Economic Assessment of Sanitation Interventions in Vietnam - WSP

Economic Assessment of Sanitation Interventions in Vietnam | Annex TablesImpactsLessonsThe WSPST program contributes to the sustainability of water and sanitation services for the smalltowns covered. This is the first time in Vietnam an official development assistance (ODA) project hassupported 4th and 5th category towns in water supply and sanitation. The emerging model is in linewith the overall decentralization and privatization processes and provides an important opportunity forthe different stakeholders to define their new roles and responsibilities and to develop their capacityaccordingly. Support takes the shape of day-to-day guidance in the preparation and implementationof the investment projects according to the policies and capacity development of the differentstakeholders.Important policies for the water and sanitation sector were developed during Phase I of the program,notably Decree 117 for the provision of clean water and Decree 88 for sewerage and drainagemanagement in urban areas. The WSPST program has been instrumental in developing Decree 117and continues to be instrumental in working out the practical modalities for its implementation. Theprogram is also at the forefront of the implementation of Decree 88 in small towns. An important factoris that under Decree 117 the connection fee has been abolished and these costs are incorporated inthe service fee. This has strongly enabled the ability of poorer households to get connected.The WSPST program is making important contributions to the development of a sustainable financialwater and sanitation services model for small towns in Vietnam. Consumers are consulted and madeaware of the tariffs and the benefits for their health. The feasibility of the investments is assessed andfirst results related to collection rates are very satisfactory (almost 100%). The steps made by theprogram in making the paradigm shift from a subsidy/budget model to a public business model arepromising and laudable.WSPST is considered to have encouraged an important evolution in development of the water sectorin the provinces involved, whereby the provincial water enterprises can expand their service area andbuild their capacity beyond the provincial towns.The systematic and comprehensive approach of the project formulation, management, implementationand evaluation of the WSPST provides good lessons and serves as an example for other projects, andfor the preparation of appropriate legislative documentation for the urban water supply and sanitationsector of Vietnam. This includes the following components: a socio-economic survey; ‘willingness topay’ and ‘commitment to connect’ studies and activities that accompany infrastructure development(capacity building, human resource development strategy, management model and financial structure,awareness raising programs, evaluation of different technological options, and project monitoring andevaluation). These kinds of component are often neglected in national budget programs and WSPSTis showing the benefits of these components and the way to bring them into the project cycle.WSPST is an excellent testing field for new approaches and technologies in sanitation involved,especially for low-income areas with differing topographical and other natural, socio-economicalconditions. Separate sewerage and wastewater treatment (off-site) technologies are uncommon inVietnam. The decentralized sanitation scheme, which uses low-cost technology options such assmall bore sewerage, baffled septic tanks with anaerobic filters and constructed wetlands, and wastestabilization ponds seems to have been accepted in the project towns. The applicability of technologyalternatives has been tested under the program and lessons from the first implemented systems willbe taken into account at later stages, and in other projects.The costs of a centralized water supply can be fully recovered even in low-income communities.The key is adequate quality from the service supplier, and appropriate awareness-raising to ensurewillingness-to-pay on the demand side. In terms of water supply technology options, centralizedsystem are often the only ones considered. However, decentralized options should also beconsidered, especially for more remote and/or poor inhabitants. Technologies include rain waterharvesting (on roofs), household-level treatment, and shared water supply connections.Solid waste management should be included in the program, at least in the IEC activities.The program approach is especially strong in increasing the participation of consumers, with specialattention paid to the poor and women. The application of a Service Based Approach instead of aSystem or Project Approach could strengthen poverty reduction even more. The new administrativeand financial tools and mechanisms further develop implementation capacities.The Sanitation Revolving Fund (micro-credit scheme) contribution for poor households andhouseholds close to meeting the poverty criteria should cover the investment cost of sanitationconstruction. Interest rate and payback period conditions should be within the reach of the poor.Delays in project implementation should be foreseen.www.wsp.org119