MINISTRY OF HOME AFFAIRS

INSTITUTE OF STATE ORGANIZATIONAL SCIENCES

******

SUMMARY REPORT

SURVEY PROJECT ON

DECENTRALIZATION OF SUBSIDIZED PUBLIC SERVICES

MANAGEMENT IN 05 CENTRAL CONTROLLED CITIES IN

VIETNAM: CURRENT STATUS AND RECOMMENDATIONS

Hanoi, July 2013

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INTRODUCTION

1. Rationale

While being key motivated forces to accelerate national social and

economic growth, the cities under the direct control of the central government

of Vietnam (hereafter referred to as centralcontrolled cities - CCCs)currently

encounter number of challenges regarding massive displacement of rural

population,which in its turns, emphasizes high pressure on employment,

accomodation, clean water and travelling issues to municipal residents.

Sustainable development in urban areas in general and in the central

controlled cities require both effective implementation of state administrative

management in urban areas and the ensured provisions of public services to

citizens and organizations dwelling on the area. The notion of public

servicesdenotes three major categories: 1) Public administrative services, 2)

Public professional career services, and 3) Public utilities/ Subsidized public

services.

Subsidized public services are the direct services,which execute national

defense and security duties, serving general needs of individuals or

developing collective productionin association with the provision of essential

goods such as primary technical infrastructure, basic public goods to citizens

either directly done by the State or through an empowered unit of the State

regarding environmental sanitation, waste treatment, clean water supply,

urban public transport, services serving production or disaster prevention,

etc…those are unlikely to be implemented as economically and effectively as

the State does.

In the past few years, the management and provisions of subsidized

public services in urban areas have initially been innovatived towards better

defining scope and responsibilities of organizations and individuals involved

in the management and direct supply; completing mechanisms and policies

for subsidized public services; enterprises providing subsidized public

services initial have taken the initial step toward innovation of operating

mechanism in business accounting; gradually implementing the socialization

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of some subsidized public services, facilitating organizations in non-state

sector of the economy to involve in providing subsidized public services.

However, the state management of subsidized public services has its

many drawbacks such as lack of strategic planning and network development

of subsidized public services are not synchronous and do not keep pace with

the requirements of social economic development; the State investment is

spreading and dispersed; responsibility and decentralized authority are

unclear; financial management mechanism is still not aligned with

requirements. The state-owned enterprises operating in the subsidized public

services sector are confused about the organizational structure and operation

mechanism. The socialization of public services has been slow and not yet

mobilized social resources for providing subsidized public services.

Therefore, the investigation, research the situation of management and

organization of supplying subsidized public services in five cities under

central governments is necessary for the proposal of innovative solutions in

mechanisms and policies to improve the efficiency of management and

organization of providing subsidized public services. However, due to the

complex characteristics of subsidized public services and limited resources,

this project focuses on research and evaluation of three specific subsidized

public services as follows:

- Environmental sanitation service (waste collection and treatment);

- Clean water supply service;

- Public transport service by transit buses

2. Objectives

2.1.Overall goal

To objectively explore and evaluate the current status in management

and provisions of subsidized public services in five central controlled cities;

that serves as the basis for scientific arguments and practices in order to

propose solutions on improving the mechanisms and policies, improving the

efficiency of management and provisions of subsidized public services in

urban areas, so as to meet the requirements of public administrative reform

and social-economic development.

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2.2. Specific objectives

- Assess the status of subsidized public services supply in five central

controlled cities;

- Assess the financial management mechanisms and incentives for the

providers of subsidized public services;

- Assess the situation of decentralization of state management for

enterprises engaged in operating subsidized public services (i.e. organization,

personnel, finance and monitoring the quality of subsidized public services);

- Evaluation of the involvement of the private sector and society in

subsidized public services;

- Assessing the satisfaction level of beneficiary of public services;

- Propose solutions to improve mechanisms and policies to improve

management efficiency of public services provided in urban areas.

3. Objects and scope of survey and assessment

- Object of survey: The project focuses on assessing waste collection and

disposal service, clean water supply services, public transport bus service.

- Scope of survey: Five central controlled cities, namely: Hanoi, Ho Chi

Minh City, Hai Phong, Da Nang, and Can Tho.

- Time period: Survey and assessment of the status of subsidized public

services management and provision in urban areas from 2010 upto present.

4. Methods of survey

- Qualitative interview methodology is applied to study the citizens who

are the officers working in the state agencies, relevant ministries as well as

business leaders to provide subsidized public services including:

+ Department of Transportation (DoT); Department of Natural

Resources and Environment (DONRE), Department of Construction (DoC),

Department of Home Affairs (DOHA); Department of Finance (DoF).

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+ District People Committees and provincial People’s committee (PPC)

in the given cities.

+ Subsidized public services units in the given cities.

- Survey people by using the randomly selected method of 01

ward/commune of the district in each city. In details:

CCCs Total number of

questionnaire

Percentage

(%)

Ha Noi 106 18.1

Hai Phong 125 21.3

Da Nang 103 17.6

HCMC 131 22.4

Can Tho 121 20.6

In total 5 cities 586 100.0

Additionally, the project used desk research methodology in combination

with expert method in reviewing current legislation.

5. Project key activities

- Review and explore legal documents related to the whole subsidized

public services and in the three subsidized public services listed above.

- Survey, discuss and conduct in-depth interviews with state

management agencies (at department and division level), the units directly

provide subsidized public services in 03 areas: waste collection and treatment,

clean water supply and public transport by transit buses in the five central

controlled cities .

- Conduct social surveys in the five central controlled cities .

- Organize seminars with experts and managers on the content of

management and organization in providing subsidized public services in

urban areas.

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Here are some highlights of the project results.

I. CURRENT MANAGEMENT AND PROVISIONS IN WASTE

COLLECTION AND TREATMENT, CLEAN WATER SUPPLY AND

PUBLIC TRANSPORT BY TRANSIT BUS SERVICES IN 5 CENTRAL

CONTROLLED CITIES

1. General characteristics and arrangements in provisions of waste

collection and treatment, clean water supply and public transport by transit

bus in 5 central controlled cities

1.1.Overview of the 5 central controlled cities

City Area (km2 )

Population

(thousand

people)

Population

density

(person/

km2

No. of administrative

units

Ha Noi 3.344,6 6.561.9 1.962 10 districts (D), 1

town (T), 18 rural

districts (RD)

HCMC 2.095,5 7.396, 5 3.530 19 Ds, 5 RDs

Hai Phong 1.522,1 1.857,8 1.221 7 Ds, 8 RDs

Da Nang 1.283,4 926,0 722 6 Ds, 2 RDs

Can Tho 1.401,6 1.197,1 854 5 Ds, 4 RDs

Total Apprx. 10,000 Apprx

18.000

47 Ds, 37 RDs, 1 T

1.2.Current provision arrangements of environmental sanitation, clean

water supply, transit buses in 5 central controlled cities

a)Environmental sanitation

City

Collection

volume

(ton/ day

and night)

Collection rate (%) The State-

funded budget

(Mil VND)

(2011) Urban Suburban

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Ha Noi 6,500 95 65 900

HCMC 7 – 7,400 90 80 1,400

Hai Phong 1,171 97 70 75

Da Nang 700 90 45 75

Can Tho 838 70 72

- Forms of waste collection and treatment services:Subsidized public

service suppliers established by the PPC; Subsidized public services Ltd.

Company; Cooperatives of waste collections; People-founded waste

collection group (Ho Chi Minh City)

b) Clean water supply:

City The rate

of water

loss (%)

The rate of

people accessed to

clean water (%)

The

lowest clean

water

price/the

highest

(thousand

VND)

The

State-funded

budget (Mil

VND)

(2011) Urban Suburban

Ha Noi 36% 97 73 4 160

HCMC 40% 87.27

Hai Phong 25% 76 6.5/13.5

Da Nang 20% 90 45 3.7/12.2 50

Can Tho 27% 71 42 6

- Forms of clean water supply services: Clean water trade company

directly under the control of the PPC; Infrastructure investment Joint Stock

Company (CII –HCMC)

c) Public transport by transit buses:

City No. of

bus

route

No. of bus

vehicle

Passenger

volume/day

The lowest

bus fare/the

highest bus

The State-

funded

budget

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fare (1,000

VND)

(Mil VND)

(2011)

Ha Noi 84 1,145 1.1 million 3/10 1,084

HCMC 150 3,208 1.57

million

3/10 1,400

Hai Phong 12 90 389,000 8/15 4

Da Nang 5 98 76,000 4/10 0

Can Tho 5 57 178,000 4/10

- Forms of public transport service by transit buses: State-own-

subsidized public service supplier (The Model of Hanoi General Company of

transport and public services); private transport businesses performing in

bidding form.

1.3. Citizens’ feedback of subsidized public services

City Level of satisfaction

with waste

collection service

Level of satisfaction

with clean water

supply

Level of satisfaction

with bus service

Ha Noi 74.0% 39% 44%

HCMC 55.9% 44% 52%

Hai Phong 69.4% 53% 36%

Da Nang 76.0% 68% 61%

Can Tho 83.5% 70% 73%

2. Current regulatory documents on environemental sanitation,

clean water supply and public transport by transit bus services

2.1. Systematization of law

Through the review of legal documents onsubsidized public services

shows the number of documents is very copious such as the law adopted by

the National Assembly, the ordinances of the Standing Committee of the

National Assembly, the Government’s decrees, Ministries’ circulars, the

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Resolution of the People’s Council;the decisions and directives of the five-

city People's Committee issued and provided on subsidized public services in

general and sanitation, clean water supply and publictransportbus services in

particular.

2.2. General comments

Law on Enterprise in 2005 stipulates the rights and obligations of

enterprises producing and supplying subsidized public products and services

in Article 8, Article 9 and Article 10: To conduct cost accounting and be

entitled to cost recovery at the price for tender implementation, or collect

charges for provision of services in accordance with the regulations of the

authorized State body; To be guaranteed an appropriate period for production

and supply of products or provision of services in order to recover its

investment capital and gain reasonable profits; To produce and supply

products or provide services in correct quantity and quality and on time as

agreed at the price or charge rate stipulated by the authorized State body; To

ensure that the same equitable and favorable conditions are applicable to all

types of customers; To be responsible before the law and customers for

quantity, quality, terms of supply and prices, charges for supply of products or

provision of services.

Decree No. 31/2005/ND-CP of the Government on the production and

supply of products, subsidized public services provided the specific list of

products and subsidized public services that enable a number of non-state

enterprises participating in subsidized public services delivery. Accordingly,

1) The products and services are essential to the country’s economic and

social life, community of a territorial region or assurance of national defense

and security; 2) The production and delivery of these products and services

consistent with market mechanism are considered more difficult to make cost

recovery; 3) The authorized state agencies assign each enterprises involved in

production and delivery of subsidized public services a quota, open bid in

accordance with the price or cost determined by state regulations. However,

this decree does not mention clean water supply service, hence, it is probably

understandable that clean water supply service is considered as regular

services and follows the market mechanism.

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In general, the system of legal documents on management and

organization in providing subsidized public services has the major limitations

as follows:

- Inspection and examination activities for operation of subsidized public

servicesare conducted by the governing bodies of subsidized public services

enterprises (i.e. Department of Transport and Department of Construction).

Therefore, it results into the lack of objectivity and fairness in inspection and

examination activities.

- There are no specific and unified regulations on quality standards and

the number of subsidized public services, so each place/region has its own

regulations on quality standards and the number of various subsidized public

services and the people enjoy these services with different qualities.

- Mechanisms and policies on socialization of subsidized public

servicesare incomplete and synchronic.

- The City People’s Council defines and decides the subsidized public

services pricing details yearly with the aim to ensure stability and social

justice without consulting with theenterprises providing public services about

prime costfor meetingthe enterprises’ business requirements.

a) Waste collection and treatment

- Law on Environmental Protection (No.52/2005/QH11), Decree No.

59/2007/ND-CP of the Government dated 9/4/2007 on solid waste

management and regulations of ministries and the provincial people

committees clearly stipulated the responsibilities of the entities on

management and organization in household garbage collection and on

handling of violations in this area.

However, there lack of regulations on equipment and technology

standards and waste transport in order to ensure quality and safety during the

operation; inspection, monitoring and handling of violations of environmental

hygiene have not been widely appreciated as they ought. In Ho Chi Minh city,

there is no consistency on establishment procedures, rights and obligations,

the governing agencies to waste picker cooperatives and also a lack of unity

between provisions of Decree No. 151/2007/ND-CP dated 10/10/2007 on the

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organization and operation of cooperatives and Circular No.04/2008/TT-BKH

of the Ministry of Planning and Investment dated 09/7/2008 guiding some

provisions of Decree No. 151/2007/ND-CP with the provisions of Decision

No.5424/QD-UBND of the Ho Chi Minh city people’s committee. It is

noteworthy that the provisions of Decision No.130/2002/QD-UB stipulate

that the Department of Transportation and Civil works is the governing body

in charge of management of environmental sanitation, but in fact, it is no

longer consistent with the actual situation because this functional

responsibilities has been assigned to the Department of Natural Resources and

Environment.

- For operating income sourcesrelated towaste collection and treatment,

Law on Environmental Protection 2005 provided fees and funds for

environmental protection. The Circular No.97/2006/TT-BTC dated

16/10/2006 of the Ministry of Finance guiding the fees and charges under the

decision of the provincial and centrally city People’s Councilincluding

regulations on cleaning fee for entity groups: individuals, families, small

business households, schools, kindergartens, the offices of enterprises and

administrative and non-business agencies, stores restaurants, hotels, food

restaurants, factories, hospitals, manufacturing facilities, markets, train

stations, bus stations, the fee rate shall not exceed 160,000 VND/m3of waste.

Regulations on the charge of household waste in Ho Chi Minh city

according to Decision No.5424 enacted in 1998 is no longer relevant because

the current situation and fee rate depends on the agreement between owners

of waste sources and waste enterprises/pickers beyond the control of the

governingagencies.

Decree No.174/2007/ND-CP of environmental protection charges for

solid waste. As such, two different types of fees relating to environmental

sanitation are sanitary fees and environmental protection fees. In particular,

the sanitary fee is used to compensate for waste collection and transportation

and the environmental protection fee is used for the solid waste disposal to

ensure environmental standards and propaganda activities improvingthe

people’s awareness. However, the actual cleaning feescollected from the

owners of waste sources are used to directly cover for the waste collectors.

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But the environmental protection charges for solid waste have not been yet

implemented in the cities.

b) Clean water supply

- Joint Circular No.75/2012/TTLT-BTC-BXD-BNNPTNT dated

15/5/2012 guiding principles, defining methods and competence to decide on

water consumption rates in the urban, industrial and rural areas, "clean water

consumption rates must be accurately and fully defined as rationalized with

production costs, the total cost of the production, distribution, consumption

(including the cost of maintaining connectors). It helps the water supply units

maintain and develop on the basis of regulations, standards, and economically

technical norms according to the provisions of law promulgated and

announced and the profits of reasonable level of commercial water volume

that the organizations and individuals conduct partly or fully all the activities

of exploiting, production, transmission, wholesale and retail water (called as

water supply units) in accordance with the pricing regulations of issued by the

State and guiding in this Circular and the supply and demand relationship of

clean water and socio-economic development conditions of the country,

regional and people’s income in each period as to ensure the legitimate rights

and interests of the water supply units and customers, etc".

- On November 21,2012, the Ministry of Construction issued Circular

08/2012/TT-BXD guiding the implementation of regulations ensuring safe

water supply including the three requirements as follows: ensuring to

maintain water pressure, stable supply, sufficient water quantity and water

quality in accordance with prescribed standards; there are solutions to deal

with unusual events and risks that may occur in the entire production process,

supplying the clean water from water source to customers; contributing to

protect public health, reducing water-related diseases, disease prevention and

socio-economic development.

However, clean water prices must be affordable to consumers but if

accurate and full of all costs will lead to beyond the affordability of

consumers. The fact shows that the enterprises must be governed by the

market rules for the input costs to produce clean water, while the price of

water consumption decided by the public administration agencies is lower

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than input cost, hence, enterprises cannot profit. In addition, there has not yet

been a system of economic and technical norms in the production of clean

water as a basis for enterprises to establish the internally economic and

technical norms to manage production costs and product’s price.

c) Public transport by transit buses

Decree No.91/2009/ND-CP dated 21/10/2009 of business rules, business

conditions and licenses for auto transport businesses. Accordingly, the

centrally governed province or city people’s committees issue the planning of

route network, construction and management of infrastructure for bus

operations, publishing bus routes and ticket prices, the country’s incentive

policy to encourage the development of passenger transport by bus in the

area. However, some cities actually have not complied with these regulations.

- The deployment of content on Decision No.280/QD-TTg dated

08/3/2012 of the Prime Minister approving the project of developing public

passenger transport by bus from the period of the year 2012 to 2020 remains

in slow speed and facing obstacles.

- Results of the implementation of the provisions of the Decision

No.34/2006/QD-BGTVT of Ministry of Transportation dated 16/10/2006 on

"Regulations on management of public passenger transport by bus" are still

limited.

- The implementation of Decree No.95/2009/ND-CP dated 30/10/2009

of the Government provided term used for freight cars and passenger cars is

embarrassing, for example, the scheme of Ho Chi Minh city People's

Committee relating to replacing 1,680 new buses are embroiled in support

mechanisms for investors.

- The price support mechanism for subsidized bus routes for each route,

each group of vehicles lacking transparency, openness and fairness, so it is

difficult to attract investment from all economic sectors operating in the field.

Calculating formula: Funds of price support = Total bus running cost

(including profit) - assigned revenue.

3.Current status in subsidized public services in 5 central controlled

cities

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3.1.Ha Noi Capital City

3.1.1.Current status in organizing and supplying of public services

a) Solid waste collection and treatment

According to the Urban Environment Company Hanoi, the volume of

solid waste in Hanoi increased at an average rate of 15% each year. Solid

waste generated more than 6,500 tons each day. Estimated percentage of

household solid waste collection is about 95% in urban districts and is about

65% in suburban districts. Industrial solid waste is collected at about 85-90%

and hazardous waste collection is only reached 60-70%. The handling and

disposing solid waste is mainly based in the landfill, wasting lands and also

impossibility to handle environmental pollution thoroughly and landfills are

already in danger of overloading. Difficulties and delays in the waste

treatment is due to waiting for the function authorities to select technologies

of intelligent waste processing, environmental hygiene and consistency with

the Hanoi

b) Clean water supply

In Hanoi, the currentoperationg 20 large-sized water supply plants and

15 water production stations under the control of Clean water factories

basically expolit underground water through 280 wells. However, on facing

the fact that the current level of underground water is getting more and more

low down, the volume of water exploited is on decline, together with water

pollution and ground subsidence, exploitation of ground water inside the

municipal areas is prohibited and water supply development is heading to the

surface water exploitation from Da river, Hong river and Duong river. Since

the start exploitung Da river water source June in 2008 of the Song Da Water

Plant (Vinaconex), the trend in using surface water for clean water supply has

begun. However, surface water source in Hanoi area may encouter difficulties

from big changes in water volume on the monthly basis within a year and

changes in quality due to the receipt of waste water run out from city.

Water supply system (including clean water transferring system and

distribution system) are not regularly maintained and upgraded to be

synchronous with water supply plants; therefore, the percentage of clean

water loss stay extremely high, from 38% - 40%. As the clean water supply

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system is equipped to the front houses in unsynchronous and complicated

network, citizens having water usage demand must put their own investments

in purchase of water pipelines, water pumps, construction of water storage

tank. In the end of May in 2013, water shortage occurs in several areas in the

city, such as: 45 households in citizen group 26, citizen coumpound 7, Quang

An ward (Tay Ho district); 100 households in citizen groups 43, 45, 46, Quan

Hoa district (Cau Giay district); hundreds of households in the building B10B,

Nam Trung Yen urban area; households in the citizen group 62, Chuong

Duong ward (Hoan Kiem); households in the alley 354 in Truong Chinh street

(Dong Da district).

Rural water supply in Hanoi reveals weakness and shortcomings in the

management, exploitation and uses. It has been many years since more than

2000 households in Chang Son Commune (Thach That District, Hanoi) fell in

to the status of servere shortage of clean water. They had to travel and buy

every barrel of clean water at prices from 100,000 - 120.000 dongs/m3. The

reason for that shortage could be tracked back from high population growth

causing water pollution, soil drought, many households have dug wells as

deep as 30 - 40m but they still failed to see water. By reviewing, the Hanoi

Department of Rural and Agricultural Development has found a number of

water supply projects in suburban areas still "sleep in blanket" and this

number, unhapply, is getting higher.

Of the 123 water supply plants invested the construction of the city, there

are 25 inactive stations.The water supply stations under the direct control of

villages, cooperatives and communal levels used to functioned well at starts

but then reveals limitations and shortcomings. So far, the city has not

provided regulations on construction management and exploitation of water

supply management system for coherent controlling. A vast number of

management boards at commune level, cooperatives, and villageshave not had

expertises and stays in poor management status, and lack of funds for timely

repairs and maintainance, that consequentlycause the works quickly degraded,

damaged, leading to unsecured water quality. In many water supply systems,

sterilization matter has not yet been equivalently concerned. While some

water supply stationsonly having their water analysis and tested once a year,

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the others did not conduct any water testing and water quality provided to

citizens have not been not announced .

c) Public transport by transit buses

According to the Department of Transportation Hanoi, in recent years,

bus service has donequick recovery steps, the number of transit buses

increased from 237 (2001) to 1,145 (2010), from transporting 19.7 millions

of turns of passenger in 2001 to 422 millionsof passengers in the year 2010.

Currently, there are 84 bus routes (including 65 routes are subsidized in bus

ticket price, 12 non-subsidized routes, 07 routes operating in socilization

mode) with a total length covered by the service of nearly 2,300 km, with

daily running of more than 10,800 turns/day and at serving more than 1.1

million passengers per day. Nevertheless, current operation of transit buses

has only met only about 10% of travel needs of the people; concurrently,

service quality remains weak, buses failed to follow strictly scheduled route

and intended ignorance of certain terminals.

According to the Urban transport operation and management center, on

some streets, buses are not fullyexploited regarding capacity, which means

possible increases in these routes; in contrast, some overloaded bus routes

should be adjusted the running schedule to cut off load of service. Regarding

infrastructure, there are needsin designing transit points and adjust the bus-

stops to attract more passengers;it should makerationalization over startpoints

and endpoints. Only by having these measures in place, costs can be saved

and the fixed networks become more stable.

There are many shortcomings regarding bidding contracts such as slow

adjustment of ticket fare, prices of raw materials and deadlines of subsidy

payments as committed in the contracts signed. Late payment of subsidies to

business (often late from 06-09 months) are often causal from the Department

of Finance and/or the State Treasury sides; slow adjustment of policies on

wages for workers and raw material prices; autonomy in leasing ground areas

to supplement for the revenues are not allowed.

- Regarding subsidies of price, after 5 years of expansion, the bus from

Hanoi (old) in Ha Tay (old) still enjoy subsidies policies. Specifically, for the

subsidized routes, if the distance is less than 25km, the fare is 5,000 VND,

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greater than 25km, the fare is 7,000 VND. Meanwhile, with the same length

of route, the non-subsidized buses fare are higher from 2-3 times. For

example, the routestarting from My Dinh station, going to Thang Long

Avenue and endingSon Tay town coverstotal 50km in length; and the bus fare

for this route is 22,000 dongs; however, covering the same length, the

subsidized route costs only 7,000 dongs.

3.1.2.Current status of decentralized management and socialization

a) Waste collection and treatment

According to Decision No. 11/2011/QD-UBND of Hanoi PPC, the city

environmental sanitation management (including collection, transportation

and disposal) in 04 districts and the main road, the road belt, the center roads.

The PPC allows bidding and order-making forms, but mostly used is the fixed

amount order-making contract with specific price while bidding is only

applied for price discount in new opened areas.

Decentralized districts actively manage environmental sanitation from

identifying unit to implement to make balance on the costs and the local

budget. However, some new established districts, as did not establish any

specific units in charge, encounter many problems in management.

-Ministry of Construction takes charge of waste appraisal, the PPC is

responsible for approval and processing payment for businesses. Department

of Finance manages budget allocations and gather financial reports relating to

the environment. Districts has its own budget for waste management activities

and to balance their income and expenditure.

- Regarding socialization, there currently exists a number of joint-stock

companies and cooperatives working in environmental services performed

socialization such as Thang Long Environmental services Joint Stock

company, Tay Do Environment Joint Stock company, Thanh Cong

Cooperative ...

As reported by the Department of Natural Resources and Environment,

Hanoi is implementing a number of projects to build waste treatment plants in

advanced technology mechanism of socialization. However, the progress of

the project is delayed, the project does not officially come into operation due

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to difficulties in land search, problems in the ground would permit the

deployment of project appraisal technological investment, handling costs and

operating large.

b) Clean water supply

- The Prime Ministerapprovesthe price framework for clean water, the

Provincial People Councildecides the specific price, and Provincial People

Committee supervises water supply criteria. Ministry of Health manages the

quality of clean water. Ministry of Construction takes control over the

continuity of clean water supply service. Enterprises actively manages the

quality of clean water following statutory regulations.

- Not yet been comprehensively decentralized: the planning of water

supply is under the management of several departments and branches of the

City (Department of Construction ...), enterprises are the ones who

implement. The City allows capital loans from 40-60% to develop a network

of water supply systems, the loans are interest free and paid through

deduction annually. Water businesses are not allowed to take control over

capital and prices of clean water. The City manages output prices and input

costs, control items; therefore businesses have to suffer losses because

revenues is unlikely to offset rising input costs such as electricity and taxes

while they have no permission to adjust the price of clean water service. An

appropriate rate of depreciation of fixed assets is the most difficult problem in

the process of costing. Some businesses also very confusing in the

depreciation because no specific guidance.

- Regarding socialization, there are several mini-sized water production

and supply stations in urban areas controlled by individuals in both

exploitation and businesses such as Dinh Cong urban areas Dinh Cong, Trung

Hoa, Nhan Chinh, Tri Thanh, Hoang Mai ...

c) Public transport by transit buses:

Traffic Control and Management Center (TRAMOC) is the unit

performing function, duties assigned by the Hanoi PPC and the Department of

Transportation and Public Works over managing the public transport by

transit bus (about revenues, service quality, infrastructure, and projects

related).

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-Department of Transport organizes bidding for bus routes and selecting

enterprises to participate on the base of specific criteria in the bidding

contracts such as vehicle quality, service quality...

-Department of Transport does not involve in managing the

organizational structure apparatus of enterprises. Enterprises are entirely

automatic regarding this activity. However, enterprises must recruited

employees in accordance with regulations of the Ministry of Transport

regarding such criteria as training qualification and other criteria stipulated in

the Circular No.14/2010/TT-BGTVT. General Directors of the enterprises are

appointed by the provincial People Committee basing on the provincial

DOHA’s consultation. The other titles are arranged by the automatic

enterprises themselves.

- About socialization, some individual enterprises such as the Bac

Ha Company Ltd. (its affiliation in Hanoi),doing business on the bus route

Tran Khanh Du – My Dinh, owning 60 bus vehicles, Hanoi transport vehicle

Joint Stock company, Dong Anh transport, commerce and tourism Joint Stock

company, Bao Yen Tourism, service and construction Ltd. company, Ha Tay

transport vehicle Joint Stock company, Bao Chau Transport Service Joint

Stock Company, Hai Van Transport Service Joint Venture company, South

Hanoi transport vehicle factory....

According to the Circular No.32/2007/TT-BTC guiding the

implementation of the Decree No.158/2003/ND-CP on value-added tax

(VAT), transporting customers by bus is not subjected to VAT; therefore, the

input VAT at the purchase of bus shall not be deducted or refunded rather it is

calculated into the fix asset costs for being depreciated. Nevertheless, when

liquidating assets, enterprises is obliged to pay VAT in the second time; and

up to now, there is no enterprise to receive VAT refundment.

Private bus transport enterprises are not granted land; rather they have to

rent land use rights for building bus repairs and maintenances station, waiting

station and to create their own stop-overs and signs, etc.which increases

transport costs.

3.2. Hai Phong City

3.2.1. Current status in organizing and supplying of public services

20

a) Solid waste collection, transport and treatment

- Hai Phong urban environment one member limited company is the

companycollecting, transporting and handling a vast major of waste from the

City; each day it collects, transports and handles approximately 900 tons of

household waste from 4 districts, which areNgo Quyen, Hong Bang, Le Chan

and Hai An and 7 urban periphery communes of An Duong rural district.Most

of waste are buried in sanitary landfill; and part of household waste are

processed into microorganism fertilizers in waste-recycle plants in power of

250 tons per day; the burning method is mostly applied to medical waste and

industrial waste, however in fact, burning ovens of the company with

incineration capacity of 400kg/day only meet part of the demand.

- In other districts and rural districts, it is roughly estimated that the total

municipal solid waste volume generated from suburban districts of about 670

tons/day. In communes, garden, land holes become popular household waste

disposal places. In certain places, the waste is collected and piled up without

being treated. Some rural districts have started to build waste station,

however, due to waste storage time is long prior to transport, local residents

show negative attitudes, request to drive-away or they even started to destroy

the stations. Large-sized garbage dumps of the City are almost overloaded;

industrial waste and dangerous waste are buried in the same together with

household waste which cause negative impacts to land and water

environment.

- Generally, the management of waste collection and treatment of the

city reveals concerning challenges due to the lack of specific implementation

plan; the system of investment regimes and policies supporting municipal

solid waste collection and treatment failed to set out reasonable fees; failed to

classify the solid waste right at source, origin, non-classification at waste

collection, recycling, transporting and processing waste have not yet been

strengthened.

b) About urban water supply:

- The percentage of Hai Phong urban citizens are supplied with clean

water is approximately 76%; the average price of household water is 7,800

vnd/m3 including living cost of 6,500 vnd (since 01 January 2012),

21

administration fee (10,000 vnd) and service cost (12,000 vnd); clean water

attrition percentage stays at low level of under 25%; surface water

exploitation is still in easy and convenient level of implementation; water-line

supply is standardized with ADB funded investment.

- Clean water is exploited at one hundred percentage; however, the

quality of surface water is on decline due to increasing pollution levels

generating from agricultural, industrial productions, household wastewater; as

a consequence, household wastewater leads to increase in chemical

substancevolumes used for water treatment, which in its turn, causes rising

costs in clean water production.

c) Public transportation by transit buses

Currently, there are six transport enterprises registered, overall in the

whole city, there are 131 bus vehicles running on 14 routes inner and outer

the city; however, the number of routes has been reduced to 2/3, operational

frequency reduces and is now often 60 minutes per turn. The reason is that the

city budget insufficiently afford in compensation for losses, price subsidy;

each year the City only inputs 02 billion dongs for investment in supporting 2

routes of state-owned enterprises while the enterprises operating in other

routes have to seek finance for themselves.If the enterprises increase ticket

price at different routes, customer quantity will reduce, that leads to decreases

in service quality, less assurance of number of transport turns within a days.

On the other hands, enterprises are currently encountering big challenges such

as bank interests and also encountering high increases in fuels and laborers

which cover almost 80% of price costs with high bankrupt possibilities.

3.2.2 Current status of decentralized management and socialization

a) About waste collection and treatment

-The provincial People Committee provides general management,

Department of Construction develops regulations in bidding, ordering to

manage this type of service, and Department of Finance takes charge of

budget.About waste management: Industrial waste management is under the

control of DONRE; medical waste management is under the control of

Department of Health; Household waste management is in charge of

Department of Construction; rural and agricultural waste is managed by the

22

Department of Agriculture and Rural development; limitations in specific

decentralization for managing hazardous waste management and security,..

-In suburban districts or rural areas, waste collection and transport

activities are managed by the district People Committees or Commune People

Committees; and the fact that waste collection and transport activities are

done spontaneously; consequently, some criteria for collecting and processing

waste failed to meet standards and cause environment polluted.

-Unit cost for sanitary fee collection: the city stipulates the unit cost for

sanitary fee value at the 75% of the total level(100%) regulated by the

Ministry of Construction, and then, 50% of the total 75% regulated by the

city.

-The typical socialization model in environment sanitary is the Co-

operative Thanh Vinh with 3 year experience in this field (including 02 main

activities of collection and transport of waste) of Duong Kinh District.

b) About water supply

-Water supply plants purchase raw water from hydraulic agricultural

units. Department of Construction is the administrative agency and DONRE

is the relating agency.

With the “State-Citizen do together”policy and international funded

finance, Hai Phong City has invested dozens of billion dongs into building

approximately 100 mini-sized water supply factories in suburban districts

such as Tien Lang, Vinh Bao, Kien Thuy, ect... Most of the water supply

plants have been completed, yet functioned in limited capacity or left unused

(almost two third of the mini-sized water supply factories) while local citizens

have been using unsecured water sources. Kien Thuy suburban, currently,

owns 25 intensive water supply systems in 13 communes, which are

functioning, yet in low efficiency, running at the capacity 50- 60% of the

designed capacity.

Many localities only invest to build water supply factory without any

investments into water pipeline system, households arrange self-invest; many

households which can’t afford to purchase water pipeline, still use rainy water

or water from drilled wells.

23

c)About public transportation by transit buses

- The City can’t arrange sufficient budget for investing into

infrastructure (signs, waiting station, land and other priority regimes) in

serving to buses. Enterprises participating in providing bus transport service

can’t arrange enough land areas for building stop-overs and vehicle

maintenance and repairs points,...

-The City leads the Department of Transport to develop the project of

Bus Operator establishment (income-raising professional career units directly

under the control of Department of Transportation. Bus ticket price is decided

by the provincial People Community. About subsidy: there are 2 subsidized

bus routes, which have not in standard and having no economic-technical

norm framework; therefore, there is no basic knowledge to establish bidding

and ordering mechanisms. In fact, State often uses all their possible finance to

subsidy.

3.3. Da Nang city

3.3.1. Current arrangements and supplying of public utility services

a) Waste collection and treatment

- The amount of municipal solid waste disposed by household each day,

on average, at approximately700 tons. With more than 90% of the waste

collected through manual methods, the environmental work-forces do not

meet the collection demands. The whole of municipal household waste are

buried as in compliance with standards in 05 waste-buried holes with total

areas of 15ha; however, due to open-air design, the waste-buried holes fail to

meet environmental regulations, waste-water leakage occurs in 2 natural

biological lakes and lead to the fact that gas pollution and waste-water

pollution exceed the allowed levels. Concurrently, a variety of concerns arise

such as increases in waste-burying land areas, increases in waste-water

leakage volume, losses in the volume convertible recycling waste, increases in

difficulties in controlling risks regarding environmental pollution and

community health issues.Although it is stipulated in statutory documents that

environmental observations is conducted quarterly, financial straits made the

implementation of environmental observation regulation mostly impossible.

24

Environmental clean-ups currently charged households at low fee of

15,000 vnd/1 household /a quarter; in suburban areas, the Environmental

clean-ups company only collects 50% of the fee for covering costs.

- Besides, the City is now facing difficulties in management and

treatment of medical waste disposed by 21 hospitals, district medical centers,

rural district medical centers and approximately 700 private health service

units, 56 medical stations of communes and wards. The management of

medical waste controlling regulations has not successfully been synchronous;

waste classification at sources has not been done; tools and equipment for

waste collection, especially waste storage bag/box labels and quality did not

met regulations; waste storehouses have not yet been established and a large

number of waste are stored open-air and lead to environmental pollution and

non-eye-catching view. Waste transport vehicles within hospital areas cause

sanitary and safety concerns; 100% of all units did not set the right waste

management profile as regulated. Charges for collecting hazardous waste and

medical waste are set at extremely low value (6,000 vnd/cube)causing

difficulties to enterprises.

b) Clean water supply

- The percentage of municipal citizens provided with water is 87%.

Water leakage percentage is 20%, reducing by compared with the last year

percentage, which was 40%; average water consumption level of each citizen

is 128 litre/person/day.

- Danang Water Supply One Member Ltd. Companyis in charge of clean

water exploitation and distribution. The company, together with its 3 plants

and with designed capacity of 155,000m3/ day and night, is currently

operating with practicial capacity of 130,000 -140,000m3/ day and night.

Ofwhich, Cau Do plant is one among big-sized plants with water treatment

capacity of 120,000m3/ day and night; San Bay water plant is the medium-

sized with capacity of 30,000m3/ day and night, and Son Tra water supply

station is a small-sized one with capacity of 5,000m3/ day and night.

c) Public transportation by transit buses

In Danang City, the current convenient transport condition has favoured

the bus transportation on its five (05) routes allocated and accumulative

25

annual transportation service capacity by bus has provided to76,100 customer

per year, responsing to 0.9 % of demand; operating capital

utilization efficiency percentage is 50%. Nevertheless, the facilities of bus

stations, bus-stops are not allocated conveniently causing low attraction to

passengers.

3.3.2. Current status of decentralized management and socialization

a) Waste collection and treatment

- Municipal People Committee, through provincial Department of

Natural Resources and Environment, has made an order with the Danang

Urban Environment One Member Limited Company (the Company) about

waste collection and treatment in value of 75billion dongs per year. The City

has invested for the Company one waste incinerator and special vehicles of

various types.

- The City has not sufficiently promulgated regulatory documents on the

operation in collecting waste water from storage tanks. Vocational training

centers have not yet met the demands of the employees working in waste

collection areas.

-The technological requirements issued by the Ministry of Science and

Technology are continuously rising fast by compared with investment and

financial capacities of the unti.

- That service is charged at low price andzerooperating incomes cause

equitizing becomes challenging; consequently, none of the units in this sector

are socialized.

b) Clean water supply

-Investments into clear water supply in Danang varies in sources, yet

there exit no managerial regimes for the whole capital sources, and that leads

to unsynchronous in managing activities. Since 2011, clean water price is

regulated by the municipal regulation. Household clean water price: for the

first 10m3, the price is set at 2,950 dongs/m

3in rural areas and 3,700

dongs/m3in the urban areas; for the consumption volume of 10m

3 to 30m

3, the

price is 3,500 dongs /m3in rural areas and 4,400 dongs /m

3in urban areas; for

the consumption of more than 30m3the price is 4,300 dongs /m

3in rural areas

26

and 5,400 dongs/m3in urban areas. Annually, the City extracts from 50 to 70

billion dongs to cover the losses from costs and from loans due to the fact that

the present water price is set lower than the factual costs.

-Regarding peripheral areas, the Company’s financial capacity is not

strong enough to put sufficient investments and developments as the finance

for implementation exceeds individual investements for household in urban

areas. Therefore, supports from rural development fund of the provincial

Department of Agriculture and Rural development or from co-funding

activities of big-sized enterprises locating on the areas are needed.

c) Public transportation by transit buses

- Danang has not yet been pressed by urban transportation pressure,

therefore, the promulgation of policies supporting investment, assissstance

and bus vehicle bidding or ordering mechanism have not yet been in place.

Subsidized prices for enterprises and citizens are not yet developed;

consequently, participation encouragement is not well promoted to the

citizens.

-Regarding bus quality, fixed-revenue requirement, in busy season,

causes buses to run across several waiting sites without stopping to pick-up

customers and results in the lacking of supervising device installments. Some

vehicles are even utilized to carry goods (vegetables, bikes). Distance

between bus-waiting stations is from 500 to700 m; therefore, there is a

symptom that buses stopping or picking-up customers at unscheduled sites.As

customers’ uses of buses for travelling is limited and that bus industry is high

investment but low speed in capital returns, this industry faces difficulties in

attracting wide ranges of participation from economic components

+ As doing business in transit busis sufferinglosses, units turn to seek for

revenues from other types of business to cover the losses such as station

exploitation. As some bus routes are forced to earn a fixed number of

revenues, service quality remains at limited level (bus-stop missing, route

cutting ect.).

3.4. Ho Chi Minh City

3.4.1. Current arrangements and supplying of public utility services

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a) About waste collection and treatment

Each day, citizens dispose about from 7,000to 7,400tons of household

waste, 500 - 700 tons of industrial solid waste, 150 - 200 tons of hazardous

waste, 9 - 12 tons of medical solid waste. In the city, waste collection and

transport activities are performed by the environmental service company,

cooperatives and 22 public utility service companies. Waste management

groups, which are people-founded, collect waste disposed by almost 60% of

about 100 to 500 households in the city, with its 1-5 rented labourers. In terms

of waste collection sites, there are current more than 250 sites across the city,

70% of which are currently in worse sanitary status causing environmental

pollution.

Management over people-founded waste collection forces is facing

challenges. A majority of waste collection cooperatives face restrictions

regarding its operational scope, scattered organization patterns, weak capacity

in accessing capital sources for serving technological renovation and

implementing policies and regimes for labourers, rudimentary waste

collection tools.

The City is encountering difficulties in waste treatment. The most

popular waste treatment method is burying. Currently, there are 5 waste

burying sites, in which, the Go Vat site (Binh Tan district) has closed, Dong

Thanh site (Hoc Mon rural district) and Phuoc Hiep 1 site (Cu Chi rural

district) are getting overloaded and only capable of receing waste in few years

more; Phuoc Hiep 2 site (Cu Chi rural district) site and Da Phuoc (Binh

Chanh district) are capable of operating until the year 2026. Accrding to the

provincial DONRE, within less than 15 years, all of waste-burying sites

across the city will be overloaded. The land areas used for the purpose of

burying waste are large; that means high costs in land clearance and

compensation, concurrently, wastewater in these areas are highly polluted

therefore treatment measures are more challenging with extremely high cost

of about 74,000 dongs/m3.

b) Clean water supply

In a daily base, water supply plants provide more than 1.8 million m3of

water for households in the city area. The percentage of the households

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provided with clear water reaches 85%, the left 10% use clean water provided

by the Centre of rural sanitary and clean water. A great deal of concerns is

being paid on the clean water provision due to slow progress in

implementation of the projects on water network development and water

pipeline improvement. Many citizens are facing with severe water shortage

conditions or are using self-exploiting water source without being treated. In

several areas, water supplements are provided from water-tank-vehicle

(approximately 1,000m3/day). In quite large number of rural areas, citizens

are still using welling water for their daily activities with unsecured quality,

hard water containing large volume of hydrogen sulfide or ferrous iron with

bad ordour. The percentage of citizens is using clean water that meets

standard ranges from 25% to 30%.

Water from Saigon River is getting more and more polluted due to other

nonpoint water sources such as household disposal wastewater, industrial

waste water, parts of solid waste and hazardous waste and the retaining of

fertilizers and chemicals that are used to control weeds, insects and peststhose

end up in water running through the areas of such provinces as Tay Ninh,

Binh Duong and Hochiminh City.

The percentage of clean water leakage in the city is as high as 40%and it

causes water shortage in certain points of the water network, which is

currently in worn-out status, some water pipelines even have holes, due to less

maintainance and repairs andbeing unsynchronous with water treatment

plants; lacking policies and regimes to handle clean water stolen behaviors.

c) Public transportation by transit buses

The City owns 30 public transportation units by transit buses. In which,

there are 27 cooperatives, one state-owned enterprise, one joint unit and one

limited company. In total, there are 3,208 buses running in 150 bus routes,

increasing 53 routes by compared with those in the year 2002,ofwhich,

110bus routes are subsidized, the other arrange revenues and spending items

by themselves. Volume of passenger using transit buses for travelling

currently reaches about 1.28 million passengers per day, which is

approximately 6.5%.

29

Despite the annual subsidy of about 1,500 billion dongs from the City,

the development of public transportation by transit buses still encounter many

difficulties in fuel costs, lost assets in vehicles, careless driving, attitudes of

bus servants, unexpected dropping out or picking up customers at

unscheduled sites, cutting off routes in travelling schedule and concerns

regarding ticket price and service quality, ect. The network of bus routes

allocation is overlapped and irrelevant; consequently, this allocation causes

inconveniences to passengers. Moreover, bus terminals and bus stations

planning actitivities do not reach high agreements between provincial

Department of Planning and Architecture, District People Committees and

provincial Department of Natural Resoces and Environment.Municipal land

fund designed for transportation system development is in remarkably

restrictied, covering just 5% of the whole city land area.

3.4.2. Current status of decentralized management and socialization

a) About waste collection and treatment

-Provincial People Committee (PPC) promulgated regulations and

management strategy on environment sector; the DONRE administers the city

environment in general and control the solid waste management in particular,

in cooperation with the DPI, Department of Construction, Department of

Science and Technology and DOF. Municipal People Committee reviews and

approves unit costs at the requests of implementative units submitted to

DONRE and DOF. District People Committees (DPC) assigns District Bureau

of Natural Resource ans Environment to execute the tasks decentralized.

Public utility Service Company of districts and rural districts collects and

translate waste on the authorized area.

-Overlapped functions in assignment of waste collection: Waste disposed

from street-front households is collected by both Public Utility Service

Company and people-founded waste management task-forces; the medical

waste is collected by both municipal environmental company and public

utility companies. That facts interferes responsibility identification.

- As Government stipulates the ceiling level of fees from 20,000 to

25,000 dongs/household/months, municipal budget is incapabale of covering

the losses for the increasing costs in waste collection.

30

-Waste collection socialization following the form of Cooperative

reveals difficulties, the reason is supposed to be the Cooperative model

restricts the efficient operation and development expansion.

b) Clean water supply

-Sai Gon Water Supply Company manages and develops water supply

systems, produces and run business on clean water across the City areas. Its

equitization meets obstacle due to the water price regulations provided in the

Circular No.75 did not attract investors due to high investment cost but low

benefits in returns. Only clean water production, which is proactive in

production costs through negotiations with DONRE and water bidding

companies, is quite attractive to investors. Following the clean water

production, public-private partnership is also potential to investors.

c) Public transportation by transit buses

-The socialization level of transit buses stays at high level, 80% of

enterprises are private ones (including limited companies, Cooperatives and

Joint venture companies). Nevertheless, the majority of those are small-sized

cooperatives with weak managerial capacity, which is similar to family

company style.

-The current bus routes operate basically following contracting upon

order and there are 05 bus route follows bidding method. However, bidding

form reveals disadvantages such as: difficulties in solving post-bidding

aftermath for the worn-out buses during the period of depreciation; short-

termed bidding contracts (less than 3 years) while vehicle depreciation time

lasts 7 years; consequently, unstable investments causes fails in bidding.

3.5. Can Tho City

3.5.1.About waste collection and treatment

Waste collection service collects of about 70% per year, the annual

waste volume collected and treated is of 170,000 tons mainly by the Can Tho

Urban Works Limited Company; Minh Tanprivate company (performing in

two subdistricts/wards); and Thao Dien Cooperative collecting and

transporting waste in towns and main roads in the 6 communes of Phung

Hieprural district. The major waste treatment method is burying. The largest

31

waste burying site covers approximately 20.7 hectares (located in Hau Giang

province). Additionally, there are 5 other small-sized waste burying sites.

State management in the field is not uniformed: some rural districts of

the city assigned managerial tasks to the Department of Natural Resources

and Environmental while districts assigned those to the District Bureau of

urban management.

The present sanitary fee amount to be collected in accordance with the

Decision No.02/2011/QD –UBND dated 04/01/2011 almost serve to cover the

cost of collection and transport of household waste to the waste collection

sites; the costs of waste transport and treatment are financed from state

budget. Annually, the Urban Environment factory under the direct control of

the Can Tho Urban works one member limited company collects the urban

sanitation fees of about 5 billion dongs in value. The city must invest an

additional amount of 30 billion dongs to carry out sanitation work.

In 2008, the service of waste collection startedto be socialized; however

the business does not have sufficient land areas and expenditure to build

transshipment yard; at the same time, there have been not any specified

sanctions for those who do not pay sanitation fees; the waste-storage land site,

of which the investor is the Urban Works company, did not allow partners to

dispose waste on.

3.5.2. Clean water supply

- The water supply in Can Tho city is basically in charge of Can Tho

Water Supply and Discharge Limited Company. The company owns 12

domestic clean water supply plants for 96,168 households in urban areas with

577km-long pipeline system. Approximately 42% of households are provided

with water supply (only 5 Districts account for 71% and2 central districts

account for 77%). Water loss rate is 27.04%. Average clean water price is set

at 6,000dongs/m3. Additionally, there are two other joint stock companies and

one company 100% owned by private (Cai Rang company with water supply

and discharge capacity of about 5.000m3serving for 4,000 households). Tra

Noc water supply and discharge companyserving particularly customers in

Tra Noc Industrial Zone, having chartered capital of 41 billion dongs, with

32

operational capacity of 20.000m3/day, serving 3,400 clients. Water loss rate is

10.3%.

Clean water in Can Tho mainly exploited from surface water. Clean

water meets the standards regulated in the Decision No.01/2009/BYT on

clean water for eating and drinking and is regularlysupervised by the local

Preventive Medicine Center.

Department of Construction is assigned by the PPC to or and make

planning for the municipal water supply and discharge system; Department of

Finance takes charge of capital management and product value appraisal.

3.5.3.Public transportation by transit buses

The bus system comprises of from 5 lines with 57 vans (including 23

joint vehicles), transporting around 6.5 million passengers/year. A city bus

fare, since 4/2010, isregulated to be 4,000 vnd/round;the fare for travelling in

bus to adjacent provinces is 10,000dongs/round. The businesses meet

difficulties due to having not subsidized road fees, parking charges. Citizens

have several concerns in using this transportation types as irrelevant bus-stop

location and threats of pickpockets.

4-Major findings extracted from surveying and interviewing citizens

4.1-About environmental sanitation service

- Regarding sanitation fee, generally citizens believethat this is

appropriate (counting 78%); a small part of citizens, mostly in Ho Chi Minh

City and Hai Phong City (accounting over 20%) considered that the current

fee is high.

- Regarding citizens’ satisfaction, the majority of comments (71%)

aremoderately satisfied (23%) with waste collection and treatment services in

their subdistricts/wardsand 74.5% of respondents show agreement that the

service is currently better than those 2 years ago.

The highestdissatisfaction rate is in Ho Chi Minh City (about 10%).

Mostly, the people here are not happy with how and when waste collection

informed; the timely manner of waste collection and the waste collections

means should ensure sanitation.

33

4.2-About clean water supply service

- A percentage of 56 of respondents in 05 cities under direct control of

the Central government commented that clear water provision have met

households’ demands. However, there remain a relatively high percentage

(20%) of opinions suggested that the amount of clean water provision only

well responds to 30-70% households’ needs, this rate is highest in Hanoi

(47.3%), and the following is in Ho Chi Minh city (17.5%).

-Regarding clean water price, generally, opinions agreed that the current

clean water price is reasonable. However, there is still a small part of citizens

commented that the clean water price is quite high, especially in the Ho Chi

Minh City and Hai Phong City.

- About the method to identify water consumption level and the amount

of money to be paid, in general, is transparent and clear. However, there are

still a few people, especially in the Ho Chi Minh or semi-urban districts that

do not see those transparent and clear. It is possibly that they are households

consuming water in fixed assigned amount, not those who use clean water and

pay on the base of water meter.

- Regarding water quality (transparent water, no unpleasant smells):

Generally, all households’opinions show that water quality in the city is

acceptable (accounting for over 70%).

However, water quality regarding ordour remains a concern in some

households, particularly in Danang City and Hanoi (accounting for more than

10%). Water quality in the urban districts is assessed to be higher than in the

coastal districts/ rural districts.

- About water management, the phenomenon in which people prompt to

connecttheir private water pipes to the public water pipeline still occur.

However, there remain the phenomena of water flowing on the streets or

individuals/agencieswaste clean water (accounting for 20%). In Hai Phong

City, the percentage of 31.4% of respondents said that there exist the wasteful

uses of water byhouseholds, agencies, organizations and there is 23.4% of

opinions confirmed that there exit the phenomena of clean water flowing on

streets.

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4.3. About transit bus service

- The survey results showed that Hanoi is the city in which the uses of

transit buses for travelling to work or going to schools are at the highest level

(over 60%). In other cities, the transit buses are mainly used for travelling to

the shopping centers or tourism purposes. The people of the semi-urban

districts/ rural districts used transit buses for goining to school more than for

going to work place.

- In general,bus service are considered to be better in quality by

compared with the previous 5 years (accounting for over 70%) and it the

service is appropriate to incomes and demands of citizens (68%). However,

recently, there are only 53.1% of respondents said that thay satisfied with the

use of transit buses.

- Regarding convenience in bus-stops, it seemed that Hanoi is evaluated

at the lower level than all other cities (accounting for 36.4%). Both Hai Phong

City and Hanoi share a common weakness which is careless bus driving

(about 30%).

-Ha Noi and Hai Phong City are both assessed at lower rank regarding

service quality at bus-stops (22%). Hai Phong is also underestimated for the

timely manner of bus service as well as vehicle facilities. Vehicle equipment

for bus in Ho Chi Minh City and in Hanoi are only ranked moderate.

- The bus fare is generally considered reasonable for all types of trip-

tickets, monthly tickets and tickets in priority.

- The main reason explained why many people do not use the transit

busesis that the bus lines are relevant to their travel needs (accounting for

more than 40%). Besides, there are other reasons which are travelling by bus

is passively dependent, time-consuming and inconvenient bus-stops.

4.4. About competency in performing socialization in services

Regarding investment intention into service sector (if possible in terms

of capital), people concern mostly in clean water supply (more than 60%), and

then waste treatment (nearly 40%). Citizens in Ho Chi Minh City and Can

Tho province show the highest investment expectation in clean water (70%).

Primary reason is that people want to invest into these services because they

35

believe that this is an area with a favorable investment environment,

especially in Haiphong (more than 70% of respondents). Moreover, that the

investmentensures profitability (at the rate of about 30%) is also the reason

people want to invest in this area.

II. RECOMMENDATIONS

1 – Well aware of the nature and importance of public utility

services in urban areas, and from that basis, identifying accurate

directions for renovation of mechanism, policies and legislation providing

on public utility services.

-Clearly identify the conceptual content of subsidized public services; it

is the products or services essential for societiesof which provisionsare not

guaranteed by market supply (due to the fact that any single producer or

supplier is unlikely to offset the cost or get very low profit in return), State

providesprovisions, regulatory items, acquisition, financing through the

decision making on the supply categories and levels of supply; production

scale; beneficiaries and stipulations on prices and fees. State has the mission

of ensuring subsidized public goods/services for societies while all of the

products/services are not necessarily produced and supplied by State or state-

owned-agencies or state-owned-companies, enterprises from different

economic components and state-owned enterprises can be involved in the

implementation.

- Innovate methods of implementation and management in compliance

with typical features of the services of waste collection, clean water supply

and public transport by transit buses.

- Promote socialization in the provision of subsidized public services

towards the direction of promoting sources from citizens to participate in

supplying subsidized public services and reducing State investments.

Diversify the supply model of subsidized public services, encourage and

attract organizations and individuals to be involved in providingsubsidized

public services; creating an equal environment for businesses and

organizations to involve in the provision of the public services. Clarify areas

36

to be transferred, financial aid policies, tax policies, the physical conditions,

training policies, inspection and control ... The socialization should be carried

out step by step with well identified model and path through segmenting

subsidized public services.

- Enhance decentralization and delegation of authority to local

governments at all levels in the implementation of the provision of subsidized

public services; clearly define the responsibilities of each level of government

in the management and provision of subsidized public services. Localities

annually invest into different patterns of subsidized public services through

open bidding for each particular workin each area to allow a wide range of

partners to participate.

- Ensure autonomy and accountability of the organizations providing

subsidized public services; Identify and develop mechanisms for providing

stipulations on rights and duties to each partners involing in providing

subsidized public services.

- (State) Strengthen inspections and supervisions overthe efficiency of

subsidized pulic services; using mechanisms and regulations to regulate and

control enterprises and private organizations in the provision of subsidized

public services at the request of the State.

2.Renovating the organizational structure and operation of urban

governments to ensure unity, coherence and efficiency in organization,

management and supply of public utility services

The borrows of the organizational and managerial modelsfrom

provincial level to apply identically to central controlled cities, the one from

rural districts to similarly apply to the districts, towns and cities directly under

the control of province, and the model from the commune level to bring in to

use exactly the same for subdistricts/wards are inconsistent with the objects of

management and the nature of a municipality. The infrastructure of the urban

is characterized by its continuum andgreatercomplicated, in comparison to

infrastructure in rural areas that form networks, synchronous systems

throughout the province, regardless of administrative boundaries and

requiresa centrally and unified management. Urban infrastructure includes

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urban technical infrastructuresuch as water supply, electricity supply,

transport infrastructure, environmental sanitation, communications ... and the

social infrastructure and welfare public utilitiesas facilities in culture, health,

fitness, sports and parks; and public services are built on a unified overall

planning in the area and provided services to all citizens in the entire city,

town, district, ward, rather than just one area.

Therefore, urban governmentin the cities should be studied and built

appropriately and ensure consistency in planning, articulation, agility in urban

management, and getting rids of the scattered management mode currently

exists.

3. Specific suggestions and petitions

3.1. Government

- Developing a mechanism to ensure "equality" relationship between

state agencies and businesses enteringcontracts on the provisions of

subsidized public services. In one hand, responsibilities and obligations

should be clearly definedfor the enterprises participating in the provisions of

such services as water supply services, waste collection, bus services, and on

the other hand, responsibilities of management agencies should be regulated

in details. The contracting enterprises providing subsidized public services

have the rights of claiming for compensation from State bodies if the contract

is not implemented properly and timely (e.g incompleted payment or fails to

meet the deadlines of funding).

- Amending the Decree No.31/2005/ND-CP towardsthe direction of

supplementing water supply services for households into the category of

subsidized public services.

- Conducting researching activities for supplementation of the provision

method for subsidized public products and services in accordance with the

provisions of the Bidding Law and its guiding documents. At the same time,

most of the contents in the Decision No.256/2006/QD-TTgdated 9 November

2006by the Prime Minister promulgating the Regulations on bidding,

ordering, assigning planned criteria for producing and supply of subsidized

products and services so as to unify contents and make focus one only one

document to facilitate the implementation.

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-Reviewing and providing amendments to unreasonable conents in the

Decree No. 75/2011/ND-CP about the borrower category regarding fields or

projects in the State investment priorities and investors favourable critieria.

-Amending the Decree No. 13/2008/ND-CP towards transferring the

consultative function to PPC in waste collection and treatment from the

Department of Construction to the Department of Natural Resource and

Environment for the conveniences in professional major, the evaluational

capacity, environmental observing capacity and sufficiency in tools for

environmental control.

- Amending the Decree No. 174/2007/ND-CP aboutenvironmental

protection costsfor solid waste relevant to current practices.

- Building the legal system in line with the policy of socialization for

applying to the organizations and individuals who participate in bids or

appointed to make order, allocatating service supply plan in waste collection

and treatment such as industrial incinetators and medical incinerators

separately following Vietnamese and international standards.Providing

additional statutory documents regulating on the products made from recycled

waste.

- Promoting the socialization of water supply services, transit buses,

waste collection and treatment and establishing policies to ensure the equity

between state enterprises and private companies on leasing space, the interest

rate of loans...

3.2. Ministries

- The Ministry of Construction and the Ministry of Natural Resources

and Environment tocooperate to build a competitive bidding criteria for

applying in environmental sanitation services in order to ensure fairness,

proper evaluation and aim to select an appropriate contractors as well as limit

inadequacies in the mechanism of "asking for – giving" in tendering activities.

-The Ministry of Construction toestablish norms of handling water

seepage in landfills to limit environmental pollution to rivers and water

resources, and this norm framework serves as a basis for proposing funds for

waste collection and treatment.

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- The Ministry of Finance toamend and providesupplementation to the

Circular No. 97/2006/TT-BTC dated 16 October 2006 promulgating

instructions on fees under the jurisdiction of Council's decision province,

central cities under the direction of applied maximum rates on actual waste.

- The Ministry of Finance to carry out researching activities to adjust the

level of VAT towards the direction of giving favourable conditions to citizen-

run businesses supported by the State, in specific, they are the specific

enterprises where VAT refund on the input of assets and materials and fuels

to serve bus operation. The regulations on the exemptions for non-road use

for buses to reduce bus fares for local people.

- The concerned Ministries and agencies to develop strategies and

providing the training and retraining for the managerial staffs and organize,

implement the services of waste collection and treatmet, water supply and

transit bus.

3.3. Local governments (provincial level)

-Strengthening communication to citizens on maintaining environmental

sanitation, water savings, and raising consciousnesson urban traffic,

especially the citizens, businesses are residing and operating along and/or

near the two bank of the main rivers to protect surface water sanitation,

preventing wastewater and waste causing the surface water to be polluted;

raising awareness aboutprotecting water resources and forms of punishment

for violations of environmental sanitation in water supply companies and the

concerned organizations and individuals.

- Conducting research on planning the development ofthe clean water

supply service system, and of waste collection and treatment, as well as the

provision of public transport by transit buses in the vision to the years of

2025-2030.

- Implementing active adjustments in the financing mechanism for

subsidized public services, specifying price of clean water to be aligned to

those stipulated in the Directive No.40/1998/CT-TTg on strengthening the

management and development of urban water supply. It equires Roadmap in

developmeing and managing water resource with vision of at least five (05)

years to investors and plans to participate in appropriate water supply.

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- Conducting application research to bring into uses the models of

organization, management and operation of public passenger transport in

cities in order to ensure the following requirements: harmonize the

coordination over the whole system, integrate different transport means,

create preferential conditions to users and favourable environment for

improving performance of passenger transport management, ensure close and

efficient management when, in the future, the operating scale of passenger

transport to be gradually expanded.

- Building operational regulationsto applied to the bus business units, the

regulations will serve as a basis for taking management over ordering-making

andprocurement; conducting research on the models and mechanisms to

manage subsidized bus tickets for bus passengers; submiting the technical

norm framework to be the base for measuring the level of subsidy for each

route and for applying in order-making and tenders; developing the

processesof control, supervision and evaluation and taking over.

- Strengthening international cooperation, diversifying and taking

advantage of capital investment for water supply and sewage treatment,

raising the proportion of people using water to standardize.

- Ho Chi Minh City needs give attentions and supports to create

favourable conditions for better and effective waste collection activities

through such measures as: supporting cooperative members in better

performance and environmental –friendly equipment in waste collection

through favourable loans with low interest rate; enforcing local government

control over and cooperation in peope-founded waste collection activities for

keeping them in better regulatory framework; building regulations, sanctions

to deal with cases of late submission or intended delays in submitting waste

collection fees; making a decline on waste collection fee and reducing

monthly deduction from the total revenue to submit into local budgetof

cooperatives so that the cooperatives may take advantages of the items to

improve the living standards for their members. It is to ensure legitimate

rights for workers, particularly the right to exploit their waste line that they

are managing.

3.4. Enterprises

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-Developing specific decentralized managementlevels specific to the

activities of hazardous waste disposal, security issues, ect. With clear and

specific regimes, policies and planning activities in decentralization so that

localities can take their active roles to handle and make plan for the above

mentioned issues in case they arise (Hai Phong City).

- Developing mechanism to buildunit cost and estimate budget in order

to ensure correspondence between performance cost and efficiency and

service quality; Adjusting policies on fees for waste collection, transportation

and treatment to be consistent to the practical costs.

- Enhancing quality of services by providing training and retraining

activities to drivers and bus staff, expanding the model of safety and

convenient bus ticket selling, calculating to attract potential passengers./.