Vietnam Environmental Technologies Export Market Plan

The recently completed Binh An Water Treatment
plant supplies the HCMC Water Company with 95,000
m 3 per day. The company pays a fixed price of $0.20 per
m 3 on a take-or-pay basis. Meanwhile, the company can
charge residential customers a maximum of $0.18 per m 3 .
A second problem is the lack of accurate water meters.
Installation of water meters is usually included in ODA
or bilateral/multilateral projects to the water sector. In
Hanoi, for example, over 70 percent of households lack
water meters. Because of the poor distribution network,
the water pressure is so low that meters cannot measure
accurately. Water supply companies therefore charge a
flat fee, resulting in overuse by some consumers and
continuing losses for water companies.
According to one estimate by the Hanoi Water Supply
Company, households pay $0.43–$0.55 month, per
person, for the equivalent of four cubic meters of water
per person; $0.107 cents per cubic meter of water is well
below prices recommended by multilateral donors
funding water-supply projects in Vietnam.
Table 4.1 Water Prices in Vietnam, per Cubic Meter
Before After
03/01/00 03/01/00
Residential $0.09 $0.12 (1–4 m 3 )
$0.18 (4–6 m 3 )
Industrial $0.18 $0.23
Luxury/Entertainment $0.29 $0.36
Note: Prices are given in U.S. dollars.
Source: Ho Chi Minh City Water Company.
because HCMC’s primary water distribution network is
unable to handle large volumes of water. HCMC Water
Co. is unable to distribute at capacity because higher
volumes will cause the old piping networks to crack.
Another problem is the small diameter of many of the
pipes in five key districts in HCMC—Districts 1 through
5—pipe capacity needs to be expanded or rehabilitated
so that the HCMC Water Co. can reach its customers.
Ho Chi Minh City
The water distribution network in Ho Chi Minh City
(HCMC), much of it built during the French colonial
period and not repaired since, is in desperate need of
overhaul. Dilapidated pipe systems and weak water
pressure have forced the HCMC Water Co. to use large
water tanks to deliver clean water to many of HCMC’s
districts.
While BOT projects are lined up to supply HCMC with
enough capacity to meet demand, the challenge will be
efficiently distributing water to consumers. Therefore, if
the two other BOT water-supply projects were to come
on line, there would be no way to distribute the water,
Hanoi
Hanoi’s primary water distribution network is in better
shape than Ho Chi Minh City’s. Its main system is a 330-
kilometer-long network built in 1985 with funding from
the Finnish Development Agency. This network meets
European health standards and delivers water to over half
a million customers. Hanoi has a second main distribution
network, which is 217 kilometers long. This network,
however, was built in the early 1900s by the French and
needs rehabilitation.
While HCMC’s biggest problems are leakage and the
need to rehabilitate existing pipelines, Hanoi Water
Supply Co. suffers from administrative weakness.
Table 4.2 Industrial Water Demand Estimates for Industrial Estates and Export Processing Zones
Size (in hectares)
Export Annual Percent of
Industrial Processing Water Total
Location Estates Zones Total Demand* Demand
Hanoi 1,700 760 2,460 0.492 8.4
Haiphong 800 100 900 0.180 3.1
Quang Ninh 200 100 300 0.060 1.0
Quang Nam-Danang 1,010 470 1,480 0.2965.1
HCMC 22,800 360 23,160 4.632 79.5
Vung Tau 600 100 700 0.140 2.4
Can Tho 150 150 0.030 0.5
Total 27,110 2,040 29,050 5.830 100.0
* Water demand is given in millions of cubic meters per year.
Source: World Bank, Vietnam Water Resources Sector Review (May 1996).
Vietnam Export Market Plan
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