trade. At appraisal, the project scope of the Cambodia component of the Project consisted of: (i) civil works for reconstruction of 105 kilometers (km) of Route Number 1 (RN1) from Neak Leoung to the border with Viet Nam at Bavet; (ii) civil works for minor improvements to 58 km of RN1 from Phnom Penh to the Mekong River ferry; and (iii) consulting services for construction supervision. The Viet Nam component of the Project consisted of: (i) civil works for reconstruction of 80 km (consisting of 22 km of National Highway No. 1A [NH1A] between Thu Duc and An Suong and 58 km of National Highway No. 22A [NH22] from An Suong and the border with Cambodia at Moc Bai); (ii) consulting services for construction supervision; and (iii) incremental assistance support to the project management unit (PMU). 3. The project framework at appraisal compared with the achievements of the Project is shown in Appendix 1.3 4. For the Cambodia component, the Kingdom of Cambodia was the Borrower, and the Ministry of Public Works and Transport (MPWT) was the Executing Agency (EA). The ADB loan4 of $40 million equivalent from ADB’s Special Funds resources financed all of the foreign cost and part of the local cost. For the Viet Nam component the Socialist Republic of Viet Nam was the Borrower, and the Ministry of Transport (MOT) was the EA. The ADB loan of $100

1 GMS countries include Cambodia, the People’s Republic of China, Lao People’s Democratic Republic, Myanmar,

Thailand, and Viet Nam. 2 The Project refers collectively to both the Cambodia component and the Viet Nam component. 3 The project framework at appraisal was modified to be in line with the revised design and monitoring framework

now adopted by ADB. 4 ADB. 1997. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the

Kingdom of Cambodia and to the Socialist Republic of Viet Nam for the Greater Mekong Subregion: Phnom Penh to Ho Chi Minh City Highway Project. Manila (Loan 1659-CAM[SF] for $40 million equivalent and Loan No. 1660-VIE[SF], for $100 million equivalent, approved on 15 December 1998). Advance procurement action to permit prequalification of the civil works contracts under the national road improvement component commenced in January 1997.

2

million equivalent from ADB’s Special Funds resources financed all of the foreign cost and part of the local cost.

II. EVALUATION OF DESIGN AND IMPLEMENTATION

A. Relevance of Design and Formulation

5. The Project was and remains consistent with ADB’s strategy for Cambodia and Viet Nam and the GMS program. The Government’s development strategy in Cambodia focuses on achieving sustainable economic growth. ADB supports this in the road subsector by emphasizing the need to restore the primary road network and provide safe and economic travel to the country’s main urban centers and border crossing points. In Viet Nam, ADB supports the Government strategy of improving transport efficiency that is conducive to economic growth and developing and strengthening links between Viet Nam and its neighbors. The GMS program promotes the development of participating countries by strengthening economic links among them. In particular, it emphasizes encouraging trade and investment among GMS countries, realizing or enhancing development opportunities, resolving or mitigating cross-border problems, and meeting common resource needs. It covers seven sectors (transport, energy, telecommunications, environment, human resource development, trade and investment, and tourism). ADB’s strategy in both Cambodia and Viet Nam is in line with the GMS program and emphasizes improving the transport network and connections to major border crossing points. The project design was consistent with the strategic objectives for the road subsector in both countries. Improving access to border posts would help to integrate the two countries and their economic development by increasing the flow of passengers and goods traffic. The Project was assessed highly relevant to the needs of the transport sector in both Cambodia and Viet Nam.5 6. The Project was prepared by an ADB-financed feasibility study 6 and ADB-financed technical assistance (TA) for detailed engineering.7 Fact-finding took place from 21 April to 9 May 1997. However, formulation of the Project was hampered by the political situation in 1997 in Cambodia, when processing had to be put on hold and the management review meeting (MRM) scheduled for 22 August 1997 was cancelled and the Project deferred. Appraisal of the Project took place one year after fact-finding from 20 April to 9 May 1998. B. Project Outputs

7. The main Project outputs for each country component are described below. 8. Cambodia Component. At appraisal it was envisaged that the road from Neak Loeung to the Cambodia–Viet Nam border at Bavet (105 km) would be rehabilitated and interim repairs from Phnom Penh to Neak Loeung (58 km) would be undertaken. These civil works were to be undertaken in one contract package. The road from Neak Loeung to the border at Bavet would be improved to a double bituminous surface treatment standard with an overall width of 11.5 meters (m). In addition, four new bridges would be built and six existing bridges rehabilitated. It was also envisaged that new border facilities at Bavet would be designed and constructed. These were all implemented as envisaged, but the interim repairs of the Phnom Penh–Neak

5 For an explanation of rating descriptions used in ADB evaluation reports, see: ADB. 2006. Guidelines for

Preparing Performance Evaluation Reports for Public Sector Operations. Manila. 6 ADB. 1993. Technical Assistance for Promoting Subregional Cooperation among Cambodia, The People’s

Republic of China, Lao PDR, Myanmar, Thailand and Viet Nam. Manila. (TA No. 5535 for $4.0 million). . 7 ADB. 1995. Technical Assistance to the Socialist Republic of Viet Nam for Ho Chi Minh City to Phnom Penh

Highway Project. Manila (TA 5649-REG for $3.0 million.

3

Loeung section were transferred to the Emergency Flood Rehabilitation Project (EFRP) 8 because of floods in 2000.9 The rehabilitation of Trabek bridges 1 and 2 was deleted from the scope of the Cambodia component following requests from the EA on 27 November 2001 and 7 December 2001. These bridges were heavily damaged in the floods of 2000 and their rehabilitation was undertaken by the EFRP. 9. The main civil works bids for Neak Loeung–Bavet were significantly lower than the engineers’ estimate and the amount allocated for civil works in the loan agreement (LA), so in 2001 ADB approved use of loan savings to finance the rehabilitation of road RN11, which had been damaged by the floods in 2000. A reallocation of about $8 million was made to cover civil works under the EFRP.10 The extension of the scope of the Cambodia component included subproject RN11C under the EFRP. RN11C involved the rehabilitation of the whole road for about 97 km and was subdivided into four contracts: 11C-1, 11C-2, 11C-3, and 11C-4. All these contracts were awarded and the work was completed in 2003. 10. The construction of border facilities at Bavet was initially included under the civil works contract for Neak Loeung–Bavet and a provisional sum was provided under the contract. However, the contractor experienced difficulties in implementing the main civil works, so a decision was taken to call for bids for construction of the border facilities under a separate contract (para. 37). The completed border facilities at Bavet have had X-ray machines, close circuit television (CCTV), and fire fighting equipment installed. The equipment is sufficient for the current volume of passenger and goods traffic, but more equipment will be required as the traffic increases. 11. Consulting services for supervision and training were implemented as envisaged at appraisal, apart from the extension of time, although this did not result in the costs being higher than those envisaged at appraisal (para. 17). The consultants trained PMU staff through formal presentations and seminars. Staff from PMU assigned to the consultant supervision team as counterpart staff members also received on-the-job training. 12. Viet Nam Component. As envisaged at appraisal, the road improvements to NH1A and NH22A were implemented, except for delays (para 26). The road was improved to asphalt concrete standard with a carriageways of 33 m, 26 m, of 14 m wide, one or two lanes, and paved shoulders, for each of the civil works contracts (para 41). The works also included the construction of eight bridges and the rehabilitation of two bridges. After all contracts were awarded, loan savings were realized. The EA requested on three separate occasions,11 that

8 ADB. 2000. Report and Recommendation of the President for a Proposed Loan and Proposal to Use Loan Savings

to the Socialist Republic of Viet Nam for the Emergency Flood Rehabilitation Project. Manila (Loan 1824-CAM(SF)).

9 For kilometer (km) 24 to Neak Loeung the rehabilitation work was to go to EFRP and the responsibility of the civil works contractor was restricted to maintenance of the road from Monivong Bridge (km 8) to km 24. Work was undertaken on this section at various times, notably September 2000 to February 2001, October 2001 to January 2002 and November 2002 to March 2003.

10 When EFRP was approved on 21 December 2000, ADB also approved the use of loan savings and extension of the scope of the Phnom Penh to HCM City Highway Project to cover rehabilitation of the transport system damaged by the floods. Surplus loan funds totaling SDR7,675,000 ($10 million equivalent at the time but subsequently about $8 million equivalent because of the depreciation of the SDR against the dollar and high price escalation) were utilized. The ADB mission fielded in July 2001 agreed with MPWT that the surplus loan funds could be reallocated to the rehabilitation works for the damaged section of RN11 (subproject R11c). On 10 April 2002, ADB approved the awarding of the contract for subproject R11c at $8.5 million (ADB portion $7.3 million).

11 5 November 2002, 28 January 2004, and June 2005

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additional items be incorporated into the civil works12 to use the loan savings. These additional civil works were to improve traffic efficiency and reduce the high rate of traffic accidents. These additional works enhanced the overall project objectives and complemented the original scope. They did not represent a change in route, physical site, or location and were fully within the project’s purpose13 and were therefore considered to be a minor change in the scope of the component. The additional works items were incorporated into the existing civil works contracts. At appraisal it was envisaged that a total of 80 km would be completed, but, because of the additional works, the length of road improved under the Viet Nam component eventually totaled 96.35 km. The incorporation of these additional items meant that the loan closing date was extended. 13. Consultant supervision was implemented as envisaged at appraisal, except for extensions of time because of wide-ranging changes in design (para 26) and the inclusion of additional civil works items because of loan savings. However, the extension of the consultants’ time did not result in higher costs than those envisaged at appraisal (para 18). 14. Cross-Border Issues. As the objective of the Project was to encourage traffic and trade flows between Cambodia and Viet Nam, attention was paid to reducing the bureaucratic and procedural constraints to cross-border trade. In this context the governments of Cambodia and Viet Nam negotiated and signed a framework agreement for regulating and easing the movement of people, goods, and vehicles across their common border. In November 1999, the GMS Cross-Border Transport Agreement was signed by only three of the GMS countries (Lao PDR, Thailand, and Viet Nam) with the remaining three countries (Cambodia, the People’s Republic of China, Myanmar) signing in November 2001. Of its 20 annexes and protocols, 16 have already been signed by the six member countries. At the Eighth Meeting of the GMS Transport Forum in Phnom Penh in August 2004, counties agreed to pilot the agreement at key border-crossing points, one of which was the Cambodia and Viet Nam border-crossing at Bavet/Moc Bai. The implementation of the Bilateral Road Transport Agreement between Cambodia and Viet Nam was launched at Bavet/Moc Bai on 30 September 2006. C. Project Costs 15. The actual detailed costs for the Cambodia component, the Viet Nam component, and the Project as a whole compared with the costs estimated at appraisal are shown in Appendix 2. For cost comparison, the local currency costs incurred by MPWT in Cambodia and MOT in Viet Nam have been converted into US dollars at the rate prevailing during each transaction. The average rates of exchange used are given in Appendix 3. A summary of contracts financed by ADB for each of the country components is given in Appendix 4.

16. At appraisal, the project cost was estimated to be $195.5 million, of which $110.7 million (about 57%) was estimated to be the foreign exchange cost, including $3.5 million for service charges and interest during construction; and the total local currency cost was $84.8 million (about 43%) including taxes and duties. The ADB loan at appraisal for the Cambodia 12 The additional work items included (a) flyover at Thu Duc intersection on NH1A, (b) flyover at Linh Xuan

intersection on NH1A, (c) flyover at Binh Phuoc intersection on NH1A (1.3 km) including reconstruction of Vinh Binh Bridge, (d) flyover at Quang Trung intersection on NH1A, (e) flyover at Cu Chi intersection on NH22A, (f) widening of the road from Cu Chi to Go Dau including Go Dau Bridge, (g) flyover at Go Dua intersection, (h) realignment of the bypass at Trang Bang (3.9 km), (i) upgrading of Provincial Road No. 786 (11.1 km), (j) flyover at Ga intersection, (k) grade separation at Tan Thoi Hiep intersection, and (l) median barrier walls to reduce accidents at various locations.

13 PAI 5.04, paragraph 6.

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component was $40 million equivalent from the Special Funds resources to finance 79% of the Cambodia component cost. The ADB loan at appraisal for the Viet Nam component was $100 million equivalent from Special Funds resources to finance 69% of the Viet Nam component cost. The ADB loans for each component were to finance the civil works, and consulting services for construction supervision. The remaining cost of $10.7 million equivalent for the Cambodia component and $44.8 million equivalent for the Viet Nam component were to be funded by the Borrower of each loan. The appraisal estimate included physical contingencies, provisions for price escalation, and an estimate of service charges during construction. The actual completion cost of the Project was $211.78 million equivalent, with a foreign exchange cost of $105.38 million equivalent (about 50%) and a local currency cost $106.40 million equivalent. ADB financed $115.94 million equivalent or (about 58% of the total project cost). The Governments of Cambodia and Viet Nam funded local costs $95.84 million equivalent. The actual completion cost of the Project was more than that envisaged at appraisal by about $16.30 million equivalent. The increase in costs is attributable to the additional resettlement activities that were undertaken in Viet Nam because of the additional works that were undertaken from loan savings and because of the additional works implemented in Cambodia. If the cost of the original scope of the Project as envisaged at appraisal ($195.5 million equivalent) is compared with the actual completion cost of the original scope of work ($129.41 million equivalent), there was a saving $66.09 million equivalent. This enabled additional items to be included, thus enhancing the overall project scope.

17. Cambodia Component. At appraisal, the cost of the Cambodia component was estimated to be $50.7 million, of which $36.1 million (71%) was estimated to be the foreign exchange cost, and the total local currency cost was $14.6 million (29%). The actual completion cost was $45.25 million equivalent, with a foreign exchange cost of $35.65 million equivalent (79%) and a local currency cost of $9.60 million equivalent (21%). ADB financed $38.15 million equivalent or about 84% of the total cost. The Government of Cambodia funded local costs of $7.10 million equivalent. The actual completion cost, including the extended scope, was $5.45 million equivalent, which was less than envisaged at appraisal. If the cost of the original scope as envisaged at appraisal ($50.7 million equivalent) is compared with the actual completion cost of the original scope of work, the completion cost was $35.92 million equivalent, a saving of approximately $14.78 million equivalent. This was because civil works costs were significantly lower than those estimated at appraisal (para. 38). These savings allowed the additional scope of work to be implemented. Because of the additional scope of work, the consultant supervision time had to be extended. This extension in time, however, did not result in an increase in the consultant supervision cost, the actual cost of which was $3.49 million, the same figure as at appraisal including contingencies. 18. Viet Nam Component. At appraisal, the cost of the Viet Nam component was estimated to be $144.8 million, of which $74.6 million (52%) was estimated to be the foreign exchange cost, and $70.2 million (48%) to be the total local currency cost. The actual completion cost was $166.53 million equivalent, with a foreign exchange cost of $69.73 million equivalent (42%) and a local currency cost of $96.80 million equivalent (58%). ADB financed $90.89 million equivalent (55%). The Government of Viet Nam funded local costs of $75.64 million equivalent. The actual completion cost was more than that envisaged at appraisal by approximately $21.75 million equivalent. The increase in costs is attributable to the additional resettlement activities caused by the additional works undertaken from loan savings. The estimated additional resettlement costs were mainly funded by HCM City People’s Committee. If the cost of the original scope as envisaged at appraisal ($144.78 million equivalent) is compared with the actual completion cost of the original scope of work ($93.49 million equivalent), there was a saving of about $51.29 million equivalent, because the civil works costs

6

were significantly lower than those estimated at appraisal (para. 41). These savings enabled the additional items to be included, which meant consultant supervision time had to be increased. However, this did not result in an increase in the cost of consultant supervision, which was $6.71 million at appraisal including contingencies and $5.35 million actual. D. Disbursements

19. The loan proceeds for each country component were disbursed in accordance with ADB’s Loan Disbursement Handbook14 by direct payment procedures for both civil works and consulting services. Details of the annual disbursements for each country loan are in Appendix 5. 20. Cambodia Component. The loan was disbursed more slowly than envisaged at appraisal because of project implementation delays (para. 24). Disbursements from the loan account were completed on 20 July 2006, the actual date of loan closing. Following the last disbursement, ADB canceled the undisbursed loan balance of SDR528,874.47 ($776,023 million equivalent).15 This reduced the loan to SDR27,503,125.53. 21. Viet Nam Component. The loan was disbursed more slowly than envisaged at appraisal because of project implementation delays (para. 28). Disbursements from the loan account were completed on 12 May 2006, the actual date of loan closing. Following the last disbursement ADB canceled the undisbursed loan balance of SDR4,172,168.72 (equivalent to $6,194,502). This reduced the loan to SDR65,272,831.28. E. Project Schedule 22. Appendix 6 provides a chronology of major events during project implementation for each country component. The implementation schedule prepared at appraisal compared with actual progress for each of the country components is shown in Appendix 7. 23. The ADB Board of Directors approved the loans on 15 December 1998. The Loan Agreement was signed on 20 March 1999 and became effective on 9 November 1999.16 At appraisal, it was estimated the Project would be implemented over 42 months, from March 1999 to August 2002. The civil works were to be implemented over a period of 36 months, from June 1999 to May 2002. The closing date of both loans at appraisal was 30 June 2003. 24. Cambodia Component. The loan was extended three times at the request of the Borrower to 31 December 2005. On 22 May 2003 the Ministry of Finance requested ADB approval for the first extension of the loan closing date by 1 year from 1 July 2003 to 30 June 2004 and for loan proceeds to be reallocated. The request was because of delays caused by:

14 ADB. 2001. Loan Disbursement Handbook. Manila. 15 A cancellation request of SDR370,000 had also been on 31 August 2004. 16 The lengthy delay in loan effectiveness was because the resettlement action plan of the Cambodia component did

not meet ADB’s social safeguard requirements, and thus had not been approved by ADB. As the loan effectiveness for the Viet Nam component was contingent upon ADB approval of the Cambodia component for effectiveness, a considerable delay occurred in the Viet Nam Loan being declared effective. The schedule of implementation set at appraisal assumed that both loans would be effective by February 1999.

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(i) the floods of 2000 and 2001 and the heavy rainfall in 2002, which made civil works difficult;17 (ii) a disorganized construction plan by the contract; 18 (iii) delay in relocating telecommunications cables;19 (iv) additional slope protection work to protect the road from future flooding; (v) additional time to carry out remedial works at the collapsed embankment in Svay Rieng bypass which had been constructed on very soft natural ground; (vi) a delay in finalizing the design of border post facilities because of a lack of clarity on construction within border areas identified as “no-man’s land” between the Cambodia and Viet Nam borders. 20 ADB approved the extension of the loan closing date and reallocation of funds on 27 June 2003. 25. On 21 June 2004, the EA requested a further extension of the loan closing date by an additional 12 months, from 1 July 2004 to 30 June 2005. Although the civil works contract had been substantially completed in mid-January 2004, the contractor was still undertaking the additional works that had been requested. There had also been delays to the construction of the cross-border facilities at Bavet, which had begun only on 16 February 2004. These were caused by the change in scope from the original asphalt concrete pavement to a reinforced concrete pavement, to match the Viet Nam side of the border, and by modifications to the fencing. As a result, it was not expected that construction of the border post would be completed until January 2005. The EA also asked to be able to use loan savings to finance furnishing and equipment for the border post facilities. The second loan extension was approved by ADB on 12 July 2004. 26. A third request for the extension of the loan closing date was made on 12 May 2005 for a 6-month extension from 1 July 2005 to 31 December 2005 and for a minor reallocation of loan proceeds. This was approved by ADB on 31 May 2005 on the grounds that the extension was needed to ensure that the first GMS road project provided adequate equipment and facilities to enable effective implementation of the GMS Cross-Border Transport Agreement at the Bavet- Moc Bai border crossing. It was agreed at the First Tripartite Meeting on 1-3 December 2004 that Cambodia and Viet Nam would establish a common control area for the inspection of goods. Given the shortage of government funds, a request was made to use loan savings to finance the common control area, which would not be completed until September 2005 (i.e., after the loan closing date of 30 June 2005). The loan extension request also included a request to use loan savings to finance additional works for the border facilities and associated costs for consulting services. The third loan extension and loan reallocation was approved by ADB on 31 May 2005. 27. Viet Nam Component. The loan was extended twice at the request of the Borrower to 31 December 2005. The extension was caused by delays, some of which were caused by the addition of items to the scope of work.

17 The flooding prevented the contractor from working on the road, as access to the quarry and base course materials

was not possible for more than 3 months of those years. Because of this, the contractor was given a 4 month extension to the construction period to end in April 2003.

18 Some delays can be attributed to the contractors failure to mobilize sufficient human and financial resources, especially during the initial implementation phase.

19 The drawings given by the Ministry of Post and Telecommunication showed inaccurate location of the cables which kept getting damaged by construction works.

20 Viet Nam constructed a concrete fence with plants extending 25 meters into area identified as “no-man’s land” during that time. Also the border gate, according to drawings given to Cambodian staff during the First Tripartite Meeting in June 2002 in Phnom Penh, would move in by 50 meters. This was somewhat against the spirit of the 1997 border treaty signed by both countries. This was to be discussed further at the Second Tripartite meeting. The border point at this area was only clearly marked in September 2006.

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28. By March 2001, only 10% of the civil works had been completed, although about 45% of the 3-year contract period had elapsed. The main reasons for the delay were (i) the time consumed by preparation of the detailed design and redesign; 21 (ii) slow progress in resettlement activities,22 including the relocation of utilities; (iii) contractors’ low bid prices and insufficient equipment; (iv) a long rainy season in 2000; 23 and (v) heavy traffic in the construction area. The implementation schedule was about 14 months behind that estimated at appraisal and thus, on 30 September 2002, the Borrower requested a loan extension to 30 June 2005 to enable it to complete the civil works and additional civil works financed by loan savings. About 20 km of road formed a ring through the northern suburbs of HCM City and the road crossed several major radial roads, including four national highways and the major Quang Trung road. All of these intersections were “at-grade” and controlled by traffic lights, so long delays were already occurring. The original designs had called for flyovers but they were deleted because of an expected shortfall in foreign cost funding from ADB. It then became apparent that there were loan savings and the Borrower asked ADB to approve construction of five flyovers and the widening of a 28-km section of the road from 14 m to 18 m to make it safer for motorcycles.24 The revised program also required an extension to the consultant supervision contract by 2 years at a cost of $1.06 million.25 All the additional work was incorporated into the existing contracts through contract amendments. ADB approved the loan extension and the implementation of additional civil works on 5 November 2002. On 7 June 2005, the EA asked ADB to approve adding works to the civil works contracts using loan savings and extending the loan a second time from 30 June 2005 to 31 December 2005. ADB approved the second loan extension on 8 August 2005.26 F. Implementation Arrangements 29. Cambodia Component. The implementation arrangements were as envisaged at appraisal. The organizational structure of MPWT is shown in Appendix 8. Overall control of the component was the responsibility of MPWT’s Secretary of State. A senior engineer was appointed as the project director on a full-time basis. The project director headed a PMU1. The PMU1 was responsible for (i) preconstruction activities (prequalification of contractors, preparation of tender documents for ADB approval, acceptance of detailed designs, pre-bid meetings, and evaluation of bids and award of contract) related to the civil works; and (ii) engagement of consultants for construction and maintenance supervision of the civil works. The

21 The TA for the Project had limited funds and it took a considerable amount of time for the TA consultants to study

issues relating to the international nature of the Project. As a result, the preliminary design on which tenders were based was inadequate for execution of the civil works. The design of most of the road alignment and bridges was not complete. This was recognized at the time of Board approval by including the detailed design in the civil works contracts. However, the full extent of the shortfalls in investigation and quantities did not become apparent until detailed design was complete. Moreover, surveys and designs of soft soil treatment, especially soft soil treatment of bridge approach roads were carried out at the construction stage. The detailed design works were time consuming. It also took a long time to carry out the surveys and designs and up to the end of 2000 the design works were basically completed and work quantities of approved new designs increased as compared to the quantities in the bidding documents. This delayed the construction progress.

22 Resettlement was hampered by an influx of squatters along the route. 23 The weather in 2000 and 2001 was not favorable and the south of Viet Nam was affected by the highest flood level

in 40 years. 24 The Borrower also requested widening of Cach Mang Thang Tam feeder road but this was rejected since the

works were not consistent with the Project objectives 25 This was to be funded by $0.20 million from the savings in the consultants category of the loan and the other $0.86

million from reallocation of unallocated category of the loan. 26 In accordance with ADB. 2005. Loan Closing Dates. Project Administration Instructions, Section 4.05. Manila (17

August). Available: Lotus Notes database, LNADBG1, a cumulative loan extension beyond 2 years requires approval by the director general, Mekong Division

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PMU1’s project director was responsible for the day-to-day implementation of the component. The same project director continued throughout the implementation period. There were eight staff within PMU1 over the course of implementation, including engineers, an accountant, and technical and administrative support staff. Two people from each of the two provinces through which the road passed, Svay Rieng and Prey Veng, were assigned alternately to PMU1 for 6 months at a time as part of a training process for provincial staff. 30. Viet Nam Component. The implementation arrangements were as envisaged at appraisal. The organizational structure of MOT is shown in Appendix 8. The implementation of the component was assigned to an agency of MOT based in HCM City, the Project Management Unit–My Thuan (PMU-MT). The PMU-MT deputy director general was the project director and was responsible for the day-to-day control of the component. A sub-PMU was established within the PMU-MT headed by a senior engineer, who was responsible to the project director for all aspects of the implementation work. The engineer was supported on a full-time basis by technical, supporting, and administrative personnel. Consultants assisted the unit with its construction supervision responsibilities. The same project director continued throughout the implementation period. There were 16 staff within the PMU-MT over the implementation period, including road and bridge engineers, civil engineers, accountants, transport economists, and resettlement specialists. Other staff were assigned to assist as necessary. G. Conditions and Covenants 31. Cambodia Component. Details of compliance with the covenants under the loan are presented in Appendix 9. The Government and MPWT generally complied with the standard loan covenants, although the covenant on resettlement and compensation to project-affected people was only partially complied with. A full resettlement audit was implemented (para. 62) following complaints from some project-affected people through a nongovernmental organization (NGO). There were also delays in fully complying with environmental mitigation measures and ADB missions noted that the consultants needed to improve these. A report by the supervision consultant specializing in environmental matters in June 2002 documented ADB’s environmental concerns and recommended a program of remedial action. Subsequent missions noted that the recommended environmental mitigation measures had been carried out. One of the covenants was that tripartite coordination meetings (Cambodia, Viet Nam, and ADB) on project implementation matters would be held two to three times a year. Although only three formal tripartite meetings were held during the implementation period, several informal meetings were held under a regional technical assistance (RETA). 27 The covenant related to road maintenance was only partially complied with. 32. Viet Nam Component. The Government and MOT generally complied with the standard loan covenants on engagement of consultants and contractors, availability of land, timely provision of counterpart funds, staffing, and reporting. However, the midterm review in November 2001 noted that the consultants needed to improve traffic control facilities during the construction period in the interests of safety. Traffic control subsequently improved and the consultants used more flag-men, better traffic signs, and safety barriers, which reduced the number of accidents. Details of compliance with the covenants under the loan are presented in Appendix 9.

27 ADB. 1999. Technical Assistance for Facilitating the Cross Border Movement of Goods and People in the Greater

Mekong Subregion. Manila. (RETA 5850).

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H. Related Technical Assistance 33. No related TA was associated with the Project. I. Consultant Recruitment and Procurement

1. Consultant Recruitment

34. Consultant recruitment under the Project was undertaken in accordance with ADB’s Guidelines on the Use of Consultants as envisaged at appraisal. 35. Cambodia Component. The consultancy contract was signed on 3 December 1999 with the consultant who prepared the detailed engineering design, as envisaged at appraisal. The consultancy supervision contract was based on a 36-month construction period ending in December 2002. At appraisal it was estimated that 114 person-months of international and 738 person-months of national consulting experts would be required. However, because of delays in construction, the contract had to be extended by variation orders. The actual input for international consultants was 152 person-months, and for national consultants it was 927 person-months. The original border post supervision consultancy contract supervision was for 6 person-months of international staff and 9 person-months of national staff, i.e. a total of 15 person-months. This was based on an 8-month construction period. The contract was signed on 2 February 2004 and services began on 16 February 2004. Because of delays, the final total was 35.5 person-months (12 person-months of international consultants and 23.5 person-months of national consultants). The increase in the consultants’ time did not result in any increase in costs (para 17). 36. Viet Nam Component. In June 1999 the PMU-MT invited five international consulting firms to submit technical and financial proposals for consultancy services. The first ranked consultant signed a consultancy services contract in August 1999 for a contract period up to 14 November 2002. At appraisal it was estimated that the total consultant supervision would be for 260 person-months of international and 1,450 person-months of domestic consulting experts. At the contract stage, the consulting services were for 228 person-months of international and 713 person-months of domestic consulting services. Because of extensive revisions to the design, and the extension of consulting services to undertake the additional works, the final international consulting services totaled 358.5 person-months, and the domestic consulting services totaled 1,304 person-months. The increase in the consultants’ time did not result in any increase in costs (para 18).

2. Procurement

37. The procurement of all goods and services under the Project was carried out in accordance with ADB’s Guidelines for Procurement as envisaged at appraisal. As also envisaged at appraisal, advance procurement action to permit prequalification of the civil works contracts was approved in June 1996 for Cambodia and in January 1997 for Viet Nam. 38. Cambodia Component. For procurement and implementation purposes, civil works was covered by a single package 28 using international competitive bidding (ICB) procedures.

28 Contract C2: Neak Loeung to Bavet (105 km) and Contract C1 for resealing and maintenance on the section from

Phnom Penh to Neak Loeung (53 km) were combined into one package. The contract also included a provisional sum for construction of border facilities. MPWT had requested ADB approval of single civil works contract on 16 June 1999 to combine C2 and C1.

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Prequalification notices were published in October 1996 and the prequalification evaluation was completed in February 1997. A total of 21 firms were prequalified. As a result of civil disturbances in Cambodia in mid-1997, the procurement process was halted. The prequalification recommenced in June 1998 and concluded in August 1998. Bids for the contract were invited from prequalified firms on 14 September 1998. Of the firms prequalified to participate, 6 firms submitted bids. The bids were significantly lower than the engineers’ estimate and the amount allocated for civil works in the Loan Agreement. This permitted a reallocation of $8 million to civil works under the Emergency Flood Rehabilitation Project (EFRP). ADB approved the contract amount for the civil works ($22.85 million) and the contract was signed on 8 December 1999. 39. There were only limited border facilities during project preparation. The road civil works contract included a provisional sum for the design and construction of a new border post to facilitate cross-border flows. The contractor was instructed that a local designer must be included in the design team as the intention was that the buildings should express traditional Khmer architecture. The design was submitted by the contractor in May 2002 and the priced bill of quantities in October 2002. It was decided, however, that the contract should be separate from the main civil works contract (because of the slow performance of the contractor). Bids were invited under local competitive bidding (LCB) procedures in July 2003 and received on 21 August 2003. The bid evaluation report was submitted to ADB on 23 December 2003 and was approved on 6 January 2004. The contract29 was awarded on 29 January 2004 and signed on 2 February 2004 with completion due by mid-October 2004. 40. Subsequent additions to the project included a separate contract 30 for an external walkway roof. LCB procedures were used. The EA opened and registered the bids for the prequalified bidders on 8 November 2004. The contract was awarded to the contractor undertaking the border post construction. Five further contracts31 for supply of equipment for the border post were also tendered. Of these, four contracts, BPC-2A, BP-C2B, BP-C2D, and BP-C2E were awarded while the fifth contract, BP-C2C, was abandoned after no bids were received. The bid evaluation reports for the four contracts were submitted to ADB on 4 March 2005 and approved on 15 March 2005. The contract for BP-C2A was awarded on 14 June 2005, and those for BP-C2B, BP-C2D and BP-C2E on 30 April 2005. 41. Viet Nam Component. For procurement and implementation purposes, the civil works were divided into three contract packages32 using ICB procedures. Prequalification applications were invited in October 1997, and 43 firms responded by the closing date. ADB approved the prequalification evaluation in December 1997. Nine applicants were prequalified for Package V1, 17 for Package V2, and 12 for Package V3. Bids were invited from the prequalified applicants on 2 July 1998. The closing date for submission was extended to 9 January 1999 to give bidders time to take into account substantial additional issues. Of the 38 prequalified firms, 23 submitted bids: 6 for Package V1, 10 for Package V2, and 7 for Package V3. ADB was informed of the bid prices on 12 January 1999 and was concerned that the bids were very low in comparison to the original estimates, being about 50% lower. On 4 February 1999, ADB asked PMU-MT to ensure that the evaluation reflected ADB’s concerns about low prices; schedules

29 Contract BP-C2: Construction of Border Post 30 Contract BP-C2F: Construction of Border Post Walkway Roof. 31 BP-C2A: X-Ray, CCTV, fire-fighting equipment; BP-C2B: office equipment; BP-C2C: laboratory equipment; BP-

C2D: computer equipment; BP-C2E: office furniture. 32 Contract V1: On NH1A on the northern outskirts of HCM City and on NH22A (22.12 km); Contract V2: on NH22A

from An Suong to the Viet Nam border with Cambodia at Moc Bai (50.33 km); and Contract V3: on NH1A including bridges (7.60 km).

12

and resources; and the performance of some bidders on earlier ADB financed projects. PMU-MT responded to ADB in sufficient detail to justify the bids. PMU-MT evaluated the bids with the assistance of the consultant and the bid evaluation report was received by ADB on 29 September 1999. After careful review, ADB approved the civil works contracts on 13 October 1999.33 42. At appraisal, the loan allocation for the civil works was $71.8 million. Because of the low bid prices for the civil works, the loan savings amounted to $35.4 million. The EA asked ADB to approve several variation orders34 to the civil works contracts, because of the inadequate design, and also additional work items in early 2001. J. Performance of Consultants, Contractors, and Suppliers 43. Cambodia Component. PMU1 reported that the performance of the consultants was generally satisfactory and that the consultants performed their tasks professionally and in accordance with their terms of reference. However, there were some deficiencies in their performance. For example, the collapse of the Svay Rieng bypass because of soft soil can be attributed to the consultants’ inadequate testing of conditions in the area. The consultants produced comprehensive reports, including a final completion report, but their benefit monitoring and evaluation report was inadequate and contained little pre-project (baseline) or post-project data. 44. From the beginning of the contract, the contractor implementing the main civil works lacked staff with appropriate technical and managerial skills. Before the major flood in 2000, the pace of work was slow and it was apparent at the end of 2001 that the contractor could not complete the works on time. However, the contractor made efforts during the second half of 2003 to increase output. The road to Bavet was substantially completed by mid-January 2004. Other ancillary works, such as road signs and markings35 and guardrails, were carried out throughout 2004, although the provision of road signs was not complete until September 2005.36 The asphalt concreting in built-up areas37 which was due to begin in May 2004 was delayed by slow mobilization of the asphalt batching plant and did not start until December 2004. Progress was slow and the work was not completed until May 2005. Additional asphalt concrete surfacing between Neak Loeung and Kampong Soeung followed in June and July 2005. At appraisal, it was assumed that civil works would be completed by about June 2002, but they were not substantially completed until January 2004. Despite the construction delays, the Project Completion Review Mission inspected all the road works and found that the quality of construction was good. As a result the contractor’s performance was rated satisfactory. 45. The contractor for the border post at Bavet was not fully mobilized until May 2004, 4-5 months after the signing of the contract. There were delays in the submission of drawings for 33 Contract V1 was valued at $12.7 million, contract V2 at $11.3 million, and contract V3$12.3 million. 34 The variation orders included: (i) increase in quantity of soft soil treatment, (ii) adjustment of pavement design

(increase in thickness of asphalt concrete layer), (iii) adjustment of bridge design (widening of Binh Phuoc Bridge, span extension of Ca Bon Bridge and An Ha Bridge), (iv) increase in quantity of side ditches, (v) increase in quantity of lighting system, (vi) addition of Moc Bai Border facilities based on the Cross-Border Agreement, and (vii) increase in quantity of miscellaneous works (earthworks, culverts, slope protection, curbs, road signage and landscaping).

35 The original painted markings as specified were replaced by using thermoplastic road markings. 36 Owing to a combination of slow supply and increased quantities caused by revisions to the road sign schedules as

the work progressed. 37 Variations to enhance the scope by the provision of asphalt concrete surfacing on selected sections were

undertaken in 2004 and 2005. The asphalt concrete road totaled 23 km.

13

civil works and services. By July 2004, only 30% of the works had been completed, although 60% of the construction time had elapsed. The works were not completed until March 2005. The contract needed a number of major variations to bring the final product into line with Cambodian Government requirements. Clearance of unexploded ordnance and additional quantities of civil works cause delays. Completion of the main border post civil works was 7 months late and completion of additional works for the walkway roof was 5 months late because of the large number of variations required by the Government. The border post at Bavet was opened on 15 December 2005. The border post and its equipment were examined by the Project Completion Review Mission and found to be in good order. The equipment was all in working order with the exception of a broken X-ray machine for which spare parts had been ordered. Overall the performance of the contractor was rated satisfactory. 46. Viet Nam Component. The performance of the supervision consultants engaged under the Viet Nam component was considered satisfactory. The consultants were asked to report more fully on environment and social aspects as these matters had not been adequately covered in monthly reports before March 2001. 47. The performance of the contractors on the civil works contracts varied. All three of the civil works contractors were using equipment that was too small and insufficient to meet the production rates needed to ensure the work schedule. Much of this equipment was old and badly maintained, so there were frequent breakdowns, resulting in delays. The civil works contractors were also informed on several occasions that there were environmental and safety-related issues that they were not taking account of, including: (i) poor maintenance of the existing road; (ii) lack of barriers and adequate signage between the existing road and the work area; and (iii) lack of or inadequate temporary drainage and reduced travel-lane width because of water-ponding. The original scope of the civil works for all three contracts was substantially complete in April 2003, about 9 months behind the schedule at appraisal. However, some of this delay was because contractors had to undertake additional civil works items that had been approved by ADB and before work on the main contracts could be continued. The Project Completion Review Mission inspected all the road works and found that the quality of construction by all contractors was good and their performance was therefore rated satisfactory. K. Performance of the Borrower, Executing Agency, and Implementation Agency 48. Cambodia Component. The performance of the Borrower and the EA was rated satisfactory.38 Overall responsibility for the Cambodia component was the responsibility of MPWT’s Secretary of State. The release of counterpart funds in 2003 was delayed and became worse because of poor revenue collection and national elections. By October 2003, the main civil works contractor had not been paid for 5 months which meant it had cash-flow problems which led to implementation delays. The implementing agency, PMU1, was responsible for the day-to-day control of the component and it effectively managed physical implementation with the assistance of the supervision consultants. Although implementation of the civil works was delayed, the quality of the completed work was satisfactory. 49. Viet Nam Component. The performance of the Borrower and the EA was satisfactory. The overall responsibility of the Viet Nam component was the responsibility of the Vice-Minister of MOT. The implementing agency, PMU-MT, was responsible for the day-to-day control of the component. The PMU-MT effectively managed physical implementation of the component with

38 The performance of the Borrower was considered partially satisfactory during the project implementation stage as

resettlement issues were not fully addressed at that time. .

14

the assistance of the supervision consultants. While implementation of the civil works was delayed, the quality of the completed works was satisfactory. The Project Completion Review Mission, however, had difficulty in collecting actual component costs in Viet Nam from the PMU-MT, as the accounts on local expenditure were at times misleading.39 PMU-MT record-keeping on resettlement activities was also misleading, with some data conflicting with that obtained on previous ADB review missions. L. Performance of the Asian Development Bank

50. Cambodia Component. The Project was originally administered and supervised from ADB headquarters but was transferred to Cambodia Resident Mission on 12 April 2002. ADB conducted 18 review missions, 1 special loan administration mission, a midterm review mission and a loan take-over mission transferring the project to the Resident Mission. Of the 18 review missions, 7 missions were resettlement review missions in response to the problems that had occurred and the subsequent resettlement audit. Review missions included visits to the project site and to the PMU1 headquarters in Phnom Penh where coordination meetings were held. ADB had a total of three project officers involved during the implementation period (two from ADB headquarters and one from the Resident Mission). The role performed by the ADB missions in providing advice on technical issues, preparation and evaluation of bid documents, and matters of loan administration was recognized by the EA and PMU1. However, ADB could not field a sufficient number of missions to fully monitor Government’s compliance and effective implementation of the resettlement action plan at the beginning of implementation stage. This has also occurred on other ADB projects.40 It was also noted that, while project completion review missions fielded from headquarters have officers and analysts assigned full-time, the workload at the Resident Mission does not permit officers and analysts to be assigned full time to a project completion review mission. There is also a need to provide further training for the Resident Mission’s project analysts on the collection and analysis of data for a project completion review mission. Overall, the performance of ADB was rated satisfactory. 51. Viet Nam Component. The Viet Nam component was originally administered and supervised from ADB headquarters but was transferred on 7 January 2003 to the Viet Nam Resident Mission. ADB conducted 13 review missions, 2 special loan administration missions, a midterm review mission and a loan take-over mission transferring the project to the Resident Mission. These missions included visits to the project site and also to the PMU-MT headquarters in HCM City where coordination meetings were held. ADB had a total of five project officers involved during the implementation of the Project. The role performed by the ADB missions in providing advice on technical issues, preparation and evaluation of bid documents, and matters of loan administration was recognized by the EA and the PMU-MT. Overall, the performance of ADB was rated satisfactory.

III. EVALUATION OF PERFORMANCE

A. Relevance

52. The Project is considered to be highly relevant. It was consistent with the Government’s development objectives and in line with the ADB’s operational strategy in the road subsector for both the Kingdom of Cambodia and the Socialist Republic of Viet Nam. The Project was 39 It appeared at one stage that actual ADB disbursements of local currency were 120% higher than ADB actually

disbursed. 40 ADB. 1999. Report and Recommendation of the President to the Board of Directors for a Proposed Loan to the

Kingdom of Cambodia for the Primary Roads Restoration Project (SF). Manila, (Loan 1967-CAM, for $68 Million).

15

particularly relevant in the context of the strategic needs to develop and strengthen links between Cambodia and Viet Nam. B. Effectiveness in Achieving Outcome

53. Each of the country components and the Project as a whole were rated effective. The outcome of the Project as envisaged at appraisal (Appendix 1) has been substantially achieved. The primary purpose of increasing the movement of people and goods and vehicles across the Cambodia–Viet Nam border at Bavet/Moc Bai, reducing vehicle operating costs (VOCs) and travel time, and increasing the level of traffic was achieved. The road and the border facilities have provided physical infrastructure that will help to realize the project goal of facilitating trade. The increase in the trans-border activities at Bavet/Moc Bai measured both in terms of persons and vehicles crossing the border and of import and export values started increasing in 2003–2004, soon after the completion of the main civil works contract. There have recently been further substantial increases. The total value of trade through the Bavet/Moc Bai border post increased by about 41% per annum between 2003 and 2006. The number of people crossing the border increased at an average annual rate of 53% between 2003 and 2006 while the number of vehicles crossing the border increased at an average annual rate of 38% during the same period. 54. However, cross-border movement has not reached its full potential and there is not yet through movement of trade traffic between Thailand, Cambodia and Viet Nam. In September 2006 as a pilot study, 40 vehicles crossed the border between Cambodia and Viet Nam. The majority of freight vehicles at present stop at the border and transfer their goods onto local vehicles which then continue into the other country. 55. Although no specific level of VOC reduction was set as a target at appraisal it has been conservatively estimated41 that VOCs have been reduced by 10% for passenger cars and by 15% for trucks and buses. In Cambodia, travel time from Phnom Penh to Bavet has been reduced by 30%. Similar reductions have been achieved in Viet Nam, especially in urban areas. Several bus routes have reduced their trip times, e.g., one bus route reduced its average trip time from 1 hour and 10 minutes to 50 minutes after the project, a reduction of 28%. 56. Traffic data collected by the project completion review mission show marked differences along the road between Neak Loeung and Bavet. In 2005, traffic between the border and Svay Rieng totaled about 8,500 vehicles per day (vpd), including motorcycles. From Svay Rieng to Neak Loeung, traffic levels were 2,984 vpd. At appraisal it was estimated that traffic growth between 1996 and 2005 would increase from 851 vpd to 1,804 vpd, excluding motorcycles. Actual traffic increased from 851 vpd in 1996 to an average of 1,879 vpd in 2005, excluding motorcycles. In Viet Nam, traffic growth from Cu Chi to Moc Bai has been increasing at about 25% per annum. The annual average growth for traffic just before the border at Moc Bai on NH22A grew from 3,265 vpd in 1996 (excluding motorcycles) to 10,354 vpd in 2005 (excluding motorcycles), a growth of 12% per annum. On NH1A near Thu Duc the traffic increased from 7,784 vpd in 1996 to 29,310 vpd in 2006, an average growth of 14% per annum. At appraisal it was estimated that passenger traffic and freight traffic would grow on average by 4–10% per annum depending on vehicle type. 57. In 2002 (before the road improvements had been completed), there were 323 accidents on NH1A. In 2005, the figure was 124, a reduction of 60%. Similar reductions have been

41 Consultant Benefit Monitoring and Evaluation Report, March 2006.

16

achieved on parts of NH22A, where traffic accidents in 2003 (just before completion of the road improvements) totalled 95. At the end of 2005, this had been reduced to 42, a 56% reduction. C. Efficiency in Achieving Outcome and Outputs

58. Each of the country components and the Project as a whole were rated highly efficient.42 The Project Completion Review Mission reevaluated the economic internal rates of return (EIRRs) for the Cambodia component, the Viet Nam component, and the overall Project. The economic viability was assessed by computing all incremental benefits and costs resulting from project implementation. At appraisal, the EIRR was calculated for each of the road sections in Cambodia and Viet Nam and for the Project as a whole. At appraisal the EIRR for the Project was 23%. The EIRR for the Cambodia component was estimated at appraisal to be 22% and for the Viet Nam component it was 24%. The recalculated EIRR for the Project as a whole is 25.1%. This compares favorably with the economic opportunity cost of capital of 12%. The EIRR recalculated for the Cambodia section of the Project was 24.1%. For the Viet Nam component as a whole the recalculated EIRR was 25.6% (28.7% for V1, 25.4% for V2, and 21.4% for V3 sections of the component). The primary differences between reevaluation and appraisal were due to (i) revised economic costs derived from actual costs, (ii) longer construction periods caused by implementation delays, and (iii) differences in traffic growth at appraisal and reevaluation. Appendix 10 shows the recalculated EIRRs as well as the supporting assumptions. D. Preliminary Assessment of Sustainability

59. Cambodia Component. The road component in Cambodia was rated less likely to be sustainable. Expenditure on road maintenance in Cambodia has been well below that required, given the condition of the road network. Funds available to the government are also limited and that has meant that fees collected from road users for road maintenance have been used for significant road works, and works in other sectors. In 2006, only $2.4 million of the $12.3 million allocated in the national budget for roads was provided for maintenance. The total amount allocated for 2006 to RN1 in both Svay Rieng and Prey Veng was KR584 million, about $136,300. This equates to $1,282 per km of road to be maintained. For RN11 the total for routine maintenance in 2006 was KR576 million, about $134,500. This equates to $1,500 per km of road to be maintained. For routine maintenance, these levels of expenditure are adequate. Although the Project Completion Review Mission’s inspection found that both RN1 and RN11 were in good condition, with little sign of damage, they had not yet required any significant periodic maintenance which will probably be due in late 2007 or early 2008. As the level of truck traffic on the project roads is increasing with the growing trade movements between Cambodia and Viet Nam and there is a significant overloading, the need for regular periodic maintenance will increase. At present, there are no weighbridges or axle-load monitoring and to ensure that the road does not deteriorate further from truck overloading it will be necessary to enforce strict adherence to load limits. Although its road maintenance funds are insufficient for the whole Cambodia road network, the Government has prioritized maintenance of roads rehabilitated under externally funded projects, including the project road. The Project Completion Review Mission informed the EA that ADB would continue to monitor the maintenance of the improved roads under through the annual government road maintenance budgets.

42 According to ADB Operations Evaluation Department guidelines, if the estimated EIRR (E) exceeds 18%. a project

is normally rated highly efficient. Highly efficient > 18%; efficient 18% ≥ E ≥ 12%; less efficient 12% > E ≥ 6%; inefficient < 6%.

17

60. Viet Nam Component. The physical and financial sustainability of the component completed in Viet Nam is rated likely. The Government is committed to undertaking maintenance and there is a sufficient flow of funds to cover operation and maintenance (O&M) and periodic and rehabilitation costs. The roads rehabilitated under the component are maintained by regional road maintenance units (RRMUs): in HCM City by RRMU-2 and by Viet Nam Road Administration (VRA) RRMU-7 for NH22A. The RRMUs receive annual budgets from the Government, although the Project Completion Review Mission’s discussion with both the RRMUs indicated only 70-75% of the requested budget was received. Given that the project roads are only 3 years old, the budget is adequate for maintenance, but periodic maintenance will be required in a few years time and the budget allocation needs to increase accordingly. The RRMUs currently receive an average of $2,100–$2,900 per km. The Project Completion Review Mission’s inspection found that the roads were in good condition, with little sign of damage. However, as in Cambodia, the level of truck traffic and overloading on the roads is high and the necessity for regular periodic maintenance will increase.

E. Impact

1. Environmental Impact

61. It was envisaged at appraisal that for both the Cambodia and the Viet Nam components there would not be any adverse environmental impacts as the civil works consisted of rehabilitation of an existing road. Initial environmental examinations (IEE) were undertaken during project preparation and these concluded that the environmental impacts of the two components during construction and operation would be minor. 62. The civil works contract documents for both components included environmental impact mitigation measures to be implemented during construction by the contractors. However, these mitigation measures were not always fully complied with. Environmental concerns included: (i) poor maintenance of the existing road, (ii) insufficient traffic control measures to minimize accidents during construction, (iii) lack of or inadequate temporary drainage and reduced travel-lane width because of water-ponding, (iv) borrow pits beside the road whose steep slopes posed a safety risk to people and animals, (v) dust in sections under construction and in unfinished sections, (vi) erosion of embankments, and (vii) disruption of the normal course of business and daily life in communities. The contractors did improve their mitigation measures after repeated warnings. In order to improve traffic safety the EAs employed traffic controllers (police staff) to improve traffic safety at critical points. The supervision consultants monitored the civil works contractors to ensure that environmental mitigation measures were properly implemented.

2. Socioeconomic Impact

63. The socioeconomic impact of both country components has been significant. In Cambodia, the level of development along RN1 has increased. There has been significant ribbon development, including residences, buildings, and shops, between 2000 and the time of the Project Completion Review Mission. At the Bavet border post, the increase in both passenger and goods traffic from Viet Nam has led to development, including several casinos and hotels on the Cambodia side of the border that attract large numbers of tourists. The number of ancillary services, such as restaurants and gas stations, has increased along the road. An industrial park close to Bavet has also recently opened, providing employment opportunities for the local residents. In Viet Nam the urban sections of the project close to HCM

18

City in particular have benefited from the road improvements, although benefits are now being observed in other project areas. New industrial areas offering employment opportunities have been built near the project roads in Viet Nam.43 One of these industrial areas employs over 10,000 people and is planning to expand its activities in a new site. No indigenous peoples and/or ethnic minority issues arose during project implementation.

3. Resettlement Impact

64. Cambodia Component. A resettlement action plan undertaken at appraisal identified 5,920 project affected persons living in 1,184 households who would be affected by the project. The calculation was based on an inventory in a corridor of influence 18 meters (m) from the road centerline. Following loan approval on 15 December 1998, between March and October 1999 the Government conducted a new census of project-affected persons and a detailed measurement survey of all fixed structures inside the 50 m right-of-way, identifying those found within (i) 10 m, (ii) 10 m to 15 m, and (iii) 15 m to 25 m from the road centerline. The Government wanted to know the resettlement costs of clearing various widths of the right-of-way before deciding what corridor of influence to use. Because the Government changed the resettlement action plan and the valuations contained in it, the loan could not be made effective44 until ADB had approved it. ADB fielded a Resettlement Review Mission from 24 to 26 October 1999 and it was agreed that the corridor of influence would be 10-15 m from the road centerline. The new resettlement plan stated that only 1,086 households would be affected by the project. After the loan became effective on 9 November 1999, resettlement activities began. On 14 February 2002, a report prepared by Legal Aid of Cambodia and the NGO Forum on Cambodia on behalf of 99 families living along the road in Prey Veng Province stated that several believed their compensation was inadequate. In response to the issues raised, an ADB Resettlement Review Mission was fielded on 1-4 June 2002 and found that nobody in the sites mentioned by the Legal Aid of Cambodia report had received compensation for lost land. The mission proposed that a tripartite group containing representatives of IRC, the NGO Forum, and ADB would conduct a resettlement audit of RN1. This audit began in November 2004 and documents provided by IRC in November 2006 showed that RGC had completed compensation payments to the affected persons identified during the resettlement audit, as agreed by ADB, NGOs, and project affected persons. In response to a letter sent by the NGO Forum on Cambodia in January 2007 on 93 outstanding cases, ADB facilitated meetings between the NGO and the Government and recommended that outstanding issues should be investigated. In response to a letter dated 30 July 2007 from another NGO (CD Cam), ADB undertook another review to determine the validity of the complaints and work with the Government to resolve them. Appendix 11 gives the background to the resettlement and the resettlement audit. 65. Viet Nam Component. A resettlement action plan undertaken at appraisal identified 5,585 households and 3,322 commercial and residential structures that would be affected by the project. The Project Completion Review Mission determined that, under the original scope of the component, the actual number of households affected was less than envisaged at appraisal. The actual cost of land acquisition, resettlement, and unexploded ordnance clearance was $32.37 million. The 3% increase over the appraisal estimates was because some resettled people requesting compensation above market rates. Because of the incorporation of additional 43 The Trang Bang Industrial Park and the Moc Bai Economic Zone are two large industrial zones that have

developed along NH22A since the implementation of the project. 44 As the loan could not be made effective and there was a cross-effectivity agreement with the Viet Nam loan, i.e.

until both loans satisfied all of ADBs effectiveness criteria then neither loan could become effective. Viet Nam had already satisfied ADBs loan effectiveness criteria but could not commence civil works due to Cambodia not having satisfied ADBs effectiveness criteria.

19

works into the civil works contracts, additional resettlement became necessary, especially within the HCM City area. The total for the additional land acquisition and resettlement compensation amounted to $31.96 million. No indigenous peoples, ethnic minorities, vulnerable groups, or non-titled people (e.g. people living in informal settlements) along the right-of-way were affected. All the project affected persons had their living conditions improved or restored because of the increase in economic activity in the area (para 63). Appendix 11 gives further details on the resettlement.

IV. OVERALL ASSESSMENT AND RECOMMENDATIONS

A. Overall Assessment

66. The overall assessment of the Project, based on based on separate assessments of the Cambodia and Viet Nam components, was that it was successful. Both components were rated successful. To arrive at this overall assessment, the individual country component ratings were aggregated using weightings developed by the Project Completion Review Mission: Cambodia component (26%); and Viet Nam component (74%). These reflect the relative importance of the component to expected overall project outcomes, taking into account its contribution to project cost at appraisal. The rating of each component was based on a review of its relevance, effectiveness, efficiency, and sustainability.45 Appendix 12 includes the quantitative assessment of each country component’s performance to determine the overall project rating. B. Lessons Learned 67. The Project encountered problems in both Cambodia and Viet Nam regarding the performance of the contractors, resettlement, and noncompliance with environmental mitigation measures. 68. The prequalification of firms that do not have the capacity to undertake the civil works in a timely manner not only results in delays but extends the period of the construction supervision consultants. There was no effective measure to ensure that bidders who passed the prequalification and won the contract had the required equipment, working capital, and management staff at the project sites as stipulated in the documents. The prequalification process needs to be more rigorous to avoid delays caused by the incorrect choice of contractors. 69. There were several areas where resettlement issues affected the completion of the civil works, especially in Cambodia, where a resettlement audit became necessary. The resettlement audit was instrumental in improving the Ministry of Finance’s understanding of proper resettlement practices and has improved overall resettlement practice in Cambodia. In future, ADB needs to undertake a careful analysis of the legal and policy framework in a country in relation to ADB’s policy, which may help to anticipate and address potential resettlement risks. The management structure for planning and implementing resettlement needs careful thought and planning to avoid conflicts of interest and to ensure efficient implementation. In Viet Nam, some residents were not satisfied with the resettlement payments and would not move until they were compensated at higher than market rates. Civil works cannot be continually delayed because of individuals attempting to receive additional benefits.

45 This project completion report is part of a sample of project completion reports independently reviewed by the

Operations Evaluation Department. The review has validated the methodology used and the rating given.

20

70. Environmental problems caused by contractors not taking an active role in protecting the environment could be avoided by more active monitoring. One way of doing this would be to withhold payment from contractors if they have not carried out environmental mitigation measures. Implementation of environmental mitigation measures should be included in tender documents and contracts, and where possible separate cost estimates for mitigation measures should be made. An environmental management action plan should also be prepared for project implementation.

C. Recommendations

1. Project-Related

a. Future Monitoring and Follow-Up Action

71. The maintenance of project facilities is critical to the long-term success of the project roads. The rapid increase in the levels of traffic since appraisal requires an adequate maintenance budget for the roads. ADB should regularly monitor the maintenance of the roads in both countries by analyzing the Government’s annual budget allocations.

b. Covenants

72. Strict adherence to the resettlement action plan agreed at ADB Board approval is essential. To avoid delays to civil works, affected people need to be informed of compensation rates and their entitlements as agreed under the resettlement action plan. ADB should allocate more resources to regular reviews of the implementation of resettlement plans of ongoing and future projects from the initial stage.

c. Timing of Project Performance Evaluation Report Preparation

73. A project performance evaluation should be undertaken in 2009 to determine whether the Project is still meeting its objectives.

2. General

74. Maintenance of the Project roads must be the top priority so the assets will continue to used by local people and contribute to the social and economic growth of Cambodia and Viet Nam. Funds must be made available for timely and effective implementation of road maintenance.

21 Appendix 1

PROJECT FRAMEWORK

Design Summary Appraisal Performance Indicators/Targets Project Achievements Key Issues and Recommendations Impact Economic Integration Increased movements (people, goods, and vehicles) across the Cambodia–Viet Nam border Reduced time and cost for each movement Benefits to vehicles using the road within Cambodia and Viet Nam, in terms of lower unit vehicle operating costs Community benefits from better road safety

After project completion records at the border by year of: - number of people crossing - volume and value of goods crossing - number and type of vehicles crossing Records of time expended by those wishing to cross, from initial application to actual crossing, for people ,goods, and vehicles Greater traffic volumes, faster speeds, lower operating costs, changes in vehicle types Reduction in vehicle and pedestrian accidents

Data available in Viet Nam and Cambodia on passenger and freight volumes These data were not collected in the BME. Travel times between cities have been reduced by 30% due to improved road conditions. Traffic volumes have increased and vehicle operating costs for vehicles are 10%-15% lower. Accidents in Viet Nam have been reduced. Data for Cambodia are inconclusive because of poor accident records.

Appendix 10 gives details of vehicle operating costs per km for different vehicle types, and also of increasing traffic volumes for Cambodia and Viet Nam components.

Outcome Improve 240 km of the existing highway between Phnom Penh in Cambodia and Ho Chi Minh City (Thu Duc) in Viet Nam Construct customs and immigration infrastructure on the Cambodian and Vietnamese sides of the border

Improvement works completed for both the Cambodia and Viet Nam sections of the road by 31 May 2002 Access roads, vehicle parking areas, bond stores, security areas, offices and residential complexes completed by 31 May 2002

Civil works for road components completed in Cambodia in January 2004 and Viet Nam in April 2003. Because of loan savings, further work was undertaken in Viet Nam on improving intersection safety by introducing flyovers. Cambodia border post not completed until March 2005 because of delays in design and separate contract bidding. Additional facilities and equipment. Cambodia border post opened 15 December 2005. Viet Nam facilities completed April 2003.

9 new bridges were completed under the Viet Nam component compared with the 8 envisaged at appraisal. The number of intersections increased from the original 2 envisaged at appraisal to a total of 10 due to the additional works.

Appendix 1 22

Design Summary Appraisal Performance Indicators/Targets Project Achievements Key Issues and Recommendations Clear road reservation of unexploded ordnance Implement a bilateral agreement between Cambodia and Viet Nam that will harmonize, regulate, and simplify cross-border movements

No ordnance contamination within the project road reservation by 31 May 2002 Enabling protocols and regulations negotiated, signed, and in operation by 31 December 2001 at the latest and preferably by 31 October 1999

Achieved Cross-Border Transport Agreement signed between Cambodia and Viet Nam in November 2001. 16 out of 20 annexes and protocols signed. Others still pending. August 2004 agreement to implement Cross-Border Transport Agreement on a pilot-basis. Full implementation expected early 2007.

Component/Outputs 4 civil works contracts for road improvement: - Cambodia – 1 contract (reconstruction 105 km, improvement 55 km) - Viet Nam – 3 contracts (reconstruction of 80 km) 2 consulting services contracts for construction supervision Unexploded ordnance removal Bilateral agreements regulating and facilitating cross-border movements

Civil works contracts signed by 31 March 1999 Civil works commenced by 1 June 1999 Civil works complete by 31 May 2002 Consulting services contracts negotiated, signed and activated by 15 March 1999 Ordnance surveys indicate no contamination

Cambodia contract signed and commenced December 1999, Viet Nam contract signed and commenced November 1999. Cambodia civil works completed December 2005, Viet Nam civil works completed December 2005. - Viet Nam – 3 contracts

including additional works reconstructed 96.35 km

- Cambodia – 2 contracts, one for road construction (105 km) and one for border post.

- R11c improved Cambodia December 1999 , Viet Nam August 1999 Achieved Full implementation expected in 2007. A pilot-basis test commenced in September 2006 to enable 40 vehicles to travel from Cambodia to Viet Nam.

Civil works in Cambodia were substantially complete in January 2004 and in Viet Nam in April 2003. Additional works were implemented because of loan savings.

23 Appendix 1

Activities 1. Detailed engineering and preparation of tender documents 2. Procurement 3. Civil works (road improvement) 4. Construction supervision 5. Capacity-building consulting services.

Inputs Financing from the ADBs Special Fund resources –$40 million for Cambodia - $100 million for Viet Nam Counterpart financing from the Governments –$11 million for Cambodia –$45 million for Viet Nam

ADB = Asian Development Bank, MPWT = Ministry of Public Works and Transport (Cambodia), km = kilometer, MOT = Ministry of Transport (Viet Nam), NH = national highway.

24 Appendix 2

APPRAISAL AND ACTUAL PROJECT COSTS

Table A2.1: Appraisal and Actual Cambodia Component Costs ($ million)

Appraisal Estimate Actual

Item Foreign

ExchangeLocal

Currency Total Foreign

Exchange Local

Currency Total A. Base Cost 1. Land/Resettlement/UXOa 0.00 5.00 5.00 0.00 2.40 2.40 2. Civil Works 28.00 6.80 34.80 22.39 5.96 28.36 3. Consultant Supervision 2.33 0.69 3.02 3.49 0.00 3.49 4. Government Management 0.00 0.40 0.40 0.00 0.52 0.52 Subtotal (A) 30.33 12.89 43.22 25.88 8.88 34.76 B. Contingencies 1. Physical 3.03 0.79 3.82 — — — 2. Price 1.37 0.94 2.31 — — —

Subtotal (B) 4.40 1.73 6.13 — — —

C. Service Charge during Construction 1.35 0.00 1.35 1.16 0.00 1.16 Total (A+B+C) 36.08 14.62 50.70 27.04 8.88 35.92 D. Extended Scope

1. Civil Works (Emergency Flood Rehabilitation) —

—

—

7.75 0.70 8.45 2. Equipment — — — 0.86 0.02 0.88 Subtotal (D) 8.61 0.72 9.33 Total (A+B+C+D) 36.08 14.62 50.70 35.65 9.60 45.25 UXO = unexploded ordnance. a The actual cost of UXO clearance was included under the civil works contracts Source: Asian Development Bank estimates.

Appendix 2 25

Table A2.2: Appraisal and Actual Viet Nam Component Costs ($ million)

Appraisal Estimate Actual

Item Foreign

ExchangeLocal

Currency Total Foreign

Exchange Local

Currency Total A. Base Cost 1. Land/Resettlement/UXOa 0.00 31.50 31.50 0.00 32.37 32.37 2. Civil Works 58.42 28.78 87.20 35.98 17.41 53.39 3. Consultant Supervision 4.66 1.09 5.75 5.11 0.24 5.35 4. Government Management 0.00 0.50 0.50 0.00 0.23 0.23 Subtotal (A) 63.08 61.87 124.95 41.09 50.25 91.34 B. Contingencies 1. Physical 6.31 3.04 9.35 — — —

2. Price 3.11 5.25 8.36 — — —

Subtotal (B) 9.42 8.29 17.71 — — —

C. Service Charge during Construction 2.12 0.00 2.12 2.15 0.00 2.15 Total (A+B+C) 74.62 70.16 144.78 43.24 50.25 93.49 D. Extended Scope Additional Works 1. Land/Resettlement/UXO — — — 0.00 31.96 31.96 2. Civil Works — — — 24.88 14.50 39.38 3. Consultant Supervision — — — 1.61 0.09 1.70 Subtotal (D) — — — 26.49 46.55 73.04 Total (A+B+C+D) 74.62 70.16 144.78 69.73 96.80 166.53 UXO = unexploded ordnance. a The actual cost of UXO clearance was included under the civil works of contracts. Source: Asian Development Bank estimates.

26 Appendix 2

Table A2.3: Appraisal and Actual Project Costs ($ million)

Appraisal Estimate Actual

Item Foreign

ExchangeLocal

Currency Total Foreign

Exchange Local

Currency Total A. Base Cost 1. Land/Resettlement/UXOa 0.00 36.50 36.50 0.00 34.77 34.77 2. Civil Works 86.42 35.58 122.00 58.37 23.37 81.74 3. Consultant Supervision 6.99 1.78 8.77 8.60 0.24 8.84 4. Government Management 0.00 0.90 0.90 0.00 0.75 0.75 Subtotal (A) 93.41 74.76 168.17 66.97 59.13 126.10 B. Contingencies 1. Physical 9.34 3.83 13.17 — — —

2. Price 4.48 6.19 10.67 — — —

Subtotal (B) 13.82 10.02 23.84 — — —

C. Service Charge during Construction 3.47 0.00 3.47 3.31 0.00 3.31 Total (A+B+C) 110.70 84.78 195.48 70.28 59.13 129.41 D. Extended Scope in Viet Nam Additional Works 1. Land/Resettlement/UXO — — — 0.00 31.96 31.96 2. Civil Works — — — 24.88 14.50 39.38 3. Consultant Supervision — — — 1.61 0.09 1.70

Extended Scope in Cambodia

1. Civil Works (Emergency Flood Rehabilitation) —

—

—

7.75 0.70 8.45

2. Equipment — — — 0.86 0.02 0.88 Subtotal (D) — — — 35.10 47.27 82.37

Total Project Cost

(A+B+C+D) 110.70 84.78 195.48 105.38 106.40 211.78 UXO = unexploded ordnance. a The actual cost of UXO clearance was included under the civil works of contracts. Source: Asian Development Bank estimates.

Appendix 3 27

CURRENCY EQUIVALENTS (1 January–31 December)a

Year KR to $1.00 D to $1.00 1998 3,700.00 13,880.00 1999 3,828.91 13,945.23 2000 3,849.54 14,176.85 2001 3,887.61 15,031.16 2002 4,014.92 15,934.27 2003 4,007.03 16,067.76 2004 4,062.21 16,174.58 2005 4,187.17 15,967.53 2006b 4,205.63 16,403.13

KR = riel/s; D = dong.. a Average over the year, except in 2006 b 2006 exchange rate is based on 1 January–31 October 2006. Source: Asian Development Bank.

28 Appendix 4

SUMMARY OF ASIAN DEVELOPMENT BANK CONTRACTS FUNDED Loan No. 1659−CAM

PCSS No. Contractor/Supplier Description Currency of Contract

Contract Amount

US Dollar Equivalent

01 -Civil Works

0002 CEC/Nopawong Construction Co., Ltd.

Construction of National Road No. 1: Neak Loeung to Bavet (Add.: 7.3KM Asphalt Surfacing Between Neak Loeung town

USD 22,030,623.58 22,030,623.58

0008 Muhibbah Engineering (Cambodia) Co., Ltd.

Construction of the Border Post Facility at Bavet, Svay Rieng province USD 1,568,688.39 1,568,688.39

0010 Muhibbah Engineering (Cambodia) Co., Ltd.

Construction of Walkway Roof at Bavet Border Post, Svay Rieng province USD 773,330.54 773,330.54

Sub-Total Cat. 01: 24,372,642.51 01A- Civil Works

0004 Shanxi Construction Engineering Co., Ltd.

Rehabilitation of National Road No. 11 Between KM 61 and KM 74 USD 1,891,575.28 1,891,575.28

0005 Shanxi Construction Engineering Co., Ltd.

Rehabilitation of National Road No. 11 Between KM 74 and KM 91 USD 1,993,815.84 1,993,815.84

0006 Thavon Vissavayotha Co., Ltd. Rehabilitation of National Road No. 11 Between KM 91 and KM 126 USD 2,025,859.30 2,025,859.30

0007 Mong Rethy/Tiwanon Rehabilitation of National Road No. 11 Between KM 126 and 151 USD 1,842,920.55 1,842,920.55

Sub-Total Cat. 01A: 7,754,170.97 02-Gov't Management (Incremental)

0003 Various Incremental Expenditures for 2005 USD 449,424.68 449,424.68

8801 Various For Liquidation of the Imprest Account Fund USD 70,852.05 70,852.05

Sub-Total Cat. 02: 520,276.73 03 Consulting Services

0001 SCOTT WILSON KIRKPATRICK/BCEOM/KCEC

Consulting Services for the Construction Supervision of RN1 Neak Loeung to the Border

USD 1,168,879.05 1,168,879.05

Appendix 4 29

PCSS No. Contractor/Supplier Description Currency of Contract

Contract Amount

US Dollar Equivalent

0001 SCOTT WILSON KIRKPATRICK/BCEOM/KCEC

Consulting Services for the Construction Supervision of RN1 Neak Loeung to the Border

GBP (£) 726,613.50 1,187,912.64

0001 SCOTT WILSON KIRKPATRICK/BCEOM/KCEC

Consulting Services for the Construction Supervision of RN1 Neak Loeung to the Border

FF 5,959,650.95 894,137.67

0009 Scott Wilson Kirkpatric (UK) Consulting Services for the Construction Supervision of Border Post Facility at Bavet

USD 235,409.00 235,409.00

Sub-Total Cat. 03: 3,486,338.36 06- Equipment

0011 TAKRAL Brothers Pte Ltd.

Supply and Delivery and Installation of a Server System and Computer Equipment at Border Post Facility at Bavet

USD 110,788.00 110,788.00

0012 COMIN KHMER Supply and Delivery and Installation of Baggage X-Ray, Electronic and Fire Equipment

USD 639,374.69 639,374.69

0013 TAKRAL Brothers Pte Ltd. Supply and Delivery and Installation of the Office Equipment at Border Post Facility at Bavet

USD 36,144.00 36,144.00

0014 China GEzhouba Group Foreign

Supply and Delivery and Installation of the Office Furniture at Border Post Facility at Bavet

USD 33,672.75 33,672.75

0015 Muhibbah Engineering (CAMB) Co., Ltd.

Procurement of TYPE A Vehicle for the Construction Supervision of the Border Post Building Facilities

USD 33,689.00 33,689.00

8801 Various For Liquidation of the Imprest Account Fund USD 3,920.00 3,920.00

Sub-Total Cat. 04: 857,588.44

TOTAL 36,991,017.01 FF = French Franc, GBP = British Pound, ICB = international competitive bidding, USD = United States dollar. Source: Asian Development Bank.

30 Appendix 4

SUMMARY OF ASIAN DEVELOPMENT BANK CONTRACTS FUNDED Loan No. 1660−VIE

PCSS

No.

Contractor/Supplier

Description Contract Amount Disbursed

Amount US$

Equivalent CONSULTING SERVICE

0001 China Engineering Consultants, Inc. in associate with Louis Berger Inc.

Construction supervision of the civil works and to act as ‘Engineer’ $7,046,371 $7,046,371

$7,046,371

Sub-total $7,046,371 $7,046,371 $7,046,371CIVIL WORKS

0002 Anam Cienco No.8 Joint Venture

V1: Road Contract length : 22.12 km on the National Highway 1A and 22ª.

$7,025,327 D349,069,265,335

$7,025,650 D349,069,265,335

$29,353,975

0003 Anam Cienco No.8 Joint Venture

V2: Road Contract length: 65.33 km on the National Highway 22A ending at the border between Viet Nam and Cambodia

$7,029,081 D316,403,077,680

$7,032,609 D316,403,077,680

$27,387,538

0004 Cienco 8, Cienco 6, Cienco 5 Joint Venture

V3: Road Contract length: 8.90 km on the National Highway1A involving the construction of 8 bridges.

$8,489,247 D252,438,695,631

$8,489,247 D252,438,695

$24,719,773

Sub-total $81,461,286GOVERNMENT MANAGEMENT (INCREMENTAL)

0005 PMU-MT Incremental Expenses incurred from July to November 2000 $69,008 $69,008 $69,008

0006 PMU-MT Incremental Expenses incurred from December 2000 to March 2001 $67,627 $67,627 $67,627

0007 PMU-MT Salary and Admin cost April-July 2001 D1,003,799,970 D1,003,799,970 $67,193

0008 PMU-MT Staff salary & Admin cost August-September 2001 D433,024,360 D433,024,360 $28,777

Sub-total 232,605 TOTAL 88,740,262

PMU-MT = project management unit-My Thuan. Source: Asian Development Bank.

Appendix 5 31

PROJECTED AND ACTUAL DISBURSEMENTS ($ million)

Table A5.1: Loan No. 1659-CAM

Year Projected Actual1999 13.50 2000 11.90 5.29 2001 10.80 3.50 2002 3.80 5.49 2003 12.37 2004 5.40 2005 4.95 2006 1.15

Total 40.00 38.15

Source: Asian Development Bank loans financial information system.

Disbursement Details

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

1999 2000 2001 2002 2003 2004 2005 2006

Projected Actual

Figure A5.1: Disbursement Details

32 Appendix 5

Table A5.2: Loan No. 1660-VIE

Year Projected Actual1999 24.10 6.022000 29.50 2.862001 30.60 12.062002 15.80 14.032003 20.782004 15.552005 16.562006 3.03

Total 100.00 90.89

Source: Asian Development Bank Loans Financial Information System.

Disbursement Details

$0

$20

$40

$60

$80

$100

$120

1999 2000 2001 2002 2003 2004 2005 2006

Projected Actual

Figure A5.2: Disbursement Details

Appendix 6 33

CHRONOLOGY OF MAIN EVENTS

Table A6.1: Loan No. 1659-CAM

Year Date Event 1997 10-21 February Reconnaissance Mission fielded 21 April - 9 May Fact-Finding Mission fielded 1998 30 March Advertisement of the project in ADB Business

Opportunities 14 April ADB management review meeting 20 April–9 May Appraisal Mission fielded 11 June ADB staff review committee meeting 14 September Invitations issued to bid for road rehabilitation contract 5-6 November Loan negotiations 15 December ADB approves loan 1999 20 March Loan agreements signed 23 June ADB approves a first extension of loan effectiveness from

18 June 1999 to 17 September 1999 9 November ADB loan declared effective 3 December Contract for construction supervision consultant signed 8 December Contract for road rehabilitation signed 2000 13-22 July Special Loan Administration Mission fielded 2002 22 March - 4 April Loan Review Mission fielded 14 February NGOs sent a report on behalf of 99 affected persons on

resettlement issues 15 April Project administration transferred from ADB’s Mekong

Infrastructure Division (MKID) to Cambodia Resident Mission

1-4 June Resettlement Review Mission fielded 21-22 June Special Project Administration Mission fielded 15-17 August Resettlement Review Mission fielded 2003 28 February - 1 March Second tripartite coordination meeting held 7 February - 4 March Loan Review Mission fielded 6-15 October Loan Review Mission fielded 3-6 December Review mission fielded (Environment) 2004 2 February Contract for construction of border post facilities signed 1 March Contract variation for the improvement of road section in

Svay Rieng town approved by ADB 1-4 March Loan Review Mission fielded 6-21 May Loan Review Mission fielded 30 June ADB approves a first extension of loan closing date 22-23 July Third tripartite coordination meeting on cross border post

held 31 August First partial loan cancellation of SDR 370,000.00

34 Appendix 6

Year Date Event 27 October - 12 November Resettlement Review Mission fielded 2005 18 January Contract for walkway roof for the border post facilities at

Bavet approved 14-22 March Loan Review Mission fielded 10-12 May Resettlement Review Mission fielded 30 June ADB approves a second extension of the loan closing

date 8-11 August Resettlement Review Mission fielded 1 September Resettlement Review Mission fielded 3-23 November Resettlement Review Mission fielded 31 December ADB approves a third extension of the loan closing date 2006 20 July Closing of loan account 7-24 November Project Completion Review fielded 2007 5 January NGO Forum on Cambodia sends a letter on 93

outstanding resettlement cases 27 February Meeting between the Government, NGOs and ADB held

to address the 93 outstanding resettlement cases

Appendix 6 35

Table A6.2: Loan No. 1660-VIE

Year Date Event 1997 21 April−9 May Fact-finding Mission 18 July PMU-MT sent prequalification invitation for civil works

contracts V1,V2,V3 30 September PMU-MT sent invitation letter for consulting services 1998 3 January ADB approves pre-qualification 14 April Management review meeting 20 April−09 May Appraisal Mission 11 June SRC held 2 July Issuance of invitations to bid for civil works (V1,V2 & V3

contracts) 9 July 5−6 November Loan negotiations 17 November Circulation of RRP 1999 9 January Bidding documents submitted for civil works V1, V2 & V3

contracts 20 March Loan Agreement signed 3 September MOT submitted proposal to PM for allocating loan

savings to 13 additional work items 9 November Civil works contracts awarded (V1, V2 & V3) 9 November Loan effectiveness 15 November Notice to proceed issued to successful bidders of civil

works contracts V1,V2 & V3 December PM approves the request for allocation loans savings to

13 additional work items 2000 27 January ADB review mission on additional work items 28 January ADB holds meeting on the mission to prioritize the

proposed additional work items 16 February MOT asks ADB to approve 13 additional work items 21 February Consultant submits a proposal to review the feasibility

study report and conceptual design of eight priority additional work items to PMU-MT

16 October ADB Special Loan Administration Review Mission 20 November ADB financial management specialist inspects PMU-MT’s

financial processing procedures and project disbursement schedules

18 December ADB review mission chairs a meeting to discuss contract variations and revise cost estimates

2001 18 January First partial cancellation of loan savings: SDR1.56 million 21−24 March ADB review mission 4 April PMU-MT submits final review report and drawings for the

feasibility study report and concept design for 7 additional work items

25 April PMU-MT sends a request for 7 additional work items to ADB for approval

1 June State Treasury’s mission visits the project site and reviews the engineer’s payment procedures to the contractors

36 Appendix 6

Year Date Event 27 June Revision to the final review report and drawing for the

feasibility study report and concept design for 7 additional work items submitted

14 September PMU MT’s submits variation order No.7 (repair work for the existing road), variation order No. 4 (Moc Bai Border) and adjustment of pavement structure

21 September ADB approves variation orders for 3 civil works contracts the soft soil treatment

5−14 November ADB Midterm Review Mission 6 November PMU MT’s submits addenda to civil works contracts for

additional work items 2002 20 February MPI sends request to ADB for approval of 13 additional

work items, (6 items of which were supported by ADB) 5 April PMU-MT submits request to ADB for extension of loan

closing date by 12 months 18 April ADB Special Loan Review Mission 12−15 June ADB Review Mission 26 June First tripartite coordination meeting: Viet Nam, Cambodia

and ADB in Phnom Penh 30 September State Bank of Viet Nam formally request an extension of

loan closing date to 30 June 2005 15 October Director, MKID approves the request for utilization of loan

savings, reallocation of loan funds and extension of loan closing date

5 November ADB sends formal approval for extension of loan closing date to 30 June 2005

30 November Groundbreaking ceremony for Go Dau 2 Bridge – additional work item

2003 23−26 February ADB Review Mission 28 February−1 March Second Tripartite Coordination Meeting 13 March ADB’s approval of cost of additional work items –

Addendum to Civil Work Contracts 26 June−1 July ADB Review Mission 2−4 July Workshop on single-stop, cross-border customs

clearance at Moc Bai, Viet Nam and Bavet, Cambodia 29 July PMU-MT submits report on BME September ADB approves the addendum to the construction

supervision services contract 29 October−01 November ADB Review Mission 2004 02 February Second ADB approval of cost of additional work items 11−13 February ADB Review Mission 28−29 June ADB Review Mission 28 June PMU-MT submits addendum 3 to the construction

supervision services contract 1 July ADB approves addendum 3 to the construction

supervision services contract 1 September Replacement of the construction supervision consultant

project manager 28 September−01 October ADB Review Mission

Appendix 6 37

Year Date Event December PMU-MT submits BME report 2005 21−22 January ADB Review Mission 17 March ADB approves additional work items – addendum 3 to

civil work contracts 14−15 April ADB review mission 31 May PMU-MT submits addendum 3 to civil work contracts 7 June SBV formal requests an extension of the loan closing

date to 31 December 2005 7−8 July ADB Review Mission 13 July ADB approves the final draft addendum 4 to the

construction supervision services contract 8 August ADB approves SBV’s request for an extension of the loan

closing date to 31 December 2005 29−30 September ADB Special Review Mission 12−14 December ADB Review Mission 26 December Replacement of the construction supervision project

manager 31 December Loan closing date 2006 20 February ADB Special Loan Review Mission 12 May Actual loan account closing date

Second partial cancellation of loan savings: SDR4,172,168

38 Appendix 7

PROJECT IMPLEMENTATION SCHEDULE

Activity

Appendix 8 39

ORGANIZATION CHARTS

Figure A8.1: Organization Chart of Ministry of Public Works and Transport, Cambodia

Minister of Public Works and Transport

Secretaries of State

General Department of Administration Services

General Department of Transport

General Department of Public Works

General Inspectorate

Public Works Regions

Department of Administration

Department of Human Resources

Department of Accounting and Finance

Department of Planning

Department of Land Transport

Department of Water Transport

Department of Merchant Marines

Department of Roads Infrastructure

Heavy Equipment Center

Public Works Research Centre

Department of Inland Waterways

Department of Airport Construction

Provincial Public Works Departments

Municipal Public Works Departments

Public Enterprises

Undersecretaries of State

Advisors

1. Royal Railway of Cambodia

2. Sihanoukville Port

3. Phnom Penh Port

4. Department of Cambodian Shipping Industry and Brokers

5. Company of Land Transport

6. Bridge Construction Company

7. Driving School

8. Laboratory of Public Works and Building

Source: Ministry of Public Works and Transport.

40 Appendix 8

Figure A8.2: Organization Chart of Ministry of Transport, Viet Nam

Minister of Transport

Legislation Department

Personnel Department

Planning and Investment Department

Staff Department and Functional Agencies

Finance and Accounting Department

Science and Technology Department

International Relations Department

Inspection Section

General Administration

Line Department and Specialised

Management Organs

Road Administration

Maritime Administration

Inland Waterway Administration

Vietnam National Railways

Registration Department

Project Management Units

Project Quality Inspection and Management

Research and Training

Research Institutes

Training Schools

Specialized Business Sector

Specialized Industry Corporation

Transport and Construction Corporation

Design Institutes

Transportation Department

Vietnam Aviation Administration

Source: Ministry of Transport

Appendix 9 41

STATUS OF COMPLIANCE WITH LOAN COVENANTS

Table A9.1: Loan No. 1659−CAM Covenant Reference in

Loan Agreement

Status of Compliance

Sector Covenants 1. The Borrower shall maintain, or cause to

be maintained, records and accounts adequate to identify the goods and services and another items or expenditure financed out of the proceeds of the loan, to disclose the use of thereof in the Project, to record the Progress of the Project (including the cost thereof) and to reflect, in accordance with consistently maintained sound accounting principles, the operations and financial condition of the agencies of the Borrower responsible for the carrying out of the Project and operation of the Project facilities, or any part thereof.

Section 4.05 (a) Complied with.

2. The Borrower shall (i) maintain, or cause to be maintained, separate accounts for the Project; (ii) have such accounts and related financial statesmen's audited annually, in accordance with appropriate auditing standards consistently applied, by independent auditors whose qualifications, experience and terms of reference are acceptable to the Bank; (iii) furnish to the Bank, as soon as available but in any event not later than twelve (12) months after the end of each related fiscal year, certified copies of such audited accounts and financial statements and the report of the auditors relating thereto, all in the English language; and (iv) furnish to the Bank such other information concerning such accounts and financial statements and the audit thereof as the Bank shall from time to time reasonably request.

Section 4.05 (b) Complied with.

3. The Borrower shall furnish, or cause to be furnished, to the Bank such reports and information as the Bank shall reasonably request concerning (i) the Loan, and the expenditure of the proceeds and maintenance of the service thereof; (ii) the goods and services and other items of expenditures financed out of the proceeds

Section 4.06 (a) Complied with.

42 Appendix 9

Covenant Reference in Loan

Agreement

Status of Compliance

of the Loan; (iii) the Project; (iv) the administration, operations and financial operation of the Project facilities, or any part thereof; (v) financial and economic conditions in the territory of the Borrower and the international balance-of-payments position of the Borrower; and (vi) any other matters relating to the purpose of the Loan.

Environmental Covenants 1. The Borrower shall ensure that the

contract for the civil works under the Cambodia Component include specific measures as indicated in the summary Initial Environmental Examination Report and in accordance with the Bank's Environmental Guidelines for Selected Infrastructure Development Project to mitigate negative environmental impacts caused by the construction. The Borrower shall cause (i) the contractors engaged under the civil works contracts to comply strictly with all environmental impact mitigation requirements set out in the contract documents, and (ii) the consultants engaged for construction supervision to monitor closely the compliance by the contractors with the environmental impact mitigation requirements.

Schedule 6, para. 4

Complied with.

Social Covenants 1. Ministry of Public Works and Transport

(MPWT), through the Inter-ministerial Committee on Resettlement for Highway 1 and the Provincial Resettlement Committees, shall be responsible for the acquisition of the land required for the Cambodia Component and for Compensation and, if required, relocation and resettlement of Project affected people. MPWT shall ensure that such land acquisition, compensation, relocation and resettlement is carried out in accordance with the Land Acquisition and Resettlement Action Plan agreed upon between the Borrower and the Bank, the Borrower's procedures and the Bank's requirement as defined in the Bank's policy

Schedule 6, para. 2

Partly complied with. A number of affected persons reportedly did not receive adequate compensation as agreed by the Government in resettlement plan.

Appendix 9 43

Covenant Reference in Loan

Agreement

Status of Compliance

on Involuntary Resettlement. In case of discrepancies between the Borrower's procedures and the Bank's requirements, the Bank's requirements shall apply. MPWT shall promptly inform the Bank of any such discrepancies. MPWT shall provide the Bank with monthly status reports on the land acquisition and resettlement process as part of the progress reports required under section 4.06 of this Loan Agreement.

2. Without limitation to overall application of the Bank's Policy on Involuntary Resettlement, the following principles shall apply in respect of compensation and resettlement of Project affected people.

(i) Project affected people shall be compensated and assisted in such a way that generally their economic data and social future will not unfavorably affected by the Project and, in particular, that they will not face a material reduction in income, deterioration of living standards or unnecessary social and cultural dislocation as a result of the Project;

(ii) Project affected people shall not be required to have formal legal title to the land used by them to be eligible for compensation; and

(iii) the amount of compensation in respect of land acquisition shall be at a level sufficient to cover the full replacement cost of the land and the structures built thereon.

Schedule 6, para. 3

Partially complied with. A resettlement audit was undertaken due to complaints by non-governmental organizations (NGOs) on behalf of project affected persons. Some complained of too little compensation, while some said they had received no compensation.

3. During construction of the Project Road, MPWT, together with other appropriate Government agencies and non-Governmental organizations, shall ensure that contractors disseminate information on the risks of socially transmitted diseases (including HIV/AIDS) to those employed during Project implementation and the population living along the Project Road. MPWT shall ensure that contract documentation contains such requirement.

Schedule 6, para. 6

Complied with.

44 Appendix 9

Covenant Reference in Loan

Agreement

Status of Compliance

Cross-border Covenants 1. The Borrower shall take all action required

from its side to enable effective implementation of the Cross-Border Framework Agreement. In particular, the Borrower shall engage in consultations and enter into protocols, agreements and other arrangements with the Government of the Socialist Republic of Viet Nam and its agencies, and issue decisions and regulations, all as required under the Cross-Border Framework Agreement and aimed at facilitating cross-border traffic between Cambodia and Viet Nam.

Schedule 6, para 5.

Complied with.

2. MPWT, the Project Implementation Agency for the Viet Nam Component, and the Bank shall meet two or three times a year, as required, alternatively in Phnom Penh and Ho Chi Minh City (HCMC), to discuss Project implementation and resolve common problems and, in particular, to consult with each other on actions required for effective implementation of the Cross-Border Framework Agreement.

Schedule 6, para 7.

Partially complied with. Meetings did not take place as often as expected. Only three formal coordination meetings (i.e. tripartite meetings) took place over the whole of the project implementation period. However, several informal meetings were undertaken as part of the regional technical assistance project, Facilitating the Cross Border Movement of Goods and People in the Greater Mekong Subregion. Tay Ninh Province on the Viet Nam side and Svay Rieng Province on the Cambodia side also discussed several times the design and construction of Bavet/Moc Bai border facilities.

Others 1. The Borrower shall ensure that a road

maintenance plan for the Project Roads and the overall road network is prepared annually on the basis of physical measurement of needs, maintenance standards agreed upon between the Borrower and the Bank, traffic volumes and other relevant parameters. The Borrower shall make sufficient annual

Schedule 6, para 8.

Partially complied with. Annual road maintenance plans were prepared, but as required under this covenant. Annual budgets were not sufficient to implement the necessary maintenance of the overall

Appendix 9 45

Covenant Reference in Loan

Agreement

Status of Compliance

budget allocations to implement the annual road maintenance plans.

road network.

2. Towards the end of 2000, MPWT and the Bank shall carry out a detail midterm review of the implementation of the Cambodia Component. The timing of the review shall be determined in consultation between the Bank, MPWT, and the Project Implementation Agency for the Viet Nam Component. During the review, the Borrower and the Bank shall determine the need, if any, for changes in Project scope and implementation arrangements and seeks to resolve any problems that may occurred in respect of procurement, financing and scheduling.

Schedule 6, para 9.

Complied with late. The midterm review was not undertaken until November 2001.

3. MPWT, with the assistance of the consultants for Project supervision, shall carry out benefit monitoring and evaluation of the Cambodia Component in accordance with schedules and terms of reference to be agreed upon with the Bank. MPWT shall direct the consultants to carry out surveys (i) at the start of Project implementation to establish baseline data and (ii) immediately after Project implementation to evaluate the Project benefits. Data to be compiled and analyzed for the purpose of benefit monitoring and evaluation include, among others, data on border crossings, traffic, and axle loads.

Schedule 6, para 10.

Partially complied with. The benefit monitoring evaluation (BME) report undertaken by the consultants was not in sufficient detail to enable a pre-project to post-project detailed analysis to be undertaken to examine the impacts of the project.

46 Appendix 9

Table A9.2: Loan No. 1660−VIE Covenant Reference in

Loan Agreement

Status of Compliance

Sector Covenants 1. The Borrower shall cause the Project to be

carried out with due diligence and efficiency and in conformity with sound administrative, financial, engineering, environmental and road construction and maintenance practices.

Section 4.01 Complied with.

2. The Borrower shall make available promptly as needed, the funds, facilities, services, land and other resources which are required, in addition to the proceeds of the Loan, for carrying out the Project and for operation and maintenance of the Project

Section 4.02 Complied with.

3. The Borrower shall cause the Project to be carried out in accordance with plans, design standards, specifications, work schedules and construction methods acceptable to the Borrower and the Bank. The Borrower shall furnish, or cause to be furnished to the Bank, promptly after their preparation, such plans, design standards, specifications and work schedules, and any material modifications subsequently made therein, in such detail as the Bank shall reasonably request.

Section 4.03 Complied with.

4. Without limiting the generality of the foregoing, the Borrower shall furnish or cause to be furnished, to the Bank monthly reports on the carrying out of the Viet Nam Component and on the operation and management of the Project facilities. Such reports shall be submitted in such form and in such detail and within such a period as the Bank shall reasonably request, and shall indicate, among other things, progress made and problems encountered during the month under review, steps taken or proposed to be taken to remedy these problems, and a proposed program of activities and expected progress during the following month.

Section 4.06b Complied with.

5. Promptly after physical completion of the Viet Nam Component, but in any event not later than three (3) months thereafter or

Section 4.06c Complied with.

Appendix 9 47

Covenant Reference in Loan

Agreement

Status of Compliance

such later date as may be agreed for this purpose between the Borrower and the Bank, the Borrower to prepare and furnish to the Bank a report, in such form and in such detail as the Bank shall reasonably request, on the execution and initial operation of the Viet Nam Component, including its cost, the performance by the Borrower of its obligations under this Loan Agreement and the accomplishment of the purposes of the Loan.

6 The Borrower shall ensure that a road maintenance plan for the Project Road and the overall road network is prepared annually on the basis of physical measurement of needs, maintenance standards agreed upon between the Borrower and the Bank, traffic volumes and other relevant parameters. The Borrower shall make sufficient annual budget allocations to implement the annual road maintenance plans.

Schedule 6, para 9.

Being complied with. As requested, the Borrower submitted an annual road maintenance plan at the end 2003. The completed project road was handed over to relevant agencies for management and maintenance

7. MOT shall be the Project Executing Agency for the Viet Nam Component. The Vice-Minister of MOT in charge of projects funded by Overseas Development Assistance (ODA) shall be responsible for overall implementation of the Viet Nam Component. PMU-MT shall be the Project Implementing Agency, responsible for the day-to-day management of the Viet Nam Component. The Director General of PMU-MT shall be Project Director. MOT Shall establish a Project Management sub-Unit (sub-PMU) within PMU-MT, to be headed by a senior engineer and staffed by at least two engineers, an accountant, and technical and administrative support staff. The senior engineer shall be appointed on a full-time basis and report to the Project Director with respect to all aspects of the Viet Nam Component.

Schedule 6, para. 1.

Complied with.

Environment Covenants 1. The Borrower shall ensure that the

contract documents for the civil works under the Viet Nam Component include specific measures as indicated in the

Schedule 6, para. 4

Complied with. The Consultant's environment specialists

48 Appendix 9

Covenant Reference in Loan

Agreement

Status of Compliance

summary Initial Environmental Examination Report and in accordance with the Bank’s Environmental Guidelines for Selected Infrastructure Development Projects to mitigate negative environment impacts caused by the construction. The Borrower shall cause (i) the contractors engaged under the civil works contracts to comply strictly with all environmental impact mitigation requirements set out in the contract documents, and (ii) the consultants engaged for construction supervision to monitor closely the compliance by the contractors with the environmental impact mitigation requirements.

conduct regular monthly inspections at the project site. ADB asked the EA to improve traffic control facilities during construction. More flag men, better traffic signs, and safety barriers were used, resulting in smoother traffic flow, and fewer traffic accidents.

Social Covenants 1. PMU-MT shall be responsible for the

acquisition of the land required for the Viet Nam Component and for compensation, relocation and resettlement of Project affected people. PMU-MT shall ensure that such land acquisition, compensation, relocation and resettlement is carried out in accordance with the Land Acquisition and Resettlement Action Plan agreed upon between the Borrower and the Bank, the Borrower’s procedures and the Bank’s requirements as defined in the Bank’s Policy on Involuntary Resettlement. In case of discrepancies between the Borrower’s procedures and the Bank’s requirements, the Bank’s requirements shall apply. PMU-MT shall promptly inform the Bank of any such discrepancies. PMU-MT shall provide the bank with monthly status reports on the land acquisition and resettlement process as part of the progress reports required under Section 4.06 of the Loan Agreement.

Schedule 6, para. 2

Partly complied with. Resettlement and compensation activities completed but with delay. Resettlement report that was due March 2006 has still not been submitted to ADB.

2. During construction of the Project Road, PMU-MT, together with other appropriate agencies and non-Government organizations, shall ensure that contractors disseminate information on the risks of socially transmitted diseases (including HIV/AIDS) to those employed during Project implementation and the population

Schedule 6, para. 6

Complied with. The EA has established a health clinic in each of the 7 districts along the project route. Contractors disseminated information on sexually transmitted

Appendix 9 49

Covenant Reference in Loan

Agreement

Status of Compliance

living along the Project road. PMU-MT shall ensure that contract documentation contains such requirement.

infections to their workers and the local population.

Financial Covenants 1. The Borrower shall maintain, or cause to

be maintained records and accounts adequate to identify the goods and services and other expenditure financed out of the loan proceeds, to disclose the use thereof in the Project, to record the progress of the Viet Nam Component (including the cost thereof) and to reflect, in accordance with consistently maintained sound accounting principles, the carrying out of the Viet Nam Component of the Project and operation of the Project facilities, or any part thereof.

Section 4.05a Complied with

2. The Borrower shall (i) maintain, or cause to be maintained, separate accounts for the Project; (ii) have such accounts and related financial statements audited annually, in accordance with appropriate auditing standards consistently applied, by independent auditors whose qualifications, experience and terms of reference are acceptable to the Bank; (iii) furnish to the Bank, as soon as available but in any event not later than twelve (12) months after the end of each related fiscal year, certified copies of such audited accounts and financial statements and the report of the auditors relating thereto, all in the English language; and (iv) furnish to the Bank such other information concerning such accounts and financial statements and the audit thereof as the Bank shall from time to time reasonably request.

Section 4.05b Complied with.

Cross-border Covenants 1. The Borrower shall take all actions

required from its side to enable effective implementation of the Cross-Border Framework Agreement. In particular, the Borrower shall engage in consultations and enter into protocols, agreements and other arrangements with the Government of the Kingdom of Cambodia and its agencies, and issue decisions and

Schedule 6, para 5.

Complied with. The second tripartite meeting was held in HCMC on 28 February 2003 to discuss the details, logistics and procedures of the single-stop-single-window facility

50 Appendix 9

Covenant Reference in Loan

Agreement

Status of Compliance

regulations, all as required under the Cross-Border Framework Agreement and aimed at facilitating cross-border traffic between Viet Nam and Cambodia.

2. PMU-MT, the Project Executing Agency for the Cambodia component, and the Bank shall meet two or three times a year, as required to discuss Project implementation and resolve common problems and to consult with each other on actions required for effective implementation of the Cross-Border Framework Agreement.

Schedule 6, para 7.

Partly complied with. Meetings did not take place as often as expected. However, several informal meetings were undertaken under the regional technical assistance Facilitating the Cross Border Movement of Goods and People in the Greater Mekong Subregion. Tay Ninh Province on the Viet Nam side and Svay Rieng Province on the Cambodia side also discussed several times the design and construction of Bavet/Moc Bai border facilities.

Others 1. Towards the end of 2000, PMU-MT and

the Bank shall carry out a detailed midterm review of the implementation of the Viet Nam Component. The timing of the review shall be determined in consultation between the Bank, PMU-MT and the Project Executing Agency for the Cambodia Component. During the review, the Borrower and the Bank shall determine the need, if any, for changes in Project scope and implementation arrangements and seek to resolve any problems that may have occurred in respect of procurement, financing and scheduling.

Schedule 6, para 10.

Complied with late The Midterm Review Mission was carried out on 5-14 November 2001.

2. PMU-MT, with assistance of the consultants for Project supervision, shall carry out benefit monitoring and evaluation of the Viet Nam component in accordance with schedules and terms of reference to be agreed upon with ADB. PMU-MT shall direct the consultants to carry out surveys (i) at the start of Project implementation to establish baseline data and (ii)

Schedule 6, para 11.

Complied with. The BME report was submitted at the end of March 2006.

Appendix 9 51

Covenant Reference in Loan

Agreement

Status of Compliance

immediately after Project implementation to evaluate the Project benefits. Data to be complied and analyzed for the purpose of benefit monitoring devaluation included, among others, data on border crossings, traffic, and axle loads.

52 Appendix 10

ECONOMIC REEVALUATION A. General

1. The methodology used in the economic reevaluation was similar to that used at appraisal. The with- and without-project situations were compared to determine the effects of introducing the project roads for each country. The main economic benefit consisted of savings in vehicle operating costs (VOCs) for normal and for generated traffic. There were also passenger time savings for normal and generated traffic. The reevaluation was carried out for the same road sections that were evaluated at appraisal: (i) C2 from the Mekong River ferry to the Bavet border post, but with costs included for the resurfacing and maintenance works on the section from Phnom Penh to the ferry—105.4 kilometers (km); (ii) V1 from Thu Duc to Hoc Mon —21.7 km; (iii) V2 from Hoc Mon to the Moc Bai border post—50.3 km; and (iv) V3—a 7.6 km section in V1 consisting of several bridges with short road sections between them. The economic evaluation was undertaken for each of these country sections of road and for the Project as a whole. 2. The assumptions in the appraisal report were modified, where necessary, based on updated information. The reevaluation of the economic internal rate of return (EIRR) considered the economic costs and benefits over the construction period plus 10 years of operation, as at appraisal. All costs and benefits in the analyses were expressed in 2006 constant prices. The methodology used to calculate the EIRR used the Highway and Design Maintenance Model (HDM-4).1 B. Economic Costs

1. Construction Costs

3. The economic construction costs were derived from the financial costs of civil works, consulting services, and resettlement costs. The costs of supervision that were shared between each of the civil works contracts were apportioned on a prorated basis in proportion to their respective shares of the total costs of civil works under the component. All financial costs were converted to economic costs by deducting taxes and duties and by differentiating local currency costs into indirect foreign exchange and local currency costs. A standard conversion factor of 0.862 was applied to the nontraded benefit and cost components.

2. Maintenance Costs

4. Incremental maintenance costs were calculated as the difference between the costs of routine and periodic maintenance without and with the civil works components, in 2006 prices. The Project Completion Review Mission obtained these costs from the Ministry of Public Works and Transport (MPWT) in Cambodia and from the Ministry of Transport (MOT) in Viet Nam, and from recent studies in Cambodia3 and Viet Nam.

1 The Highway Design and Maintenance (HDM) model was developed by the World Bank and is used worldwide as

best practice. 2 The standard conversion factor of 0.86 was also used at appraisal and is consistent with other recent projects in

Cambodia and Viet Nam. 3 Post Completion Economic Evaluation, Ministry of Public Works and Transport, November 2005; and, TA 4691-

CAM: Preparation of transport Infrastructure Development and Maintenance Project, Supplementary Appendix, Volume 1, July 2006.

Appendix 10 53

5. Maintenance costs for both the without- and the with-project case have been calculated. For the without-project case, essential routine maintenance (e.g., pothole patching, shoulder maintenance, cleaning culverts) would be required to keep the road open to traffic. In the with- project case, both routine and periodic maintenance are necessary. Routine maintenance costs have been calculated on a per km per year basis. At appraisal, although maintenance was taken into account, it was not clear what surface roughness the road would be maintained at under periodic maintenance in the without-project situation. It also appeared at appraisal that in several years routine maintenance costs in the without- and the with-project cases would be about the same. This is a little unrealistic. The Project Completion Review Mission based its calculations for periodic maintenance of the road in both the without- and with-project cases on similar studies in Cambodia and Viet Nam. In the without-project case it is assumed that once the surface roughness reaches a value, as measured by the international roughness index (IRI)4 of 10.0 meters/kilometer (m/k), periodic maintenance will be undertaken to reduce this surface roughness. The periodic maintenance in the without-project case would maintain an average roughness of IRI 5.0 m/km. In the with-project case periodic maintenance would be undertaken when the road achieved a roughness of IRI 5.0 m/km and would have the effect of reducing the roughness to 2.5 m/km. C. Economic Benefits

1. General

6. The estimated economic benefits were based on a comparison of the with- and without-project cases for each of the civil works contracts. Without the Project, the roads would generally have been in either poor or fair condition, and would have had a low vehicle speed, and consequent high vehicle operating costs (VOCs). With the Project, the roads would be in a good condition. Because of the improved surface condition, higher vehicle speeds would be possible, which would, in turn, reduce VOCs. The VOC savings have been calculated for normal and generated traffic. Time savings benefits have also been calculated.

2. Traffic Forecasts

7. The Project Completion Review Mission obtained updated traffic count data for the project roads from MPWT in Cambodia and the MOT in Viet Nam and also from the data that had been obtained as part of the benefit and monitoring exercise undertaken by the construction supervision consultants in 2004, immediately after the project roads opened. Additional traffic data have been collected for 2005 and 2006. The traffic data were obtained at several locations along the road sections. Recent traffic volumes are shown in Table A10.1.

4 The international road roughness index (IRI) is measured in meters per kilometer.

54 Appendix 10

Table A10.1: Recent Traffic Volumes

(annual average daily traffic)

Year and

Road

Motorcycle

Car

Light Truck

Medium Truck

Heavy Truck

Bus

Total

Total Including2 - Wheel

Cambodia

C2 3,148 542 222 494 621 1,879 5,027

Viet Nam V1 35,168 3,578 1,089 6,002 10,132 5,992 26,793 61,961 V2 16,728 2,692 3,370 1,224 1,116 1,909 10,311 27,039 V3 29,611 3,012 1,306 7,382 12,506 3,678 27,884 57,495

Source: Asian Development Bank estimates. 8. At appraisal the traffic forecast was made from traffic counts that had been undertaken in 1996 to the time of opening of the Project roads in 2002 and then for a 10-year period of operation until 2011. The traffic growth at appraisal was calculated for each section of the Project roads, for each country separately, and for different vehicle categories (motorcycles, cars, buses, and trucks). Traffic growth was based on the estimated growth in gross domestic product (GDP), vehicle-specific elasticities, and population growth. For Cambodia, the traffic forecast at appraisal over the 1996 to 2011 period averaged 9.2% per annum for motorcycles, 6.2% for cars, 13.1% for buses, and 10.8% for trucks. In Viet Nam, the estimated traffic growth calculated at appraisal over the 1996 to 2011 period averaged 11.3% per annum for motorcycles, 7.5% for cars, 4.6% for buses, and 10.7%, for trucks. 9. The future traffic growth rates for the economic reevaluation were calculated in a similar way to those estimated at appraisal, i.e. taking into account future expectations of growth in GDP, regional GDP growth, population growth, and the transport elasticity of demand for different vehicle categories. The elasticity of demand for transport in Cambodia is considered to be between 1.0 and 1.5 depending on vehicle type. A range of elasticity values have been employed in previous studies in Viet Nam over the last decade ranging from 1.2 to 1.5 to estimate demand growth for passenger transport and between 1.0 and 1.4 for freight transport growth. Motorcycle demand has regularly been based on an elasticity of 2.0. Traffic growth was estimated over the period 2003 (the year the project roads opened in Viet Nam) and 2004 (the year the project road opened in Cambodia) to 2012 for Viet Nam and 2013 for Cambodia, i.e. until the tenth year of project benefits (as at appraisal). Actual traffic figures along the project roads during the period 2004–2005 have been obtained from traffic surveys. Traffic growth has been estimated from 2005 until the end of the evaluation period. A summary of the traffic growth rates for passenger and freight traffic for each project road is shown in Table A10.2.

Appendix 10 55

Table A10.2: Traffic Growth Rates (% per annum)

Growth Period

Vehicle Type 2005–2009 2009–2013 From 2014 Cambodia Car 8.8 8.4 6 Bus 8.1 7.9 6 Trucks 8.4 7.9 6 Motorcycles 10.0 8.0 6 Viet Nam Car 10.4 8.0 8 Bus 9.9 8.0 8 Trucks 9.9 8.0 8 Motorcycles 10.0 8.0 8

Source: Asian Development Bank estimates 10. A comparison of the appraisal estimates for traffic growth for the project road sections in Cambodia and Viet Nam between 1996 and 2005 compared to actual traffic in 2005 is shown in Table A10.3. It can be seen that the appraisal traffic forecast for Cambodia was reasonably accurate. In Viet Nam, however, the appraisal traffic estimate was underestimated.

Table A10.3: Traffic Growth on Project Road Sections at Appraisal and Actual (excluding motorcycles)

Road Section

1996 Actual Total

Vehicles

Appraisal Estimate at 2005

Appraisal Estimate of Growth per Annum (%)

2005 Total

Vehicles

Actual Growth Per Annum (%)

Total Including2 - Wheel

Cambodia C2 (2004) 851 1,804 8.7 1,879 9.2 5,027

Viet Nam

V1 7,070 17,524 10.6 26,793 17.3 61,961 V2 2,927 6,728 9.7 10,311 15.0 27,039 V3 7,876 20,220 11.0 27,884 15.1 57,495

Source: Asian Development Bank estimates. 11. At appraisal, it was anticipated that the fall in VOCs because of the improved road surface would generate traffic, i.e. that traffic that did not travel before would now find a benefit in doing so because of the improved road conditions. At appraisal this was estimated to be 10% increase per year and this estimate has also been used in the economic reevaluation.

3. Vehicle Operating Cost Savings

12. The VOCs were updated by the Project Completion Review Mission based on data obtained from the construction supervisors, and other relevant studies in Cambodia and Viet

56 Appendix 10

Nam. The data were used in the HDM-4 model to calculate the VOCs. The costs were updated to 2006 economic prices by excluding taxes and duties. The rate of road deterioration used in the economic analysis is based on the levels of surface roughness that existed before the road improvements were implemented, i.e. the without-project case. These were compared with the roughness values in the with-project case and the VOC savings due to the road improvement were calculated. The road roughness level after improvement of the roads was assumed to be IRI 2.0 m/km at the year of opening. 13. Typical VOCs for various vehicle types, based on opening year surface roughness levels in accordance with the IRI are shown in Table A10.4. The table also shows the VOCs for the average surface roughness of the without-project case, which varied between IRI 3.0 m/km to IRI 5.0 m//km, depending on the road section. VOC savings for generated traffic are valued at 50% of unit VOC savings.

Table A10.4: Typical Vehicle Operating Costs With and Without Improvement ($ per km)

Vehicle Type Without(IRI = 4)

With (IRI = 2.0)

Car/Jeep 0.28 0.15 Light Truck 0.17 0.12 Medium Truck 0.27 0.21 Heavy Truck 0.51 0.37 Medium Bus 0.23 0.17 Large Bus 0.41 0.30 Light Commercial Vehicle 0.19 0.14 Motorcycle 0.04 0.03

IRI = international roughness index in meters / km. Source: Asian Development Bank estimates.

4. Time Savings

14. Improvements to the road as a result of the Project have significantly reduced travel times. Passenger time savings were based on estimated economic values of time, observed average vehicle occupancy rates, and the calculated time savings resulting from higher vehicle speeds. Person time value was estimated at $0.25 per hour for working time and one third of this rate for non-working time. D. Results of Economic Analysis

15. The EIRR for each of the civil works contracts road sections was calculated on the basis of the stream of estimated costs and benefits over the construction period, plus 10 years of use. This was the same method as at appraisal. The EIRR for the Cambodia component, C2, was 24.1%. The overall EIRR for the Viet Nam component as a whole was based on the aggregate costs and benefits for all of the individual civil works road sections. The EIRRs for the civil works road sections was 28.7% for contract V1; 25.4% for contract V2; and 21.4% for contract V3. The recalculated EIRR for the Viet Nam component as a whole was 25.6%. All the EIRRs of the individual sections of roads compare favorably with the opportunity cost of capital of 12% for the acceptance of economic feasibility. The EIRR for the Project as a whole was 25.1%. The results from the economic reevaluation for each of the road sections and for the Project as a whole

Appendix 10 57

compared to appraisal are summarized in Table A10.5. Tables A10.6–A10.10 show the cost and benefit streams and the EIRR for C2, V1, V2, and V3, and the Project as a whole. 16. The difference in the EIRRs calculated by the Project Completion Review Mission and those at appraisal are due to (i) revised economic costs derived from actual costs (including additional resettlement costs); (ii) longer construction periods caused by delays in implementation; and (iii) differences in traffic volumes and traffic growth at appraisal and reevaluation. Table A10.5: Summary of Estimated Economic Internal Rates of Return for Cambodia and

Viet Nam Components

EIRR (%)

Road Section At

Appraisal At

PCR

C2 22.0 24.1

V1 34.0 28.7 V2 18.0 25.4 V3 18.0 21.4

Total Viet Nam Component 24.0 25.6

Total Project 23.0 25.1

EIRR = economic internal rate of return, VOC = vehicle operating cost. Source: Asian Development Bank estimates.

58 Appendix 10

Table A10.6: Economic Evaluation for Cambodia Section C2 ($ million)

Capital Maintenance VOC Generated

VOC Vehicle

Time Cost

Generated Vehicle

Time Cost

Net Costs and

Year Cost Cost Savings Traffic Savings Savings Benefit 1999 2000 5.78 (5.78)2001 4.44 (4.44)2002 5.16 (5.16)2003 8.48 (8.48)2004 4.58 (6.55) 13.21 0.73 0.52 0.03 16.452005 4.65 (0.27) 4.86 0.27 0.01 0.00 0.772006 1.30 (0.27) 5.84 0.32 0.02 0.00 5.162007 (0.06) 6.96 0.39 0.03 0.00 7.442008 (0.06) 8.18 0.45 0.04 0.00 8.742009 (0.05) 9.45 0.53 0.06 0.00 10.082010 2.60 11.03 0.61 0.09 0.00 9.142011 (6.34) 11.80 0.66 0.13 0.01 18.932012 (0.06) 5.33 0.30 0.02 0.00 14.312013 (8.60) 7.10 6.34 0.35 0.03 0.00 (0.38)

EIRR 24.1%( ) = negative, EIRR = economic internal rate of return, VOC = vehicle operating cost. Source: Asian Development Bank estimates.

Table A10.7: Economic Evaluation for Viet Nam Section V1 ($ million)

Capital Maintenance VOC Generated

VOC Vehicle

Time Cost

Generated Vehicle

Time Cost

Net Costs and

Year Cost Cost Savings Traffic Savings Savings Benefit 1999 5.99 (5.99)2000 3.62 (3.62)2001 4.16 (4.16)2002 8.00 (8.00)2003 5.90 (0.9) 13.21 0.73 0.41 0.02 9.412004 10.28 0.1 13.60 0.76 0.44 0.02 4.422005 12.06 0.0 12.15 0.68 0.40 0.02 1.202006 5.62 (0.9) 14.12 0.78 0.41 0.02 10.612007 0.0 20.27 1.13 0.43 0.02 21.862008 0.1 10.75 0.60 0.40 0.02 11.652009 0.0 13.87 0.77 0.43 0.02 15.102010 (0.9) 13.27 0.74 0.46 0.03 15.372011 0.0 18.28 1.02 0.48 0.03 19.812012 (13.91) (0.9) 12.63 0.70 0.46 0.03 28.61

EIRR 28.7%( ) = negative, EIRR = economic internal rate of return, VOC = vehicle operating cost. Source: Asian Development Bank estimates.

Appendix 10 59

Table A10.8: Economic Evaluation for Viet Nam Section V2 ($ million)

Capital Maintenance VOC Generated

VOC Vehicle

Time Cost

Generated Vehicle

Time Cost

Net Costs and

Year Cost Cost Savings Traffic Savings Savings Benefit 1999 5.29 (5.29)2000 4.40 (4.40)2001 4.91 (4.91)2002 6.22 (6.22)2003 5.08 (0.09) 7.26 0.40 0.02 0.00 2.692004 5.39 (0.09) 9.83 0.55 0.04 0.00 5.122005 4.95 (2.05) 11.30 0.63 0.08 0.00 9.112006 1.29 (0.09) 6.93 0.39 0.02 0.00 6.142007 (0.01) 8.51 0.47 0.04 0.00 9.042008 2.22 10.36 0.58 0.08 0.00 8.792009 (1.98) 18.53 1.03 0.15 0.01 21.702010 (0.02) 11.98 0.67 0.03 0.00 12.692011 (0.02) 15.97 0.89 0.06 0.00 16.952012 (9.38) (0.02) 20.53 1.14 0.12 0.01 31.20

EIRR 25.4%( ) = negative, EIRR = economic internal rate of return, VOC = vehicle operating cost. Source: Asian Development Bank estimates.

Table A10.9: Economic Evaluation for Viet Nam Section V3 ($ million)

Capital Maintenance VOC Generated

VOC Vehicle

Time Cost

Generated Vehicle

Time Cost

Net Costs and

Year Cost Cost Savings Traffic Savings Savings Benefit 1999 5.25 (5.25)2000 3.11 (3.11)2001 5.99 (5.99)2002 5.84 (5.84)2003 6.62 0.00 12.64 0.70 0.14 0.01 6.872004 5.97 0.35 10.86 0.60 0.14 0.01 5.292005 5.49 (2.96) 12.87 0.71 0.14 0.01 11.192006 2.55 (0.30) 5.90 0.33 0.01 0.00 3.992007 0.00 4.02 0.22 0.01 0.00 4.252008 0.04 5.77 0.32 0.03 0.00 6.082009 0.00 5.03 0.28 0.01 0.00 5.322010 (0.30) 7.18 0.40 0.02 0.00 7.892011 0.00 4.54 0.25 0.00 0.00 4.802012 (10.21) (0.30) 5.98 0.33 0.01 0.00 16.83

EIRR 21.4%( ) = negative, EIRR = economic internal rate of return, VOC = vehicle operating cost. Source: Asian Development Bank estimates.

60 Appendix 10

Table A10.10: Economic Evaluation for Total Project ($ million)

Capital Maintenance VOC Generated

VOC Vehicle

Time Cost

Generated Vehicle

Time Cost

Net Costs and

Year Cost Cost Savings Traffic Savings Savings Benefit 1999 16.53 (16.53)2000 16.92 (22.70)2001 19.50 (23.94)2002 25.23 (30.39)2003 26.08 (9.02) 33.11 1.84 0.57 0.03 2.012004 26.22 (6.16) 47.50 2.64 1.14 0.06 47.732005 27.16 (5.29) 41.19 2.29 0.63 0.03 23.042006 10.75 (1.54) 32.79 1.82 0.47 0.03 31.052007 0.00 (0.09) 39.76 2.21 0.51 0.03 50.032008 0.00 2.32 35.06 1.95 0.54 0.03 44.002009 0.00 (2.04) 46.88 2.60 0.65 0.04 62.292010 0.00 1.39 43.45 2.41 0.59 0.03 54.242011 0.00 (6.37) 50.59 2.81 0.68 0.04 79.422012 (33.50) (1.27) 44.46 2.47 0.61 0.03 96.662013 (8.60) 7.10 6.34 0.35 0.03 0.00 7.84

EIRR 25.1%

( ) = negative, EIRR = economic internal rate of return, VOC = vehicle operating cost. Note: Negative costs under maintenance indicate maintenance cost savings. Source: Asian Development Bank estimates.

Appendix 11 61

RESETTLEMENT ACTIVITIES A. CAMBODIA

1. Background

1. A resettlement action plan that was acceptable to ADB was a prerequisite to project appraisal. An action plan was reviewed and found acceptable by an ADB team during project appraisal on 20 April to 9 May 1998 and during loan negotiations on 4-6 November 1998. The first resettlement action plan identified 5,920 affected persons living in 1,184 dwelling units. The count was based on an inventory of affected persons using a corridor of influence of 18 meters (m) from the road centerline. The resettlement action plan was condensed into a summary resettlement plan and attached as an appendix to the project document1.. In order for the loan to become effective, certain conditions had to be satisfied, one of which was stated in the summary resettlement plan as follows “preliminary activities, including a detailed survey, establishment of the provincial and district level committees under the provincial governor, consultations with affected persons, final valuations, preparation and submission of budget requirements, and establishment of monitoring procedures, were to be completed by 31 December 1998” (para. 28), This target date was not met. 2. Following ADB loan approval in December 1998, the Government conducted a new census of affected persons between March and October 1999. It also carried out a detailed measurement survey of all fixed structures inside the 50-m right-of-way, identifying those found within (i) 10 m, (ii) 10 m to 15 m, and (iii) 15 m to 25 m from the road centerline. The Government wanted to know the resettlement costs of clearing various widths of the right-of-way before deciding on what corridor of influence to use. The first implementation plan (the Cambodia Resettlement Action Plan) was submitted by the Inter-ministerial Resettlement Committee (IRC)2 in July 1999. The plan underwent several revisions before it was finally approved by ADB. The plan submitted to ADB in October 1999 (the Cambodia Resettlement Implementation Plan), which declared a corridor of influence of 10 m to 15 m from the road centerline, was acceptable to ADB and the loan became effective on 9 November 1999.

2. Complaints Raised by the NGO Community3

3. On the 14 February 2002 a report by Legal Aid of Cambodia and the Nongovernmental Organization Forum on Cambodia (NGO Forum) on behalf of 99 families living along the road in Prey Veng Province stated that people in the three communities of Neak Loeung, Stoeung Slot, and Kampong Trabek believed that their compensation was inadequate to restore their economic and social base. The report claimed that the Government had reneged on its commitment to compensate families for acquired land, regardless of the tenure status of the property holder, and to provide land certificates for the remaining unaffected land if the affected person did not already have such a certificate. The report reminded the Government of a

1 ADB. 1997. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the

Kingdom of Cambodia and to the Socialist Republic of Viet Nam for the Greater Mekong Subregion: Phnom Penh to Ho Chi Minh City Highway Project. Manila

2 An edict (Prakas) of the Ministry of Economy and Finance, dated 16 February 1999, created the IRC. The IRC is headed by the MEF. Its members include representatives from the Council of Ministers; MPWT; Ministry of Agriculture, Forestry and Fisheries; Phnom Penh Municipality Council; Governors and Deputy Governors of Prey Veng and Svey Rieng provinces.

3 The NGOs also raised these issues in a visit to ADB in April 2002 and at the ADB Annual Meeting in Shanghai in May 2002.

62 Appendix 11

provision in the loan agreement that affected persons would be compensated at full replacement cost for lost buildings and that they would not face a material reduction in income. 4. In response to the issues raised by the NGO community, an ADB Resettlement Review Mission was fielded on 1-4 June 2002. The mission included members of the ADB Environment and Social Safeguard Division (SOCD) and the Cambodia Resident Mission; the Government; the NGO Forum on Cambodia; and Legal Aid of Cambodia. The Mission visited the three sites mentioned in the Legal Aid of Cambodia report and heard directly from the affected persons. In no case did the mission find instances where people had received compensation for land, although all of them had reported having lived on the site for some years. Valuations for housing that were the basis of compensation payments were not clear to the people affected, and in many cases did not equal replacement cost. Furthermore, the mission found that people had been required to move from the corridor of impact without alternative sites to move to and had been left landless and without an alternative source of income. 5. The Resettlement Review Mission proposed that a tripartite group comprising members of IRC, NGO Forum, and ADB would conduct a resettlement audit of RN1 to check on the issues and recommend actions to address them. The Government did not agree to finance the audit proposed by the ADB; instead, it promised to act on the complaints raised by the affected persons. However, the Government did not act immediately, nor did it address all of the affected persons’ complaints. For example, construction of the relocation site in Stoeung Slot began only in February 2003, and the 16 affected persons were able to move there only in May 2003. On the other hand, the concerns of the families at Neak Loeung were relieved to some extent by a decision of the Government to reduce the corridor of impact which meant that the shops that abutted the shoulders of the existing road did not have to be demolished. 6. However, complaints by affected persons persisted and in the second half of 2004 ADB renewed its call for a resettlement audit. The Government eventually agreed to the audit but again noted that it did not wish to pay for it. The resettlement audit began in November 2004 and was one of the case studies of a regional technical assistance project.4 In response to a letter sent by the NGO Forum in January 2007 on 93 outstanding cases, ADB facilitated meetings between the NGO Forum and the Government and recommended that outstanding issues should be investigated. In response to a letter dated 30 July 2007 from another NGO (CD Cam), ADB undertook a review to determine the validity of the complaints and work with the Government to resolve them.

3. Resettlement Audit

7. The available records of 750 affected persons (out of a total of 1029) from 23 communes were reviewed during the audit. Of these, 222 households were headed by women. The main occupations of these affected persons were farming, trading and employment in private and government offices. A total of 243 plots of land belonging to 217 affected persons with an area of 20.5 ha were acquired and $171,881 was paid in compensation. For two bypasses, an additional 20.3 ha (280 plots) was acquired and $150,000 was paid. In all cases the standard rate was paid, regardless of quality and other considerations. However, the audit found that these rates were at or near current market prices. A total of 582 buildings (20,714m2) belonging to 556 affected persons were affected, all of which were placed in one of four categories for purposes of compensation, again without regard to the specific nature of the structure. A total of

4 The audit was used as one of the case studies of the ADB regional technical assistance project, Capacity Building

for Resettlement Risk Management. A significant portion of the cash requirements of the audit was provided for under this project. The Cambodia Resident Mission also provided resources to pay for the audit.

Appendix 11 63

$313,853 was paid as compensation. Contrary to the loan covenant, depreciation and value of salvage materials were deducted from the compensation and hence affected persons were paid below replacement value. For plants and trees, only the persons affected by the two bypasses were paid $14,464 in compensation. There were no records of payment to affected persons in the right-of-way, who also had claims to trees. 8. Affected persons were also paid five other entitlements: a disturbance allowance ($19,400 for 485 buildings), a shifting allowance ($10,200 to 255 affected persons), special assistance to households headed by women ($1,600 to 80 out of a total of 222 affected), compensation for vulnerable households ($660 to 33 affected persons), and for those below the poverty line ($800 to 40 affected persons). 9. The audit team interviewed 983 affected households. Of these 27 were not in the affected persons’ list given by the IRC. Another 38 families were able to demonstrate that they were affected and had not been compensated. The key findings based on the questionnaire survey among the 983 households are summarized below:

(i) 906 out of the 938 households were still living within the project area; (ii) 72 households were severely affected and had to relocate but had no land to

move to; (iii) there was no significant change in household income after resettlement; (iv) 933 households had lost land, of which 420 lost residential or small business

plots, 376 lost purely residential plots, and 101 lost farming plots; (v) 683 affected persons claimed they had residential claims on their land, 177

claimed to have full titles, 23 said that government did not recognize their claims, 82 had been residing on the site for less than 5 years;

(vi) with the exception of properties in the bypass sections, no compensation for land or trees was provided to affected persons living along the right-of-way of NR 1;

(vii) the level of public participation was very low and most affected persons did not have much knowledge of entitlements;

(viii) many affected persons complained that the compensation they received was low; (ix) the grievance redress process did not work and affected persons were even

threatened not to make any complaints; and (x) construction of the road had interfered with farming and affected persons were

not compensated for this. 10. An action plan was proposed to pay compensation that the affected persons were owed and to provide the allowances and other forms of assistance that had not been given to eligible affected persons. A working group, comprising members of ADB, the Government, and an NGO was set up. Documents provided by IRC in November 2006 showed that the Government had completed compensation payments to all affected persons identified during the ADB-financed resettlement audit, as agreed with ADB, NGOs, and affected persons. Before the resettlement audit, the Government had paid $1.09 million in compensation to affected persons. After the audit, the Government paid an additional $1.30 million to implement its outstanding resettlement obligations, as identified by the resettlement audit. Table A11.1 shows the numbers of households and compensation that was paid for the Cambodia component.

64 Appendix 11

Table A11.1: Resettlement Data in Cambodia

No. of Unit Rate Amount No. of Unit Rate Quantity AmountHouseholds $/unit $ Households $/unit $

Compensation for unpaid landin the by-pass roads- Residential m2 2/m2

- Agricultural m2 0.5/m2 35 m2 0.5/m2 216,877.76 108,438.88

Reimbursement of depreciation and 1,365 958,165.54 1,059 HH 994,445.67deductions applied to paymentsin 2000

Other fixed structures- Various 56,752.99 3 756.81

Sub-Total 1,014,918.53 1,103,641.36

Financial Assistance to women-headed 71 HH 20/HH 71 1,420.00households

Disturbance allowance 1,715.38 21 Building 40/Building 21 840.00

Rehabilitation support

Loss of Annual Income 36 250 Riel 224,223.36 14,013.96

Sub-Total 1,715.38 16,273.96

Substitute plot for shifting Aps 178 HH 500/HH 178 89,000.00Income restoration 187 HH 300/HH 187 56,100.00Prepare relocation site 76,843.10 39,151.42

Sub-Total 76,843.10 184,251.42

Total 1,093,477.01 1,301,906.74

m2 =square meters, HH = households

2000 - 2005 2005 (October) - 2006 (November)

Appendix 11 65

B. VIET NAM

1. Background

11. settlement action plan undertaken at appraisal noted that about 98.5 hectares (ha) of land would need to be acquired. The resettlement plan estimated that about 5,585 households and about 3,322 commercial and residential structures would be affected. Of these households, 1,182 were to be removed completely. Another 131 public and community facilities would be affected. The Project Completion Review Mission determined that, under the original scope of the component, the actual amount of land acquired amounted to 71.6 ha, less than at appraisal. Similarly, the number of households affected was less than at appraisal, 4,980 (about 10% fewer than estimated at appraisal). The households that had to be completely removed totaled 779 (about 33% fewer than estimated at appraisal). However, the number of public facilities affected was 190, higher than the appraisal estimate of 131 facilities. At appraisal the estimated cost of land acquisition, resettlement, and unexploded ordnance clearance was $31.50 million.1 The actual cost of land acquisition, resettlement, and unexploded ordnance clearance was $32.37 million.2 The 3% increase over the appraisal estimates was due to difficulties with some resettled people who had asked for compensation above market rates. The Project Completion Review Mission noted that figures obtained from the resettlement division within PMU-MT differed slightly from those obtained by other ADB review missions. The PMU-MT was supposed to supply a resettlement report by March 2006, but, because of internal problems within PMU-MT, this has still not been submitted to ADB. Until it is submitted it is difficult to come to a firm conclusion on the actual number of people resettled. Table A11.2 shows the numbers of households and other relevant data under the original scope of works.

Table A11.2: Resettlement under Original Scope of Works

Item

Land Acquisition

(square meters)

Number of HH and

Public Facilities

Number of HH

Completely Removed Buildings

Area of Buildings

(square meters)

Tâay Ninh 84,468 1,405 1,370 26 53,949 Binh Duong 64,623 282 271 108 29,977 TP HCM 566,995 3,458 3,314 645 317,732 Cu Chi 140,895 1,163 1,125 43 86,619 Hoc Mon 144,249 729 696 214 82,989 Disct.12 203,280 1,179 1,126 285 118,174 Thu Duc 78,571 387 367 103 29,950

Total 716,086 5,145 4,980 779 401,658

HH = households. Source: Asian Development Bank estimates.

1 No data was given at appraisal on the breakdown of these costs to land, resettlement, and UXO was given. 2 Land acquisition and resettlement cost was $30.38 million and UXO clearance was $1.99 million.

66 Appendix 11

2. Additional Works

12. Because of the incorporation of additional works into the civil works contracts, additional resettlement became necessary, especially within the HCM City area. The total for the additional land acquisition and resettlement compensation amounted to $31.96 million.3 13. There were long delays in obtaining consent from the relevant People’s Committees for compensation rates and for the costs associated with the additional works. Further delays were experienced in obtaining the compensation budget from the Ministry of Transport. Although significant achievements were made, there continued to be a problem with ongoing construction works, particularly in respect of the implementation of the additional work items, notably the flyover intersections. While all of the resettlement for the original scope of works had been completed, problems associated with additional works remained. For four of the intersections, about 60% of the affected people had been resettled by February 2003. ADB was informed that the remaining households were illegal occupants and that they were requesting compensation levels far in excess of the official levels paid to legal households under the original project scope. In accordance with HCM City People’s Committee compensation guidelines, illegal households are paid 70% of that for legal households. About 434 of these households would not accept the proposed levels of compensation and there was an ongoing issue affecting the resettlement program. By February 2004 there had been significant progress and a nongovernmental organization (NGO) responsible for resettlement activities assured ADB that activities were now being carried out in accordance with ADB guidelines. It was, however, reported by the NGO that resettlement activities had been affected by the redesign of sections of the civil works. Table A11.3 shows the numbers of households and other relevant data under the additional scope of works.

3 The additional resettlement costs for contract V1 were $22.27 million, for V2, they were $0.81 million, and for V3

they were $8.88 million. The resettlement costs were funded by HCM City People’s Committee for contracts V1 and V3 and by Tay Ninh Province for contract V3.

Appendix 11 67

Table A11.3: Resettlement under Additional Scope of Works

Area Location

Land Acquisition

(square meters)

Area of Buildings

(square meters)

Number of Households

Completely Removed

Affected Public

Facilities

Commercial and Residential

Building Completely Removed

Cu Chi

Cu Chi Town

12,901.64

6,291.41

128

6

6

1

Cu Chi district 128 6 6 1 Quang Trung intersection

District 12

72,751.41

47,230.71 396

185

6 3

Tan Chanh Hiep ward 9,322.70 23 0 1 0 Trung My Tay ward 25,215.09 19,626.99 175 79 1 0 Dong Hung Thuan ward 38,213.62 27,603.72 198 106 4 3 Ga Thanh Loc ward 45,060.78 23,428.82 182 34 3 0 District 12 182 34 3 0 Linh Xuan 12,845.00 9,076.00 163 2 7 0 Intersection Linh Xuan ward 4,284.68 2,163.68 63 2 1 0 Thu Duc District Linh Trung ward 8,560.00 6,912.00 100 6 Thu Duc Intersection District 9

Tan Phu ward (phase 1)

115,410.00 89,515.99 25,115.00

55,179.00 16,806.00

719 298

471 173

21 2

4 2

Tan Phu ward (phase 2) 30,686.92 8,802.18 114 82 7 0 Thu Duc District Linh Trung ward (phase 1) 12,145.07 8,002.87 129 109 1 0 Linh Trung ward (phase 2) 21,568.00 21,568.00 178 107 11 2 Go Dua 60,896.54 42,901.64 311 72 4 0 Thu Duc District Tam Binh and Binh Chieu

ward 60,896.54 42,901.64 311 4 4 0

Binh Phuoc 28,819.00 19,881.30 233 33 4 1 Thu Duc District Tam Binh ward 25 3 1 0 Hiep Binh Phuoc ward 208 30 3 1 Tay Ninh Province 306 7 0 Go Dau bridge 38 4 0 Trang Bang bypass 268 3 0 Total 348,684.04 203,988.61 2,438 803 58 9 Figures in bold are totals of each section Source: Project Management Unit My Thuan

68 Appendix 12

QUANTITATIVE ASSESSMENT OF OVERALL PROJECT PERFORMANCE

Loan No. 1659−CAM Criteria

Assessment

Rating (0–3)

Weight (%)

Weighted Rating

Relevancea Highly relevant 3 20 0.60 Effectivenessb Effective 2 30 0.60 Efficiencyc Highly Efficient 3 30 0.90 Sustainabilityd Less Likely 1 20 0.20

Overall Rating

Successful

2.30

a Project objectives and outputs were relevant to the strategic objectives of the Government and the Asian

Development Bank. b Project achieved its outcome. c Project achieved objectives in an efficient manner. d Project benefits and development impacts are sustainable. Source: Asian Development Bank.

Rating Value

Relevance

Effectiveness

Efficiency

Sustainability

3 Highly relevant Highly effective Highly efficient Most likely 2 Relevant Effective Efficient Likely 1 Partly relevant Less effective Less efficient Less likely 0 Irrelevant Ineffective Inefficient Unlikely

Rating: Greater than 2.7 = Highly successful

Between 1.6 and less than 2.7 = Successful Between 0.8 and less than 1.6 = Partly successful Less than 0.8 = Unsuccessful

Source: Asian Development Bank.

Appendix 12 69

Loan No. 1660−VIE

Criteria

Assessment

Rating (0–3)

Weight (%)

Weighted Rating

Relevancea Highly relevant 3 20 0.60 Effectivenessb Effective 2 30 0.60 Efficiencyc Highly Efficient 3 30 0.90 Sustainabilityd Likely 2 20 0.40

Overall Rating

Successful

2.70

a Project objectives and outputs were relevant to the strategic objectives of the Government and the Asian

Development Bank. b Project achieved its outcome. c Project achieved objectives in an efficient manner. d Project benefits and development impacts are sustainable. Source: Asian Development Bank.

Rating Value

Relevance

Effectiveness

Efficiency

Sustainability

3 Highly relevant Highly effective Highly efficient Most likely 2 Relevant Effective Efficient Likely 1 Partly relevant Less effective Less efficient Less likely 0 Irrelevant Ineffective Inefficient Unlikely

Rating: Greater than 2.7 = Highly successful

Between 1.6 and less than 2.7 = Successful Between 0.8 and less than 1.6 = Partly successful Less than 0.8 = Unsuccessful

Source: Asian Development Bank.

70 Appendix 12

OVERALL PROJECT PERFORMANCE (based on weighted components: 26% Cambodia and 74% Viet Nam)

Criteria

Assessment

Rating (0–3)

Weight (%)

Weighted Rating

Relevancea Highly relevant 3 20 0.60 Effectivenessb Effective 2 30 0.60 Efficiencyc Highly Efficient 3 30 0.90 Sustainabilityd Likely 1.74 20 0.35

Overall Rating

Successful

2.45

a Project objectives and outputs were relevant to the strategic objectives of the Government and the Asian

Development Bank. b Project achieved its outcome. c Project achieved objectives in an efficient manner. d Project benefits and development impacts are sustainable. Source: Asian Development Bank.

Rating Value

Relevance

Effectiveness

Efficiency

Sustainability

3 Highly relevant Highly effective Highly efficient Most likely 2 Relevant Effective Efficient Likely 1 Partly relevant Less effective Less efficient Less likely 0 Irrelevant Ineffective Inefficient Unlikely

Rating: Greater than 2.7 = Highly successful

Between 1.6 and less than 2.7 = Successful Between 0.8 and less than 1.6 = Partly successful Less than 0.8 = Unsuccessful

Source: Asian Development Bank.