Viet Nam: Secondary Cities Environment Improvement Project (Binh Thuan and Dak Nong)

Water and other urban infrastructure and services / Other urban services - Urban flood protection - Urban policy, institutional and capacity development - Urban sanitation

Since the Doi Moi (reforms) in the late 1980s, Viet Nam has maintained rapid economic growth, averaging over 6.5% annually during 19912015. The country's economic transition from agriculture to industry and service sectors closely links with its urban growth and associated demographic distribution. In 2018, 34.5% of the country's population lived in cities as compared with 19.5% in 1990._By 2025, the urban population will reach 52 million, accounting for 50% of the country's population_and contributing to more than 70% of the national Gross Domestic Product (GDP).

Viet Nam's urbanization is uneven. The five first-tier centrally administered cities generate more than half the GDP from Vietnamese cities, more than 37% of export turnover, and more than 56% of gross national budget revenues despite accounting for only 20% of the population and 3% of the land area._

The government's urban development strategy is focused on achieving a balanced and strategic growth by establishing transport corridors and a network of urban centers across the country._The strategy envisages secondary cities as development hubs of the subregion. The government targets that, by 2025, (i) 90% of urban population has access to water supply, (ii) urban road area accounts for 1525% of the urbanized area, (iii) 90% of municipal waste is collected and treated, and (iv) wastewater is treated in accordance with stipulated standards._

Access to urban services in secondary cities. With an increasingly urban economy, urban services in Viet Nam are critical for promoting inclusive growth by providing basic infrastructure for businesses and households, creating jobs, safeguarding the surrounding environment, and reducing exposure to flooding and other extreme events. In Viet Nam's secondary cities, less than 60% of households are connected to a potable water supply system and only 10% of their urban wastewater is treated by a centralized system. The lack of proper stormwater management limits the drainage systems capacity and exacerbates flood impacts. More than 40% of municipal solid waste is neither collected or improperly treated.

Service delivery constraints in secondary cities. Technical, institutional, and financial constraints causing these service delivery gaps include: (i) inadequate quantity and quality of service coverage and underperforming urban environmental infrastructure assets; (ii) unclear responsibilities among service providers, lack of technical capacity for asset management, and inadequate public investments management; and (iii) inability to charge and collect full cost of services, limited own source revenues and dependency on the central and/or provincial governments for fiscal transfers, and imbalance expenditure patterns including investment expenditures accounting for smaller share as compared with recurrent expenditures_while not enough financing being provided for operations and maintenance (O&M).

Provincial capitals of Gia Nghia (Dak Nong province), Phan Thiet (Binh Thuan province) and Phan RangThap Cham (Ninh Thuan province) were selected due to their regional development constraints. Their economies are primarily agriculture-based and particularly vulnerable to climate change._Although opportunities for mineral resources-based, manufacturing and service industries are gradually emerging, these underdeveloped provinces struggle to find greener development pathways to transform their agriculture-based economy to that of industry and service sectors-based economy.

Livability of secondary cities in Binh Phuoc, Dak Nong, Binh Thuan and Ninh Thuan provinces enhanced

Access to urban environmental infrastructure and services in participating cities improved

Urban environmental infrastructure improved

Institutional effectiveness and policy environment improved