Ho Chi Minh City Urban Mass Rapid Transit Line 2 Investment ...

DRAFT FRAMEWORK FINANCING AGREEMENT 1 

(VIE: Ho Chi Minh City Urban Mass Rapid Transit Line 2 Investment Program) 

Parties This Framework Financing Agreement (“FFA”) dated [ ] is 

between the Socialist Republic of Viet Nam and Asian Development 

Bank (“ADB”). 

MFF Investment 

Program 

Multitranche 

Financing 

Facility 

Viet Nam is committed to improve urban public transport infrastructure to 

reduce transportation costs and increase public modal share by 

implementing the Ho Chi Minh City Urban Mass Rapid Transit Line 2 

Investment Program ("Investment Program"). The Investment Program is 

part of Viet Nam’s Socio-Economic Development Plan for 2006-2010, 

and an integral part of the HCMC Urban Transport Masterplan (UTM), as 

described in Schedule 1 hereto. 

The total cost of the Investment Program over the period 2011 to 2016 is 

expected to be $1,374.5 million. The total cost of Viet Nam's HCMC 

UTM, over the period 2010 to 2020 is expected to be about $5.4 billion 

equivalent. 

The Multitranche Financing Facility ("Facility") is intended to finance 

projects, under the Investment Program, provided that such projects 

comply with the criteria and approval procedure set out in Schedule 4 

hereto and that understandings set out in this FFA are complied with. 

The Investment Program will finance the construction of mass rapid 

transit (MRT) Line 2 to improve public transport services and access in 

six central districts of Ho Chi Minh City. It is expected that the Facility will 

comprise two loans to finance projects under the Investment Program. 

The Investment Program comprises two components: (a) MRT Line 2 

System Development; and (b) MRT Implementation Support: 

(i) Loan 1 will comprise: (a) civil works comprised of site preparation 

and construction of initial depot buildings to be used for project 

implementation and remaining main depot infrastructure; (b) initial 

systems for stations; (c) project management and implementation 

support to MAUR ; (d) functional design and procurement 

assistance services; (e) social development, gender 

mainstreaming program and public awareness ; and (f) integrated 

sustainable urban transport measures. 

(ii) Loan 2 will comprise: (a) civil works which include the remaining 

depot construction and all works for the main MRT Line 2; (b) 

procurement and installation of the required MRT Line 2 E&M 

systems and equipment and provision of rolling stock; and (c) 

construction supervision services. 

1 This is a draft for discussion between the Borrower and ADB. It is subject to further changes.

2 

Financing 

Framework 

Agreement 

This FFA does not constitute a legal obligation on the part of ADB to 

commit any financing. ADB has the right to deny any financing request 

made by Viet Nam, cancel the uncommitted portion of the Facility, and 

withdraw Viet Nam's right to request any financing tranche under the 

Facility. Financing tranches may be made available by ADB provided 

matters continue to be in accordance with the general understandings 

and expectations on which the Facility is based and which are laid out in 

this FFA. 

This FFA does not constitute a legal obligation on the part of Viet Nam 

to request any financing. Viet Nam has the right not to request any 

financing under the Facility. Viet Nam also has the right at any time to 

cancel any uncommitted portion of the Facility. 

Viet Nam and ADB may exercise their respective rights to cancel the 

Facility or any uncommitted portion thereof, and ADB may exercise its 

right to refuse a financing request, by giving written notice to such effect 

to the other parties. The written notice will provide an explanation for the 

cancellation or refusal and, in the case of a cancellation, specify the date 

on which the cancellation takes effect. 

Financing Plan The financing plan for the Ho Chi Minh City Urban Mass Rapid Transit 

Line 2 Investment Program is summarized below. 

Amount Share (%) of 

Source 

($ million) Total 

Asian Development Bank 

540.0 39.3 

Kreditanstalt für Wiederaufbau 313.0 22.8 

European Investment Bank 195.0 14.2 

Government 326.5 23.7 

Total 1,374.5 a 100.0% 

Source: Asian Development Bank estimates 

Financing Terms ADB will provide loans to finance projects under the Investment Program, 

as and when the latter are ready for financing, provided, Viet Nam is in 

compliance with the understandings hereunder, and the projects are in 

line with those same understandings. Each loan will constitute a tranche. 

Each tranche may be financed under terms different from the financing 

terms of previous or subsequent tranches. The choice of financing terms 

will depend on the project, capital market conditions, and ADB’s 

financing policies, all prevailing on the date of signing the legal 

agreement for such tranche. 

Tranches may be provided in sequence or simultaneously, and some 

may overlap in time with each other. There is no maximum or minimum 

size for a tranche. 

Commitment charges are not payable on the Facility. They are payable 

only on financing actually committed by ADB as a loan. ADB rules on

commitment charges,which are in effect when the legal agreements are 

signed for a tranche, will apply with respect to such tranche. 

Amount 

The maximum financing amount available under the Facility is five 

hundred and forty million dollars ($540,000,000). It will be provided in 

individual tranches from ADB’s Ordinary Capital Resources. The terms 

and conditions of each loan will be determined in the context of each 

tranche and will follow prevailing ADB policies and procedures. 

Availability Period 

The last date on which any disbursement under any tranche maybe 

made will be 30 June 2017. The last financing tranche is expected to be 

executed no later than 31 December 2014.. 

Terms and Conditions 

Viet Nam will cause the proceeds of each tranche to be applied to the 

financing of expenditures of the Investment Program, in accordance 

with conditions set forth in this FFA and the legal agreements for each 

tranche. 

Execution The Executing Agency will be HCMC People’s Committee (HCMC PC) 

and the main Implementing Agency (IA) will be the Management 

Authority of Urban Railways (MAUR). The Executing Agency will 

implement the Investment Program in accordance with the principles set 

forth in Schedule 1 to this Agreement, and as supplemented in the legal 

agreements for each tranche. 

Periodic 

Financing 

Requests 

Viet Nam may request, and ADB may agree, to provide loans under the 

Facility to finance the Investment Program and its related projects upon 

the submission of a Periodic Financing Request (PFR). Each PFR 

should be submitted by Viet Nam. Viet Nam will make available to 

HCMC PC the proceeds of the tranche in accordance with the related 

PFR, and the legal agreements for the tranche. ADB will review the 

PFRs and, if found satisfactory, prepare the related legal agreements. 

The projects for which financing is requested under the PFR will be 

subject to the selection criteria set out in Schedule 4 hereto, satisfactory 

due diligence, and preparation of relevant safeguard and fiduciary 

frameworks and other documents. The Facility will be implemented in 

accordance with the general framework set out in Schedule 3 to this FFA, 

and the Facility Administration Manual agreed between Viet Nam and 

ADB. 

Until notice is otherwise given by Viet Nam, the State Bank of Vietnam 

will be Viet Nam's authorized representative for purposes of executing 

PFRs. 

3

4 

General 

Implementation 

Framework 

Procedures 

The Facility will be implemented in accordance with the general 

framework set out in Schedule 3 hereto. 

Tranches to be provided under the Facility will be subject to following 

procedures and undertakings: 

(a) Viet Nam will have notified ADB of a forthcoming PFR in advance 

of the submission of the PFR. 

(b) Viet Nam will have submitted a PFR in the format agreed with 

ADB. 

(c) ADB may decline to authorize the negotiation and execution of 

any legal agreement for a tranche. 

(d) If ADB confirms acceptance of the PFR, the legal agreements 

such as loan agreements and project agreements will be 

negotiated and executed by the parties. 

PFR Information The PFR will substantially be in the form attached hereto, and will contain 

the following details: 

(i) Loan, grant, guarantee, or cofinancing amount; 

(ii) Description of components to be financed; 

(iii) Cost estimates and financing plan; 

(iv) Implementation arrangements specific to the projects; 

(v) Confirmation of the continuing validity of and adherence to the 

understanding in this Agreement; 

(vi) Confirmation of compliance with the provisions under previous 

Loan Agreement and Project Agreement, as appropriate; and 

(vii) Other information as may be required under the Facility 

Administration Manual, or reasonably requested by ADB. 

Safeguards 

Attached as Schedule 5 are references to the Safeguard Frameworks 

that will be complied with during the implementation of the Facility. 

ADB’s Safeguard Policies in effect as of the date of signing of legal 

agreements for a tranche will be applied with respect to the projects 

financed under such financing tranche. 

Procurement All goods and services to be financed under the Facility will be procured 

in accordance with ADB’s Procurement Guidelines (2010, as amended 

from time to time). 

Consulting 

Services 

Disbursements 

Monitoring, 

Evaluation and 

Reporting 

All consulting services to be financed under the Facility will be procured 

in accordance with ADB’s Guidelines on the Use of Consultants (2010, 

as amended from time to time). 

Disbursements will be made in accordance with ADB’s Loan 

Disbursement Handbook (2007, as amended from time to time). 

MAUR, assisted by the project supervision consultants, will establish 

systematic project performance monitoring and analysis throughout the 

life of the Investment Program and Tranche 1 in accordance with the

Arrangements Project Design and Monitoring Framework (included in Schedule 2) and 

ADB’s Project Performance Management System Handbook. The project 

performance monitoring and evaluation surveys will be carried out at the 

midterm of ADB Loan 1 implementation and 6 months after the Program 

completion. 

In addition to the regular review mission every six months, ADB will send 

numerous special review missions to MAUR. First, an inception review 

mission will be fielded to review the land acquisition and resettlement, 

and procurement of the project supervision consulting services and 

address issues that MAUR is encountering and expects to encounter for 

ADB Loan 1. Second, a midterm review will be undertaken to assess 

overall progress in project implementation and achievements, when 

reports of the detailed design study, economic and financial studies, and 

social and environmental studies are completed. Third, a project 

completion review mission will be fielded about 1 year after ADB Loan 1 

completion. There will also be special reviews as required to address 

issues that arise during program implementation. 

Schedule 2 hereto sets as the Design and Monitoring Framework for the 

Facility, against which the implementation effectiveness will be evaluated. 

Undertakings Attached as Schedule 6 are the undertakings provided by Viet Nam. 

SOCIALIST REPUBLIC OF VIET NAM ASIAN DEVELOPMENT BANK 

By _____________________________ By _____________________________ 

Name of Authorized Representative Name of Authorized Representative 

5

6 

Appendix 1 

A. Urban Transport Subsector Roadmap 

1. Subsector Assessments 

SCHEDULE 1�� 

� 

MFF CONSTITUENTS 

a. Overall Transport Sector Context 

1. In 2009 the transport and communications sector in Viet Nam accounted for 

approximately 4.5% of the country’s GDP, which has more than doubled since 2004. For urban 

transport, the greater urban areas of Hanoi and Ho Chi Minh City (HCMC) comprise of 14 

million people, almost 6 million employed and generate 20 million passenger trips per day. Both 

cities effectively represent the only urban centers that require substantial urban transit services, 

with all secondary cities below 1 million people. Efficient transportation in these two major cities 

is essential for their continued economic growth, which has been above the national average for 

well over a decade, as well as to serve as important hubs that provide critical support and 

services for many sectors. 

2. Strong growth in major urban centers has resulted in large demand for transportation, 

which has been met mainly by rapid expansion of private vehicle fleets, and only Ha Noi has a 

bus system serving a reasonable portion of demand. Private vehicles represented an 

abnormally high proportion (80-90%) of total trips, with the vast majority being motorcycles, but 

there is significant potential to increase the number of cars, as when household incomes rise 

many more families will purchase cars. The current road network is becoming severely 

congested in peak times, and the increase in private car ownership will only exacerbate this 

problem as road space expansion is limited. Improvement of the efficiencies in the transport 

sector will lead to increase in the regional and international competitiveness and reduce logistics 

costs and mitigate urban congestion and environmental and social degradation. 

b. Challenges and Relevance to Development 

3. Transport is one of the key sectors to sustain Viet Nam's socioeconomic growth in the 

next decade. As an input to the Viet Nam's next socioeconomic development plan, the Ministry 

of Transport (MOT) submitted Five Year Plan for 2011–2015 in October 2009 1 , which identified 

the core sector problems as following: (i) incomplete and disintegrated institutional system and 

development plans, (ii) unsatisfactory quality and capacity of transport service, (iii) lack in quality 

and quantity of transport infrastructure in both urban and rural areas, (iv) insufficient state 

budget and other financial sources, and (v) complicated situation of the global economy. 

4. Urban transport in Viet Nam is at an early stage of development and is on an 

unsustainable path that will hinder long term growth . Private vehicles dominate transportation, 

especially motorcycles, but existing road infrastructure is reaching saturation point and 

congestion becoming severe during peak hours. The public transport systems consist of a 

badly integrated bus network that cannot compete with private transport modes. Traffic 

planning is weak and traffic management systems are inadequate to control city traffic. Strong 

growth has lead to heavy congestion along major routes and inner city areas, which creates a 

poor urban environment. Importantly the necessary policy and regulatory measures to 

1 

Transport Minister of Viet Nam. 2009. Transmittal Letter of No.7011/BGTVT-KHDT of 7 October 2009, Five Year 

Plan 2011–2015. Hanoi.

Appendix 1 7 

discourage private transport modes cannot be implemented until a viable public mass transport 

system exists for city residents and suburban commuters. 

5. Enhancement of Transport Efficiency. Improvement of the efficiencies in the urban 

transport will lead to increase in the regional and international competitiveness and reduce 

logistics costs and mitigate urban congestion and environmental and social degradation. 

Efficient urban transport can only be achieved through synergy of both road and urban transit 

networks. Whilst setting a target of 15-20% of land for urban transport, the actual land is 

inadequate in existing urban areas and expensive. Also the majority of the roads are narrow, 

with only 10-15% of roads having a cross-section width of above 12m (suitable for buses), 50- 

60% of roads have cross-section width of 7-12m (only suitable for cars and minibuses); 30-40% 

of the remaining roads have a cross-section width of less than 7m, which is only really suitable 

for motorcycles. 

6. For urban public transit, the demands will be met through mass rapid transit lines along 

major urban corridors, with some to be extended in the future to regional growth centers, and 

significant expansion of the bus network, including Bus Rapid Transit (BRT) lines. To ensure 

the growth in urban transit ridership, it is proposed to integrate all modes of urban transit into 

common terminals or multimodal transfer points, with coordination of bus and rail in schedules, 

common standards for operations, safety/emergency services, and maintenance including 

ticketing systems. These efficiency improvements are integral parts of the urban transit system 

but need extensive coordination to be effective. 

7. Institutional, Organizational, and Financial Development Planning, designing, 

constructing, commissioning, operating and maintaining a modern urban transit system is highly 

complex, requiring expertise and knowledge based on past experiences of similar systems, but 

this is lacking. The city Department of Transport has overall responsibility for the coordination 

of transport planning, and coordinate other departments which manage the road network. The 

institutions that plan, develop and operate urban transit are not well integrated under the city 

PCs, with separate agencies for bus management, bus operations, new agencies for Mass 

Rapid Transit (MRT) systems and line departments for road investment and traffic management. 

However, there is no agency responsible for the overall urban transit system, so a hierarchy of 

operational management for each urban transit mode needs to be achieved through a Public 

Transport Authority (PTA). 

8. The investment costs to achieve the urban transport master plan targets are large with 

large financial gaps. For Ha Noi the total investment cost will be about US$ 12.7 billion, of which 

roads share US$ 6.8 billion (54%), urban transit at $5.4 billion (43%), and others at $0.4 billion 

(3%). In Ho Chi Minh City (HCMC), the corresponding amounts are $11.2 billion (51%), $9.8 

billion (42%) and $1.1 billion (7%). These costs are too large to be borne by the cities alone 

and will require substantive external financing, through either the national government, official 

development assistance (ODA), or private sector by bonds, debts, or other financing methods 

9. The emphasis to separate policy, regulatory and operator roles is particularly 

noteworthy, but a multi-modal orientation is still lacking, resulting in imbalances and integration 

problems between subsectors, and also resulting in poor and inadequate coordination with 

investments and programs in other sectors 

10. Traffic Safety and Social Sustainability . Social sustainability in urban transport is 

derived from the modal shift from private to public transport which has numerous indirect social 

benefits to public transport users and the general population. This will include safety

8 

Appendix 1 

improvements, less congestion, lower commuting times, pedestrian friendly environment, and 

indirect economic opportunities, which in combination will lead to an improved urban 

environment and a better quality of life. For the development of an urban transit network, traffic 

and passenger safety is a core issue to be addressed by a central PTA, which would be 

responsible for all urban transit safety in coordinating and managing all transit modes safety to 

passengers. Poorly managed urban transit in Viet Nam's major cities will significantly impact 

the urban environment and social conditions of city communities. A key advantage of modal 

shift from private to public modes is that it will result in social sustainability in urban areas. 

11. Mainstreaming Climate Change (Mitigation and Adaptation) Mainstreaming Climate 

Change (Mitigation and Adaptation) is needed as Viet Nam is one of the countries that are most 

vulnerable to the impacts of climate change with the benefits of investing in adaptation and 

mitigation outweighing the costs. The introduction of a well integrated urban transit system, 

which encourages modal shift from private vehicle to public transport, will support climate 

change mitigation in urban areas, by encouraging a use of lower carbon transport modes. The 

urban transport master plans have a model shift of 30-40%, which when combined with natural 

growth of the city, has significant savings in total greenhouse gas (GHG) emissions. Within the 

urban transit developments, systematic methods are proposed to be introduced as climate 

change adaptation measures. MRT and other structures will be designed to adapt to impacts 

such as flooding caused by sea level rise and more frequent and severe floods, by having 

raised entrances to MRT stations and higher pumping capacity. 

2. Strategic Directions 

a. Viet Nam’s Strategy and Plans 

12. Viet Nam’s current national planning strategy for the country is reflected in the 

Socioeconomic Development Plan (SEDP) for 2006–2010. It highlighted the national importance 

of the transport sector in promoting economic growth, poverty reduction, safety enhancement, 

environmental protection, and human resource development. The SEDP for 2011–2015 is 

expected to place greater emphasis on the overall protection of the environment and 

improvement of the business environment; and to stress the need for more effective 

management of the transport sector. In the next decade (2011–2020), it is expected that the 

continued planned development of infrastructure will require about $16 billion annually. Based 

on current estimates, less than half of that amount is projected to be available. The Viet Nam's 

primary source to make up this very significant shortfall is the private sector and overseas 

development assistance (ODA). 

13. An improved urban transit network is vital to meet the growing travel demand. A well 

integrated high capacity public urban transport system is essential to meet the demands of a 

growing urban metropolis Both HCMC and Ha Noi have established urban transport master 

plans with the prime objective to expand the present road and public transit network capacity to 

meet the future challenges for demand in passenger and movement of goods and services. 

Bold targets for urban transit share of 45-50% by 2020, which is high by international standards, 

will require large investment. . The purpose of implementing the urban transport master plans 

is to increase transport efficiency in the city with sound hierarchical road network, the more 

efficient use of the urban transit network and encouraging private vehicle users to switch to 

public transit. 

14. The Prime Minister approved in January 2007 the HCMC Urban Transport Masterplan 

(UTM) that proposes to develop a network of nine urban mass rapid transit (MRT) lines,

Appendix 1 9 

improvements and expansion of the bus system and traffic management system improvements, 

all of which will support a modal shift from private to public transport. Together with 

improvements to the road system and supporting policy and regulatory measures, the UTM 

objective is for public transport to achieve 50% of transport demand by 2020. The first phase of 

MRT implementation is underway, with Table 1 showing a summary of the three ongoing MRT 

line projects. In October 2010, the HCMC PC approved the urban mass rapid transit line 2 

feasibility study, which approves alignment, technical standards, investment cost, construction 

period. The decision sets a 7 year schedule for implementation from 2010 to 2016. 

Line No. Length 

(km) 

Table 1: Ongoing MRT implementation 

Investment cost 

($billion) 

Construction 

period 

1 18.7 2.4 2010-2016 JICA 

Expected 

cofinanciers 

2 11.3 1.35 2012-2016 ADB, EIB, KfW 

5 12 1.2 2012-2017 Spain 

ADB = Asian Development Bank, EIB = European Investment Bank, JICA = Japan International Cooperation Agency, 

KfW = Kreditanstalt für Wiederaufbau 

b. ADB Strategy and Plans 

15. As outlined in the CPS for 2007–2010, the ADB’s strategy is to support Viet Nam's 

investment to improve transport infrastructure and reduce transport costs. The ADB's strategic 

thrusts, which are in line with Viet Nam’s Socioeconomic Development Plan (SEDP) for 2006– 

2010, include (i) addressing the social equity aspects of Viet Nam’s transport needs, and (ii) 

providing support for investment projects to address critical transport needs that are constraints 

to economic growth in the main development centers, 

16. Expected ADB's investments in urban transport subsector will be targeted to enhance 

transport efficiency in urban transport networks, which will be realized primarily due to 

reductions in travel time and cost. Additionally, increased urban subsector efficiency will be the 

result of increased capacity, and improved transport reliability and connectivity. Expected 

outputs include (i) capacity development technical assistances to strengthen implementation, 

operation and maintenance, modal shift in urban transport subsector; and to climate mitigation 

and climate change adaptation development for urban transport; and (ii) project preparatory 

technical assistances for MRT and sustainable urban transport projects. 

17. In the planned and ongoing ADB's interventions in the urban transport sector for 2011- 

2015, MRT systems is planned to take one of the largest share of 35% of transport funds. With 

those interventions, 23 km of MRT is expected to be constructed, and associated urban 

transport infrastructure works completed to enhance integration of all modes. 

B. Strategic Context 

1. Country Strategy and Program and its Progress 

18. ADB’s Country Strategy and Program (CSP) 2007–2010 for Viet Nam9 aims to help Viet 

Nam reduce poverty to 10%–11% by 2010, in accordance with Viet Nam’s Socio-Economic 

Development Plan (SEDP), through (i) pro-poor business-led economic growth, (ii) social equity 

and balanced development, and (iii) environmental protection and management. Regarding the

10 

Appendix 1 

transport sector, CSP points out that Viet Nam has a relatively inefficient and expensive 

transport system for an expanding economy with fast regional integration. ADB aims to help Viet 

Nam improve the transport investment program and sector efficiency and reduce transport 

costs. As the HCMC PC and agencies require substantial investments and institutional support, 

ADB aims to help strengthen institutional capacity. Urban transport projects will include 

measures to help Viet Nam address governance, environment, social, and integration issues, as 

appropriate. 

19. Midterm Review for the CSP 2 evaluates that the progress in meeting Viet Nam’s SEDP 

and CSP transport sector output and outcome targets has been mixed. Planning and 

implementation delays persist, particularly in large-scale projects such as expressways and 

urban mass transit. Outcome indicators (such as reduction in transport costs, reduction in traffic 

fatalities, and increases in freight volumes) are more appropriate for monitoring CSP outcomes 

and would be valuable to inform strategic planning and results monitoring. It is proposed that 

ADB undertake and periodically update a survey of urban transport costs jointly with the 

authorities and other development partners in the sector. 

20. Key issues identified in the CSP remain valid—management of the transport sector is 

relatively inefficient and transport costs relatively high. Modernization and efficiency require 

capacity development of urban transport sector policy and planning at the state level, and an 

appropriate allocation of responsibilities and risks between the state and business. Reform of 

state-owned enterprises in the transport sector is needed to promote competition, reduce costs, 

improve quality, and increase re-investment of capital resources. Demand for transport 

infrastructure increases with economic growth, and requires long-term commercial funds 

(including ordinary capital resources) for large infrastructure, especially for revenue-generating 

projects such as MRTs. However, the perceived risks of doing business in Viet Nam—as viewed 

by private sector sponsors and banks—have increased, reducing the interest of these investors, 

and projects now face difficulties in raising funds. 

2. Socio-Economic Development Plan for 2011-2015 

21. Viet Nam is developing the SEDP for the five-year period 2011-2015. General objectives 

of the SEDP are to: (i) develop a sustainable economy at high growth rate on the basis of 

continuing the change in the economic structure, improving quality, effectiveness and 

competitiveness, and being active in the global integration; (ii) creating the foundation in order to 

transform our country into a modern industrialized; increasing the content of science and high 

technology in products; radically improving and enhancing the quality of education, training and 

human resources; (iii) improving the material and spiritual life of the people, particularly the 

poor, and the ethnic minority in the mountainous and remote areas; (iv) strengthening the 

protection of environment and natural resources and actively coping to climate change impacts; 

(v) maintaining political stability and guaranteeing national security and defense, order and 

safety of the society. 

22. Under the SEDP, the following investment is planned into transportation infrastructure: 

(i) mobilizing capital resources from state budget, sovereign bonds, ODA and private 

enterprises, etc. to complete basically the essential transportation network to meet the demand 

of transporting goods and people between regions and to other regional countries; (ii) 

strengthening investment into improvement and maintenance of current works as well as 

construction of new transportation works that bring high socio-economic benefits (highways, 

2 ADB. 2010. Viet Nam: Country Strategy and Program Midterm Review 2007–2010. Manila

Appendix 1 11 

gateway seaports, international transshipment ports, big international airports, etc.); (iii) 

investing into transportation system for foreign affairs, completing the border belt; (iv) building 

system of bridges across rivers to make it convenient for the people’s travel; (v) completing new 

railways for economy’s sake, seaports’ link and industrial zones; (vi) quickly developing means 

of quick transportation with large quantity (undergrounds and aboveground streetcars or so) in 

Ha Noi and Ho Chi Minh City; (vii) completing urban traffic system to solve the traffic jams that 

are caused by rapidity of urbanization, and developing transportation system in the locals with 

an effort to build car roads to the central for 100% communes and commune complexes in order 

to improve quality of transportation means and services. 

23. Four core key objectives were targeted: (i) Enhancement of Transport Efficiency at the 

Subregional Level; (ii) Institutional, Organizational and Financial Development in Transport; (iii) 

Traffic Safety and Social Sustainability; and (iv) Mainstreaming Climate Change (Mitigation and 

Adaptation). The emphasis to separate policy, regulatory and operator roles is particularly 

noteworthy, but a multi-modal orientation is still lacking, resulting in imbalances and integration 

problems between subsectors, and also resulting in poor and inadequate coordination with 

investments and programs in other sectors 

3. Strategic Relevance 

24. The proposed investment plan is relevant with the ADB's strategies such as Strategy 

2020, CPS 2007-2010, and also with the Viet Nam's national development strategies like SEDP 

2011-2015. The investment plan, in association with other sustainable transport funds, to 

implement low carbon transport measures and policy reform, will support Viet Nam’s effort to 

develop an integrated sustainable urban transport system in HCMC and enhance the 

efficiencies of the urban transport subsector. 

C. Policy Framework 

25. Viet Nam’s urban transport subsector reform actions and plan are summarized in Table 

2. The investment plan for MRT2, including the proposed integrated sustainable urban transport 

technical assistance, supported by the proposed Clean Technology Fund (CTF) technical 

assistance and loan, will support selected key actions to ensure sustainability of the urban 

transport subsector. 

26. To improve the efficiencies in the urban transport subsector, the Investment Program will 

provide technical assistance for an Integrated Sustainable Urban Transport (ISUT) study, which 

will study integrated sustainable urban transport related to the project, including; (i) demand 

forecasting, integrated fares and ticketing, (ii) bus restructuring and intermodal facilities, and (iii) 

sustainable transport policy. The output of this study will identify pilot measures to improve 

public transport, which will be implemented under a separate Clean Technology Fund project 

expected to be approved in 2012.

12 

Appendix 1 

Table 2: Urban Transport Subsector Policy Framework 

Reform Action Status Planned 

Sustainable 

integrated urban 

transport network 

Adopt a low carbon 

transport approach 

for urban transport 

Efficient public 

administration of 

urban transport 

Enhancement of 

sustainability of MRT 

projects and MAUR's 

financial capacities 

Development of urban 

transport masterplans 

with multimodal 

integration 

Develop urban 

transport polices to 

encourage public 

transport usage and 

constrain private 

vehicles 

Establishment of a PTA 

to improve integration 

between public 

transport modes 

Establishment of O&M 

agency and fare policy 

for MRT 

HCMC UTM approved in 

2007 and three MRT lines 

under preparation 

Development of public 

transport systems in 

HCMC, Ha Noi, Hai 

Phong and Da Nang 

World Bank are assisting 

establishment of a PTA in 

Ha Noi 

DOT have completed 

initial review of PTA 

structure for HCMC 

JICA are assisting to 

develop and establish of 

an O&M agency in HCMC, 

by 2012 

CTF will support bus 

system 

improvements 

ISUT to develop 

strategy for 

integration and 

multimodal options 

for MRT2 stations 

ISUT will assist 

HCMC examine 

parking strategy, 

congestion charging 

and other 

alternatives 

ISUT will assist 

HCMC to examine 

establish PTA 

MRT2 will support 

O&M agency 

structure, and with 

O&M option for first 5 

years by E&M 

contractor 

DOT = Department of Transport, HCMC = Ho Chi Minh City, ISUT = integrated sustainable urban transport, JICA = 

Japan International Cooperation Agency, MAUR = Management Authority for Urban Railways, MRT = mass rapid 

transit line 2, O&M = operation and maintenance, PTA = public transit authority, UTM = urban transport masterplan 

D. MRT2 Development and Investment Program 

27. The Investment Program total cost is estimated at $1,374.5 million equivalent, inclusive 

of contingencies, local taxes, and financing costs during construction. The investment plan for 

the Investment Program is shown in Table 3 and the investment program summary financing 

plan is summarized in Table 4. ADB will provide $540 million, with Kreditanstalt für 

Wiederaufbau (KfW) to provide financing of $313.0 million, the European Investment Bank (EIB) 

to provide financing of $195.0 million and the government to provide $326.5 million. 

28. Scope of the first tranche includes, (i) civil works comprised of site preparation and 

construction of initial depot buildings to be used for project implementation and remaining main 

depot infrastructure; (ii) initial systems for stations; (iii) project management and implementation 

support to MAUR ; (iv) functional design and procurement assistance services; (v) social 

development, gender mainstreaming program and public awareness; (vi) integrated sustainable

Appendix 1 13 

urban transport measures. and (vii) incremental administration. The ADB loan of $40 million will 

be used for scope (i), (iii), (v) and (vi) and the KfW loan 3 will be used for (ii) and (iv). 

29. The second tranche scope of the Investment plan will include (i) remaining depot works, 

(ii) civil work for mainline and stations, (iii) electrical and mechanical systems and rolling stock, 

(iv) land acquisition and resettlement, (v) incremental administration, and (vi) consulting 

services for construction supervision. The ADB loan of $500 million will be used for scope (i) 

and (ii), the EIB loan of $195 million will be used for scope (i), (ii) and (iii), and the KfW loan loan 

will be used for scope (iii) and (vi). 

30. Viet Nam counterpart funds will be used for (i) land acquisition and resettlement, (ii) 

incremental administration, (iii) local taxes and (iv) interest during construction for EIB and KfW. 

The estimated amount of counterpart funds is $326.5 million. 

Table 3: Investment Plan – Investment Program 

($ million) 

($ million) 

ADB KFW EIB Government Total 

of Viet Nam 

Amount % Amount % Amount % 

A. Base Cost 

1 Civil works 362.7 77.7% 0.0 0.0% 104.3 22.3% 0.0 0.0% 467.0 

2 E&M systems 0.0 0.0% 163.6 76.6% 49.9 23.4% 0.0 0.0% 213.5 

3 Rollingstock 0.0 0.0% 60.1 100.0% 0.0 0.0% 0.0 0.0% 60.1 

4 Land acquisition 

and resettlement 

0.0 0.0% 0.0 0.0% 0.0 0.0% 127.6 100.0% 127.6 

5 Consulting 

services 

12.1 15.8% 52.0 83.2% 0.0 0.0% 0.6 1.0% 64.7 

6 Incremental 

administration 

0.0 0.0% 0.0 0.0% 0.0 0.0% 16.6 100.0% 16.6 

7 Taxes and duties 0.0 0.0% 0.0 0.0% 0.0 0.0% 81.9 100.0% 81.9 

Subtotal (A) 374.8 36.3% 275.7 26.7% 154.2 15.0% 226.7 22.0% 1031.4 

B Contingencies 110.8 47.7% 22.3 9.6% 40.8 17.6% 58.1 25.1% 232.0 

C Financing Charges 

During 


54.4 49.1% 15.0 13.5% 0.0 0.0% 41.7 37.4% 111.1 

Total Project Cost 540.0 313.0 195.0 326.5 1,374.5 

(A+B+C) 

% Total Project 

Cost 

39.3% 22.8% 14.2% 23.7% 100% 

3 The KfW loan of $313 million will be approved in two phases, similar to the ADB two tranches

14 

Appendix 1 

Table 4: Summary Financing Plan – Investment Program 

($ million) 

Financier 

Tranche 1 

Tranche 2 

Total 

Asian Development Bank 40.0 500.0 540.0 

Kreditanstalt für Wiederaufbau 36.4 276.6 313.0 

European Investment Bank 0.0 195.0 195.0 

Government 27.9 298.6 326.5 

Total 104.3 1,270.2 1,374.5 

Source: Asian Development Bank estimates

Design Summary 

Impact 

An integrated 

sustainable public 

transport system in six 

districts of HCMC. 

Outcome 

Competitive MRT 

services along the 

project corridor. 

Outputs 

Tranche 1 

1. Initial site works 

and office facilities 

at depot 

2.1 Implementation 

Support Program 

SCHEDULE 2 

DESIGN AND MONITORING FRAMEWORK FOR THE FACILITY 

Performance Targets 

and Indicators 

Public transport 

percentage share 

increases from 5% in 

2008 to 30% by 2025. 

300,000 daily loadings 

and 15,000 per 

direction peak loading 

on MRT2 3 years after 

opening 

Reduced average travel 

time along MRT2 

corridor by 20% from 

2010 level by 2018. 

Non-MRT public 

transport capacity 

increases by 100% in 

project districts by 

2018. 

Number of traffic 

accidents decrease 

from trend by 30% by 

2018. 

Construction of initial 

site works and office 

buildings in Tham 

Luong depot area by 

end 2013. 

Completion of Phase 1 

and Phase 2 support 

program for at least 100 

Data Sources and 

Reporting Mechanisms 

� Government statistical 

publications by district 

� Government and 

public transport 

operator statistics 

� Government traffic 

surveys, accident and 

hospital records 

� Independent public 

opinion survey 

� Benefit Monitoring and 

Post-Evaluation 

reports 

� Monitoring reports 

from CTF funded 

project 

� Progress Reports 

� Project Review 

Mission Reports 

� Project Completion 

Reports 

� Training assessment 

reports 

Appendix 2 15 

Assumptions 

and Risks 

Assumptions 

Continued strong growth in 

Viet Nam and regional 

economies. 

Risks 

Implementation of other 

planned MRT lines and 

sustainable transport 

initiatives are delayed 

Priority of climate change 

mitigation and adaptation 

measures lowered 

Assumptions 

� Government resources are 

available to operate and 

maintain MRT2. 

� Acceptance of public 

transport modes. 

Risks 

� Policy and Regulatory 

reforms to support modal 

shift are not timely enacted 

� Integrated services are not 

planned, implemented and 

operated efficiently. 

� Public transport services 

are not financially 

sustainable. 

Assumptions 

� Government demonstrates 

leadership to coordinate 

various stakeholders. 

Risks 

� Government 

underestimates major 

infrastructure development 

and implementation needs

16 

Appendix 2 


2.2 Social 

Development and 

Gender 

Mainstreaming 

Program 

2.3. Integrated 

sustainable urban 

transport 

Tranche 2 

1. Construction of 

MRT2 main line 

and depot facilities. 

2. MRT2 E&M 

systems and rolling 

stock and operation 

of metro services 

installed. 



MAUR or EA agency 

staff in implementation 

issues by December 

2012 and December 

2014 respectively, 

including all women 

staff. 

Approval of social and 

gender program by May 

2012 and 

implementation of 

measures by December 

2014 

Agreed milestones for 

policy measures, 

including gender 

initiatives, by July 2012 

Integrated Sustainable 

urban transport final 

report accepted by 

October 2013 

By 2017 

Completion of 9.5km 

underground, 0.5km atgrade 

and 1.7km 

elevated MRT line 2 

and depot facilities at 

Tham Luong by 

December 2016, 

including gender and 

socially inclusive 

designs, spatial 

planning and facilities 

Provision and 

operational 

commissioning of all 

systems, equipment 

and rolling stock by 

December 2016 

E&M and rolling stock 

designed with gender 

and socially inclusive 

features 




� Project Review Mission 

Reports 


Reports 


reports 

Assumptions 

and Risks 

for HCMC. 

� Problems arising from 

limited experience of 

implementing large 

complex internationally 

supported project; 

operating the MRT system; 

and integrating of urban 


Assumptions 



various stakeholders, 

including integration with 

other MRT systems. 

Risks 

� Problems arising 

unforeseen difficult 

construction conditions or 

project interfaces 

� Delays in land acquisition 

and resettlement for 

mainline station works 

.

Appendix 2 17 






Assumptions 

and Risks 

Activities with Milestones Inputs 

Tranche 1 

� ADB: $40 million OCR 

1.1 Implementation of civil works – contracts awarded by December 2011 and � Civil works: $22.7 mil 

completed by June 2013 

� Support services: $8.1 

mil 

2.1 Functional design consulting services – consultants mobilized by May 2011 � ISUT: $3.6 mil 

2.2 Project management and implementation support consulting services – 

consultants mobilized by October 2011, programs designed by June 2012 

and completed by December 2014. 

� SDGMP: $0.4mil 

� Other: $5.2 mil 

� Government: $27.9 

million 

2.3 Social/gender consulting services – consultants mobilized by January 2012 

and measures designed and completed by June 2014 

� Civil works: $2.3 mil 

� E&M systems: $2.3mil 

� Consulting services: 

2.4 ISUT consulting services – consultants mobilized by October 2011, CTF 

measures component completed by March 2012 and development and 

completion of MRT2 and CTF interface integration measures at all stations 

by December 2015. 

$2.1 mil 

� ISUT: $0.3 mil 

� Incremental 

Administration: $1.0 mil 


� KfW: $36.4 million 



$13.0mil 

Tranche 2 

1.1 Implementation of civil works – all contracts awarded by June 2013 and 

completed by December 2016 

1.2 Construction supervision consulting services – consultants mobilized by 

April 2012. 

1.3 Land Acquisition – all land acquisition and resettlement completed for 

mainline by December 2013. 

2.1 Provision and installation of MRT2 systems – all contracts awarded by 

December 2012, completed by December 2016 and system commissioned 

by December 2017 

� ADB: $500 million OCR 

� Civil works: $340mil 

� Other: $160mil 

� Government: $298.6 mil 

� Incremental Admin: 

$16.2mil 

� Land acquisition: 

$127.6mil 

� Other: $154.8mil 

� KfW: $276.6 million 

� E&M systems: 

$140.1mil 

� Rolling stock: $60.1mil 

� Consulting Services: 

39.0mil 

� EIB: $195 million 

� Civil works:$104.3mil 



ADB = Asian Development Bank, CTF = Clean Technology Fund, E&M = electrical and mechanical, EIB = European 

Investment Bank, GHG = greenhouse gas, HCMC = Ho Chi Minh City, KfW = Kreditanstalt für Wiederaufbau, km = 

kilometer, MAUR = Management Authority for Urban Railways, MRT2 = Mass Rapid Transit Line 2, O&M = operation 

and maintenance, OCR = ordinary capital resources 

Source: ADB staff, PPTA Consultant

18 

Appendix 3 

A. Program Management 

SCHEDULE 3 

IMPLEMENTATION FRAMEWORK 

31. The executing agency will be the HCMC People's Committee (HCMC PC) and the main 

implementing agency will be the Management Authority of Urban Railways (MAUR). HCMC PC 

currently serves as the executing agency for several ADB projects. MAUR was established in 

2007 to implement all nine Urban Railways in HCMC and has strong leadership, a sound 

organizational structure and the capability to further develop its institutional capacity as the MRT 

network expands. A project management unit for MRT2 has been established by MAUR under 

the responsible Vice Chairman that will be responsible for the day to day management and 

coordination of implementation. The PMU head will ensure compliance with ADB procurement 

and consulting guidelines and ADB safeguard policies. The PMU staff will be assisted by 

experienced engineers, accountants, and other staff as required. Department of Transport will 

be the implementing agency for ISUT. ADB has reviewed and is comfortable with MAUR’s 

capacity and finance and resource management to implement the Investment Program and 

Loan 1 and will provide support is some areas where there are specific needs to expand the 

overall capabilities of MAUR. 

32. The MAUR will ensure that the Investment Program follows the detailed arrangements 

as described in the Facility Administration Manual (FAM). Any update of the FAM will become 

effective only after approval of such change by Viet Nam and ADB. In the event of any 

discrepancy between the FAM and the loan agreements, the provisions of the loan agreements 

will prevail. 

B. Procurement and Consulting Services 

33. Viet Nam will ensure that procurement of goods, works and services financed by ADB 

from the MFF will be procured in accordance with ADB's Procurement Guidelines (2010, as 

amended from time to time). The civil works contracts under the Investment Program will be 

procured using international and national competitive bidding procedures, depending on the size 

of the procurement. Some of the civil works packages will be procured as design and build 

contracts. Relevant sections of ADB’s anticorruption policy (1998, as amended to date) will be 

included in all bidding documents and contracts. 

34. Goods will be procured using international and national competitive bidding procedures, 

depending on the size of the procurement. For services, Viet Nam will engage consulting firms 

for project management support; construction supervision; detailed design to be completed by 

contractor; environmental supervision and management; and project performance monitoring. 

Viet Nam will ensure that all consulting services under ADB financing will be selected and 

engaged using the quality and cost-based selection method and a full technical proposal in 

accordance with ADB’s Guidelines on the Use of Consultants by Asian Development Bank and 

Its Borrowers (2010, as amended from time to time). 

C. Disbursement Arrangements 

35.. The individual loan proceeds will be disbursed, in accordance with ADB Loan 

Disbursement Handbook (2007, as amended from time to time) and the loan agreement. The 

proceeds will be either directly disbursed to civil works contractors and consultants engaged 

under the Investment Program or utilize imprest account and statement of expenses

procedures. 

D. Accounting, Auditing, and Reporting 

Appendix 3 19 

36.. HCMC PC through MAUR will maintain separate records and accounts by funding 

source for the Investment Program, and have such accounts and related financial statements 

audited annually by an independent auditor acceptable to ADB and in accordance with auditing 

standards acceptable to ADB. HCMC PC through MAUR will submit to ADB, within 6 months of 

the close of the fiscal year, certified copies of audited project accounts and financial statements 

and auditor's reports, all in English. The audit of such financial statements will include (i) an 

assessment of the adequacy of accounting and internal control systems with respect to project 

expenditures and other financial transactions, and (ii) an assessment of compliance with 

financial loan covenants and ADB requirements for project management. 

37.. HCMC PC through MAUR will report the progress of project implementation by 

submitting quarterly progress reports to ADB within 2 weeks of the quarter to which they relate. 

The form and content of the progress reports will be agreed with ADB and other cofinanciers 

during the project inception mission. HCMC PC through MAUR will monitor project 

implementation in accordance with the project implementation schedule, and will keep ADB and 

the cofinanciers informed of any significant deviations from the schedule. The quarterly reports 

will include summary information on basic data, utilization of funds, achievement of immediate 

development objectives, compliance with covenants, implementation progress, and major 

issues and problems. HCMC PC through MAUR to prepare the performance and monitoring 

reports to be submitted to ADB on a semiannual basis. ADB shall review quarterly and 

semiannual reports during its annual reviews. Within 3 months of the physical completion of the 

Project, HCMC PC through MAUR will submit to ADB a project completion report which will 

provide a detailed evaluation of the project design, costs, contractors’ and consultants’ 

performance, social and economic impact, economic internal rate of return (EIRR), and such 

other details as may be requested by ADB. Within 3 months of the physical completion of the 

Investment Program, HCMC PC will submit to ADB an investment program completion report. 

E. Program Performance Monitoring and Evaluation 

38.. HCMC PC and ADB will agree on a set of indicators for evaluating the performance of 

the Investment Program in relation to its impacts, outcomes, outputs, and conditions to establish 

baseline indicators and values at least 2 months prior to commencement of civil works in project 

provinces. HCMC PC will collect the baseline data within 6 months of the date of the 

effectiveness of the first tranche, including among others (i) economic development and 

socioeconomic indicators, (ii) transport costs and times, (iii) transport charges, (iv) accident 

rates, (v) traffic levels, (vi) affected persons’ incomes, (vii) access to social services, (viii) jobs 

created in construction and maintenance, and (ix) incidence of sexually transmitted diseases. At 

the beginning of the implementation of the first project, HCMC PC will establish baseline and 

target values for the indicators. The indicators will be measured and compared with the baseline 

at inception, completion, and 3 years after completion of the first project. Where relevant, 

indicators will be disaggregated by gender and ethnicity. The supervision consultant services 

will include qualified consultants to help establish the monitoring and evaluation system, and 

train HCMC PC staff in its use. The main sources of data will include (i) secondary data from 

government sources, (ii) a household socioeconomic sample survey, and (iii) participatory rapid 

appraisal. HCMC PC will submit a report summarizing the key findings of monitoring at 

inception, completion, and 3 years after physical completion of the Investment Program to ADB.

20 

Appendix 3 

F. Program Review 

39.. Viet Nam and ADB will undertake regular annual reviews of each project to assess: (i) 

implementation status, (ii) design and construction standards, (iii) performance of consultants 

and contractors, (iv) project impacts, and (v) status of compliance with the covenants stipulated 

in the loan agreement. Viet Nam and ADB will jointly undertake an in-depth midterm review of 

each individual tranche to assess (i) implementation status, (ii) design and construction 

standards, (iii) performance of consultants and contractors, (iv) project impacts, (v) status of 

compliance with the covenants stipulated in the loan agreement, and (vi) the need for any 

changes in the project scope or schedule to achieve the project impact. The review will allow for 

any necessary midcourse corrections to ensure successful implementation and the achievement 

of objectives of the project. Viet Nam and ADB will conduct a similar midterm review of the 

Investment Program at the fifth year of the Investment Program to assess (i) implementation 

status, (ii) performance of consultants and contractors, (iii) program impacts, and (iv) status of 

compliance with the covenants stipulated in the Facility Agreement.

A. Requirements 

SCHEDULE 4 

SELECTION CRITERIA AND APPROVAL PROCESS FOR PROJECTS 

Appendix 4 21 

40. The following are the selection criteria for works to be financed under the Investment 

Program: 

(i) The proposed works will be technically sound with a feasibility study and 

preliminary design prepared. The HCMC People’s Committee (HCMC PC) will 

ensure that the functional design of the works is prepared within the overall time 

frame agreed for the Investment Program and prior to the approval stage. 

(ii) The proposed works will be economically feasible and financially sustainable, 

and the estimated economic internal rate of return equal to or higher than 12%, 

based on the economic analysis to be conducted in accordance with ADB's 

Guidelines for the Economic Analysis of Projects (1997). The entire Project's 

financial internal rate of return will be higher than the weighted average cost of 

capital of the Project finance in accordance with ADB's Guideline for the 

Financial Analysis of Projects; 

(iii) HCMC PC through MAUR will have conducted environmental screening, in 

accordance with ADB's Safeguard Policy Statement of 2009 (SPS 2009), of each 

tranche. For each tranche, an environmental assessment report will be prepared, 

including an environmental management plan, in accordance with the 

environmental assessment and review framework and SPS 2009; 

(iv) The proposed works will be in line with the larger objectives of the Investment 

Program and be socially sound and include measures to mitigate any possible 

negative social impacts. For the mainline, an initial poverty and social 

assessment will be conducted in accordance with ADB's Guidelines on Initial 

Poverty and Social Assessment. 

(v) HCMC PC through MAUR will have conducted social safeguards screening for 

works component in accordance with the agreed Resettlement Framework. For 

each component or section of the mainline where there will be resettlement 

impacts, a resettlement plan will be prepared in accordance with the agreed 

Resettlement Framework and ADB Safeguard Policy Statement. 

(vi) All necessary approval by the central government and the local governments in 

the project area will be obtained. 

(vii) Sufficient Viet Nam’s counterpart funding will be allocated to all loans to complete 

implementation of the entire Investment Program. 

B. Procedures 

41. Each works will be prepared and processed in accordance with the following 

procedures: 

(i) Functional design will be conducted by consultants engaged by MAUR. 

(ii) Project preparatory technical assistance (PPTA) consultants will assist MAUR to 

complete checklists for initial poverty and social assessment, involuntary 

resettlement, indigenous peoples, and environmental screening. These 

documents will be sent for review to ADB through HCMC PC, which may require

22 

Appendix 4 

revisions. 

(iii) Upon completion of the functional design and PPTA analysis, MAUR will prepare 

and submit to ADB a summary appraisal report for the works, together with the 

required attachments, including resettlement plan, environmental assessment, 

and summary poverty reduction and social analysis. 

(iv) MAUR will disclose the RP to the displaced persons before submitting it to ADB 

for review and concurrence. 

(v) Depending on the environmental categorization, MAUR will prepare and submit 

to ADB for review the required environmental assessment report. The final 

environmental assessment report will be submitted/endorsed by HCMC PC to 

ADB for public disclosure on ADB’s website. 

(vi) For each tranche classified by ADB as environment category A, MAUR will 

submit to ADB a draft full environmental impact assessment (EIA) in a timely 

manner to permit disclosure on ADB website 120 days before approval of the 

PFR. 

(vii) ADB will review the summary appraisal reports, together with the required 

attachments. If it finds that the road section does not satisfy eligibility criteria and 

procedures, or does not comply with ADB's policies, ADB may advise MAUR to 

make the necessary modification. MAUR will prepare and submit the appraisal 

reports to ADB. 

42. Based on ADB's approval and subject to any modification, and remedial measures 

required by ADB, MAUR will implement the project. MAUR will ensure that ADB has access to 

all documents related to the proposals and approval process. These documents should be kept 

for 5 years after approval.

SCHEDULE 5 

SOCIAL DIMENSIONS AND SAFEGUARD REQUIREMENTS 

Appendix 5 23 

43. The Socialist Republic of Viet Nam and ADB will ensure that all the requirements 

prescribed in this Schedule, and the following safeguard frameworks and plans that have been 

prepared with respect to the Facility and the first tranche and of which ADB has been provided 

full copies, and which are deemed incorporated herein by reference, are complied with during 

the processing and implementation of the Investment Program: 

(i) Environmental Assessment and Review Framework (EARF), dated August 2010; 

(ii) Initial Environmental Evaluation for Loan 1, dated August 2010; 

(iii) Resettlement Framework (RF), dated 8 July 2010; 

(iv) Resettlement Corrective Action Plan, dated 13 July 2010; 

(v) Gender Action Plan, dated September 2010 

44. The frameworks cover the Facility-specific information and requirements in accordance 

with ADB’s safeguard policies: (i) the general anticipated impacts of the components or projects 

likely to be financed under the Facility on the environment and involuntary resettlement; (ii) the 

requirements and procedures that will be followed for screening and categorization, impact 

assessments, development of management plans, public consultation and information 

disclosure (including the 120-day disclosure rule, if required), and monitoring and reporting; and 

(iii) the institutional arrangements (including budget and capacity requirements) and the HCMC 

PC’s and ADB’s responsibilities and authorities for the preparation, review and clearance of 

safeguard documents. 

45. In all cases, for each new PFR preparation, Viet Nam through HCMC PC will review 

ongoing projects to check on the status of compliance with the safeguard frameworks and 

corrective action plan, and submit the review reports to ADB, together with other required 

safeguard documents relevant to components included in the tranche being processed. In any 

case if major noncompliance is discovered in the course of the review of ongoing projects, a 

corrective action plan will be prepared and submitted to ADB. 

A. Environment 

46. Viet Nam through HCMC PC will ensure that the design, construction, operation, and 

maintenance of the facilities under the Program are carried out in accordance with ADB’s 

Safeguard Policy Statement (2009), ADB's Public Communications Policy (2005), the 

Government’s environmental laws and regulations. MAUR shall ensure the construction and 

operation of the Program shall comply with the environmental management plan (EMP) included 

in ADB-approved IEE prepared for Tranche 1 as well as the EMP included in the environmental 

assessment document to be prepared for subsequent tranches. If there is any discrepancy 

between Viet Nam ’s laws and regulations, and ADB’s policies, ADB’s policies will prevail. Viet 

Nam through the HCMC People’s Committee (MAUR) will ensure that potential adverse 

environmental impacts arising from the Program are minimized by implementing all mitigation 

and monitoring measures as presented in the environment management plan (EMP) included in 

the environmental assessment documents (IEE/EIA) approved by ADB for each tranche. 

47. MAUR shall ensure that all components of the Program to be funded by Viet Nam and 

the other financiers shall adopt the provisions of the IEE, EIA and EMP and shall be in 

compliance with ADB's SPS 2009.

24 

Appendix 5 

48. MAUR shall ensure that environmental approvals required by Viet Nam , such as those 

from the Ministry of Natural Resources and Environment and other relevant agencies, are 

obtained on a timely manner. Copies of such approvals shall be submitted to ADB upon 

issuance. 

49. MAUR will ensure timely and satisfactory implementation of EMP provisions. MAUR 

shall ensure that all bidding documents and civil works contracts include the EMP and shall 

ensure compliance of contractors to the provisions of the EMP. 

50. The environmental assessment of Tranche 2 and subsequent tranches as well as 

projects, components and subprojects to be prepared after MFF approval shall be conducted 

consistent with ADB's SPS 2009 and the environmental assessment and review framework 

(EARF) agreed between MAUR and ADB. 

51. MAUR shall adequately supervise the construction works carried out by contractors to 

ensure compliance with the monitoring and mitigation measures set forth in the EMP. MAUR 

shall ensure that consultants engaged for construction supervision monitor closely the 

compliance by the contractors with the EMP. Semi-annual reports on implementation of the 

EMP will be submitted by MAUR to ADB on a timely basis. 

52. Prior to commencement of site works, MAUR shall establish an environmental grievance 

redress mechanism, acceptable to ADB, to receive and facilitate resolution of affected peoples' 

concerns, complaints, and grievances about the Project's environmental performance. MAUR 

shall make public the existence of this grievance redress mechanism through public awareness 

campaigns; review and address environmental grievances of stakeholders in relation to the 

Program, any of the service providers, or any person responsible for carrying out any aspect of 

the Program; and proactively and constructively respond to such grievances. 

53. For Tranche 2 as well as any subsequent tranches or components likely to have 

significant environmental impacts (Category A), MAUR shall engage and retain qualified and 

experienced external expert(s) to review and verify the environmental monitoring information 

provided by MAUR to ADB with regard to EMP implementation. Such expert shall not be 

involved in day-to-day project implementation or supervision nor an employee of any firm which 

has been contracted for the construction phase of the Project. The external expert shall 

undertake monitoring annually and shall submit corresponding report to HCMC PC and ADB. 

B. Involuntary Resettlement 

54. Viet Nam will ensure that the entire Program is carried out in accordance with Viet 

Nam’s applicable laws and regulations, ADB’s Safeguard Policy Statement (2009), and the 

agreed Resettlement Framework (RF). In case of discrepancies between Viet Nam ’s laws, 

regulations, and procedures, and ADB’s policies, ADB policies will prevail. 

55. MAUR will ensure that the preparation of the resettlement plan for the mainline will be in 

accordance with the agreed RF. Following detailed design, the RP will be prepared through the 

conduct of census and detailed measurement survey (DMS) to determine the actual impacts on 

land and assets of each household. Consultation and disclosure activities will be undertaken. A 

qualified appraiser will be engaged to carry out replacement cost survey for land and non-land 

assets. The RP will be submitted to ADB for review and concurrence. Land acquisition,

Appendix 5 25 

relocation of affected households, and clearance of land will not commence until the RP has 

been agreed between ADB and MAUR and the provisions in the agreed RF have been 

implemented satisfactorily. 

56. MAUR will only issue Notice-to-Proceed to the civil works contract to commence 

construction activities for a specific section once the head of the District Compensation Board 

has officially confirmed in writing that (i) payment has been fully disbursed to the displaced 

persons and rehabilitation measures are in place for that specific section as per RP agreed 

between MAUR and ADB; (ii) already compensated DPs for that specific section have been 

cleared the area in a timely manner; and (iii) that the specific section is free from any 

encumbrances. 

57. MAUR is responsible for disclosing and disseminating the RP (draft and final) as 

required in the relevant laws of Viet Nam and ADB Safeguard Policy Statement. Copies of the 

resettlement external monitoring reports on RP implementation will be made available to MAUR 

office and affected wards. 

58. MAUR will ensure that the agreed resettlement corrective action plan for the depot 

priority area for Tranche 1 between MAUR and ADB will implemented. 

59. MAUR will carry out resettlement due diligence for the remaining depot area and will 

submit to ADB a Corrective Action Plan if there are any outstanding issues. The Corrective 

Action Plan may include additional compensation, assistance in cash or in kind, and 

supplementary interventions such as income restoration programs to already-compensated 

households. These activities will be done in parallel with the preparation of the RP and planning 

of income restoration measures. 

60. MAUR shall adequately supervise RP implementation and the construction works carried 

out by contractors to ensure compliance with the monitoring and mitigation measures set forth in 

the RF and RP. Quarterly reports on implementation of the RP will be submitted by MAUR to 

ADB on a timely basis. 

C. Social Dimensions 

61. MAUR will ensure that all Works contracts under the Project incorporate provisions and 

budgets to the effect that contractors: (a) comply with the Viet Nam’s applicable labor laws and 

related international treaty obligations and do not employ child labor; (b) provide equal wages to 

male and female workers for work of equal value; and (c) carry out the HIV/AIDs and Human 

Trafficking Prevention Program in the construction campsites. 

62. MAUR will implement the agreed Gender Action Plan (GAP) developed for the Project to 

ensure the effectiveness of gender mainstreaming. The GAP will include but not be limited to: 

(1) use of employment targets for women and gender-specific core labor standards as part of all 

civil works and other transport services employment generation; (2) consideration of genderinclusive 

physical design features in new transport infrastructure and sustainable transport 

measures; (3) targets for women’s participation and inclusion of gender-related content in 

capacity building activities; (4) reference to gender in TORs for consulting services, research 

and plans developed under the project; and (5) mitigating gender-related impacts of 

resettlement, and increased risks of human trafficking and HIV/AIDS.

26 Appendix 6 

SCHEDULE 6 

UNDERTAKINGS 

63. Viet Nam will, and will cause HCMC PC to; (i) ensure timely implementation of the 

Investment Program, including executing the implementation arrangements set out in Schedule 

3 to this FFA and monitoring and evaluating implementation based on the Design and 

Monitoring Framework set out in Schedule 2 to this FFA; (ii) ensure that all projects financed 

under the Facility are selected and approved in accordance with the criteria and procedure set 

out in Schedule 4 to this FFA; and (iii) ensure all projects financed under the Facility are 

developed, implemented and maintained in accordance with the safeguard requirements set out 

in Schedule 5 to this FFA. 

64. HCMC PC will comply with ADB’s relevant policies and procedures, including those on 

procurement, disbursement, safeguards, social dimensions, gender, governance, and 

anticorruption measures, in the preparation and implementation of investments. Breach of 

undertakings will trigger ADB’s right to hold back financing, and to suspend or terminate the 

Facility. 

A. Budget Resources 

65. HCMC PC will ensure that funding is available for regular maintenance and 

implementation, as required, of the MRT constructed under the Investment Program. 

Furthermore, HCMC PC will ensure that annual operational and maintenance plans are 

prepared for the MRT2 on the basis of the agreed-upon maintenance standards, passenger 

volumes, and assessment of needs. 

66. Viet Nam will ensure that HCMC PC makes available all counterpart funds required for 

timely and effective implementation of the Investment Program, and will ensure that necessary 

resources thus required are released in a timely manner. 

B. Construction 

67. Viet Nam through HCMC PC will ensure that the Program is carried out in accordance 

with the applicable technical specifications and design, and that the construction supervision, 

quality control, and project management of the Program are performed in accordance with 

applicable standards and best international practices. Viet Nam will ensure that the works 

improved under the Program are maintained in accordance with applicable standards and best 

international practices. 

68. HCMC PC will ensure that civil works contracts will include appropriate clauses requiring 

contractors to allow their workers to attend planned campaigns on HIV/AIDS and human 

trafficking prevention during construction and will maintain adequate sanitation and working 

conditions. 

C. Urban Transport Sector Policies 

69. HCMC PC will submit quarterly project progress reports and progress reports to ADB 

periodically on the Urban Transport Sector Policies (UTSP) and consult with ADB on further 

urban transport sector policy measures, if and when available. 

70. Viet Nam will keep ADB informed of key transport sector and urban transport subsector

Appendix 6 27 

studies undertaken in Viet Nam and, on request, will provide ADB with copies of all available 

documents relevant to such studies, including consultants’ reports, and will ensure that ADB has 

the opportunity to comment on the recommendations contained therein prior to the finalization of 

the reports. 

71. HCMC PC and their concerned agencies will participate in the Integrated Sustainable 

Urban Transport study, and coordinate, review and consolidate government responses to 

options and recommendations made by the consultant. Upon completion of the report, the 

HCMC PC will undertake the necessary actions to implement the measures and process any 

regulatory or policy reforms agreed 

D. Governance 

72. Viet Nam will comply with, and will ensure that HCMC PC complies with, ADB’s 

Anticorruption Policy (1998, as amended to date). Viet Nam, consistent with its commitment to 

good governance, accountability and transparency, agrees (a) that ADB has the right to 

investigate, directly or through its agents, any alleged corrupt, fraudulent, collusive or coercive 

practices relating to the Program; and (b) to cooperate fully with any such investigation and to 

extend all necessary assistance, including providing access to all relevant books and records, 

as may be necessary for the satisfactory completion of any such investigation. In addition, Viet 

Nam will (a) conduct periodic inspections on the contractors’ activities related to fund 

withdrawals and settlements; (b) ensure that all contracts financed by ADB in connection with 

the Program include provisions specifying the right of ADB to audit and examine the records 

and accounts of all contractors, suppliers, consultants, and other service providers as they 

relate to the Program; and (c) the construction supervision consultant shall verify the 

contractors’ payment certificates in accordance with working drawings and contract 

specifications. Individuals and/or entities on ADB’s anticorruption debarment list are ineligible to 

participate in ADB-financed activities and may not be awarded any contracts under the project. 

To support these efforts, relevant provisions are included in the loan agreement and the bidding 

documents for the investment program. 

73. Viet Nam will ensure that for civil works, a grievance redress mechanism is developed 

so that complaints, grievances and/or reports from stakeholders on misuse of funds and other 

irregularities are received and resolved quickly. The HCMC PC will (a) make public the 

existence of this grievance redress mechanism through a public awareness campaign in every 

area where project funds are used; (b) review and address grievances of stakeholders in 

relation to the Project, any of the service providers, or any person responsible for carrying out 

any aspect of the Project; (c) proactively and constructively respond to them; and (d) provide 

easy access for beneficiaries to contact numbers for complaints and where to secure more 

information. 

E. Project Performance Monitoring and Evaluation 

74. HCMC PC will ensure the implementation of a systematic Project performance 

monitoring and evaluation system for use throughout the Project period, and thereafter as 

needed, that indicates: (i) the effectiveness of Project implementation activities, including (a) the 

precise nature, timeliness, cost and quality of physical infrastructure implemented in the Project, 

(b) the integrity of resettlement and related programs, and (c) the extent to which the HIV 

Program is implemented as planned, and their impacts; and (ii) the effectiveness of the Project 

with regard to its anticipated effect on economic and social development relative to the baseline 

prior to its implementation as indicated by at least the following indicators: (a) public transport 

modal share, (b) daily loadings of Line 2, (c) average travel time along project corridor, (d) 

capacity of non-MRT public transport in project districts, and (e) number of traffic accidents in

28 Appendix 6 

project area. Viet Nam will ensure that baseline data is collected within 6 months of the 

Effective Date, with a second survey to be conducted upon Project completion and a third 

survey to be conducted 3 years after Project completion to establish Project impact. 

F. Reporting 

75. HCMC PC, through MAUR, will: (i) collect and consolidate all Project progress reports, 

site reports, technical and financial reports and submit them to ADB; (ii) review and submit 

quarterly progress reports, a baseline Project evaluation report and an overall Project 

completion report; and (iii) review and submit other reports as may be reasonably requested by 

ADB. Quarterly reports will include updated implementation, financial and procurement-related 

information. Quarterly reports shall be submitted to ADB within 30 days of the end of each 

quarter. 

76. Within 6 months of Project completion, HCMC PC, through MAUR, will submit to ADB, a 

Project completion report providing a detailed evaluation of Project design, costs, performance 

of Project consultants, and contractors, the performance indicators described above, social and 

environmental impacts, economic and financial assessments, and such other information as 

may be requested by ADB.

Date: 

To: Asian Development Bank 

6 ADB Avenue 

Mandaluyong City, Metro Manila 

PERIODIC FINANCING REQUEST 

ATTENTION: Director General, South East Asia Department 

Fax No. +632 636-2015 

Sir/Madam: 

RE: VIE-Ho Chi Minh City Urban Mass Rapid Transit Line 2 

Investment Program: 

Periodic Financing Request # 1 

Please refer to the Framework Financing Agreement (FFA) for Ho Chi Minh City Urban Mass 

Rapid Transit Line 2 Investment Program dated [ ] between Asian Development Bank 

(ADB) and the Socialist Republic of Viet Nam. Expressions defined in the FFA shall have the 

same meanings herein. 

Pursuant to the provisions of the FFA, the Socialist Republic of Viet Nam (Viet Nam) requests 

ADB to process this Periodic Financing Request (PFR) for a tranche, in the form of a loan from 

its ordinary capital resources. The proposed financing amounts, terms, conditions, and financing 

plan are specified in Annex A hereto. Descriptions of the project for which financing is hereby 

requested are set out in Annex B to D hereto. 

By: SOCIALIST REPUBLIC OF VIET NAM 

[Signature of Authorized Representative] 

[Full Name and Title of Authorized Representative]

Annex A 

Project Description Under the Ho Chi Minh City Urban Mass Rapid Transit Line 2 Investment 

Program (Investment Program), the following two components are 

proposed for financing under this periodic financing request (PFR): 

Cost Estimates and 

Financing Plan 

Loan Amount and 

Terms 

Period of Loan 

Utilization 

Advance Contracting Not required. 

Retroactive Financing Not required 

(i) Mass Rapid Transit (MRT) Line 2 System Development. 

Depot works to include site preparation works and construction of 

initial buildings at Tham Luong depot site; and remaining depot 

infrastructure works. 

(ii) MRT Implementation Support. Consulting services for 

Management Authority for Urban Railways (MAUR) and other 

HCMC People’s Committee (HCMC PC) transport agencies to 

assist with implementation:. 

a. Project Management and Implementation support for 

compliance with financier requirements, MRT 

management, operations and maintenance, and public 

transport management, 

b. Social Development and Gender Mainstreaming Program 

(SDGMP) to address key social development, gender and 

public awareness issues, 

c. Integrated Sustainable Urban Transport (ISUT) study for 

(i) demand forecasting, integrated fares and ticketing, (ii) 

bus restructuring and intermodal facilities, and (iii) 

sustainable transport policy. 

The design and monitoring framework for this tranche is in Annex B. 

The total cost, including taxes, duties, physical and price contingencies, 

interest and other charges, is estimated at $104.3 million. The detailed 

cost estimates by financiers and financing plan are in Annex C. 

The request is for a loan of $40 million equivalent from the ordinary 

capital resources of the Asian Development Bank (ADB) provided under 

ADB’s London interbank offered rate (LIBOR)-based lending facility, with 

a 20 year term including a grace period of 6 years, an interest rate 

determined in accordance with ADB’s LIBOR-based lending facility, and 

such other terms and conditions as agreed in the FFA, and further 

supplemented under the Loan and Project Agreements. 

The physical implementation is expected to be completed by 31 

December 2016. No disbursements from the loan account will be 

requested or made later than 30 June 2017.


Arrangements 

Procurement and 

Consulting Services 

Confirmation of 

Continuing Validity of 

and Adherence to 

Provisions of FFA, 

Previous 

Agreements, and the 

Design and 

Monitoring 

Framework 

Readiness of the 

Project for 


The Executing Agency will be the HCMC People’s Committee (HCMC 

PC) and the main Implementing Agency (IA) will be the Management 

Authority for Urban Railways (MAUR). The Department of Transport will 

be the IA for the ISUT. 

A project management unit (PMU) for MRT2 has been established by 

MAUR under the responsible Vice Chairman that will be responsible for 

the day to day management and coordination of implementation. 

Viet Nam will ensure that procurement of goods, works and services 

financed under Loan 1 be procured in accordance with ADB's 

Procurement Guidelines (2010, as amended from time to time). The 

Government will ensure that all consulting services will be selected and 

engaged using the quality and cost-based selection method and a full 

technical proposal in accordance with ADB’s Guidelines on the Use of 

Consultants by Asian Development Bank and Its Borrowers (2010, as 

amended from time to time). 

The procurement plan (including civil works, goods and services) is in 

Annex D. 

Viet Nam confirms that the understandings set out in the FFA have been 

adhered. 

� Preparatory works, including advance action for procurement of civil 

works and recruitment of consultants, are ongoing. 

� The functional design consultant is being recruited by MAUR and 

functional design will be completed by June 2011. 

� Resettlement Framework and Resettlement Corrective Action Plan for 

the depot-priority area have been prepared. 

� Counterpart funding is available. 

Safeguards The environmental assessment and review framework, the Initial 

Environmental Evaluation for Loan 1, the Resettlement Framework and 

Resettlement Corrective Action Plan for the depot-priority area are 

incorporated by reference in the FFA.


Impact 

Competitive MRT2 

services along the 

project corridor 

Outcome 

Effective support for 


MRT2 infrastructure 

Outputs 

1. Construction of 

initial site works 

and office facilities 

at depot 

2 Provision of 

implementation 

Support Program 

DESIGN AND MONITORING FRAMEWORK 



173,800 daily loadings 

and 8,500 per direction 

peak loading on MRT2 

by 2018 

Reduced weighted 

average travel time 

along MRT2 corridor by 

20% from 2010 level by 

2018 

Non-MRT public 

transport capacity 

increased by 100% in 

project districts by 2018 

from 2010 level 

Number of traffic 

accidents down from 

trend by 30% by 2018 

from 2010 level 

MAUR project staff 

meet necessary skills 

level standards by 2015 

Social and gender 

issues incorporated in 

MRT2 features in all 

districts by end 2014 

Sustainable transport 

measures incorporated 

into MRT2 detailed 

design by 2013 and 

polices implemented as 

agreed 

All initial site works and 

office buildings in Tham 

Luong depot area 

constructed by end 

2013. 

Phase 1 and Phase 2 

support program for at 

least 100 MAUR or EA 



Government and public 

transport operator 

statistics 

Government traffic surveys 

and accident and hospital 

records 

Independent public opinion 

survey 

Benefit monitoring reports 

Monitoring reports from 

CTF-funded project 

� Independent training 

evaluation reports 

� Benefit Monitoring and 

technical assistance 

reports 

� Monitoring reports 

from CTF funded 

project 


� Project Review 

Mission Reports 


Reports 


reports 

Annex B 

Assumptions 

and Risks 

Assumptions 

Government resources are 

allocated for MRT2 O&M 

Sustainable transport 

initiatives implemented and 

acceptance of public 


Risks 

Policy and regulatory 

reforms to support modal 

shift not enacted in a timely 

way 

Integrated services not 

planned, implemented, or 

operated efficiently 

Public transport services not 

financially sustainable 

Assumptions 

� Public acceptance of 

HCMC transport 

masterplan modal shift 

objectives 

Risks 

� Integrated services are not 

planned, implemented and 

operated efficiently. 

Assumptions 

� Timely completion of 

detailed design of initial 

works 



various stakeholders 

� Participation of relevant 

government agencies in 

programs. and study


3 Provision of social 

development and 

gender 

mainstreaming 

program 

4 Completed 

integrated 

sustainable urban 

transport study 



agency staff in project 

management and 

implementation 

completed by 

December 2012 and 

December 2014 

respectively, including 

all women staff. 

Approval of program by 

April 2012 and 


measures by December 

2014, including gender 

action plan targets 

Agreed milestones for 

transport policy 

measures by July 2012 

Integrated sustainable 

urban transport final 

report accepted by 

October 2013 



Activities with Milestones Inputs 

1 Implementation of civil works – contracts awarded by December 2011 and 

completed by June 2013 

2.1 Functional design – consultants mobilized by May 2011 and design 

approved by December 2011 

2.2 Project management and implementation support – consultants mobilized 

by October 2011, support programs designed by June 2012 and completed 

by December 2014. 

3 Social development and gender mainstreaming program – consultants 

mobilized by January 2012 and measures designed and completed by June 

2014 

4 Integrated sustainable urban transport study – consultants mobilized by 

October 2011, CTF measures component completed by March 2012 and 

development and completion of MRT2 and CTF interface integration 

measures at all stations by December 2015. 

Assumptions 

and Risks 

Risks 

� Social and gender 

initiatives given low priority 

due to higher costs 

� Inability of staff to address 

problems arising due 

limited experience of 

implementing large 

complex project; operating 

the MRT system; and 

integrating of urban 


� ADB: $40 mil OCR 

� Civil works: $22.7 mil 

� Support services: $8.1 

mil 

� SDGMP: $0.4mil 



� Government: $27.9 mil 

� Civil Works: $2.3 mil 



$2.1 mil 


� Incremental 

administration: $1.0 mil 

� Other: $19.9mil 

� KfW: $36.4 mil 



$13.0mil 

ADB = Asian Development Bank, CTF = Clean Technology Fund, EIB = European Investment Bank, E&M = electrical 

and mechanical, GHG = greenhouse gas, HCMC = Ho Chi Minh City, ISUT = Integrated Sustainable Urban 

Transport, KfW = Kreditanstalt für Wiederaufbau, km = kilometer, MAUR = Management Authority for Urban 

Railways, MRT2 = Mass Rapid Transit Line 2, O&M = Operation and Maintenance, OCR = Ordinary capital resources 

Source: ADB staff, PPTA Consultant

Annex C 

DETAILED COST ESTIMATE BY FINANCIER a 

($ million) 

Item ADB KfW Government Total 

A. Base Cost b 

1. MRT System Development 

Civil works 22.7 0.0 2.3 25.0 

E&M systems 0.0 23.4 2.3 25.7 

Consulting Services 0.0 13.0 1.3 14.3 

2. MRT Implementation Support 

Consulting Services 8.1 0.0 0.8 8.9 

Social Development and Gender 

Mainstreaming Program 

0.4 

0.0 0.0 0.4 

Integrated Sustainable Urban Transport c 3.6 0.0 0.3 3.9 

Incremental administration 0.0 0.0 1.0 1.0 

Total Base Cost 34.8 36.4 8.0 79.2 

Physical and Price Contingencies d 0.0 0.0 16.9 16.9 

Financing Charges During Implementation e 5.2 0.0 3.0 8.2 

Total 40.0 36.4 27.9 104.3 

a 

in 2009 prices 

b 

Includes taxes and duties of $7.1million for Project 1, financed by the government 

c 

Study to determine investments for a proposed $60 million loan in 2012, with $10 million ADB and $50 million Clean 

Technology Fund financing 

d 

Physical contingencies computed at 10% of civil works & equipment, 5% of pre-investment stage cost. Price 

contingencies are computed at 0.7-1.2% on foreign exchange costs, and 5.0-7.0% on local currency costs.. 

e 

Includes interest during construction and commitment charges 

Source: Asian Development Bank

PROCUREMENT PLAN 

Annex D 

Basic Data 

Project Name: Ho Chi Minh City Urban Mass Rapid Transit Line 2 Investment Program 

Country: Viet Nam Executing Agency: HCMC Peoples Committee 

(HCMC PC). 

Loan Amount: $40 million Loan (Grant) Number: TBD 

Date of First Procurement Plan: 5 November 2010 Date of this Procurement Plan: t.b.d. 

A. Process Thresholds, Review and 18-Month Procurement Plan 

1. Project Procurement Thresholds 

1. Except as the Asian Development Bank (ADB) may otherwise agree, the following 

process thresholds shall apply to procurement of goods and works. 

Procurement of Goods and Works 

Method Threshold 

International Competitive Bidding (ICB) for Works Above $3,000,000 

National Competitive Bidding (NCB) for Works Beneath that stated for ICB, Works 

Shopping for Goods Below $100,000 

2. ADB Prior or Post Review 

2. Except as ADB may otherwise agree, the following prior or post review requirements 

apply to the various procurement and consultant recruitment methods used for the project. 

Procurement Method Prior or Post Comments 

Procurement of Goods and Works 

ICB Works Prior 

NCB Works Prior For first contract only, 

subsequent contracts 

require post review 

Shopping for Goods Post 

Recruitment of Consulting Firms 

Quality- and Cost-Based Selection (QCBS) Prior

3. Goods and Works Contracts Estimated to Cost More Than $1 Million 

3. The following table lists goods and works contracts for which procurement activity is 

either ongoing or expected to commence within the next 18 months. 

General Description 

CW1: 

Initial Depot Works 

Contract 

Advertisement 

Value Procurement Prequalification Date 

($ million) Method of Bidders (y/n) (quarter/year) Comments 

7.7 ICB N Q2/2011 

4. Consulting Services Contracts Estimated to Cost More Than $100,000 

4. The following table lists consulting services contracts for which procurement activity is 

either ongoing or expected to commence within the next 18 months. 

Contract 

Value 


a 

Recruitment 

Advertisement 

Date 

International 

or National 

($ million) Method (quarter/year) Assignment Comments 

CS-1: 

Project Management and 

Implementation support 

to MAUR 

8.9 QCBS, 80:20 Q1/2011 International 

CS-3: 

Social Development and 

Gender Mainstreaming 

Program 


CS-4: 

Integrated Sustainable 

Urban Transport 


Total 13.2 

a Contract amount includes taxes and duties, to be financed by Borrower 

B. Indicative List of Packages 

5. The following table provides an indicative list of all procurement (goods, works and 

consulting services) over the life of the project. Contracts financed by the Borrower and others 

should also be indicated, with an appropriate notation in the comments section. 


CS-2: 

Functional Design 

Estimated 

Value 1 

(cumulative) 

$ million 

13.0 

Estimated 

Number of 

Contracts 

Recruitment 

Method 2 

1 KfW 

procedures 

Type of 

Proposal Comments 

Full KfW 

Financed 

1 

Contract amount of Package CS-2 is based on KfW funding of €10.0 million. 

2 

Actual procurement method to be used by Kreditanstalt für Wiederaufbau (KfW) for consulting services contracts 

to be consistent with their procurement guidelines.

National Competitive Bidding 

1. General 

6. The laws to be followed for national competitive bidding shall be those set forth in the 

Law on Procurement No. 61/2005/QH11 of 29 November 2005 and the Construction Law no. 

16/2003/QH11 of 26 November 2003 and with the processes described in Decree No. 

111/20006/DD-CP of 29 September 2006, and revised decree issued in 2009, with the 

clarifications and modifications described in the following paragraphs required for compliance 

with the provisions of the Procurement Guidelines. 

2. Registration 

(i) Bidding shall not be restricted to pre-registered firms and such registration shall 

not be a condition for participation in the bidding process. 

(ii) Where registration is required prior to award of contract, bidders: (i) shall be 

allowed a reasonable time to complete the registration process; and (ii) shall not 

be denied registration for reasons unrelated to their capability and resources to 

successfully perform the contract, which shall be verified through postqualification. 

(iii) Foreign bidders shall not be required to register as a condition for submitting 

bids. 

(iv) Bidder’s qualification shall be verified through post-qualification process. 

3. Eligibility 

(i) National sanction lists may only be applied with approval of ADB 1 . 

(ii) A firm declared ineligible by ADB cannot participate in bidding for an ADB 

financed contract during the period of time determined by ADB. 

4. Prequalification and Post qualification 

(i) Post qualification shall be used unless prequalification is explicitly provided for in 

the loan agreement/procurement plan. Irrespective of whether post qualification 

or prequalification is used, eligible bidders (both national and foreign) shall be 

allowed to participate. 

(ii) When pre-qualification is required, the evaluation methodology shall be based on 

pass/ fail criteria relating to the firm’s experience, technical and financial 

capacities. 

1 Section 52 of the Integrity Principles and Guidelines allows ADB to sanction parties who fail to meet ADB's high ethical standards based on the 

decisions of third parties, such a decision can only be made by the Integrity Oversight Committee on the basis of ADB's own independent 

examination of the evidence. As such, the process should follow the normal assessment and investigative processes prescribed by the Integrity 

Principles and Guidelines. http://www.adb.org/Documents/Guidelines/Integrity-Guidelines-Procedures/integrity-guidelines-procedures- 

2006.pdf

(iii) Qualification criteria shall be clearly specified in the bidding documents, and all 

criteria so specified, and only criteria so specified, shall be used to determine 

whether a bidder is qualified. The evaluation of the bidder’s qualifications should 

be conducted separately from the technical and commercial evaluation of the bid. 

(iv) In carrying out the post-qualification assessment, the Employer/ Purchaser shall 

exercise reasonable judgment in requesting, in writing, from a bidder missing 

factual or historical supporting information related to the bidder’s qualifications 

and shall provide reasonable time period (a minimum of 7 days) to the bidder to 

provide response. 

5. Preferences 

(i) No preference of any kind shall be given to domestic bidders or for domestically 

manufactured goods. 

(ii) Regulations issued by a sectoral ministry, provincial regulations and local 

regulations which restrict national competitive bidding procedures to a class of 

contractors or a class of suppliers shall not be applicable. 

(iii) Foreign bidders shall be eligible to participate in bidding under the same 

conditions as local bidders, and local bidders shall be given no preference (either 

in bidding process or in bid evaluation) over foreign bidders, nor shall bidders 

located in the same province or city as the procuring entity be given any such 

preference over bidders located outside that city or province 

6. Advertising 

(i) Invitations to bid (or prequalify, where prequalification is used) shall be 

advertised in Government Public Procurement Bulletin. In addition, the procuring 

agency should publish the advertisement in at least one widely circulated 

national daily newspaper or freely accessible, nationally-known website allowing 

a minimum of twenty-eight (28) days for the preparation and submission of bids 

and allowing potential bidders to purchase bidding documents up to at least 

twenty-four (24) hours prior the deadline for the submission of bids. Bidding of 

NCB contracts estimated at $500,000 or more for goods and related services or 

$1,000,000 or more for civil works shall be advertised on ADB’s website via the 

posting of the Procurement Plan. 

(ii) Bidding documents shall be made available by mail, or in person, to all who are 

willing to pay the required fee, if any. 

(iii) The fee for the bidding documents should be reasonable and consist only of the 

cost of printing (or photocopying) the documents and their delivery to the bidder. 

(Currently set at 1 Mln VND, increase subject to approval of ADB) 

7. Standard bidding documents 

(i) The Borrower’s standard bidding documents, acceptable to ADB, shall be used. 

The bidding documents shall provide clear instructions on how bids should be

submitted, how prices should be offered, and the place and time for submission 

and opening of bids. 

(ii) Bidders shall be allowed to submit bids by hand or by mail/ courier. 

8. Bid Opening 

8. A copy of the bid opening record shall be promptly provided to all bidders who submitted 

bids. 

9. Bid Evaluation 

(i) Merit points shall not be used in bid evaluation. 

(ii) Bidders shall not be eliminated from detailed evaluation on the basis of minor, 

non-substantial deviations. 2 

(iii) Except with the prior approval of ADB, no negotiations shall take place with any 

bidder prior to the award, even when all bids exceed the cost estimates. 

(iv) A bidder shall not be required, as a condition for award of contract, to undertake 

obligations not specified in the bidding documents or otherwise to modify the bid 

as originally submitted. 

(v) Bids shall not be rejected on account of arithmetic corrections of any amount. 

However, if the Bidder that submitted the lowest evaluated bid does not accept 

the arithmetical corrections made by the evaluating committee during the 

evaluation stage, its bid shall be disqualified and its bid security shall be forfeited. 

10. Rejection of All Bids and Rebidding 

(i) No bid shall be rejected on the basis of a comparison with the owner's estimate 

or budget ceiling without the ADB’s prior concurrence. 

(ii) Bids shall not be rejected and new bids solicited without the ADB’s prior 

concurrence. 

11. Participation by Government-owned enterprises 

9. Government-owned enterprises shall be eligible to participate as bidders only if they can 

establish that they are legally and financially autonomous, operate under Enterprise law and are 

not a dependent agency the contracting entity. Furthermore, they will be subject to the same bid 

and performance security requirements as other bidders. 

12. Non-eligibility of military or security units 

10. Military or security units, or enterprises which belong to the Ministry of Defense or the 

Ministry of Public Security shall not be permitted to bid. 

2 Minor, non-substantial deviation is one that, if accepted, would not affect in any substantial way the scope, quality, or performance specified in 

the contract; or limit in any substantial way, the Contracting entity rights or the Bidder’s obligations under the proposed contract or if rectified, 

would not unfairly affect the competitive position of other bidders presenting substantially responsive bids.

13. Participation by Foreign contractors and suppliers. Joint Ventures and 

Associations 

(i) Foreign suppliers and contractors from eligible countries shall, if they are 

interested, be allowed to participate without being required to associate or form 

joint ventures with local suppliers or contractors, or to subcontract part of their 

contract to a local bidder. 

(ii) A bidder declared the lowest evaluated responsive bidder shall not be required to 

form a joint venture or to sub-contract part of the supply of goods as a condition 

of award of the contract. 

(iii) License for foreign contractors operation in Vietnam would be provided in a 

timely manner and will not be arbitrarily withheld. 

14. Publication of the Award of Contract. Debriefing. 

(i) For contracts subject to prior review, within 2 weeks of receiving ADB’s “Noobjection” 

to the recommendation of contract award, the borrower shall publish in 

the Government Public Procurement Bulletin, or well-known and freelyaccessible 

website the results of the bid evaluation, identifying the bid and lot 

numbers, and providing information on: i) name of each bidder who submitted a 

bid; ii) bid prices as read out at bid opening; iii) name and evaluated prices of 

each bid that was evaluated; iv) name of bidders whose bids were rejected and 

the reasons for their rejection; and v) name of the winning bidder, and the price it 

offered, as well as the duration and summary scope of the contract awarded. 

(ii) For contracts subject to post review, the procuring entity shall publish the bid 

evaluation results no later than the date of contract award. 

(iii) In the publication of the bid evaluation results, the borrower shall specify that any 

bidder who wishes to ascertain the grounds on which its bid was not selected, 

should request an explanation from the procuring entity. The procuring entity 

shall promptly provide an explanation of why such bid was not selected, either in 

writing and / or in a debriefing meeting, at the option of the borrower. The 

requesting bidder shall bear all the costs of attending such as debriefing. In this 

discussion, only the bidder’s bid can be discussed and not the bids of 

competitors. 

15. Handling of Complaints 

11. The national competitive bidding documents shall contain provisions acceptable to ADB 

describing the handling of complaints in accordance with Article 47 of Decree No. 

111/20006/DD-CP, read with Articles 72 and 73 of Law on Procurement No. 61/2005/QH11. 

16. ADB Member Country Restrictions 

12. Bidders must be nationals of member countries of ADB, and offered goods, works, and 

services must be produced in and supplied from member countries of ADB.

Ho Chi Minh City Urban Mass Rapid Transit Line 2 Investment ...

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?