Vietnam Environmental Technologies Export Market Plan

have designated the project as one of Vietnam’s “seven
most important” development programs.
By 2005, the government objective will provide 80
percent of the rural population with clean water and 50
percent of the rural population with adequate sanitation
facilities. In order to achieve these rates of penetration,
the plan’s authors estimated an investment of $132.3
million per year will be needed. In total, the master plan
calls for $2 billion to implement the project.
The majority of the financing for rural clean water and
sanitation projects will come from overseas development
assistance sources. Since the program started, MARD
reports that 750,000 farming families have been able to
access clean water supplies, bringing the total number
of rural users nationwide with access to clean water to
19.7 million. This marks a penetration rate of 33 percent
of the rural population.
The program is also designed to provide hygienic
toilets to 50 percent of all rural families and to install
wastewater treatment facilities for 30 percent of rural
water users. The government has spent over $5 million
on the program since the beginning of the year.
Approximately $16.2 million in funds for the project are
also being supplied by DANIDA, the World Bank,
UNICEF, and the Asian Development Bank. Denmark is
also financing a $1.8 million water supply and sanitation
project in the north-central province of Ha Tinh.
AusAID has provided $45 million in financing for
rural water supply projects in Bac Giang, Bac Ninh, Ha
Tinh, Tra Vinh, and Vinh Long provinces.
Between 1990 and 1997, UNICEF dispersed $14.8
million in funding as part of a rural water supply program
to 20 million people, covering all of Vietnam’s 61
provinces. The program has installed 180,000 clean water
stations, including 500 small water plants. Half of the
water installations have been set up in rural areas, with
15 percent in mountainous zones and 11 percent at
kindergartens, schools, and local clinics. The remainder
were set up for the families of war veterans.
4.4—Distribution
While the quality of treated water in Vietnam usually
meets World Health Organization standards, once it
leaves the treatment plants, it is exposed almost
immediately to contamination. Between 40 and 50
percent of the water pumped out of the country’s
treatment plants is lost on its way through Vietnam’s 119
rusted and leaky distribution networks.
The majority of the 14,800 kilometers of water pipes
in urban systems are either cast iron, concrete, or steel
Case Study 4.2—Relationships Count
Hong Kim Co. is a local Vietnamese company based in Ho Chi
Minh City. For four years it served as an agent for a Canadian-
American water purification company based in Nevada called
Vector Corp. Vector sold water purification equipment under the
brand name Diamond Rain. The equipment retailed for between
$30,000 and $200,000, with the primary markets being hospitals,
schools, and bottled water companies.
Last year, Vector Group left Vietnam to focus on other markets,
but it licensed the trademark to Hong Kim Co. After four years
serving as an agent, Hong Kim Co. knows the technology and
provides sufficient after-sales service. The Diamond Rain
trademark is established, and the system is considered durable and
of high quality. Hoping to build on its success of distributing U.S.-
made purification equipment, Hong Kim Co. executives have
traveled to the United States to meet with other companies, such
as Ametek and Universal Aqua.
The government’s $2 billion rural water supply program could
turn out to be a gold mine for Hong Kim Co. The government is
allocating overseas development assistance funds to most of
Vietnam’s provinces to implement the program. In one province,
Australian aid has already funded construction of a 200,000
gallon/day purification system, and the province has funds from
other sources, including the UNDP, to install another 60
purification systems.
In addition to having a solid product with a proven track record
in Vietnam, Hong Kim Co. has a trump card: Several of its
employees are directly related to the chairman of the province
awarding the contract. While this many not necessarily win the
deal for Hong Kim, this small distributor of American-built
purification technology is now on the inside track to win several
parts of this sizeable rural water supply initiative.
and are in extremely poor condition. With the unsealed
pipes and low water pressure comes greater exposure to
contaminants from outside the pipes.
Vietnam’s water companies are extremely inefficient.
Not only does a huge amount of leakage and waste occur,
but the companies continually fail to earn enough income
to offset operating costs or upgrade their distribution
systems.
Because of unreliable piped water supplies, authorities
have been unsuccessful in controlling the use of ground
water sources. Well digging at the household, neighborhood,
and industrial levels continues unregulated in many
urban and rural areas. This is resulting in both
contamination and depletion of ground water supplies in
some urban areas.
Charging less than their operating costs, municipal
water companies are losing money and have no funds to
upgrade their infrastructure, creating the supply
inefficiencies. After years of debate, the government
finally agreed to raise water prices effective March 1,
2000, but prices remain below operating costs (Table 4.1).
16 U.S. Department of Commerce, International Trade Administration