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

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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