RISK FACTORS IN WATER ENVIRONMENT IMPROVEMENT PROJECT: A CASE STUDY OF BIEN HOA CITY IN DONG NAI PROVINCE

By

Le Van Tuan

Abstract

             

Vietnam has just been developing in recent years. The speed of economic development is growing rapidly but substandard managerial capacity has not satisfy the actual requirements, so great urban areas of Vietnam are now facing with complicated issues of urbanization process and urban development such as migration, accommodation, labor, career, traffic jam, flood, environment pollution.

The developments in field water environment improvement are still slow and delay because there a lot of problems happened in development the project. therefore make project stage cannot be completed as expected, by analyzing to find out the root causes of these problems from the data, which are investigated from a real project, base on key relevant theories, the Author would like to develop the solutions for future improvements.

Executive summary

Rationale of research

This research has been conducted to identify risk factors in water environment improvement projects.

Objectives of study

To study and analyze activities in water projects to find the risk factors and propose solution.

Methodology  

The exploratory research method is used to review literature and study the “Dong Nai water environment improvement project (sewerage and drainage sector)”.

Findings and conclusion

This report describes risk factors in each phase development of Dong Nai water environment improvement project, and has revealed high-risk factors can seriously affect the success of the project.  Actually, Rationale of research

This research has been conducted to identify risk factors in water environment improvement projects.

Objectives of study

To study and analyze activities in water projects to find the risk factors and propose solution.

Methodology  

The exploratory research method is used to review literature and study the “Dong Nai water environment improvement project (sewerage and drainage sector)”.

Findings and conclusion

This report describes risk factors on each phase development of Dong Nai water environment improvement project, and obviously has revealed high-risk factors can seriously affect the success of the project. Actually, Vietnam present has enormous efforts to overcome policy and reduce risk in development project. However, investors still face a lot of problems (risks) when development project.

The report may not offer the complete of risk factors in various stages of project implementation, but also clear description of the risk factors may affect the efficiency projects that most water environment improvement projects in Vietnam are all experiencing the problem of land acquisition and resettlement, legal, project costs incurred up compared to initial estimates of financial, construction progress and fund for operation and maintenance.

Recommendation

Study suggests measures to improve the management process of the development stages’ project. Note that the proposal cannot be applied to other project which not use ODA loan and in field wastewater treatment.

1.      Land acquisition and resettlement:

·         Acquisition of land and other assets, and resettlement of people will be minimized as much as possible.

·         All Project Affected Persons (PAP) residing, working, doing business or cultivating land within the recovered area for the Project as of the cut-off-date, are entitled to be provided with rehabilitation measures sufficient to assist them to at least maintain or improve their pre-Project living standards.

-       compensation at replacement cost, without deduction for depreciation or salvaged materials from houses and other structures;

-       priority given for agricultural land-for-land of equal productive capacity acceptable to the PAPs;

-       replacement of residential land of equal size and acceptable to the PAPs;

-       transportation and subsistence allowances; and

-       Business/income rehabilitation allowances (even for non registered businesses).

-       Replacement of residential and agricultural land should be as near as possible to the land/compensation that is lost.

-       Particular attention should be paid to the needs of vulnerable groups among those displaced, especially those below the poverty line.

-       Appropriate reporting, monitoring and evaluation mechanisms should be identified and set in place as part of the resettlement management system.

2.      Legal: The government should be modified, reduced many regulations in Laws to do the project more quickly, so investors have more responsibility and can actively to make decision in the implementation of the project.

3.      Financing:

·         Structure of project financing: The government in Vietnam should require to Plan and use ODA to specify findings of an analysis of the institutional framework covering:

-       the identification of agencies responsible for use ODA loan activities and authorities of all levels that have a role in project implementation;

-       an assessment of the institutional capacity of such agencies;

-       Do implementation of transparency in the use of loans.

·         Project cost estimate:

-       Cost estimation should carefully be conducted in terms of recent Vietnam economic condition basic cost of is increased in Vietnam.

-       To assure the quality in the cost estimate phase of projects, the investor should have a good training program for their engineering staff, which develop cost estimate. Training on the job is a good method to help employees to be more professional.

4.      Construction: using WBS to divide and control schedule. The contractor should focus to difficulty objectives to reduce risk or delay on project.

5.      Operation and Maintenance: Dong Nai province People's Committee and centre Government should build a legal framework. It will create the financial foundation for wastewater treatment company like:

-       Development of sewage tariff schedule, raising program and method for applied gradually offset the cost price are also necessary to operate system with sustainability from the point of view of finance.

-       Create navigation tools to help investment.

 Vietnam present has enormous efforts to overcome policy and reduce risk in development project. However, investors still face a lot of problems (risks) when development project.

The report may not offer the complete of risk factors in various stages of project implementation, but also clear description of the risk factors may affect the efficiency projects that most water environment improvement projects in Vietnam are all experiencing the problem of land acquisition and resettlement, legal, project costs incurred up compared to initial estimates of financial, construction progress and fund for operation and maintenance.

Recommendation

Study suggests measures to improve the management process of the development stages’ project. Note that the proposal cannot be applied to other project which not use ODA loan and in field wastewater treatment.

1.      Land acquisition and resettlement:

·         Acquisition of land and other assets, and resettlement of people will be minimized as much as possible.

·         All Project Affected Persons (PAP) residing, working, doing business or cultivating land within the recovered area for the Project as of the cut-off-date, are entitled to be provided with rehabilitation measures sufficient to assist them to at least maintain or improve their pre-Project living standards.

-       compensation at replacement cost, without deduction for depreciation or salvaged materials from houses and other structures;

-       priority given for agricultural land-for-land of equal productive capacity acceptable to the PAPs;

-       replacement of residential land of equal size and acceptable to the PAPs;

-       transportation and subsistence allowances; and

-       Business/income rehabilitation allowances (even for non registered businesses).

-       Replacement of residential and agricultural land should be as near as possible to the land/compensation that is lost.

-       Particular attention should be paid to the needs of vulnerable groups among those displaced, especially those below the poverty line.

-       Appropriate reporting, monitoring and evaluation mechanisms should be identified and set in place as part of the resettlement management system.

2.      Legal: The government should be modified, reduced many regulations in Laws to do the project more quickly, so investors have more responsibility and can actively to make decision in the implementation of the project.

3.      Financing:

·         Structure of project financing: The government in Vietnam should require to Plan and use ODA to specify findings of an analysis of the institutional framework covering:

-       the identification of agencies responsible for use ODA loan activities and authorities of all levels that have a role in project implementation;

-       an assessment of the institutional capacity of such agencies;

-       Do implementation of transparency in the use of loans.

·         Project cost estimate:

-       Cost estimation should carefully be conducted in terms of recent Vietnam economic condition basic cost of is increased in Vietnam.

-       To assure the quality in the cost estimate phase of projects, the investor should have a good training program for their engineering staff, which develop cost estimate. Training on the job is a good method to help employees to be more professional.

4.      Construction: using WBS to divide and control schedule. The contractor should focus to difficulty objectives to reduce risk or delay on project.

5.      Operation and Maintenance: Dong Nai province People's Committee and centre Government should build a legal framework. It will create the financial foundation for wastewater treatment company like:

-       Development of sewage tariff schedule, raising program and method for applied gradually offset the cost price are also necessary to operate system with sustainability from the point of view of finance.

-       Create navigation tools to help investment.