Document of The World Bank

Report No: ICR3183

IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-4114; IDA-4770)

ON

CREDITS

IN THE AMOUNT OF

SDR59 MILLION (US$86 MILLION EQUIVALENT)

AND

SDR49 MILLION (US$75 MILLION EQUIVALENT)

TO THE

SOCIALIST REPUBLIC OF VIETNAM

FOR THE

NATURAL DISASTER RISK MANAGEMENT PROJECT

June 2nd, 2014

Vietnam Sustainable Development Unit Sustainable Development Department East Asia and Pacific Region

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CURRENCY EQUIVALENTS

(Exchange Rate Effective: September 1, 2013)

Currency Unit = Vietnamese Dong (VND) VND 1 million = US$47.4

US$1.00 = 21,085 VND

FISCAL YEAR January 1 – December 31

ABBREVIATIONS AND ACRONYMS

AF AusAid

Additional Financing Australian Agency for International Development

APL Adaptable Program Loan CAS Country Assistance Strategy CBDRM Community-based Disaster Risk Management CCCC Commune CBDRM Coordination Committee CCFSC Central Committee for Flood and Storm Control CEMMA Committee for Ethnic Minorities and Mountainous Areas CFAA Country Financial Accountability Assessment CFs CG

Commune Facilitators Consultative Group

CPCO Central Project Coordination Office CPMO Central Project Management Office CPMU CPO

Central Project Management Unit Central Project Office

CPS CPRGS

Country Partnership Strategy Comprehensive Poverty Reduction and Growth Strategy

DARD Provincial Department of Agriculture and Rural Development (of MARD) DCA DDO

Development Credit Agreement Deferred Drawdown Option

DEM Digital Elevation Model DDMFC DDMFSC DMC

Disaster Management Center

DMSFCD Dyke Management and Storm and Flood Control Department DMU Disaster Management Unit DONRE Department of Natural Resources and Environment DPI Department of Planning and Investment DPL DRM

Development Policy Loan Disaster Risk Management

DSU Dam Safety Unit EA Environmental Assessment EMP Environmental Management Plan EMDF Ethnic Minority Development Framework

EMC Emergency Management Center ERL Emergency Recovery Loan ERR FM GDHMS

Economic Rate of Return Financial Management General Department of Hydro-Meteorological Services

GDP GIS

Gross Domestic Product Geographic Information System

GOV Government of Vietnam GDP Gross Domestic Product ICB JSDF

International Competitive Bidding Japan Social Development Fund

LIDAR Light Detection And Ranging MARD Ministry of Agriculture and Rural Development MOC Ministry of Construction MOCI Ministry of Culture & Information MOD Ministry of Defense MOET Ministry of Education and Training MOF Ministry of Finance MOFA Ministry of Foreign Affairs MOFI Ministry of Fisheries MOH Ministry of Health MOI Ministry of Industry MOLISA Ministry of Labor, the Invalids and Social Affairs MONRE Ministry of Natural Resources and Environment MOT Ministry of Transportation MPI Ministry of Planning and Investment MPT Ministry of Posts and Telecommunications MTR NCWMF

Mid-term Review National Center of Weather and Meteorological Forecast

NCSR NDMIP

National Committee for Search and Rescue National Disaster Mitigation Investment Plans

NDMP Natural Disaster Mitigation Partnership NDRMP Natural Disaster Risk Management Project NGO Non-Governmental Organization NS NTF OOG

National Strategy for Disaster Prevention, Response and Mitigation to 2020 Netherlands Trust Fund Office of Government

PCU PER-IFA

Project Coordination Unit (Southern Regional Hydromet Center) Public Expenditure Review and Integrated Fiduciary Assessment

PHRD Policy Human Resource Development PIM Project Implementation Manual PIP Project Implementation Plan PIU Project Implementation Unit PPC Provincial People’s Committee PPMU Provincial Project Management Unit PPR Project Preparation Report PPSC Provincial Project Steering Committee PSC Project Steering Committee OM Operational Manual OOG Office of Government RAP Resettlement Action Plan

RPF Resettlement Policy Framework RNE Royal Netherlands Embassy SA Special Account SCP Safer Commune Plan SEDP SIL

Socio-Economic Development Plan Specific Investment Loan

SIDA Swedish International Development Agency SIO SNSDMV

Sub-project Implementation Office Second National Strategy for Disaster Management in Vietnam

SRHMC Southern Regional Hydro-Meteorological Center SBD State Budget Department STD TOR

State Treasury Department Terms of Reference

UNDP VN-Haz

United Nations Development Program Vietnam Managing Natural Hazards Project

VWRAP Vietnam Water Resources Assistance Project

Vice President: Axel van Trotsenburg, EAP

Country Director: Victoria Kwakwa, EACVF Sector Director: John Roome, EASSD Sector Manager: Jennifer J. Sara, EASVS

Project Team Leader: Toru Konishi, EASVS ICR Team Leader: Dzung Huy Nguyen, EASVS

SOCIALIST REPUBLIC OF VIETNAM NATURAL DISASTER RISK MANAGEMENT PROJECT

CONTENTS

Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph

1. Project Context, Development Objectives, and Design .............................................. 1 2. Key Factors Affecting Implementation and Outcomes ............................................... 5 3. Assessment of Outcomes ........................................................................................... 14 4. Assessment of Risk to Development Outcome ......................................................... 20 5. Assessment of Bank and Borrower Performance ...................................................... 21 6. Lessons Learned ........................................................................................................ 23 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners ........... 25 Annex 1. Project Costs and Financing .............................................................................. 33 Annex 2. Outputs by Component...................................................................................... 33 Annex 3. Economic Analysis ............................................................................................ 33 Annex 4. Resettlement Impacts ........................................................................................ 49 Annex 5. Bank Lending and Implementation Support/Supervision Processes ................. 50 Annex 6. Beneficiary Survey Results ............................................................................... 52 Annex 7. Stakeholder Workshop Report and Results ....................................................... 53 Annex 8. Summary of Borrower's ICR and/or Comments on Draft ICR ......................... 54 Annex 9. Comments of Cofinanciers and Other Partners/Stakeholders ........................... 65 Annex 10. List of Supporting Documents ........................................................................ 66

A. Basic Information

Country: Vietnam Project Name: Natural Disaster Risk Management Project

Project ID: P073361, P119684 L/C/TF Number(s): IDA-41140,IDA-47700,TF-54753,TF-55176,TF-57258

ICR Date: 06/30/2014 ICR Type: Core ICR

Lending Instrument: SIL Borrower: SOCIALIST REPUBLIC OF VIETNAM

Original Total Commitment:

SDR59M Disbursed Amount: SDR104.54M

Revised Amount: SDR108M Environmental Category: A Implementing Agencies: Ministry of Agriculture and Rural Development and Ministry of Finance Cofinanciers and Other External Partners: Japan Social Development Fund (JSDF), Policy Human Resource Development (PHRD) and Netherlands Trust Fund (NTF). B. Key Dates

Process Date Process Original Date Revised / Actual Date(s) Concept Review: 09/12/2002 Effectiveness: 05/30/2006 05/30/2006

Appraisal: 05/23/2005 Restructuring(s):

05/24/2010 06/17/2010 06/30/2011 12/28/2011 05/31/2012

Approval: 09/15/2005 Mid-term Review: 06/11/2007 06/11/2007 Closing: 06/30/2010 12/31/2013 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Moderately Satisfactory Risk to Development Outcome: Moderate Bank Performance: Moderately Satisfactory

Borrower Performance: Moderately Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings

Quality at Entry: Satisfactory Government: Moderately Satisfactory

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Quality of Supervision: Moderately Satisfactory Implementing Agency/Agencies: Moderately Satisfactory

Overall Bank Performance: Moderately Satisfactory

Overall Borrower Performance: Moderately Satisfactory

C.3 Quality at Entry and Implementation Performance Indicators

Implementation Performance Indicators QAG Assessments (if any) Rating

Potential Problem Project at any time (Yes/No):

No Quality at Entry (QEA): None

Problem Project at any time (Yes/No):

Yes Quality of Supervision (QSA): None

DO rating before Closing/Inactive status:

Satisfactory

D. Sector and Theme Codes

Original Actual Sector Code (as % of total Bank financing) Flood protection 70 67 General public administration sector 9 9 General education sector 7 9 Health 7 5 Rural and Inter-Urban Roads and Highways 7 10

Theme Code (as % of total Bank financing) Natural disaster management 40 50 Administrative and civil service reform 20 15 Participation and civic engagement 20 15 Water resource management 20 20 E. Bank Staff

Positions At ICR At Approval Vice President: Axel van Trotsenburg Jemal-ud-din Kassum Country Director: Victoria Kwakwa Klaus Rohland Sector Manager: Jennifer J. Sara Mark D. Wilson

Project Team Leader: Toru Konishi Laurent Msellati

ICR Team Leader: Dzung Huy Nguyen

ICR Primary Authors: Dzung Huy Nguyen

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F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The project development objectives were to assist the recipient to establish and implement a comprehensive risk management framework for natural disaster prevention, preparedness and mitigation and recovery to enable it to: (i) reduce the vulnerability to flood and storm hazards in the project areas; (ii) increase the efficiency of post-disaster recovery and reconstruction efforts; and (iii) strengthen the capacity of national and local disaster risk management institutions. Revised Project Development Objectives (as approved by original approving authority) There was a minor revision of the project development objective during the processing of Additional Financing (AF) of US$75 million in 2010 expanding the scope of Component 3 – Post-Disaster Reconstruction Support - to include “other natural hazards”. Therefore, the revised objective of the project was to assist the recipient to establish a comprehensive natural disaster risk management framework to enable it to: (i) reduce the vulnerability to flood, storm and other natural hazards in the project provinces; (ii) increase the efficiency of post-disaster recovery and reconstruction efforts; and (iii) strengthen the capacity of national and local disaster risk management institutions. (a) PDO Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised Target Values

Actual Value Achieved at Completion or

Target Years

Indicator 1 : Approval by the Government of the Second National Strategy and Action Plan (2001-2010) Value (quantitative or qualitative)

n/a Yes n/a Yes

Date achieved 05/30/2009 n/a 11/16/2007

Comments (incl. % achievement)

The Vietnamese Prime Minister approved the National Strategy for Disaster Prevention, Response and Mitigation to 2020 (NS) on November 16, 2007 and the subsequent national action plans for implementation of the Strategy on September 29, 2009. Target fully achieved.

Indicator 2 : Central Committee for Flood and Storm Control (CCFSC) has been strengthened Value (quantitative or qualitative)

n/a Yes n/a Yes

Date achieved 06/30/2010. n/a 02/27/2010

Comments (incl. % achievement)

Institutional arrangements and responsibilities of CCFSC and its subordinate branches in line ministries and provinces have been rearranged and strengthened by the Vietnamese Prime Minister’s Decree No. 14/2010/NĐ-CP dated February 27, 2010. CCFSC has been effective in coordinating the implementation of the National Strategy, and responding to main flood and storm events, including Typhoon Ketsana in 2009, floods in 2009 and 2010 and Wutip, Nari and Haiyan in 2013. Target fully achieved.

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(b) Intermediate Outcome Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised Target Values

Actual Value Achieved at Completion or

Target Years

Indicator 1 : Number of provinces with completed Natural Disaster Mitigation Investment Plans Value (quantitative or qualitative)

0 10 n/a 12

Date achieved 09/15/2005 06/30/2010 n/a 06/29/2012 Comments (incl. % achievement)

12 provinces in the Central Region and Mekong Delta developed Natural Disaster Mitigation Investment Plans (NDMIPs). Target fully achieved.

Indicator 2 : Percentage of people in targeted communities (e.g., Mekong Delta) reporting improved early warning of floods and storms Value (quantitative or qualitative)

0 10 30 90

Date achieved 09/15/2005 06/30/2010 12/31/2013 06/29/2012 Comments (incl. % achievement)

90% of project communes have access to early warnings on floods and storms. Target fully achieved (300%)

Indicator 3 : Number of feasibility studies completed for sub-projects to be funded under the program Value (quantitative or qualitative)

0 15 n/a 17

Date achieved 09/15/2005 06/30/2010 n/a 06/29/2012 Comments (incl. % achievement)

17 feasibilities studies were completed. Target fully achieved (113%).

Indicator 4 : Number of sub-projects completed Value (quantitative or qualitative)

0 8 n/a 12

Date achieved 09/15/2005 06/30/2010 n/a 06/29/2012 Comments (incl. % achievement)

Among 12 sub-projects funded by the project, 11 sub-projects were completed and 1 sub-project focusing on Hydromet services for Mekong Delta was partly completed. Target fully achieved (150%).

Indicator 5 : Number of Safer Commune Plans prepared Value (quantitative or qualitative)

0 40 n/a 30

Date achieved 09/15/2005 05/30/2009 n/a 06/29/2012 Comments (incl. %

Lessons learnt from the initial pilot implemented in 10 communes in three provinces revealed that Community-based Disaster Risk Management (CBDRM) plans needed

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achievement) to be accompanied by actual investments. Additional grant funds were secured but were insufficient to meet the hard and soft investments of all 40 communes, particularly given the cancellation of US$2 million out of US$8.5 million Netherlands Trust Fund (NTF). Target partially achieved (75%).

Indicator 6 : Procedures for Damage Assessment are revised Value (quantitative or qualitative)

n/a Yes n/a Yes

Date achieved 09/15/2005 06/30/2007 N/A 09/30/2012

Comments (incl. % achievement)

The existing Damage Assessment Guidelines were revised and updated. However, the revised procedures have not been effectively used for post-disaster damage assessments due to the complexity of the methodology and the limited capacity of the Government at the national and subnational levels. Target partially achieved.

Indicator 7 : Acceptable criteria approved for prioritizing allocation of post – disaster assistance Value (quantitative or qualitative)

n/a Yes n/a Yes

Date achieved 09/15/2005 06/30/2008 n/a 09/30/2012 Comments (incl. % achievement)

A set of eligible, measurable and transparent criteria for determining post-disaster allocations was approved by MARD and MOF, and applied for post-disaster support. Target fully achieved.

Indicator 8 : Percentage of completed sub-projects withstanding subsequent disaster events of the same type of hazard up to the intensity of a 1-in-30 year event Value (quantitative or qualitative)

n/a n/a 95 100

Date achieved 07/17/2010 12/31/2013 12/31/2013

Comments (incl. % achievement)

This indicator was added during the period of the AF in order to promote and measure the “Build-Back-Better” approach. All reconstructed public infrastructure withstood subsequent disaster events, including Typhoon Ketsana in 2009, floods in 2009 and 2010 and Wutip, Nari and Haiyan in 2013. Target fully achieved (105%).

Indicator 9 : Length of time from the date of release of funds to the relevant provinces to completion of sub-projects Value (quantitative or qualitative)

n/a n/a 12 months 8-14 months

Date achieved 07/17/2010 12/31/2013 12/31/2013

Comments (incl. % achievement)

This is a new indicator, which was added during the period of the AF to strengthen measuring the achievement of the second development objective. Post-disaster reconstruction went through five planning cycles of post-disaster reconstruction (2008–2012). On average, it took about 8 to 14 months to complete damages assessment and budget mobilization in each cycle before reconstruction work would start. Consequently, the strengthening of government speed in the allocation and disbursement of post-disaster resources was not fully met. Nevertheless, new budget procedures have been prepared to expedite reconstruction and are pending approval. Target partially achieved.

Indicator 10 : Detailed needs assessment for the establishment of an Emergency Management Center completed

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Value (quantitative or qualitative)

n/a Yes n/a Yes

Date achieved 09/15/2005 05/30/2009 n/a 12/31/2013

Comments (incl. % achievement)

A detailed needs assessment for the establishment of an EMC was fully completed. Instead of establishing the EMC, the Government established a sustained department level Disaster Management Centre (DMC) in early 2010, which is part of the CCFSC’s Standing Office responsible for emergency response and relief. Target fully achieved.

G. Ratings of Project Performance in ISRs

No. Date ISR Archived DO IP Actual Disbursements

(USD millions) 1 12/29/2005 Satisfactory Satisfactory 0.00 2 08/24/2006 Satisfactory Satisfactory 5.00

3 09/29/2007 Moderately Unsatisfactory Moderately Unsatisfactory 9.03

4 06/23/2008 Unsatisfactory Unsatisfactory 15.55

5 10/21/2008 Moderately Unsatisfactory Unsatisfactory 17.67

6 06/16/2009 Moderately Satisfactory Moderately Satisfactory 40.98 7 06/25/2010 Satisfactory Satisfactory 71.82 8 06/29/2011 Satisfactory Moderately Satisfactory 98.54 9 03/31/2012 Satisfactory Moderately Satisfactory 116.52

10 12/22/2012 Satisfactory Moderately Satisfactory 135.54 11 07/29/2013 Satisfactory Moderately Satisfactory 152.54 12 12/31/2013 Moderately Satisfactory Moderately Satisfactory 162.54

H. Restructuring (if any)

Restructuring Date(s)

Board Approved

PDO Change

ISR Ratings at Restructuring

Amount Disbursed at Restructuring in

USD millions

Reason for Restructuring & Key Changes Made

DO IP

05/24/2010 N MS MS 69.96

Reallocation of Credit Proceeds and Extension of the Closing Date. The Development Credit Agreement was amended twice, on March 5, 2010 and May 24, 2010. An Extension was made for 12 months (June 30, 2010 - June 30, 2011) to support the completion of ongoing infrastructure works, which had been suspended due to unpredictable storms and bad weather affecting the construction progress, and the processing of the procurement of

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Restructuring Date(s)

Board Approved

PDO Change

ISR Ratings at Restructuring

Amount Disbursed at Restructuring in

USD millions

Reason for Restructuring & Key Changes Made

DO IP hydromet equipment through the ICB process.

06/17/2010 Y MS MS 71.82

Additional Financing. The amount of SDR49.4 million (US$75 million equivalent) was approved by the Board to scale up Component 3 – Post-Disaster Reconstruction Support.

06/30/2011 N S MS 98.59

Closing Date was extended for 6 months (June 30 - December 31, 2011) to complete ongoing infrastructure works and procure the hydromet equipment package.

12/28/2011 N S MS 116.35

Closing Date was extended for 5 months (December 31, 2011 - May 31, 2012) to support the procurement of the hydromet equipment package.

05/31/2012 N S MS 133.47

Closing Date was extended for 28 days (May 31 - June 28, 2012) to allow supplier to deliver a major part of the hydromet equipment package.

I. Disbursement Profile

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1. Project Context, Development Objectives, and Design

1.1 Context at Appraisal

1. Country Context. Vietnam is one of the most disaster-prone countries in the world. Due to its geographic position and topography, the country suffers from multiple natural hazards including typhoons, tropical storms, floods, drought, seawater intrusion, landslides, forest fires and occasionally earthquakes. From 1994 to 2004, natural hazards claimed almost 6,000 lives and resulted in direct material losses to the capital stock of over US$2.5 billion - on average 5 percent of gross annual capital formation - reaching 12 percent of gross annual capital formation in years with high-impact events, equivalent to 2.5 percent of the gross domestic product (GDP). 2. Strengthening disaster risk management (DRM) has been a priority in the country’s development agenda. In 1990, the Government of Vietnam (GOV) established the Central Committee for Flood and Storm Control (CCFSC) - a cross-ministerial agency with subordinate provincial and local committees - for managing disaster mitigation, emergency response and long-term reconstruction and recovery. At project appraisal stage, CCFSC’s actions had largely focused on disaster emergency response and relief. Institutional capacity and resources available for the agency to carry out its mandate were limited. Studies carried out during project preparation noted annual funding gaps for all natural disaster-related expenditure requirements ranging between US$46 million to US$130 million for the period between 2000 and 2003. Project preparation also revealed that the institutional framework for implementing a comprehensive approach to DRM, covering both disaster risk prevention and response, needed to be further developed and expanded to fully involve key agencies and relevant stakeholders.

3. Bank Strategy and Rationale for Bank involvement. Poverty Reduction was identified as a key theme of the Country Assistance Strategy (CAS) for Vietnam for the years 2003 to 2006. The Vietnam Development Report 2004 and the Joint Staff Assessment of the Comprehensive Poverty Reduction and Growth Strategy (CPRGS)1 for Vietnam highlighted that many households were vulnerable to falling into poverty if confronted with an adverse shock, such as weather-related natural hazards. Vietnam’s Development Goal Number 8 of the Vietnam Development Report 2004 specifically targeted reduction of people falling back into poverty due to natural hazards. 4. Over the past two decades, the Bank has accumulated extensive knowledge and operational experience in disaster risk reduction and post-disaster recovery through engagements in more than thirty countries. Building on this body of global knowledge on disaster prevention and vulnerability reduction, the Natural Disaster Risk Management Project (NDRMP) adopted an innovative approach to mainstreaming DRM by focusing on disaster risk reduction measures, including at the community level where the disaster vulnerability and consequently demand for such measures is high, to reduce the impacts of recurring natural disasters on Vietnam’s development.

1 Vietnam Poverty Reduction Strategy Paper Progress Report and Joint Staff Assessment. Report No. 27672-VN, dated January 22, 2004.

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1.2 Original Project Development Objectives (PDO) and Key Indicators

5. The project's development objective (PDO)2, as stated in the original Development Credit Agreement (DCA), was to assist the recipient to establish a comprehensive natural DRM framework to assist the GOV to: (i) reduce the vulnerability to flood, storm and other natural hazards; (ii) increase the efficiency of post-disaster recovery and reconstruction efforts; and (iii) strengthen the capacity of national and local disaster risk management institutions. 6. Accordingly, the project’s original key performance indicators were:

• The number of provinces with completed Natural Disaster Mitigation Investment Plans (NDMIPs);

• The number of feasibility studies completed for sub-projects; • The number of sub-projects completed; and • The number of Safer Commune Plans (SCPs) completed.

1.3 Revised PDO (as approved by the original approving authority) and Key Indicators, and Reasons/Justification

7. Additional Financing (AF) for Component 3 – Post-Disaster Reconstruction Support was approved by the World Bank Board on June 17, 2010. There were no significant changes to the objective, project design, implementation approach or institutional arrangements. Only a minor revision was made to the PDO to include “other natural hazards”. Therefore, the revised PDO was to assist the recipient to establish a comprehensive DRM framework to enable the GOV to: (i) reduce the vulnerability to flood, storm and other natural hazards in the project provinces; (ii) increase the efficiency of post-disaster recovery and reconstruction efforts, and (iii) strengthen the capacity of national and local DRM institutions. The scope of the Project was amended under AF to scale up support for post-disaster reconstruction to help address the existing public financing gaps.

1.4 Main Beneficiaries 8. The project was expected to benefit the population living in 12 hazard-prone provinces in Vietnam’s Central and Mekong Delta regions by supporting strategic investments in disaster mitigation, post-disaster reconstruction, training and equipment for emergency preparedness and response, establishment of early warning system, and development of knowledge on local risks and Safe Commune Plan (SCP) that would reduce the human suffering and economic costs caused by natural hazards. NDRMP targeted upland and lowland coastal communities which primarily derive their livelihood from farming (wetland, cash crops and subsistence), fishing (shrimp cultivation and off-shore fisheries), and small business activities (food stalls, basic provisions). 9. The second group of beneficiaries comprised of DRM institutions and involved agencies, including CCFSC and its subordinate provincial and local (district and commune) committees, line ministries including the Ministry of Agriculture and Rural Development

2 There was a difference in wording of the PDO between the PAD and the DCA, but no discrepancy in substance.

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(MARD), Ministry of Natural Resources and Environment (MONRE), Ministry of Finance (MOF), Ministry of Planning and Investment (MPI), Ministry of Health (MOH), Ministry of Education (MOE), Ministry of Transport (MOT), etc., and provincial sectoral departments. These have benefited from technical assistance provided during the development of the National Strategy for Natural Disasters Prevention, Response and Mitigation to 2020 (NS), provincial integrated DRM plans, the community-based disaster risk management (CBDRM) model, risk mapping and modelling, feasibility studies and design of mitigation works, as well as during the series of trainings on DRM, damage and needs assessments, prioritization and implementation of post-disaster reconstruction support.

10. In addition, the project also benefited a group of NGOs and other donors in their engagement on DRM in Vietnam by improving the coordination and information-sharing network between the Government and mass organizations, donors and international NGOs under the operation framework of the Natural Disaster Mitigation Partnership (NDMP).

1.5 Original Components (as approved) 11. Component 1: Prevention and Mitigation Investments (estimated cost US$73.7 million, of which IDA Credit US$63.5 million) supported medium-sized priority prevention and mitigation sub-project investments to reduce disaster risks and strengthen prevention capabilities in areas most effected by floods and storms. 12. Component 2: Community-based Disaster Risk Management (estimated cost US$1 million), entirely funded by grants, was combined with other project components to strengthen the capacity of the most vulnerable population to carry out risk reduction measures and reduce vulnerability to disasters. (At appraisal, addition grant funding was expected to complement the IDA resources for this component – see para. #19) 13. Component 3: Post-Disaster Reconstruction Support (estimated cost US$20.8 million, of which IDA Credit US$20 million) supported post-disaster reconstruction of small-size public infrastructure, helping to address a recurrent financing gap for post-disaster recovery, and – financed under a PHRD co-financing grant – enable fast recovery and reduce the diversion of public resources from planned investments into reconstruction, as well as improve the damage assessment process and the efficiency and effectiveness of public resource utilization post-disasters. 14. Component 4: Project Management and Institutional Strengthening (estimated cost US$12 million, of which IDA Credit US2.5 million) supported project management organization and strengthened Government institutions to ensure better coordination and integration between agencies and different levels responsible for prevention, response and post-disaster recovery.

1.6 Revised Components 15. Additional Financing. AF in the amount of SDR49.4 million (US$75 million equivalent) was approved by the Board on June 17, 2010 to scale up the on-going Component 3 – Post-Disaster Reconstruction Support. The AF was provided on the premise of achieved progress of the original loan, specifically the Government’s approval of the National Strategy

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as one of the two key PDO indicators, and the emerging needs of Government and communities linked to post-Ketsana and Mirinae typhoons (in 2009) reconstruction. In addition, the AF further supported the strengthening of institutional capacity and procedures on post-disaster reconstruction. There was no significant change in the PDO, project design, implementation approach or the institutional arrangements. At the intermediate outcome level, there were two new indicators added in order to strengthen monitoring of the second development objective of the original credit and the overall PDO, and promote a “Build-Back-Better” approach in post-disaster recovery. Several intermediate outcome indicators were also revised to better capture the recent implementation progress and measure the results of the project. The closing date for the AF credit was December 31, 2013.

1.7 Other Significant Changes 16. Shift of strategic support approach from Adaptable Program Loan (APL) to Specific Investment Loan (SIL). NDRMP was designed as an APL with two phases. However, a joint decision was made by the Government and the Bank when the AF preparation was initiated that further support for DRM will not take APL form. There were two reasons for this. First, important lessons learned during the implementation of NDRMP and the rapidly changing country context meant that the APL structure would restrict necessary revisions to project modalities - a constraint alleviated by a shift to SIL. Second, it became apparent that the Government was unlikely to meet one of the three required policy development triggers (i.e. the amendment of Circular from the General Statistics Office on disaster damage statistics and assessment) which in any case was deemed in the end less significant for achieving the development objective than originally envisaged. Consequently, the option to proceed with the second phase APL including the AF was rejected in favor of (i) additional financing for Component 3 to address a financing gap in post-disaster reconstruction; and (ii) the preparation of a follow-up operation as a SIL. 17. Closing Date extensions for the original Credit. Given the decision to diverge from the APL instrument, the existing operation was extended several times in tandem with the AF. The original closing date was extended four times for a total of six years: (a) the first extension was from June 30, 2010 to June 30, 2011 (12 months); (b) the second extension was from June 30, 2011 to December 31, 2011 (6 months); (c) the third extension was from December 31, 2011 to May 31, 2012 (5 months); and the fourth extension was from May 31, 2012 to June 28, 2012 (28 days). The first extension was to support the completion of ongoing infrastructure works which had been suspended due to unpredictable storms and bad weather affecting the construction progress, and the processing of the procurement of hydromet equipment through the ICB procurement process. The extension also allowed the GOV to process the AF. In September 2010, the AF of US$75 million was approved and became effective in November 2010. Second and third extensions were granted after satisfactory completion of the tender documents for the hydromet equipment package and evaluation of relevant bidding documents. The fourth extension was to allow the delivery of a major part of the hydromet equipment package, thus enabling partial payment of the contract of about US$2.72 million from the original IDA Credit per terms stipulated in the contract. These extensions did not require extra cost for supervision as the Bank supervision missions were conducted for the implementation of both Original Credit and the AF at the same time by the same task team.

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18. Reallocation of credit proceeds. The DCA was amended twice. The first amendment was on March 5, 2010 to add Quang Tri Province to the project target area per Government’s request. The second amendment was on May 24, 2010 - as part of the first restructuring - to reallocate SDR758,365 from Category (5): Goods and works for eligible post-disaster reconstruction under Part C.1 of the Project to Category (1): Works under Part A of the Project. These amendments did not alter the overall allocation of resources to the different project components. 19. Grants allocations. In addition to the credit, the project received a grant total of US$14,460,000 from the Japanese Government (US$1,460,000 from JSDF and US$4,500,000 from PHRD) and the Government of the Netherlands (US$8,500,000 from NTF). The grant support included piloting and scaling up of the CBDRM model and institutional capacity-building. By June 29, 2012, a total of unallocated US$2,607,894 was returned to financing agencies because of slow implementation progress. Of which, US$ 2 million out of US$8.5 million NTF was cancelled by the Government of the Netherlands. AusAid also provided in-kind technical assistance through a team of three DRM specialists including a long-term Chief Technical Advisor located at the CPMO to help the Government to manage project implementation, a DRM Specialist and a Hydrodynamic Modeling Specialist for three years.

2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design, and Quality at Entry 20. Soundness of background analysis. PHRD provided a grant for the preparation of the project in 2002. The preparation time spanned over a relatively long timeframe from June 2002 to May 2005 due to the institutional complexity and the novelty of the DRM approaches being introduced in Vietnam. In addition, during project preparation, a number of alternatives, including APL, DPL with a DDO for “Contingency Funding Facility”, and immediate relief or an Emergency Recovery Loan (ERL) were discussed and eventually rejected by both the Government and the Bank since these instruments were deemed to be ill-suited for the long-term goal of designing and implementing a comprehensive DRM strategy. The preparation phase allowed for sound background analysis, and strong GOV and community ownership in the project design which was particularly important given the complexity of the Government’s institutional arrangements and the need to implement an integrated approach to DRM. During project preparation, new knowledge and lessons learned on DRM within and outside the Bank were considered and adopted3. The design of the AF incorporated information and studies generated earlier in the project as well as latest DRM knowledge, including lessons learned from on-going post-disaster recovery activities. 21. Assessment of Project design. At first, the project was designed as a long-term support program to help the Government and communities to move from focusing on disaster relief and response to a comprehensive and integrated approach to DRM encompassing development planning, disaster preparedness, forecasting, prevention, mitigation, recovery and reconstruction at the national, regional, provincial and local levels. This approach was adjusted for the country context, and its objectives partially achieved during the project

3 A list of forty-three Bank-funded projects and twenty-four projects funded by other development agencies which are related to DRM in Vietnam and other countries were reviewed.

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implementation period between 2006 and 2013. The on-going follow-up project - Vietnam Managing Natural Hazards Project (Vn-Haz) - continues to support the country to fully achieve the implementation of a comprehensive DRM framework. 22. Second, the original PDO was clearly-stated and important for the country as confirmed by the Government’s legislative actions and engagement on DRM. The PDO addressed the Government’s demands in putting disaster preparedness and forecasting as its foremost objectives, shifting the focus away from disaster response and relief. The principal strengths of the project design were: (a) strong country involvement in project designing and preparation; (b) appropriated strategic choices in supporting Government; and (c) the use of pilots which allowed the project to identify risks early on in the implementation process and correspondingly modify the program and project design. 23. Third, the Government’s commitment was strong, which was vital to be able to coordinate the implementation of the innovative DRM approaches. From the outset, the Government led the preparation process with support from the Bank and partners. This ensured strong ownership and understanding of the project by the central and local authorities. Project preparation involved an intensive planning process undertaken together with the provincial, district and commune authorities. This included participatory community assessment during the selection of the vulnerable communes to be piloted under the project, and the level of funds allocated to each area for community activities. 24. Fourth, strategic choices made in the project design reflected both lessons learned and reality on the ground. The first decision was to focus on integrated DRM instead of pure post-disaster recovery support. On this basis, the project design emphasized: (a) support to local capacity development taking into account the Bank’s competitive advantage and other development agencies’ plans to assist the central DRM agencies, (b) assistance to a selected number of vulnerable communes with a comprehensive integrated DRM approach (including CBDRM), which were identified through evidence-based analysis of disaster risks and the emerging and competitive demands to improve DRM capacity rather than assuming a general program, and (c) reliance on existing partnership arrangements to improve coordination between the Government, donors and NGOs rather than creating new ones under the project. 25. Fifth, another strategic decision was the establishment of clear eligibility criteria for the selection of sub-projects and a special procurement procedure for emergency situations at the beginning of the implementation process which helped to minimize resettlement and adverse environmental impacts as well as the complexity of normal procurement procedures to ensure the completion of the post-disaster reconstruction support within 12 months. 26. Lastly, project components were clearly formulated and conducive to PDO achievement. Project design was flexible, which allowed interested development agencies to co-finance a number of project activities (i.e. institutional capacity building, CBDRM, etc.), enabled the reallocation of fund among components (if needed), and mobilization of additional IDA funding to respond effectively to the highly dynamic post-disaster situation, as well as implementation of lessons learnt in the course of the project. In addition, the set of natural hazards initially considered – floods and storms – was also broadened to include other natural hazards, such as landslide, earthquake and tsunami, under the AF.

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27. Overall project risk identification and mitigation at entry. The overall project risk rating at entry was considered substantial, which seems appropriate for the challenges of the project related to institutional weaknesses and the innovative nature of the project. However, even when some of the challenges, which led to implementation delays, cost escalations, and inadequate project management, were correctly identified as sources of risk during project preparation, they were insufficiently mitigated in the project design. Other sources of risk were not identified (and therefore lacked mitigation measures at entry). The main shortcomings in the risk assessment were: 28. Impact of the country‘s rapid socio-economic development to the strategic approach in supporting the DRM agenda: A number of financing instrument options, including APL, SIL, ERL, DPL with a DDO were discussed by the Government and the Bank during project preparation. The APL instrument was considered the most suitable for the long term goal of designing and implementing a comprehensive DRM strategy. However, the rapid development progress in the country and changes in Government’s priorities for interventions and capacity-building affected the continuation of the APL form by not achieving one of three required policy development triggers for progression to APL II as described in para. #16. Decisions were made at the preparation of both the AF and the follow-up project to shift the strategic support approach from an APL to a SIL, as the latter provided greater flexibility to the changing circumstances in the rapidly developing country while still ensuring lessons learned from the NDRMP were fully incorporated into the project design and implementation. 29. Underestimation of the Government’s institutional arrangements. The assessment of the role of CCFSC as the key Government’s coordination body to provide overall guidance for project implementation was correct. The role of DMC, which was expected to be the key Government agency to provide coordination and integration among the various agencies and different levels responsible for natural disaster prevention, response and recovery, was not sufficiently assessed. At the project beginning, DMC was only a small division within MARD’s Dyke Management and Flood Control Department (DDMFSC), which acted as the CCFSC’s Standing Office. In this role, DMC was not in the position to provide the required coordination under the project. In addition, mitigation measures proposed to improve the speed and efficiency in the allocation and disbursement of post-disaster recovery resources were insufficient. An improvement of the existing procedures could not have been achieved by simply developing a project operational manual but required a revision of the existing laws. In this case, the existing State Budget Law would need to be revised and ratified by the National Assembly. The institutional context could have been more carefully assessed during project preparation, particularly for the AF as lessons learned had been clearly drawn out by then. 30. Inadequate implementation capacity. Even though the integrated DRM approach was a new concept for Vietnam introduced by the project, no critical risks or subsequent mitigation measures related to capacity of the management units at both central and provincial levels were identified at appraisal. This led to a delay in the start-up of the project and in also the implementation of several risk reduction investments. More preparatory work could have been carried out in order to set out a well-defined implementation strategy. 31. No Quality at Entry review was conducted for this project.

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2.2 Implementation 32. The following are several key factors that contributed to successful implementation: 33. Government’s strong ownership. NDRMP was an ambitious program with implementation challenges facing the Government administrative capacity both at the central, provincial and community levels. Implementation was delayed in the first three years until the mid-term review (MTR) due to the complexity of the project in both, the new integrated DRM approach and implementation arrangement vis-à-vis the weak institutional capacity for DRM. The MTR identified six issues that undermined implementation: (i) absence of leadership by MARD; (ii) lack of adequate capacity on the part of the Central Project Office (CPO); (iii) lack of DDMFC involvement in capacity-building; (iv) insufficient attention to CBDRM implementation; (v) slow progress on upgrading post-disaster reconstruction procedures; and (vi) insufficient communications between MARD, CPO, and the provinces. In response, MARD initiated a series of actions, including: (i) the establishment of the MARD-led Senior Working Group comprised of a MARD Vice Minister, senior officials from participating ministries and provinces together with the Project Steering Committee, (ii) timely revision of the Project Implementation Manual and Components’ Operational Manuals, which further clarified responsibilities between the various agencies and adjusted the implementation arrangement at the national, provincial and commune levels, (iii) mobilization of qualified experts and staff for the CPO/ Central Project Management Unit (CPMU) to undertake procurement, financial management, monitoring and evaluation (M&E), social and environmental safeguards in July 2008, and (iv) subsequent establishment of the technical working group at DDMFSC in July 2008 to lead day-to-day implementation. MARD’s immediate actions, combined with the Bank’s close supervision, resulted in improved project performance. The project was upgraded to “moderately satisfactory” status in May 2009 and “satisfactory” status in June 2010. Moreover, the disbursement rate was significantly increased from 16 percent at the MTR to 46 percent in June 2009 and 98 percent at closing date. 34. Continuous engagement of local officials and communities. Project activities, particularly post-disaster reconstruction and CBDRM at the local level were advanced through close consultation and participation of the communities, including frequent workshops and training with mayors and officials from participating communes. The CBDRM methodology for local risk and vulnerability analysis and prioritization of mitigation measures, including application of the “Build-back-better” approach helped to bring together specialized technical expertise and local knowledge, while building beneficiaries’ commitment and ownership of results. The project recruited Commune Facilitators (CFs) under the CBDRM activities, who played the key roles in strengthening implementation, institutional linkages and information dissemination between villages and communes. As the results, the CBDRM model piloted in 30 communes under the project has been scaled-up nationwide via the National Program for CBDRM, which was approved in 2009 and launched in 2010. 35. Nevertheless, several factors – some outside the control of the Government and implementing agencies but some within their control – affected implementation negatively. As a result, the project experienced delays that required several extensions of the

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original closing date by a total of 24 months. Factors outside of the Government or implementing agencies control include: 36. Initially, the project was slowed down by delayed credit effectiveness. Several effectiveness conditions could not be met on timely basis, including delays in: (i) the establishment and staffing of the CPMO in MARD, Project Coordination Unit (PCU) in the Southern Regional Hydromet Center of MONRE and Provincial Project Management Unit (PPMU) in Ben Tre and Nghe An provinces; and (ii) approval by MARD of Project Implementation Manual (PIM) and feasibility studies of the Year-1 sub-projects. In effect, more than eight months passed between Bank’s approval in September 2005 and declaration of effectiveness in May 2006. 37. Recurrent bad weather interfered with works and unpredictable storms in 2010 and 2011 forced the contractors to frequently stop the construction of several sub-projects exposed to the sea under Component 1. 38. Evolution of the country’s legal and institutional frameworks for socio-economic development. In order to fully achieve the second specific objective of the post-disaster reconstruction support component and the AF, which was to enhance the speed and efficiency in allocation and disbursement of post-disaster resources and the effectiveness of public resource utilization, at least two existing Laws on Procurement and State Budget should have been adjusted to help establish streamlined procedures for public resources utilization and mobilization for post-disaster recovery. 4 The revised Procurement Law, which has been recently adopted by the National Assembly (No. 43/2013/Q/QH13) on November 26, 2013, and will become effective on June 1, 2014, included provisions to facilitate medium- and long-term recovery. However, the State Budget Law that would allow a faster process for allocating and utilizing funds for post-disaster reconstruction is yet to be amended. Consequently, this specific objective was not fully achieved at the AF’s closing date. 39. Leadership and capacity constraints in the project implementation agencies/units at various levels at the beginning of project implementation. While leaving the CPMU largely in charge, MARD’s leaderships could have been improved, including monitoring and, when necessary, actively and decisively engaging in addressing bottlenecks. In addition, the CPMU lacked qualified experts to undertake procurement, financial management, M&E, as well as social and environmental safeguards. Some delays were related to the weak capacity of CPMU and PMUs at national and provincial levels in some specific areas, including the management and adjustment of detailed engineering designs, and preparation of procurement package for hydromet equipment under Component 1. 40. Insufficient attention to CBDRM implementation. The CBDRM approach was introduced in Vietnam in early 2000 by a limited number of NGOs. The implementation was primarily led by NGOs rather than being mainstreamed into existing Government institutional

4 Socio-economic development in the country led the Politburo and National Assembly to prioritize the adjustment and updating of other emerging Laws. In addition, the Government also wanted to incorporate and update all other issues related to budget and procurement management, which would require time spent on more consolidated social studies, rather than updating and adjusting issues on emergency response only.

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arrangements at the national, subnational, and community levels. Therefore, both MARD (CPO and other DRM technical agencies) and the targeted communities struggled to initiate CBDRM activities. The project envisaged capacity-building for CBDRM planning, and a pilot was launched in 10 communes. Evaluations of the pilot indicated that planning alone was insufficient and needed to be supplemented by actual investments. The project team secured additional grant funds from Bank-administered sources (PHRD and JSDF) as well as project-specific co-financing from the Government of Netherlands, albeit with some delays. Once in place, this additional grant funding allowed more intensive support to CBDRM which was successfully provided to 30 communes. The roll-out to the final 10 communes was prevented in large part because of the subsequent cancellation of US$ 2 million out of the US$8.5 million NTF. 41. Additionally, the project adopted an unusual approach by providing AF while simultaneously extending the original project. The AF approved in June, 2010 was provided for Component 3 only, to be implemented by MoF. At the same time, as described in para. #17, the original project was extended in order to allow completion of works (through June, 2011) and the procurement of the hydromet equipment (through May, 2012), under Component 1 of the original project. This was a pragmatic administrative solution that did not undermine the efficiency of the project or stretch Bank supervision, since the additional supervision required by the extensions to the original Credit were incorporated into the supervision of the AF. However it did reflect, to an extent, the institutional compartmentalization of the original project across the three ministries MOF, MONRE and MARD - and contradicted the rationale for a single 'platform' for the Bank's support for DRM. (As noted elsewhere in this ICR, by the end of the AF this institutional fragmentation had been addressed, not least in the design of the follow-on Managing Natural Hazards project).

2.3 Monitoring and Evaluation (M&E) Design, Implementation, and Utilization 42. M&E design is moderately satisfactory. M&E was challenging given the high degree of institutional complexity and the novelty of the new approach in DRM. The large number of sub-projects also posed challenges for maintaining accurate and up-to-date information on implementation progress and results. The system suffered from some weaknesses in design: (a) PDO indicators were confusing, which made the project impact and the achievement of the outcomes difficult to evaluate. In addition, the two PDO level indicators did not capture all aspects of the PDO, particularly Component 3. Enhancing the speed and efficiency in allocation and disbursement of post-disaster resources and the effectiveness of public resource utilization was one of the key objectives of Component 3 and the AF. However, (a) no revision or adjustment of the PDO indicators was made at the AF preparation to highlight the importance and capture it; (b) specific definition and methodological precision, including the difference between outputs and outcomes and different approaches in measuring quantity and quality of outputs/ outcomes were absent in the PIM; and (c) the baseline survey was not carried out until July 2009. The development of practical methodology and a baseline survey to measure some of the key economic, environmental, social, and gender impacts, particularly for CBDRM, post-disaster recovery support and sub-projects under Component 1, as identified in the PAD, could had been more carefully addressed at the time of the MTR.

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43. M&E implementation and utilization were moderately satisfactory due to methodological limitations as mentioned above. This led to delays in the establishment of an effective M&E system. The system was fully operational in July 20095, whereas the project implementation started in May 2006. From this time onwards, the system supported project implementation and monitoring, allowing for rapid informed decisions and timely resource allocation. In most cases, data was collected in time following appropriate methods through monthly and quarterly construction supervision reporting and external monitoring consultancies. It also contributed to a shift in focus within the Government concerning infrastructure investments away from measuring inputs and outputs towards measuring outcomes. All CPMU, PMUs and PPMUs benefited from progress reports prepared by a qualified independent consultant firm as well as a series of trainings on operation of the M&E system. The M&E framework of the NDRMP is considered as an example of good practice and has been used by the GOV in designing their larger M&E systems for tracking both the implementation of National Strategy for DRM and the National CBDRM Program.

2.4 Safeguard and Fiduciary Compliance 44. Safeguards Compliance was satisfactory (OP 4.01, OP 4.04, OP 4.37, OP 4.11, OP 4.12 and OD 4.20). The original project was classified as Environmental Category A and the AF as Environmental Category B. A safeguard policies package was prepared, including Resettlement Policy Framework (RPF), Ethnic Minority Policy Framework (EMPF) and the Environmental Assessment (EA). A series of training on safeguards for project officers at the national and provincial levels was conducted as part of the project’s capacity-building support. 45. Environmental safeguards compliance was satisfactory. The Project triggered three environmental safeguard policies including Environmental Assessment (OP 4.01), Natural Habitats (OP 4.04) and Safety of Dams (OP 4.37). To address environmental issues relating to these environmental safeguard policies, six documents as part of the environmental review were prepared for both the original project and AF, including: (a) a general EA for the entire project; (b) three specific EAs for the three sub-projects in phase I; (c) an environmental management framework (EMF) for AF; and (d) an environmental review procedure for investment under the CBDRM component. In addition, a separate environmental review procedure was developed for investments under Component 3 (post-disaster reconstruction support)6 of the original project. Regarding the policy on safety of dams, dam safety report and emergency preparedness plan were prepared for Vuc Mau sub-project in the first year by Dam Safety Unit under MARD and reviewed by an independent panel of experts. During project implementation, at central level CPO under MARD and PCU under MPI assigned a full-time staff responsible for project environmental safeguards issues and also hired an independent environmental monitoring consultant to assist in periodically monitoring contractors’ compliance with the environmental safeguard policies and preparing monitoring reports. Additionally, construction supervision consultants were also trained in environmental

5 The M&E framework was adjusted in October 2010 per recommendations made by the Bank’s 11th supervision mission conducted in June 2010. 6 For example, a proposed sub-project would be screened to determine whether it is eligible. All eligible sub-projects were then prepared with appropriate environmental assessment documents (i.e. EIA or EMP) in accordance with national environmental protection law and the Bank environmental safeguard policies.

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safeguards to undertake daily monitoring of contractor’s environmental safeguard compliance and reporting to the CPO and PCU. At the provincial level, PPMU also appointed a staff member responsible for environmental safeguards compliance issues. An environmental monitoring program was adequately carried out with involvement of locally-affected communities. Specific actions were fully incorporated into the project planning, information dissemination, community participation and implementation processes. Consultations with local stakeholders including locally-affected people, ethnic minorities, and local NGOs (i.e. the Vietnam Women’s Union, Fatherland Front, Farmer Association, and Veteran Association), and information disclosure were continuously conducted throughout project implementation to address safeguard-related issues in a timely manner. Monitoring reports prepared periodically by independent monitoring consultants and submitted to the Bank showed that there were no significant environmental issues during implementation. Adverse environmental impacts due to construction such as dust, noise, wastes, accident risks, traffic interruption, damages to local roads, cultivation interruption and ecological loss were fully mitigated through application of proper mitigation measures indicated in the detailed EMPs. As such, there were no complaints from locally-affected communities. Throughout project implementation, environmental safeguard policies were fully complied with. 46. Social safeguards compliance – Involuntary Resettlement (OP 4.12), and Indigenous Peoples (OP. 4.10) were satisfactory. Given that the project involved land acquisition to allow for the rehabilitation of existing civil works, RPF was prepared in accordance with the Bank’s OP 4.12. The RAPs for first-year sub-projects were also prepared in accordance with the project’s RPF. In addition, since ethnic minority peoples were present in the project area, an EMPF was prepared. As a principle, efforts had been made, during project implementation, to avoid the land acquisition. However, where not avoidable, efforts were made, through exploring various technical engineering designs, to minimize the impact of the land acquisition/resettlement. 47. During the original credit period, despite efforts made to avoid land acquisition, 265 hectare of land (primarily agricultural land) were permanently acquired. This affected 4,168 households, of which 989 households had to resettle, and 165 had their businesses and/ or more than 20 percent of their agricultural land affected. Compensation payment, financial and livelihood restoration support, and resettlement work was provided in accordance with the project’s RPF. During the AF period, since the project focused on the Component 3 - Post-Disaster Reconstruction, most of the civil works (rehabilitation and construction) took place within the existing land area. As a result, the need for land acquisition was very small. Minor land donation (for road rehabilitation works) occurred occasionally with the support from local people to enable prompt restoration of the roads/ bridges following disaster events. Although there was no significant impact on the livelihoods of affected households, guidance was provided by the Bank in such cases to ensure the land donation was legally accepted and the land acquisition was conducted in accordance with the project’s RPF. 48. The Bank’s review of the social safeguards implementation of the sub-projects (including a systematic review by an independent monitoring consultant) indicated that land acquisition and resettlement was undertaken in full compliance with the project’s RPF. Complaints were addressed well before project closure. Affected households, particularly those severely affected, restored their livelihood to pre-project levels. No ethnic minority households were adversely affected as a result of the project. These households also

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participated in the consultation during the sub-project preparation. Gender aspects were also given attention, particularly to families who were severely affected as a result of the project to support their prompt livelihood restoration. 49. Financial Management (FM) of the original credit and AF was moderately satisfactory. The weaknesses in FM capacity of the CPMU were identified at the MTR, including: (i) lack of accounting software; (ii) late delivery of interim financial reports; (iii) weak planning and budgeting; and (iv) late appointment of an external auditor. Through a series of immediate actions undertaken by MARD and its project office and units, including training provided to the CPMO, PMUs and PPMUs staff, installment of accounting software, allocation of more staff to perform financial reporting and PPMUs supervision, the FM performance of the project gradually improved from Moderately Unsatisfactory at MTR to Moderately Satisfactory toward the end of the project. The AF had better FM performance compared to the original credit, which was maintained at Moderately Satisfactory throughout the AF timespan, due to stronger FM skills of the AF CPMU situated with the MOF, and lessons learnt from implementation of the original credit. While the lack of counterpart funding proved to be a challenge for provinces during the original credit implementation, the AF demonstrated stronger performance on managing counterpart funds and did not face similar issues. The inflexible fund allocation mechanism in the AF, however, led to some unutilized funds at project closing while demand for funding from provinces still existed. The issue of ineligible expenditures due to misunderstanding the Financing Agreement occurred in both original credit and AF, which were then settled by provinces using counterpart fund. 50. Procurement was moderately satisfactory for both the original credit and AF. An 18-month procurement plan had been prepared at appraisal. In the subsequent years, detailed procurement plans were also prepared for each procurement package especially those with higher value and more technically complex. In general, the procurement performance was found to be consistent with the Bank’s Procurement Guidelines and the Legal Agreements. The Bank’s post reviews found a number of procedural deviations and non-compliance. However, these issues were adequately rectified. There were also some delays in procurement primarily due to the lack of efficiency and effectiveness in the procurement management of a few complex packages and in dealing with the price fluctuations. Bank provided support, including technical training on procurement to CPMO and PCU and guidance on the preparation of bidding documents, to accelerate the process. These packages were then successfully awarded and implemented.

2.5 Post-completion Operation/Next Phase

51. The transitional arrangements to post-completion operation appear to be adequate, as demonstrated by the following measures: 52. Institutional arrangement. In February 2010, the Prime Minister issued Decree No. 14/2010/NĐ-CP to rearrange and strengthen the institutional and coordination mechanism of the CCFSC and its provincial branches across the country. In addition, the DMC which was a division within MARD’s Dyke Management and Flood and Storm Control Department was separated and from 2010 onwards promoted as a National Center for DRM.

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53. Establishment of DRM legislative framework. With project support, a National Strategy for Disaster Prevention, Response and Mitigation to 2020 (NS) has been established and approved by Prime Minister in November 2007. The strategy lays out Vietnam’s primary DRM objectives to move away from the traditional emergency response and relief focus to a comprehensive and integrated DRM. Subsequently, a National Action Plan for implementation of the NS was also approved by the Prime Minister in September 2009. Both the NS and the action plan are currently being implemented with funding from the central and local governments, donors and international organizations. 54. Promotion of the community participatory approach in DRM. CBDRM models, including CSPs, community early warning and evacuation systems, and community-scale mitigation measures with participatory approach have been aggregated and consolidated into a nationwide CBDRM program. The National CBDRM Program was approved by the Prime Minister in 2009 and is being implemented in some 6,000 disaster vulnerable communes across the country through funding support from the central and local governments, donors and international organizations. 55. Follow-up project. Lessons learnt from the NDRMP were incorporated in the design of the follow-up US$180 million IDA-financed project titled Vietnam-Managing Natural Hazards (Vn-Haz). A similar clustering approach for CBDRM and early warning systems has been incorporated while a river-basin approach was introduced in the design in the follow-up project. Vn-Haz incorporated a flexible design to better reflect the changing circumstances and priorities for interventions and capacity-building that might occur during project implementation linked to Vietnams’ rapid development. VN-Haz became effective in December 2012 and its implementation has been satisfactory so far.

3. Assessment of Outcomes 3.1 Relevance of Objectives, Design, and Implementation 56. The Project Development Objective (PDO) was and remains relevant to Vietnam’s development priorities and strategies. The country remains highly vulnerable to disasters. Almost 60 percent of Vietnam’s total land area and over 70 percent of its population are at risk to the above referenced natural hazards. Over the past two decades, extreme weather events have caused more than 13,000 deaths and property damage in excess of US$6.4 billion. DRM challenges have intensified. Climate change is projected to result in a significant increase in typhoon and flooding risks, including sea level rise in Vietnam. Moreover, Vietnam will also experience significant increased saltwater intrusion and coastal erosion, negatively impacting agricultural productivity, aquaculture production, and the vulnerability of coastal cities7. The recent World Bank Vietnam Country Partnership Strategy (CPS) for the period from 2012 to 2016 acknowledges these issues and reiterates the importance of improving resilience in the face of external economic shocks, natural hazards and the impact of climate change (Key Cross-Cutting Theme - Resilience). Similarly, the recently prepared NS and its National Action Plan also emphasize the importance of investing in risk reduction and management.

7 World Bank (2013). Turn Down The Heat: Climate Extremes, Regional Impacts, and the Case for Resilience.

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57. Project Design is consistent with the PDO and relevant to on-going and planned efforts to face the challenge of disaster risk reduction and management. Project design was flexible, allowing for the adjustment to reflect emerging good practices regarding institutional strengthening and engagement of local governments and communities, as well as inclusion of financing of post-disaster recovery works. 58. Project Implementation supported the evolution of the legal and institutional framework for DRM in Vietnam. Implementation arrangements remained relevant throughout implementation, including the AF, and at the end contributed to the institutionalization of project interventions and consolidation of CCFSC as the country’s leading DRM coordination body. Implementation also allowed for the development of approaches and methodologies that have been mainstreamed in the follow-up VN-Haz project.

3.2 Achievement of Project Development Objectives

59. The project has largely achieved its development objective, which was “the establishment and implementation of a comprehensive risk management framework for natural disaster prevention, preparedness, mitigation and recovery”. 60. For the first time a country-level comprehensive DRM framework has been established through project support. A National Strategy and a National Action Plan were approved by Prime Minister in November 2007 and September 2009 respectively. The Strategy lays out Vietnam’s primary DRM objectives in order to move from the traditional focus on preparedness and response with a strong emphasis on structural measures (such as dykes and seawalls) to a comprehensive and integrated approach to DRM, including structural measures (i.e. building and rehabilitation of reservoirs, dams and dykes) and non-structural measures (i.e. CBDRM, capacity building and institutional strengthening activities). The Strategy also provides guidance to sectors and provinces in formulation and implementation of their programs to achieve the overarching objectives of the Strategy. Subsequently all 19 ministries and 63 provinces developed sectoral and provincial action plans respectively for Strategy’s implementation. These sectoral and provincial action plans built upon the experiences from the project-supported Integrated Natural Disaster Mitigation Investment Plans (IDRMPs) which were prepared in 12 provinces. The IDRMPs have been highly appreciated by the provincial and local governments and incorporated into respective provincial and local plans. 61. Supporting the implementation of the NS, the project financed upgrading/ construction of 12 prioritized large-scale disaster-mitigation structures and 681 community public services infrastructure, including schools and health care facilities, which were damaged by the heavy storms and floods in 2006, 2007, 2009 and 2010, for the benefit of more than 3 million people living in 15 hazard-prone provinces. In addition to the structural measures, the project also provided a series of activities to build capacity of the government agencies at the national, provincial and local levels (see para. #65 for further details). Equally important, more than 210,000 villagers living in 30 communes have benefited directly from the CBDRM model, including the CSPs, community early warning and evacuation systems, and community-scale mitigation measures. As a result, the CBDRM model which reflects a participatory approach has been rolled out nationwide through the National Program for CBDRM, which was approved in 2009 and launched in 2010. The project also helped to leverage support from

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many donors to strengthen the country’s capacity in DRM. This includes improved coordination and information-sharing network between the Government, donors such as ECHO, UNDP, RNE, Embassy of Luxembourg, the Swedish International Development Agency (SIDA), AusAID, and international NGOs, such as CARE International, OXFAM GB, OXFAM HK, World Vision, and ADPC. 62. The PDO included three complementary outcomes: (i) reducing the vulnerability of the Project Provinces to flood and other natural hazards, (ii) increasing the efficiency of post-disaster recovery and reconstruction efforts, and (iii) strengthening the capacity of national and local DRM institutions. 63. Reducing the vulnerability of the Project Provinces to flood and other natural hazards was successfully achieved by the well prepared 17 feasibility studies, technical designs, and implementation of all 12 project-funded structural investments, vis-à-vis the target of 15 completed feasibility studies and 8 completed sub-projects originally envisaged. The completed sub-projects, including dyke systems, safe harbors for fishing boats, reservoirs/ dams, pumping station and drainage improvement, have generated good results in prompting DRM as well as reducing economic losses in the target provinces. For instance, a combination of dyke and emergency road sub-projects in Hai Lang district of Quang Tri province has helped to protect 12 communes with a total population of 64,000 people and 5,200 ha of 2-crop rice. Improved drainage system located along the Hanoi – Ho Chi Minh national railway route has significantly reduced flooding to ensure the safety of railway operations during the wet season. Construction of five safety storm shelter harbors has provided better protection against typhoons for thousand small and medium-size fishing boats, repairing and upgrading dam safety of the Vuc Mau Reservoir in Nghe An significantly reduced flood risks during the wet season and provided sufficient water in the reservoir for irrigating more than 2,000 ha of rice during the dry season. Despite delays in the procurement process, which resulted in delaying the provision of accurate and reliable forecasts to the concerned communities, the installation of an early warning system in the Mekong Delta improved the capacity of the Southern Regional Forecast Center in forecasting and early warning from 10 percent to 90 percent, in particular, information accuracy increased up to 85-90 percent. No damage in the protected areas was reported during the wet season of the subsequent years after completion of the risk reduction investments. 64. Increasing the efficiency of post-disaster recovery and reconstruction efforts was partially achieved: guidelines for a damage and needs assessment (DANA) with a detailed set of objective and measurable criteria for allocation for post-disaster assistance were developed in close consultation with relevant agencies at national and subnational levels, NGOs and communities. Affected provinces and communities followed these detailed criteria to prioritize the sub-projects in need of reconstruction. The operational manual and criteria were frequently adjusted and improved to better fit the local context. All reconstructed public infrastructure operated well and withstood recent storms and subsequent floods in 2013. Efficiency improvements in post-disaster recovery and reconstruction efforts have not been fully achieved as both speed and quality remain the same as before the project. Despite urgency, the current procedures are no different from normal public investment procedures. The project targeted the completion of the entire of cycle of damages assessment, budget mobilization, technical design, procurement and construction within 12 months. In reality, at end of project it still took 8-14 months to complete the damages assessment and budget

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mobilization 8 . Consequently, the project did not fully meet its target in strengthening Government’s procedures for a rapid disbursement facility to fund post-disaster reconstruction. It is widely accepted that there is a need for a ‘fast-track’ procedure for prioritization of sub-projects and mobilization of available resources for medium and long term post-disaster recovery activities. The project financed a review of the existing procedures and recommendations for a new mechanism were submitted to the Government, relevant ministries (including MPI, MOF and MARD) and provinces for their decision. These recommendations are being discussed under (i) the on-going MOF-led revision of the State Budget Law; and (ii) the MARD-led development of a detailed Government Decree on the establishment of the community funds for DRM. Specialists from various relevant World Bank teams, including Poverty Reduction and Economic Management (PREM) and Procurement are providing technical inputs to both processes. 65. Strengthening the capacity of national and local DRM institutions. The capacity of CCFSC and its Standing Office has been strengthened. The Prime Minister’s Decree No. 14/2010/NĐ-CP dated February 27, 2010 rearranged and strengthened the institutional and coordination mechanisms of CCFSC and its provincial branches across the country. In addition, the DMC, which was a division of the MARD’s Dyke Management and Flood and Storm Control Department (as the Standing Office of the CCFSC), was promoted to be a national center for DRM from 2010 onwards. CCFSC, including its Standing Office and DMC, has been effectively coordinating the implementation of the NS. In particular, they effectively responded to Typhoon Nargis and Ilke (2008) and Ketsana (2009), to floods in the central region (2009, 2010) and in the Mekong Delta (2011), and to Typhoon Naris, Wutip and Hyain (2013). Community capacity on DRM has also been strengthened through the implementation of the CBDRM activities. Involvement of communities ensured ownership and sustained quality of investment, as well as increased local awareness. On the other hand, it also promoted partnership and collaboration between central, provincial and commune levels, and between commune officials and the local people. The CBDRM component demonstrated adaptability in implementation (i.e. the outcomes of the pilot) and leveraged substantial funding for its (modified) implementation. It guided the establishment of the Government’s National Program on CBDRM which covers 6,000 vulnerable communes across the country. Although only 30 communes received the CBDRM support versus the target of 40 communes originally envisaged at project design, this reflected the needs of communities to include the investments on structural and non-structural measures in the support of the implementation of the SCP instead of only non-structural measures as the original design during the implementation of the pilot phase in 10 communes. Between 80-90 percent of expenditures per commune were for structural measures, whereas only 10 percent for non-structural measures. This placed substantial demands on available financing which was compounded by the cancellation of US$2 million out of the US$8.5 million NTF for rolling out the CBDRM model in other 30 vulnerable communes in March 2010.

3.3 Efficiency (details are presented in Annex 3)

8 Some current steps present technical challenges in comparing the needs among different sectors, including prioritization and the development of an inter-sectoral reconstruction package, and impose unnecessarily lengthy administration at the national level. For instance, the review of MPI at national level and DPI at the provincial level should be unnecessary since most of the proposed investments were small-scale reconstruction works, which fall under the responsibility of the provinces.

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66. The overall economic analysis prepared at project closing show that the aggregate project investments are having an Economic Rate of Return (ERR) of about 25 percent. The economic analysis considered costs and benefits from the country’s perspective. The analysis considered the expected ERR from the C1 and C3 investments. At appraisal no cost-benefit analysis was done for the project as it was considered inappropriate to evaluate investments in prevention and post-disaster recovery activities. 67. Investments for enhancing disaster response capability and reducing vulnerability generate returns in terms of capital stock damage being avoided and lives being saved in the events of natural hazards. Flood maps were prepared to determine possible losses, weighted by the expected frequency of occurrence of different natural hazards their and intensities. Dynamic hydraulic models for both “with” and “without project” scenarios represented: (i) the enhanced scenario including the structural and non-structural investments completed under the NDRMP, and (ii) the pre-existing damaged and/ or precarious structures and poor preparedness capacity available before the project. By mapping the expected flooded area under different natural events together with the duration and depth of flood in the affected areas, and overlapping those maps with the land use and affected assets in the flooded areas, the corresponding expected value of project benefits were estimated. 68. Benefits were estimated from most of the sub-projects financed under C1 and from typical investments financed under C3. C1 and C3 spent about 90 percent of the project costs including the AF. Reduced expected losses considered included: (i) those directly affecting the family households (lost agricultural production and household assets); (ii) private and public infrastructure (roads, electricity, water systems, schools, etc.); and (iii) human health costs, lives saved, and environmental protection values. The C2 and C4 costs were also considered for the analysis as they contributed to the attainment of the benefits from the two core components by enhancing the effectiveness of the project interventions, by building capacity to manage risks and by coordinating implementation among stakeholders. 69. The financial assessment confirmed that by reducing the expected losses due to natural hazards the livelihood of the poor in the project areas is significantly improved. Farm models combining typical cropping patterns and livestock activities for the analyzed sub-project areas representing typical household were also prepared. The project improvements would allow for increases in household income of about 11 percent to 45 percent depending on the area and the type of works involved.

3.4 Justification of Overall Outcome Rating Rating: Moderately Satisfactory. 70. The rating for the project’s overall outcomes is considered as moderately satisfactory because: (i) the objectives, design and implementation of the project remain highly relevant to the country’s development priorities; (ii) all PDO and most intermediate outcome indicators were substantially attained; and (iii) the economic efficiency of the investments is well above the reference 12 percent opportunity cost of capital. 71. The project achieved its development objective by establishing and supporting the implementation of the National Strategy on DRM. At the intermediate outcomes level, the

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project strengthened the capacity of the Government’s institutional arrangement for DRM at various levels and communities, demonstrated by their effective response to subsequent typhoons and other hazards. Participatory CBDRM was widely promoted and recognized by the GOV through the National Program for CBDRM launched in 2010. However, the impact of project was not optimized because project outputs were fragmented and somewhat uncoordinated. For example, whereas the prioritized large-scale disaster-mitigation structure was focused in a single location, the CBDRM and the early warning system were undertaken in different locations. Consequently, the project missed potential synergies between structural and nonstructural interventions, which is an important feature of contemporary approaches to DRM. 72. Post-disaster reconstruction support significantly helped the Government and the communities in filling funding gaps for recovery activities. It also introduced a faster effective procedure for prioritization of public infrastructure and funding allocation for post-disaster reconstruction, including damage and needs assessment, and a detailed set of objective and measurable criteria for allocation for post-disaster assistance. However, mainstreaming such arrangements into GOV’s procedures was not yet achieved as it requires revisions to the Government’s exiting Laws which are yet to be fully enacted.

3.5 Overarching Themes, Other Outcomes, and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development 73. Damage and loss assessments indicate that disasters tend to affect the poor disproportionately due to their social and physical vulnerability. The project had an impact by helping to increase the resilience of poor communities thus avoiding increased poverty levels after disasters. The project also helped to strengthen the social capital of these communities through the participatory processes for risk and vulnerability analysis and preventive planning. This social capital is reflected in mutual support systems that can help communities not only in responding to future disasters, but also in engaging in risk mitigation. In addition, after reconstructing public infrastructure such as irrigation cannels, pumping stations and rural roads, rural people subsequently improved their agricultural and livelihood activities