SOCIALIST REPUBLIC OF VIET NAM

Independence – Freedom – Happiness

Ministry of Planning and Investment

REVIEW

Community Based Rural Infrastructure Project (CBRIP)

&
Northern Mountains Poverty Reduction Project (NMPRP)

Final Report

Ha Noi, September 2005

Acknowledgements

This review of the Community Based Rural Infrastructure Project (CBRIP) and the Northern
Mountains Poverty Reduction Project (NMPRP) was undertaken by a Review Team comprising
of representatives from the concerned Departments of the Ministry of Planning and Investment,
with inputs from the Ministry of Labour, Invalids and Social Affairs (MOLISA), the Ministry of
Finance, the State Committee on Ethnic Minorities (CEM), the Central Project Management Units
of both projects. The review was supported by a team of consultants, namely, Mr Edwin Shanks
(Institutional Development), Ms Vu Xuan Dao (Financial Management), Ms Tran Thi Van Anh
(Socio-economic Development), and Mr Ngo Huy Liem (Community Infrastructure).

Funding for the review was kindly granted by the FAO / World Bank Cooperative Program.

In total, around 375 people were involved in the various consultation activities from central,
province, district, commune and village levels. Field work was undertaken in 4 provinces and 4
Districts (Tan Ky District in Nghe An Province, Huong Khe District in Ha Tinh, Bat Xat District
in Lao Cai, and Van Chan District in Yen Bai). Representatives from 30 communes were involved
in the consultation through a series of district consultation workshops and commune visits.

The Review Team would like to express their sincere thanks to the province, district and
commune authorities, and Project Management Units at different levels, for arranging these visits,
and for the many valuable ideas, contributions and recommendations made to the review.

At central level, a review workshop was held to present the draft report with representatives from
central Government agencies, donors and NGOs, and other projects and programs. The workshop
participants contributed many useful ideas and valuable feedback on the report, for which the
Review Team would like to express their thanks.

The consultants would like to thank Mr Pham Hai (Project Director of CBRIP), Ms Le Thi Thong
(Project Director of NMPRP) and Mr Robin Mearns (World Bank) for their guidance and support
in conducting the review, and Mr Nguyen Vang (M&E Officer with NMPRP) for his useful
contributions throughout the study and detailed comments on the draft report. Our thanks are also
extended to staff of the Central Project Management Units for providing logistical support, and in
particular to Ms Nguyen Thi Hanh Nga, Ms Do Thi Van Anh and Mr Hoang Manh Dai for their
inputs in organizing the review, the fieldwork visits and consultation workshops.

The final report was written on behalf of the Review Team by the consultants, and responsibility
for any factual errors or misconceptions in the report rests with the authors.

Edwin Shanks edwin@fpt.vn

Vu Xuan Dao vxdao2004@yahoo.com
Tran Thi Van Anh trvananh@hn.vnn.vn
Ngo Huy Liem ngohuyliem@fpt.vn

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Abbreviations

CBRIP Community Based Rural Infrastructure Project

CDB Commune Development Boards (NMPRP)
CDBC Commune Development Budget Component (NMPRP)
CDD Community Driven Development
CEM Committee for Ethnic Minority Affairs
CF Community Facilitator
CPCC Commune Project Coordinating Committee (CBRIP)
CPMU Central Project Management Unit
DCA Development Credit Agreement
DFID UK Department for International Development
DPMU District Project Management Unit (NMPRP)
DTSG District Technical Support Group (CBRIP)
IDA International Development Association
M&E Monitoring and Evaluation
MIS Management Information Systems
MPI Ministry of Planning and Investment
MOLISA Ministry of Labour, Invalids and Social Affairs
NGO Non Governmental Organization
NCB National Competitive Bidding
NMPRP Northern Mountains Poverty Reduction Project
NTP-PR National Target Program on Poverty Reduction
PAD Project Appraisal Document
P-CLIP Poor Communes Livelihoods and Infrastructure Program
PIM Project Implementation Manual
PPMU Province Project Management Unit
SW Small Works
UNDP United Nations Development Program
VBARD Vietnam Bank for Agriculture and Rural Development

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List of Contents

Acknowledgements ................................................................................................. ii
Abbreviations ........................................................................................................ iii
List of Contents ..................................................................................................... iv

EXECUTIVE SUMMARY ..............................................................................................1

PART A: INTRODUCTION ........................................................................................ 14

1. Scope and objectives of the review .............................................................. 14
1.1 Context ....................................................................................................................................14
1.2 Specific objectives ..................................................................................................................15
1.3 The review process and participants .......................................................................................15
1.4 Specific issues and content of the report .................................................................................17
2. Description of the projects ........................................................................... 19
2.1 Project objectives ....................................................................................................................19
2.2 Funding, geographical area and components ..........................................................................20
2.3 Main strategies for implementation.........................................................................................22
2.4 Management structure, fund flow and investment ownership.................................................23
2.5 Range and concentration of investment activities...................................................................25
2.6 Comparisons between CBRIP, NMPRP and Program 135 .....................................................27

PART B: LESSONS AND EXPERIENCE ...................................................................... 29

3. Overall progress and disbursement.............................................................. 29
3.1 Disbursement rates and patterns..............................................................................................29
3.2 Factors influencing overall progress and disbursement ..........................................................30
3.3 Comparison of the models for decentralized management .....................................................33
4. Participation mechanisms and reaching poor groups ................................... 35
4.1 Representation on commune management organizations .......................................................35
4.2 Consultation and planning steps..............................................................................................36
4.3 Information dissemination and awareness raising...................................................................38
4.4 Reaching poor communes and ethnic minority areas..............................................................38
4.5 From poor communes to poor villages....................................................................................39
4.6 From poor villages to poor households and social groups ......................................................40
5. Infrastructure investment process, quality and sustainability ..................... 41
5.1 Scheme selection, planning and design...................................................................................41
5.2 Procurement methods..............................................................................................................42
5.3 Technical supervision and community supervision ................................................................43
5.4 Operations and maintenance ...................................................................................................44
5.5 Paid labour opportunities for local people ..............................................................................45
5.6 Quality and cost-effectiveness of construction works.............................................................47
6. Commune management capacity and institutional impacts .......................... 49
6.1 Considerations of scale and intensity of impacts ....................................................................49
6.2 Main institutional innovations.................................................................................................50
6.3 Increasing confidence in commune management ...................................................................50
6.4 Training in technical, management and supervision skills......................................................51
6.5 Institutional training capacity..................................................................................................52
6.6 Community facilitation ...........................................................................................................53

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PART C: RECOMMENDATIONS FOR THE SEDEMA PROGRAM AND P-CLIP ................ 54
7. Building capacity for commune investment ownership ................................ 55
7.1 Phasing in the levels of investment ownership and management ...........................................56
7.2 Establishing effective organizations at commune level ..........................................................58
7.3 Introducing a systematic and comprehensive training program..............................................59
7.4 District support capacity and community facilitation .............................................................65
7.5 Covering the real costs of capacity building and training .......................................................65
8. Procurement strategy and maximizing local economic benefits from program
investments ........................................................................................................ 66
8.1 The distribution of economic benefits under current programs ..............................................66
8.2 Short-term paid labour or longer-term employment opportunities .........................................67
8.3 Re-examining cost-effectiveness in public procurement methods..........................................68
8.4 Procurement strategy of the new program and related design aspects....................................69
9. Targeting strategy and resource allocation to reach remote villages and poor
groups ................................................................................................................ 72
9.1 Budget allocations to communes and villages ........................................................................72
9.2 Chronically poor households in the uplands ...........................................................................73
9.3 Links between the poverty reduction programs and the forestry sector..................................73
9.4 Specific participation methods to involve poor people and women........................................74
9.5 Introducing non-formal vocational skills training methods ....................................................74
9.6 Public information and awareness raising...............................................................................74
10. Integration of programs at the local government levels ........................... 76

Annex 1. Review questions ................................................................................. 78

Annex 2. Fieldwork methods............................................................................... 80
Annex 3. Project documentation ......................................................................... 83
Annex 4. Project cost summary tables ................................................................ 84
Annex 5. Financial management and disbursement procedures.......................... 85
Annex 6. Activities under the CDBC of NMPRP .................................................... 94

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 EXECUTIVE SUMMARY

Scope and objectives of the review (see Main Report: Part A / Section 1)

1. The Government of Vietnam is currently preparing the national poverty reduction target
programs for the period 2006 to 2010. This includes the National Target Program for Poverty
Reduction (NTP-PR) under MOLISA, and the Socio-Economic Development Program for
Communes with Extreme Difficulties in Ethnic Minority and Mountainous Areas under the State
Committee on Ethnic Minority Affairs (referred to here as the SEDEMA Program).

2. The World Bank has been invited by the Ministry of Planning and Investment (MPI) on
behalf of the Government to consider support for an investment program to help finance and add
value to these re-designed national target programs. The proposed World Bank supported
operation is referred to as the Poor Communes Livelihoods and Infrastructure Program (P-
CLIP). In particular, it is intended this program should be aligned as closely as possible to the re-
designed SEDEMA Program.

3. The objectives of the P-CLIP would be to reduce poverty and foster secure and
sustainable livelihoods for people living in the country’s poorest and most marginal communes.
In particular, it would seek to enhance the Government’s national target programs with respect
to local-level capacity building and empowerment, transparency and accountability, poverty
targeting, and monitoring and evaluation.

3. The P-CLIP will follow-on and draw lessons from two existing World Bank supported
projects which take a Community Driven Development approach – and which are the subject of
this current review. These are the Community Based Rural Infrastructure Project (CBRIP) and
the Northern Mountains Poverty Reduction Project (NMPRP). These projects currently work in
a combined total of 979 poor communes in 19 provinces, with a total investment of USD 225.9
million in the period from 2002 to 2007.

4. The purpose of this review was to undertake a consultation with project managers and
other concerned stakeholders at all levels – central, province, district, commune and village – in
order to understand stakeholder viewpoints and opinions on the strengths and weaknesses of the
two projects. The specific objectives were agreed as follows:
i) To assess the performance, effectiveness, efficiency, and preliminary impacts
(where this is possible) of the two projects as related to the Project Objectives;
ii) In particular, to focus on the institutional aspects and impacts of the projects with
respect to capacity building, project implementation processes and procedures,
mechanisms to promote local ownership and participation, targeting, and project
management and financial management systems;
iii) To identify specific issues, and useful lessons and models from the two projects
that can be incorporated into the preparation and design of the proposed P-CLIP.

Project objectives, approach and components (Part A / Section 2)

5. The Project Objectives of both CBRIP and NMPRP express critical linkages between: (a)
investment in local capacity building (at commune level in particular) as a ‘foundation’ and
‘vehicle’ for (b) investment in the provision of improved commune and village infrastructure
and services, that should result in (c) improved access and benefits for the beneficiary groups.

1
The two projects are primarily ‘commune investment projects’ that are intended to have
community-wide benefits in poor communes and villages, rather than directly targeting
individual household poverty situations.

6. The two projects are working on a large-scale to introduce new and improved approaches
to commune investment ownership, participatory planning, commune and village cadre training,
community supervision of investment activities, and decentralized project management etc. The
large scale on which the two projects are operating is important in assessing their cost-
effectiveness and institutional impacts, because this is yielding valuable experience that can be
applied in Government programs that operate on a similar large scale.

7. The range of components varies between the two projects. CBRIP concentrates on the
provision of inter-commune, commune and village infrastructure. The NMPRP has a broader
range of components including small-scale infrastructure, social service provision in health and
education and agricultural extension, in addition to which 15% of the NMPRP budget is
allocated to a Commune Development Budget Component. Both projects include a substantial
capacity building and training component (of between 7.5% to 9%).

8. Both these approaches have advantages. By limiting the scope of activities to

infrastructure investments, the CBRIP has been able to concentrate more fully on building up the
capacity of the communes to act as Investment Owners for small-scale infrastructure schemes.
The NMPRP, on the other hand, is better representative of the range of different types of
investment that may be required to more comprehensively support socio-economic development
of the poor communes. In this respect, NMPRP is closer in design to the Government’s national
target programs (Program 135 and the future SEDEMA Program).

9. Both projects are achieving a concentration of investments in a complementary range of

infrastructure at commune and village level, that may be expected to yield measurable impacts
on socio-economic development in these locations. This contrasts with other projects and
programs in which the investments tend to be more scattered. This includes Program 135 which,
in a majority of provinces, has focused on fewer larger-scale infrastructure investments in each
commune, whereas NMPRP and CBRIP have generally shifted to smaller-scale works.

Overall progress and disbursement (Part B / Section 3.1 & 3.2)

10. Initial disbursement was slow under both projects in the first two years (2002 and 2003);
which is a situation encountered by many loan-financed projects in Vietnam. However, the
overall rates of disbursement have speeded up considerably in 2004 and 2005. It is recognized
that these two projects are now amongst the better-performing projects in the portfolio of World
Bank investment projects in Vietnam in terms of disbursement rate.

11. This performance can be attributed to three main factors: (i) generally effective
decentralization of management responsibilities to lower levels; (ii) clear definition of the
appropriate levels at which different types of procurement are best managed and implemented;
and (iii) the provision of intensive training for local Project Management Units in procurement
procedures and financial management etc.

12. Slow initial disbursement was primarily because the Project Management Units at all
levels were getting-to-grips with the new (World Bank) project procedures and regulations. The
assessment of overall progress should take into account the fact that these procedures were new

2
for a majority of districts and for all the communes involved in the two projects. This is in the
context of the newly introduced decentralized management systems in poor commune areas.

13. Delays were also caused by bottlenecks in the coordination and synchronization between
‘local government procedures’ and ‘project procedures’ with respect to: (i) approval steps for
procurement plans; (ii) infrastructure design steps and procurement for design; (iii) final
appraisal and liquidation; and (iv) insufficient allocation of counterpart funds or delays in
counterpart fund allocation in some provinces. One outcome of this has been long sub-project
cycles for infrastructure schemes that can take more than one year to complete. This is
compounded by the large volume of small sub-projects being processed through the system.

14. However, the experience from both NMPRP and CBRIP is now showing that
disbursement rates can be quite rapid under this type of decentralized program – provided there
are simple, effective and harmonized procedures. This experience indicates a number of factors
that need to be taken into account in the design of future projects and programs, for which the
following recommendations can be made:
• Projected disbursement rates over the whole program period should be carefully
modulated to take into account the critical capacity building phase at the beginning;
• Essential financial management regulations and procedures should be agreed and issued
as early as possible; currently, financial management regulations are often issued several
months after project start-up;
• It needs to be ensured that a phased program of management training begins as early as
possible – in the final stages of program preparation; start-up training needs to be
followed by re-fresher training (as experience has shown that building commune capacity
in investment management requires at least two-rounds of training courses);
• In particular, more specialized and practical training is required for staff at province,
district and commune level on a range of procurement methods, combined with more
intensive training for the commune accountants;
• Training needs to provided not only for staff of the Project Management Units at
different levels, but also to fully involve other concerned agencies that have a critical role
in sub-project approval procedures and financial management etc (e.g. the province and
district State Treasury, financial departments and sections etc);
• Lastly, experience has shown that processing issues (relating to procurement and
disbursement) are time-consuming at first, but can be resolved with good direction from
the Province and District People’s Committees; it is clear that in those localities where
the People’s Committees have taken an active role in providing leadership for the
projects, the projects are progressing more quickly and smoothly.

Models for decentralized management (Part A / Section 2.4 and Part B / Section 3.3)

15. Both projects have been promoting a decentralized approach to project management and
implementation, while adopting somewhat different models for this. The main differences
between them can be summarized as follows:

3
 CBRIP
• One Special Account under the Central
Project Management Unit (CPMU) in
MPI receiving IDA loan funds;
• Communes the Investment Owners for all
Small Works from the beginning of the
project (apart from inter-commune
works);
• Direct transfer of IDA funds from the
CPMU Special Account to the commune
project accounts;
• CPMU maintains an administrative role in
some procurement, managing the
commune accounts and capacity building.
NMPRP
• Six separate province Special Accounts and
one under CPMU receiving IDA loan funds;
• Districts the Investment Owners for a
majority of Small Works, combined with a
phased introduction of Investment
Ownership by the communes through the
Commune Development Budget
Component;
• Transfer of funds from the province Special
Accounts to district second-generation
accounts and commune sub-accounts;
• CPMU only has a coordination and capacity
building role.

16. In assessing how effective these models have been, it is important to consider the
assignment and delegation to appropriate levels of both ‘administrative responsibility’ and of
‘decision-making authority’. In this respect, the comparative strengths and weaknesses of the
two projects can be analyzed as follows:

Community Based Rural Infrastructure Project

17. The CBRIP has achieved effective transfer of the authority for Investment Ownership of
sub-projects to the commune level on a large scale. This experience shows that it is best to make
the communes the Investment Owners from beginning of project, and to adopt a ‘learning-by-
doing approach’, while accepting that some mistakes will be made in early stages of program
implementation.

18. The transfer of administrative responsibilities to lower levels (centre to province,

province to district...), however, has not been fully achieved, particularly for financial
management. This can result in time-delays and bottlenecks in communication between levels,
as higher levels are still undertaking administrative tasks that should be delegated.

19. The direct transfer of funds from the CPMU Special Account to the commune project
accounts has advantages – because it ensures that funding reaches commune level, and allows
for continued oversight of the new process by central agencies. However, it also runs the risk of
partially ‘by-passing’ the province and district administrations, and the responsibilities they have
in regular financial management and checking disbursements etc.

20. Giving communes the responsibility for Small Works contracts has had positive impacts,
not only on commune capacity but also in the quality of works. However, communes are still
reliant on the districts for advice and support on assessment and selection of contractors.

21. In summary, CBRIP has been more effective in decentralizing investment ownership
responsibilities to the communes, but less effective in achieving an appropriate degree of
decentralized management to provinces and districts to support this.

4
Northern Mountains Poverty Reduction Project

22. The NMPRP has achieved effective transfer of decision-making authority and
responsibilities for project management and coordination to province and district levels (through
the 6 province Special Accounts). This is in line with the objectives of the Government’s
program on Public Administration Reform, and decentralized financial management by
provinces in their area of jurisdiction as specified in the Budget Law from 2002.

23. The project has been slower to achieve a transfer of authority for Investment Ownership
to the communes. A phased introduction of the Commune Development Budget Component is
built into the project design – but it needs to be ensured that this is achieved in the remaining
project period up to 2007.

24. The project has achieved effective transfer of both the decision-making authority and
responsibilities for the procurement of Small Works contracts to the district level. This is
possibly the main reason for the significant increase in the disbursement rate under this project
in 2004 to 2005.

25. Commune involvement in procurement decisions is, however, still limited in many
places which can have an adverse impact on the extent of local consultation in the design and
construction process.

26. In summary, NMPRP has been more effective in decentralizing project management
responsibilities to the province and district authorities, but hitherto has been slower in building-
up commune capacity for investment ownership and management.

Main institutional impacts (Part B / Section 6)

27. It can be concluded that the main aspects in which the two projects are developing and
introducing important institutional innovations are as follows:

• Firstly, by widely introducing the principles, mechanisms and procedures for Commune
Investment Ownership and management of infrastructure and other types of activities.

• Second, by developing practical approaches to encouraging people’s participation, that

are closely aligned to the steps for Local Democracy, and which may be cost-effectively
replicated on a large-scale in the future.

• Third, by developing and introducing practical approaches and more systematic contents
for training programs for commune and village cadres that may also be applied on a large
scale. In particular, the model adopted by NMPRP of systematically working with and
through the Province Training Schools to provide large-scale training for commune
cadres, is worthy of wider application in future programs.

• Fourth, by developing and introducing practical approaches to community supervision of

works and activities. The Prime Minister has issued Decision No.80/2005/QD-TTg
(dated 18 April 2005) on the mechanism for community investment supervision; and in
this respect both NMPRP and CBRIP have valuable practical experience in training

5
 methods and the activities of the Commune Supervision Boards that can be widely
applied in future programs.

Recommendations for the SEDEMA Program and for P-CLIP

28. Based on the analysis made in Part A and B of the report, Part C draws-out broader
policy conclusions and operational recommendations for the design of the Socio-Economic
Development Program for Communes with Extreme Difficulties in Ethnic Minority and
Mountainous Areas for the period 2006 to 2010 1 , and the proposed World Bank financed Poor
Communes Livelihoods and Infrastructure Program (P-CLIP).

Building capacity for commune investment ownership (Part C / Section 7)

29. It is the broad intention of the SEDEMA Program that the commune authorities should
be the Investment Owners and managers in the future for both production development and
infrastructure components of the program. The experience from CBRIP and NMPRP, as well as
from other projects working in these areas, clearly shows that poor communes can act as the
Investment Owners. However, there are a number of basic requirements and necessary
conditions for building local capacity that need to be fulfilled in order to achieve this.

30. Appropriate phasing in the levels of investment ownership and management

assigned to the communes. It is necessary to progressively build-up the capacity and
confidence of the communes over time – by moving step-by-step from smaller to larger-scale
works and activities, from lower to higher levels of investment management, and from simple to
more complex sets of procedures. In order to ensure that communes are not overloaded in the
early stages of the program, there should be a manageable size of investment and a manageable
number of activities assigned to them.

31. It is recommended that the future program should be designed around a ‘Growth-path for
commune capacity building’ that provides a framework for: (a) decision-making about the size
and types of investment a commune can manage at a given point in time; and (b) for
progressively building-up the required management and technical skills-base and confidence of
the communes over the program period (see Figure 6 / Page 57).

32. According to this framework, communes would be grouped into three categories
according to current capacity (on the basis of an agreed set of Capacity Indicators), and during
program period they would be expected to progressively move from a lower to higher level of
investment ownership and management.

33. Formulating an overall Capacity Building Target for the program would have the
advantage of creating ‘positive incentives’ for communes, districts and provinces to be seen to
be performing well in terms of developing commune capacity.

34. The ‘Growth-path for commune capacity building’ would allow for an appropriate
division of responsibilities, for levels of investment management and procurement, between the
communes and districts, but with a phased transfer of these responsibilities to the commune
level. The types of procurement managed by the communes would be clearly linked to the size
and complexity of the investment, and the commune skills-base.

1
Reference is made to the Third Draft SEDEMA Program Document presented by the State Committee on Ethnic
Minority Affairs in June 2005.

6
35. It should be recognized, however, that not all types of infrastructure are suitable for
decentralized commune management. Inter-commune works, complex schemes that require a
high level of technical inputs to design and construction, and the involvement of specialized
service agencies for operations and maintenance, are generally not suitable for full commune
management. These should continue to be under the districts as Investment Owners.

36. Establishing effective organizations at commune level. One of the strongest aspects of
both NMPRP and CBRIP is the attention that has been given to the formation and training of
Commune Management Boards and Commune Supervision Boards. This has been critical to the
performance of both projects. Based on this experience, it is recommended that in future
programs a clearer distinction should be made between the membership, and respective tasks and
functions of the commune ‘management’ and ‘supervision’ board structures.

37. It is also recommended that steps should be taken to ensure a more balanced ratio of men
and women on these management and supervision boards, so that women are more fully and
actively involved in all project activities, and so that women’s opinions can affect decisions.

38. For this, the following proposal can be made:

Commune Management Boards Commune Supervision Boards

Responsible for investment ownership,
management and administrative aspects
• Chairman / Vice-chairman of the
Commune People’s Committee;
• Core technical and administrative staff
including the commune accountant,
cadastral officer, statistics officer, roads /
irrigation officer, extension worker, (and
representatives from the mass
organizations if required);
• Board members for decision-making: the
village heads and one woman from each
village selected by villagers.
Responsible for supervision and monitoring of
activities on behalf of the local community
• Chairman of the Commune People’s
Council;
• Representatives from the Fatherland Front
and the other mass associations;
• Village members including one woman and
one man elected by villages to undertake
supervision of activities in their village;
• Other experienced local people as
identified by the commune.

39. Introducing a systematic and comprehensive training program. This will be the key
to success of the SEDEMA Program. Providing more intensive and better quality technical and
management training for local cadres is essential in order to bring about successful
empowerment of communes. As such, investment in training for grassroots cadres and the
community should be seen as an investment in the future, especially for the remote areas where
ethnic minorities live.

40. For this, it will be necessary to introduce a phased, systematic and comprehensive
program of capacity building over several years. Start-up training needs to be followed by
periods of practicing skills and re-fresher training to build-up the required skills-base.

41. Based on the experience from CBRIP and NMPRP, it is recommended that a budget
allocation of around 8% of the total is required and appropriate for this type of capacity building
and training component for the poor communes.

7
42. It is strongly recommended that close linkages should be established between the cadre
training component of the overall Public Administration Reform Program under the Ministry of
Home Affairs, and the training component of the SEDEMA Program. In this respect, the
SEDEMA Program provides the applied and practical context for application of the broader
training under the PAR Program, and closely linking these programs will enhance their overall
effectiveness and integration into the provincial training systems.

43. Based on the experience from CBRIP and NMPRP, and from other projects and
programs, it is possible to recommend a set of Core Training Courses for commune and village
cadres on technical and managerial topics that should be included in the new program (see also
Table 7 / Page 63):

1. Commune investment management

2. Procurement methods, procedures and management
3. Commune accountant training
4. Community consultation and participatory planning methods
5. Community supervision of infrastructure works
6. Community Supervision of production development activities
7. Infrastructure design skills and construction management
8. Operations and maintenance of infrastructure
9. Adult education and literacy training
10. Program Monitoring and evaluation.

44. Practical training materials have already been developed under existing projects and
programs for some of these Core Training Courses, which could be adapted and used for wider
application in the future. It is recommended that as part of the preparation of the new program
these materials are collected, to review their content and quality and adapt them accordingly.

45. It is recommended that the model introduced by NMPRP for integrating such a training
program within the provincial training systems to provide large-scale training for commune and
village cadres should be adopted in new program. This should include funding and Technical
Assistance to increase the capacity of the Province Training Schools themselves, particularly
with respect to training needs assessment, learner-centered teaching methods, new course
content, and the evaluation of training quality and impacts.

46. Building-up effective support capacity at district level. The transfer of Investment
Ownership responsibility to lower levels (from province to district, and from district to
commune) raises an important set of issues relating to the provision of effective and timely
support from higher levels. Supporting commune Investment Ownership requires new ways of
working for district staff and agencies, improved information flow and communication between
commune and district level, and horizontally between district agencies. It needs to be ensured
that district staff have the necessary skills and motivation to fulfill this role adequately, and that
there is effective cross-sector coordination between district agencies.

47. Experience has shown that Commune Facilitators can play an essential role in providing
this ‘training and coaching’ support for the communes and in strengthening linkages with the
districts. In this respect, a large contingent of Community Facilitators has been trained by
CBRIP, NMPRP and by several other projects working in the poor communes. This is a valuable
human resource that should not be lost to the system in the future – and it is recommended that
the future program should actively seek to build on these existing community facilitation skills.

8
48. Covering the real costs of capacity building and training. At several points in this
review, it is noted that the existing levels of cost-norms in the Government system are generally
not sufficient to cover the costs of managing and implementing this type of decentralized
program in the remote, upland communes. It is suggested that there is a need for up-dated and
geographically differentiated cost-norm systems that more accurately reflect the real costs of
operating in these remote and difficult areas.

49. In particular, more intensive capacity building is possible under donor-assisted projects
(such as CBRIP and NMPRP) because of higher cost-norms and more flexible budget
allocations afforded to these projects. Current levels of cost-norms under the Government
system (for travel and daily allowances, training course preparation, training costs etc.) makes it
difficult to achieve this more intensive level of capacity building, especially in the remote upland
areas. This is a critical constraint that needs to be addressed in the future SEDEMA Program.

Procurement strategy and maximizing local economic benefits from program investments
(Part C / Section 8)

50. A stated aim of the Government’s national target programs is to allocate investment
capital for public works according to the principle: “The works are built for use of the commune,
local people have jobs and earn payment from building the works, thereby gradually reducing
poverty in the whole commune and in each village”.

51. The main question asked in this section is – what mechanisms can be put in place to
make this principle become more and more of a reality in the SEDEMA Program in the future?
In particular, this question is examined in relation to: (i) how can public investment activities
help to create better longer-term employment opportunities for local people; (ii) how to more
actively and fully engage local economic units such as small-scale enterprises (SMEs) and
cooperatives in bidding for and undertaking small public works; and (ii) the procurement
strategy, methods and regulations that will be included in the new program to support this.

52. Under many existing projects and programs operating in the poor communes, a
substantial proportion of the economic benefit of the investment activities does not go directly
into the local economy at commune or district level. For example, a majority of infrastructure
works are awarded to contractors from the province capital or outside the province. Similarly, a
majority of paid labour on construction schemes in the uplands continues to be given to external
laborers, rather than to local villagers.

53. Finding ways to increase the amount of cash going directly into the local economy (at
commune and district level) from program investments could substantially increase the impacts
on poverty reduction in these areas. This would be through an increase in direct benefits to
SMEs and households, as well as secondary benefits and multiplier effects in the local economy

54. It is the stated objective of the Government to prioritize and maximize paid labour
opportunities for local people on commune and village infrastructure schemes. Experience from
CBRIP and NMPRP shows that this needs to be supported by: (i) enforcing contractor
obligations in this regard; (ii) facilitating better communication between the poor and ethnic
minority communities and the contractor companies on the terms and conditions of employment;
and (iii) adequately covering the costs of training and administration that are incurred to
maximize these local paid-labour opportunities.

9
55. Looking more broadly at this issue – a number of recent international studies have
critically questioned the extend to which the provision of short-term ‘casual’ employment on
construction of public works can significantly contribute to poverty reduction. These studies
suggest that if public works are to be used effectively in situations of long-term poverty, it is
necessary to address the following points in program design:
• Creating sustained public-works related employment (i.e. not just short-term casual
labour on construction sites, but longer-term employment related to the on-going
operations and maintenance of infrastructure);
• Integration of public works programs with other development interventions;
• Creating linkages with small-scale enterprise development and micro-finance activities;
• Introducing flexible or piece-based employment, enabling local people to combine public
works employment with other responsibilities and income earning opportunities;
• Introducing higher wages to make it worthwhile for people to allocate their valuable time
to public works;
• Better poverty targeting measures to ensure these opportunities are afforded to the
poorest people.

56. In this respect, a number of specific recommendations can be made for the SEDEMA
Program and for PCLIP, as follows:

57. First, careful design of the procurement strategy, methods and regulations is required in
order to maximize these local economic benefits, and to increase the competitiveness of the local
economic units, while at the same time remaining transparent. It is strongly recommended that
this should be a central focus of the detailed design of the new program.

58. Presently, in the draft SEDEMA Program Document, little indication is given as to the
specific procurement methods that will be used in the future program. In the previous phase,
Program 135 was granted a relaxation of the Government’s procurement regulations to allow for
directly appointed contracting for infrastructure works (valued under VND 1 billion). It is,
however, recommended that this practice should not be continued in the new program. While
appointed contracting may speed up implementation, it can also reduce transparency in
procurement management, and the opportunities for effective supervision by the community.

59. The experience from CBRIP and NMPRP has shown that Small Works type-procurement
(i.e. limited competitive bidding with at least 3 price quotations) is viable in these remote upland
areas for commune and village infrastructure works; combined with Community Participation
Contracts for small-scale works and activities that can be locally constructed and managed. It is
recommended that a basically similar model should be applied in the new program – but through
an appropriate adaptation and refinement of the Government’s public procurement regulations in
order to promote integration between projects and programs.

60. Second, strengthen the regulations for Community Participation Contracting and apply
this method more widely in the future program. It is recommended that particular attention
should be given to extending the experience with Community Participation Contracts from
NMPRP and CBRIP and other programs that have introduced this approach – including the
experience from Program 135 in some provinces such as Tuyen Quang.

61. It will also be beneficial to establish benchmarks for the proportion of the investment
capital that would be expected to go through Community Participation Contracts. This would

10
help to re-enforce the shift to smaller-scale village infrastructure as intended under the
SEDEMA Program, as well as providing a stimulus for these types of procurement that increase
the benefits for local economic units.

62. Third, pro-actively engage with local economic units in order to boost their chances of
being able to compete for public contracts, and increase information flow on these
opportunities. One of the biggest difficulties currently faced by SMEs and cooperatives is that
they lack information on tender opportunities, knowledge about different procurement methods
and regulations, and how to prepare bidding documents etc. There is strong justification for
providing more information and training on these topics. This would be to build-up the capacity
of these economic units to bid for contracts, while not giving them unfair advantage during the
procurement process.

63. Fourth, build in a wider range of mechanisms to enhance long-term employment

opportunities for local people, beyond the provision of short-term paid labour on construction
sites. It is intended that vocational training, for youth in particular, will be an important
component of the SEDEMA Program. It is recommended that some of these vocational training
courses should be closely linked to the infrastructure investments made in villages and
communes. In order to increase the pool of skilled local laborers, training should be provided on
simple infrastructure design, basic construction skills and techniques, and operations and
maintenance. This would also create a more solid foundation and local capacity to undertake
sustainable operations and maintenance.

64. Fifth, distinguish more clearly between paid labour opportunities and voluntary
community contributions. It is recommended that a much clearer distinction should be made
between paid labour and voluntary contributions according to the level of investment ownership
and the scale of infrastructure schemes. This would be as follows:

• For larger public infrastructure – prioritize paid labor (e.g. for roads and bridges,
secondary schools, large irrigation head-works etc.) and voluntary contributions should
not be required for these types of schemes;

• For small-scale productive infrastructure – prioritize community contributions (e.g. for

works that have economic benefits for households including small-scale irrigation
systems, water supply schemes, village electricity connections, kindergartens etc.).

Targeting strategy and resource allocation to reach remote villages and poor groups
(Part C / Section 9)

65. It is intended that the SEDEMA Program will be targeted on 1,850 mountainous and
ethnic minority communes that experience the greatest difficulties, and 2,500 villages with
greatest difficulties that are located in more prosperous (Zone II) communes and districts. It is
also intended the new program will have a stronger focus on supporting smaller-scale commune
and village infrastructure investments and activities. This shift in focus to the village level brings
with it a number of challenges with respect to effective targeting and resource allocation.

66. One of the main strengths of Program 135 (in the previous phase) was the transparent
criteria for budget allocation to communes. This principle of transparency should be maintained
in the future program. At the same time, there is a need for more differentiated mechanisms for
targeting and delivering benefits to the poorest communities and social groups in these

11
communes, including: (i) remote and isolated villages, (ii) smaller ethnic minority groups, (iii)
ethnic minority women and girls, and (iv) the poorest category / chronically poor households.

67. Commune budget allocations. Under the SEDEMA Program it is intended to introduce
formula-based budget allocations to improve commune targeting. In this respect, it is
recommended that the budget allocation to communes (for both infrastructure and production
development components) should be based on the following criteria:
i) Level of remoteness (distance from the commune centre to district centre, and
from the village to the commune centre);
ii) Population (number of villages and households);
iii) A measure of relative poverty based on either the ‘cumulative poverty-gap’ or
‘poverty rate’ according to the new poverty line introduced by the Government.

68. Remote and isolated poor villages. The criteria for village budget allocations, and the
selection criteria for infrastructure and livelihood activities, both need to be adjusted and
weighted to provide access for the remote villages to be able to participate and gain benefits
from the program. Generally higher levels of investment per-capita are required for these
villages. This is to create favorable conditions for remote villages, where the poverty rate is high
even though the population may be small, but which have more difficult access to basic social
and economic services. For this, a combination of criteria for resource allocation including (i)
village population size and (ii) distance from the commune centre, may be sufficient to pick-up
these differences; however, this would need to be tested in the field and modified accordingly.

69. Chronically poor households in the uplands. An urgent priority, at this point in time, is
to address the situation of the poorest category households in upland communities (i.e.
‘destitute’ and ‘hungry’ households that fall into MOLISA Category IV). The economic
development activities and social welfare mechanisms of the existing poverty reduction
programs (HEPR-PR and Program 135) generally do not adequately address the situation of
these chronically poor households (that may constitute around 5% to 7% of households in many
upland communes). Because the mass associations are often less active in these upland
communes, there are limited alternative forms of social assistance. It is therefore strongly
recommended that in the preparation of the new program, a thorough Social Assessment should
be made to quantify the extent and nature of this issue, and to analyze needs and opportunities
for assisting these households.

70. Specific participation methods to involve poor people and women. The experience from
both CBRIP and NMPRP shows that specific methods are required to encourage the
participation of the poorest category households in projects activities, for example, in the
selection of works and other activities at village level. The scale of livelihoods activities such as
agriculture extension, and credit, also needs to be appropriate with resource conditions and
potentials of poor households. And specific mechanisms and processes of participation also need
to be developed in a practical way to assure participation of women, in particular poor and ethnic
minority women.

71. Introducing non-formal vocational training methods. In the future Poverty Reduction
Target Programs of the Government, it is intended that high priority will be given to the
provision of vocational skills training for poor households. However, it is essential to recognize
that vocational skills training opportunities are currently very limited for poor households.
Access to the formal vocational training school system is dependent on secondary school
qualifications and language requirements and is hence prohibitive for a majority of poor people

12
in the uplands, especially those from ethnic minorities. It is recommended that priority should be
given under the new program to introducing new approaches to non-formal community-based
education and skills training for upland people that are not dependent on qualification
requirements, and that are geared to small-scale income generation opportunities.

72. Public information and awareness raising. The experience from CBRIP and NMPRP
also shows that it is important to improve the two-way information flow with local communities,
and this should be a high priority for the design of future programs. There should be more
detailed information and specific methods for different groups: commune and village cadres,
men and women, the poorest households, ethnic minority groups, and people with limited Kinh
language abilities. The Village Heads are a particularly important link in two-way information
flow between the Commune and local people, and more should be done to increase their capacity
to fulfill this role.

73. It is recommended that information and awareness raising activities need to be

strengthened in the future program, by paying particular attention to: (i) the language, format and
content of training and information materials and activities to make them suitable for these poor
groups; and (ii) promoting collaboration with mass media agencies. There should be a
diversification of information channels, by more actively involving the mass associations, and
making greater use of mass media (television and radio) and audio-visual methods which are
more suitable and effective for poor communities and ethnic minority households.

13
 Part A: Introduction

1. Scope and objectives of the review

1.1 Context

The Government of Vietnam is currently in the process of re-designing the national poverty
reduction target programs for the period 2006 to 2010. This includes the National Target
Program for Poverty Reduction (NTP-PR) under MOLISA (leading on from the Hunger
Eradication, Poverty Reduction and Job Creation Program), and the Socio-Economic
Development Program for Communes with Extreme Difficulties in Ethnic Minority and
Mountainous Areas (referred to here as the SEDEMA Program) under the State Committee on
Ethnic Minority Affairs (leading on from Program 135). These programs are currently in the
final stages of preparation and will be formally submitted to the Government in mid-2005.

The World Bank has been invited by the Ministry of Planning and Investment (MPI) on behalf
of the Government to consider support for an investment program to help finance and add value
to these re-designed national target programs. The proposed World Bank supported operation is
referred to as the Poor Communes Livelihoods and Infrastructure Program (P-CLIP). It is
intended this program should be aligned as closely as possible to the re-designed SEDEMA
Program in particular. The objectives of the P-CLIP would be to reduce poverty and foster
secure and sustainable livelihoods for people living in the country’s poorest and most marginal
communes. In particular, it would seek to enhance the Government’s target programs with
respect to local-level capacity building and empowerment, transparency and accountability,
poverty targeting, monitoring and evaluation.

The P-CLIP will follow-on and draw lessons from two existing World Bank supported projects
which take a Community Driven Development (CDD) approach – and which are the subject of
this current review. These are the Community Based Rural Infrastructure Project (CBRIP) and
the Northern Mountains Poverty Reduction Project (NMPRP). These projects currently work in
a combined total of 979 poor communes in 19 provinces, with a total investment of USD 225.9
million over the period from 2002 to 2007.

In Official Letter No.221/CP-QHQT (dated 18 February 2004) of the Prime Minister, a list of
projects intended for financing by loans from the World Bank in the period 2004 to 2006 is
approved in principle. It is stipulated that for projects that have continuation it is necessary to
make a review and assessment of the effectiveness, experience and lessons learnt from the
previous phase or project, as a basis for the preparation, appraisal and approval of the new
project. This is the context in which the current review of CBRIP and NMPRP has been
undertaken by MPI and other concerned Government agencies, in order to derive lessons of
operational relevance for the proposed P-CLIP.

The Review Team comprised of representatives from the concerned Departments of MPI 2 , with
inputs from the Ministry of Labour, Invalids and Social Affairs (MOLISA), the Ministry of
Finance, the State Committee on Ethnic Minorities (CEM), the Central Project Management
Units (CMPU) of both projects, supported by a team of consultants. Throughout the review
consultation was also sought with donors that are supporting the Government in the re-design of
2
Including the Regional and Local Economy Department, Foreign Economic Relations Department, Investment
Appraisal and Supervision Department, and the Agriculture Economy Department of MPI

14
the national target programs (including UNDP, the Embassy of Finland, UNICEF, DFID and the
World Bank).

1.2 Specific objectives

The overall purpose of the review was to undertake a consultation with project managers and
other concerned stakeholders at all levels – central, province, district, commune and village – in
order to understand stakeholder viewpoints and opinions on the strengths and weaknesses of the
two projects. The specific objectives were agreed as follows:

iv) To assess the performance, effectiveness, efficiency, and preliminary impacts (where this
is possible) of the two projects as related to the Project Objectives;

v) In particular, to focus on the institutional aspects and impacts of the projects with respect
to capacity building (human resource and organizational development), project
implementation processes and procedures, mechanisms to promote local ownership and
participation, targeting, and project management and financial management systems;

vi) To identify specific issues, and useful lessons and models from the two projects that can
be incorporated into the preparation and design of the proposed P-CLIP.

In this respect, it is important at the outset to emphasize what the review has and has not aimed
to achieve. Firstly, the review should not be considered as a formal evaluation, and it has not
attempted to be fully representative in terms of the number of communes and districts covered.
Secondly, we have not made an assessment of socio-economic impacts of the two projects.
Thirdly, the review has not gone into the details of project management and implementation, nor
of the application of environmental or social safeguards. These aspects are covered by other in-
depth Monitoring and Evaluation (M&E) studies commissioned by the two projects, as well as
by the regular project supervision process.

Rather, what the review has aimed to achieve is a broad stakeholder consultation, in order to
assess factors relating to progress and performance so far, and to synthesize these lessons and
experience from the projects as a contribution to future programs in the poor communes.

1.3 The review process and participants

The review questions and an outline of the stakeholder assessment methods are given in Annex 1
and 2. The review adopted the following sequence of steps, involving concerned agencies and
stakeholders at central, province, district, commune and village levels:

Stage 1: Meetings with central agencies to define the scope and objectives of the review.
The Outline and Terms of Reference for the review were initially shared and discussed with key
central agencies taking part in the review (as identified above). The purpose of these meetings
was to identify specific issues and questions that should be addressed by the review.

At this stage it was broadly agreed that we should concentrate primarily on institutional aspects
and impacts. It is recognized that NMPRP and CBRIP represent new ways of implementing
large-scale (multi-province) investment projects with a decentralized management focus; and
that while overall investment under the two projects is quite scattered (USD 255.9 million over
19 provinces), the strategic meaning and main impacts of the projects may lie in these

15
institutional models. Accordingly, at this point in the project cycle it is important to verify how
effective these institutional approaches have been for future programs, as well as to maximize
the impact and sustainability of the existing projects. It was also suggested the review should
consider possible wider institutional impacts – for example, in the participation and involvement
of the mass associations and other organizations in project implementation, and on wider local
government planning and implementation processes.

Stage 2: Review of background documentation. The review has made use of an extensive
range of project documentation (listed in Annex 3), including specifically: (i) the Project
Appraisal Documents (PAD) and Project Implementation Manuals (PIM); (ii) financial
management guidelines; (iii) training materials and reports produced by the projects; (iv) the
Annual Progress Reports and data from the Management Information Systems (MIS); (v) reports
from the Mid-term Review of both projects that were conducted in 2004; (vi) independent
project audits; and (vii) independent M&E studies commissioned by the projects.

The latter M&E studies include: (i) a Process Monitoring Study undertaken for CBRIP 3 , which
in the first monitoring period (from 2003 to 2004) covered a total of 59 communes located in 12
of the 13 CBRIP provinces; and (b) a Lesson Learning Study on Infrastructure Construction
conducted for NMPRP 4 which covered all six project provinces, including a technical
engineering survey in 18 communes and a participation review in 12 communes. These in-depth
studies cover various aspects including: the effectiveness of participation in sub-project
selection, design and construction; technical review of infrastructure quality and cost-
effectiveness; and project planning and management aspects.

Stage 3: District Consultation Workshops and commune visits. Field visits were undertaken
in 4 provinces and 4 districts, and representatives from 30 communes were involved in the
consultation through commune visits and district consultation workshops:

¾ NMPRP:
Lao Cai Province Bat Xat District Muong Hum Commune
Den Sang Commune
+ 17 project communes in district workshop
Yen Bai Province Van Chan District Nam Muoi Commune
Nam Lanh Commune
¾ CBRIP:
Ha Tinh Province Huong Khe District Huong Trach Commune
Huong Do Commune
Nghe An Province Tan Ky District Tien Ky Commune
Huong Son Commune
+ 7 project communes in district workshop

One-day District Consultation Workshops that were held in Bat Xat and Tan Ky Districts.
Participants at these workshops included representatives of the District People’s Committee,
People’s Council, the Project Management Units, district treasury, relevant technical sections,
3
CBRIP. 2004. Project Process Monitoring: first annual report (November 2003 to October 2004).The Louis
Berger Group Inc. and VICA Consultants Ltd.
4
NMPRP. 2005. Construction Experience Lesson Learning Study: summary report. WSP International.

16
the mass associations, commercial banks, and representatives from all project communes in
these districts (17 NMPRP communes in Bat Xat, and 7 CBRIP communes in Tan Ky).

At these consultation workshops, the district and commune participants were divided into
separate groups to discuss questions relating to: (i) the quality and effectiveness of the capacity
building provided by the projects; (ii) the effectiveness of the project implementation processes
and procedures; (iii) the effectiveness of the relationships between local communities and
different management levels involved in the projects; and (iv) comparison between the projects
and other Government programs that work in the same communes and which have similar
components (such as Program 135).

During the commune visits, discussions were held with the Commune Project Coordinating
Committees (under CBRIP) and the Commune Development Boards (under NMPRP), and with
local people including both men and women. Participants were divided into separate groups to
discuss different aspects including: project management, infrastructure planning and
construction, and local participation and targeting. Additional meetings were held with the
Province Project Management Units (PPMUs) and concerned departments at province level.

Stage 4: Validation of findings. At the end of the field-work in each province and district,
meetings were held with the People’s Committees in order to share and obtain feedback on the
main findings of the visit. These meetings also provided an opportunity to elicit viewpoints from
the province and district leadership on the priorities for future programs working in the poor
communes based on current experience.

Lastly, a Central Review Workshop was organized in Ha Noi (on 06/06/2005) to present and
gain feedback on the main findings of the review. Participants at this workshop included central
Government agencies, donors and NGOs, other projects and programs, and some province,
district and commune representatives.

In total, around 375 people were involved in these various consultation activities. Accordingly,
this final report is based on the ideas and suggestions of a large number of staff involved in the
projects and other stakeholders at different levels. All the meetings and discussions held during
the study were highly stimulating and productive – and it is the sincere hope of the authors that
the report accurately documents the contributions of the participants, as well as reflecting
consensus viewpoints in a coherent manner.

1.4 Specific issues and content of the report

Following this introduction, Part A / Section 2 provides a description of the two projects. This
is to give the reader essential background information, as well as to highlight key similarities and
differences between the projects with respect to their objectives, main components and activities,
management structure and implementation mechanisms etc. Leading on from this, the report is
structured around the main questions and issues that have guided the review, as follows:

Part B: Lessons and experience

• Section 3. Overall progress and disbursement. Review question: How effective are the
overall investment and fund flow mechanisms of the projects in transferring funds to the
local level, and what factors influence the rate and effectiveness of disbursements?

17
• Section 4. Participation mechanisms and reaching poor groups. Review question: How
effective are the projects in encouraging local participation in schemes and activities, and
in reaching the intended beneficiaries (including poor communities and poor social
groups)?

• Section 5. Infrastructure investment process, quality and sustainability. Review

question: How effective are the implementation processes and procedures for investment in
commune and village infrastructure, and how cost-effective and sustainable are these
infrastructure investments?

• Section 6. Commune management capacity and institutional impacts. Review question:

How effective have the projects been in building local capacities for project management
and investment ownership, and what are the institutional impacts of this?

Part C: Recommendations and issues for future programs

• Section 7. Commune investment ownership. Review question: What measures need to be

taken to effectively and sustainably build capacity for investment ownership by the poor
communes, and what are the necessary conditions for this?

• Section 8. Maximizing local economic benefits from program investments. Review

question: How can the effectiveness of program investment activities be enhanced, in order
to increase the direct economic benefits going to poor people and poor communities, and
multiplier effects in the local economy that will maximize impacts on socio-economic
development?

• Section 9. Reaching remote villages and poor groups. Review question: How to improve
targeting and program implementation mechanisms to reach remote and poor villages and
hamlets, and the poorest social groups and households in the uplands?

• Section 10. Integration of programs at local government levels. Review question: What is
implied by the integration of projects and programs at the local government levels (province,
district and commune) and why?

18
2. Description of the projects

Detailed information on the project components, management systems and implementation

mechanisms can be obtained by referring to the Project Appraisal Documents (PAD), Project
Implementation Manuals (PIM) and other resource documents listed in Annex 3. This section
gives a short illustrative description and comparison of the projects which can be used as
background information for the subsequent analysis made in the report.

2.1 Project objectives

The Project Objectives and key performance indicators as given in the Project Appraisal
Documents are as follows:

Project objective Key performance indicators

CBRIP: to reduce rural poverty in
poor rural communes by: (i)
increasing the capacity of communes
for decentralized and participatory
planning and management of
development activities; (ii) providing
essential small-scale, community-
based infrastructure; and (iii)
generating direct income for the poor
through providing construction
employment.
NMPRP: poor villagers in the
northern mountains use a variety of
improved and sustainable
infrastructure and social services,
and the institutional capacity of
upland communes and districts is
increased.
• Degree of participation of stakeholder groups in
planning and selection of infrastructure;
• Number of civil works contracts signed by
communes and application of competitive
contracting procedures;
• Number of households which gain new or improved
access to essential infrastructure;
• Number of O&M groups established;
• Level of improvement in standards of living as
assessed by beneficiaries; and
• Number of local labor days generated and income
earned.
• Access to, and use of, transport, market, water,
health and education infrastructure and services;
• Changes in service quality as assessed by villages
and groups;
• Sustainability of operations and maintenance
systems;
• Improvements in district and commune management
capacity;
• Improvements in agricultural livelihoods as assessed
by villages and groups; and
• Project impact on poverty and incomes and selected
indicators of agricultural production and health and
education attainments will be monitored by an
independent organization.

It will be noted that the overall scope of the Project Objectives differs to the extent that CBRIP is
concentrated primarily on infrastructure provision, whereas NMPRP covers both infrastructure
and livelihood components including social service provision and agricultural extension.

19
At the same time, there are essential similarities in the logic and formulation of the Project
Objectives in the critical linkages that are expressed between:

1) Investment in local 2) Investment in the 3) Improved access

capacity building (at provision of improved and benefits for the
commune level in and sustainable commune beneficiary groups
particular) as a and village infrastructure (poor communes,
‘foundation’ and and services, that should villages and
‘vehicle’ for... result in... households).

Consideration of these 3 main elements in the Project Objectives is important in assessing the
institutional as well as physical performance and impacts of the two projects. In this respect, it is
also important to note that both NMPRP and CBRIP are primarily ‘commune investment
projects’ that should result in improved access to infrastructure and services for the
beneficiaries, rather than directly targeting household poverty situations.

2.2 Funding, geographical area and components

Background data and information on the projects are summarized in Table 1 & 2 below, and in
the indicative project cost tables given in Annex 4.

Table 1. Community Based Rural Infrastructure Project

Background Information

Project period: 2002 to 2007

Total USD 123.4 million (USD 102.8m IDA loan + 20.6m counterpart funds
investment: and local contributions)

Project area: 611 communes in 98 districts in 13 provinces of the Central Region

from Thanh Hoa Province in the north to Binh Thuan in the south5 .
• 68% of project communes included in Program 135.

Commune Commune budgets allocated according to population, ranging over a

investment 3-year investment period from USD 58,000 for a commune with a
range: population under 1,800, up to USD 175,000 for a commune with over
5,000 people.

Main project • Inter-commune, commune and village infrastructure (87.2%

components: of total project funds) including roads, water supply, small-scale
irrigation, public buildings (e.g schools, kindergartens, community
houses), flood protection works, electrification...)
• Capacity building and training (7.3%)
• Project planning and management (5.5%)

5
Including Thanh Hoa, Nghe An, Ha Tinh, Thua Thien Hue, Quang Nam, Quang Ngai, Binh Dinh, Phu Yen,
Khanh Hoa, Ninh Thuan, Binh Thuan, Lam Dong and Binh Phuoc provinces.

20
 Table 2. Northern Mountains Poverty Reduction Project
Background Information

Project period: 2002 to 2007

Total USD 132.5 million (USD 110m IDA loan + 12m counterpart funds +
investment: 10.5m co-financing from DFID for capacity building).

Project area: 368 upland communes in 44 districts in 6 provinces of the Northern

Mountains Region 6 .
• 96% of project communes included in Program 135.

Commune Commune budgets ranging from USD 28,000 to 560,000 per

investment commune (based on Commune Development Plans made during
range: project preparation).

Province budget Lao Cai (USD 27m), Son La & Yen Bai (17m), Bac Giang, Phu Tho &
allocations: Hoa Binh (15m).

Main project • Rural roads and markets (estimated at 25.7% total project
components: funds and no more than 30% of province budgets);
• Small-scale irrigation, water supply, and agricultural
extension including demonstration models and applied research
(27.2%);
• Health and education (13.6%) including basic infrastructure,
facilities and upgrading village teacher and health-worker
qualifications;
• Commune Development Budget Component (constituting
12.8% of total project funds and around 15% of the province IDA
budgets);
• Capacity building and training (8%);
• Project planning and management (6.8%).

Total investment. The figures for the IDA loan amount given here are those included in the PAD
and Development Credit Agreements (DCA). However, due to changes in the USD exchange
rate in recent years, the total funding available for each project has increased in the order of
10%. This may not result in many new activities and investments, but rather used to off-set
shortfalls in existing budgets. In particular, the original cost estimates for many infrastructure
schemes are now considerably under-resourced, due to the long period since preparation of the
projects (which began in 1998), and rapid inflation in the cost of construction materials.

Commune investment range. The method used for determining the level of commune
investment differs between the projects. Under CBRIP a simple formula is used based on
population of the communes, whereas in NMPRP the figures were determined through commune
planning exercises undertaken during the project preparation period (2000 to 2001). It is
recommended that formula-based budget allocations to communes are preferable for future
programs to allow transparent, consistent and predictable planning (see Section 7.1). At the same
time, the experience from NMPRP shows this needs to be linked to aspects of planning for

6
Due to the transfer of Tan Uyen District (previously in Lao Cai Province) to the new Lai Chau Province, and the
division of Ky Son District in Hoa Binh into 2 districts (with a new district of Cao Phong), the project currently
works in 356 communes in 44 districts.

21
which the district is the management focus (for example, in district road area networks, and
training of commune and village teachers and health-care workers).

Project area. There is considerable overlap between communes included in CBRIP and NMPRP
and those in Program 135 (68% and 96% respectively). This is indicative of the current situation
whereby many of the poor communes now have two, three or more Government, donor and
NGO assisted projects and programs working side-by-side. Promoting mechanisms to increase
the coordination, complementarity and integration between these projects and programs is
becoming critical, in order to maximize local impacts and to reduce the management burden on
local staff (see Section 10).

Main project components. NMPRP has a broader range of components covering both
infrastructure and livelihoods, in addition to which 15% of the province budgets are allocated to
a Commune Development Budget Component (CDBC). The experience from NMPRP is,
therefore, more illustrative of the range and concentration of different types of components and
activities that may be required to comprehensively tackle poverty reduction and to promote
socio-economic development in the poor communes. CBRIP, on the other hand, focuses on
inter-commune, commune and village infrastructure. In this respect, one of the main strengths of
CBRIP lies in the clearly formulated project objectives, and in the comparatively straightforward
project design and process for implementing the project at community level.

2.3 Main strategies for implementation

While the range of project components varies, the two projects share a number of main
principles and strategies for implementation, as follows:

Community driven development projects. This is by introducing participatory planning

processes at commune and village level for the selection and planning of investments; local
contributions to design, construction and operations and maintenance of small-scale works;
enhancing the role of the community in supervision of construction works; and promoting local
ownership through community managed sub-projects. In this respect, the two projects generally
adopt the steps laid out in the Government’s legislation on Local Democracy (see Section 4.2).

Decentralized management and linking capacity building to project implementation. The

responsibilities for Investment Ownership have been transferred to commune level under
CBRIP, and to district and commune levels under NMPRP. To support this, both projects
include a substantial capacity building and training component. In NMPRP this is supported by
the DFID co-financing grant (9% total project budget), while in CBRIP the capacity building is
financed through the loan and counterpart funds (around 7.5% total project budget).

Scaling-up geographically. The projects work in a combined total of 979 communes in 142
districts. They are, therefore, introducing these approaches to participatory planning, commune
cadre training, and commune investment management on a large-scale. This point is particularly
important in assessing the cost-effectiveness and institutional impacts of the projects.

Over the last decade, there have been many donor and NGO supported rural development
projects in Vietnam that have been introducing methods of local participation and community
development. However, these have mostly been working on a smaller scale – in a limited
number of communes and districts, or through single province projects. Much valuable
experience has been gained through many of these projects. However, at this point in time, we
can say that the critical challenge is how to apply these principles and approaches on a much

22
larger scale – in many hundreds of poor communes and thousands of villages, as covered by the
Government’s Poverty Reduction Target Programs. In many respects, the most valuable
experience from NMPRP and CBRIP is that these projects are operating on a comparable large-
scale through the Government system (see Section 6.1).

2.4 Management structure, fund flow and investment ownership

Figures 1 & 2 provide an overview of the management structure, fund-flow, and levels of
investment ownership under the two projects. Reference can also be made to a detailed
description of the financial management and disbursement procedures provided in Annex 5. It
will be noted from Figures 1 & 2 that the overall model for decentralized management varies
between the two projects in a number of respects.

Figure 1. CBRIP: management levels, overall fund flow

and investment ownership

IDA

One Project Overall coordination MPI

Special Account and support for Central Project
under CMPU capacity building by Management Unit
CPMU (CPMU)

Management support PPC / DPI

by PPMU from Province Project
counterpart funds Management Unit
(PPMU)

Districts the DPC

District Project
Investment Owner District Technical
Accounts in
for inter-commune Support Group
commercial bank
works (*) (DTSG)

Commune Project Communes the Commune Project

Accounts in Investment Owner Coordinating
commercial bank for all commune Committee
works (and Commune
Supervision Boards)

Note (*) Transfer of IDA funds to District Project Accounts for 2% supervision funds and
1.7% management funds. Payment of contractors direct from CPMU.

23
 Figure 2. NMPRP: management levels, overall fund flow
and investment ownership

IDA

CPMU the MPI

CPMU Special Investment Owner Central Project
Account for Capacity Building Management Unit
Plan (DFID co- (CPMU)
financing)

Provinces the PPC / DPI

6 Province
Investment Province Project
Special Accounts
Owner for larger Management Unit
schemes (NCB) (PPMU)

Districts the DPC

District Second Investment Owner District Project
Generation Accounts for a majority of Management Unit
in commercial bank small works (DPMU)

Communes the
Commune
Investment Owner
Development Board
Commune Project for Commune
(and Commune
Accounts in Development Budget
Supervision Board)
commercial bank Component (15%
project funds)

Management of the Special Accounts. Under CBRIP disbursement from the International
Development Association (IDA) to the project is made through one Special Account held by the
Central Project Management Unit (CPMU) in MPI. This is the most common model for IDA
financing in Vietnam, whereby funds are channeled through a single Special Account at central
level, from which they are disbursed to Project Accounts held in commercial banks at lower
levels. For NMPRP the IDA funds are disbursed to seven separate Special Accounts: one under
the CPMU and to six province Special Accounts managed by the PPMUs (with an additional
Special Account under CPMU for the DFID co-financing). The NMPRP is one of two projects in
the rural development portfolio of the World Bank in Vietnam that adopts this ‘decentralized’
model of direct disbursement to province level 7 .

Disbursement to Project Accounts. Under CBRIP funds are disbursed directly from the Special
Account held by CPMU to commune and district Project Accounts held in the district branch of

7
The other project channeling funds through province Special Accounts is the Coastal Wetlands Protection and
Development Project.

24
the Bank for Agriculture and Rural Development (VBARD). The direct transfer of the majority
of project funding from the centre to a large number of commune accounts is one of the unique
and ambitious aspects of this project. Under NMPRP disbursement of funds from the province
Special Accounts is made to District Project Accounts, and through these to separate Commune
Project Sub-accounts for the Commune Development Budget Component (CDBC) held in the
district branch of VBARD.

Counterpart funds. While loan funds are channeled through the commercial banking system,
counterpart fund accounts are based in the province and district treasury. The treasury is
responsible for supervising expenses and disbursement from the counterpart fund in accordance
with existing Government regulations.

Investment ownership and management. The above differences in fund flow are related to the
designated levels of Investment Ownership under the two projects. Under NMPRP, the districts
are the investment owners for the majority of small-scale infrastructure works, while the
communes are investment owners for the CDBC, and the PPMUs for a limited number of larger
schemes. Accordingly, the districts are given full Project Management Unit (DPMU) status
under this project. Under CBRIP, the communes are the investment owners for all commune
infrastructure works in the project, while the districts are investment owners only for inter-
commune schemes but with disbursement to contractors made directly from the CPMU.
Accordingly, the districts mainly provide technical and administrative support to the communes,
as reflected in the name of the District Technical Support Groups (DTSG).

These differences in the management structure and system result from assessments of
institutional capacity made during the project preparation period. For NMPRP, it was considered
not possible to transfer full investment ownership responsibility to the communes in this region
from the beginning of the project – hence a ‘two-tier’ system and phased transfer of investment
ownership responsibilities to the district and commune levels was introduced. For CBRIP, on the
other hand, it was considered feasible to transfer such responsibilities to the commune level from
the outset of the project. It can be generally concluded that both approaches have strengths and
weaknesses, which are considered further in following sections of the report. Section 3.3 gives
an assessment of the comparative effectiveness of these models for decentralized management.

2.5 Range and concentration of investment activities

The range of investment activities included in the projects can be best illustrated by looking at a
number of specific examples. Tables 3 & 4 present data on the infrastructure schemes completed
in Lao Cai and Nghe An provinces in 2004. It will be noted that both projects are investing in a
large number of infrastructure works, with the average investment per scheme being
comparatively small. One feature of these small-scale works is that they are geographically
scattered in remote communes and villages, which presents a number of challenges with respect
to procurement processing, and ensuring high quality technical design and construction.

It is the general policy of the two projects that auxiliary facilities should be included in these
schemes, such as water supply, sanitation, furniture, and teacher accommodation for village
classes, which has greatly increased the effectiveness of use of schools and is greatly appreciated
by local communities 8 . Under both projects, however, there are recorded cases in which
sanitation has not been provided for schools and kindergartens as part of the construction
package, and it needs to be ensured that these are provided by supplementary funding.

8
NMPRP. 2005. Construction Experience Lesson Learning Study: summary report. WSP International.

25
 Table 3. Lao Cai Province (NMPRP): Infrastructure works completed in 2004
(USD – approximate)
Type of scheme Number Total Average
schemes investment investment
Commune and village roads, bridges etc 14 979,000 70,000
Commune markets 4 73,000 18,300
Small-scale irrigation schemes 32 907,500 28,500
Clean water supply schemes 25 391,500 15,660
School buildings, village classrooms and 130 2,645,000 20,346
teacher accommodation
Commune clinics (up-grading) 3 148,200 49,400
Source: NMPRP – Management Information System
.
Table 4. Nghe An Province (CBRIP): Infrastructure works completed in 2004
(USD – approximate)
Type of scheme Number Total Average
schemes investment investment
Inter-commune roads 7 356,000 50,850
Commune and village roads, bridges etc 14 312,530 22,300
Schools, village classrooms, kindergartens 21 450,800 21,460
Community houses 22 286,520 13,000
Small-scale irrigation schemes 8 136,330 17,050
Clean water supply schemes 9 191,830 21,300
Electricity supply 5 126,330 25,250
Commune clinics (up-grading) 1 20,250
Source: CBRIP – Management Information System

Looking at commune level, an example of the range of project investments and activities in one
commune in Yen Bai Province under NMPRP is given in Table 5.

It will be seen that these activities include: (a) the main project components in infrastructure and
services (amounting to around USD 555,000); and (b) the Commune Development Budget
Component (CDBC). The CDBC under NMPRP is still in the early stages of implementation
(with preparatory training taking place in 2004 and the first cycle of activities taking place in
2005); so at this stage it is still to early to provide comprehensive data on the types of activities
that communes and villages are selecting for this, or to draw lessons from implementation of this
component. Separate financial management guidelines have been issues by the Ministry of
Finance for the CDBC 9 . A summary of these guidelines, and a list of eligible and non-eligible
activities that may be included in the CDBC are given in Annex 6.

9
Circular No.90/2003/TT-BTC (dated 24 September 2003) of the Ministry of Finance on guidelines on the
mechanism of financial management for the Commune Development Budget Component under the Northern
Mountains Poverty Reduction Project.

26
 Table 5. Range of activities in the Commune Development Plan for
Nam Muoi Commune, Van Chan District, Yen Bai (NMPRP)
Activity Investment
(USD – approximate)
Infrastructure
District to commune road (17km) and bridges 303,100
Drainage system 13,290
Commune market 18,420
Small-scale irrigation (3 village schemes) 52,850
Clean water supply (1 village scheme) 9,175
Village classrooms (6 villages) 37,780
Village teacher accommodation (6 villages) 10,250
Upgrading commune health clinic 5,125
Services
Agriculture extension models (4 technologies / 70 households) 6,960
Training to upgrade village teacher qualifications 3,480
Training commune and village healthcare workers 4,050
Equipment for village healthcare workers 440
Commune Development Budget Component
CDBC (budget allocated to commune over 3 years / 5 cycles) 69,500

2.6 Comparisons between CBRIP, NMPRP and Program 135

As part of this review, the stakeholders at commune and district level were asked to make an
assessment of strengths and weaknesses in the implementation CBRIP and NMPRP as compared
to Program 135. Based on this assessment, and our own analysis, some of the main differences
can be summarized as follows:

CBRIP & NMPRP Program 135

• CBRIP and NMPRP are achieving a
greater concentration of investment in a
complementary range of infrastructure at
commune and village level, and both
projects have generally been effective in
shifting to smaller-scale village works.
• The two projects are moving ahead more
quickly on transferring Investment
Ownership authority and responsibilities to
the communes.
• By limiting the scope of activities to
infrastructure investments, the CBRIP in
particular has been able to concentrate
more fully on building up the capacity of
the communes to act as Investment Owners
and managers.
• Program 135 investments tend to be
concentrated on fewer and larger
infrastructure schemes in each commune
(e.g. commune roads, secondary schools
and larger irrigation works) which are
geographically more scattered.
• The larger size of these investments in
Program 135 is reflected in the fact that
many schemes exceed the annual budget
allocation per commune, and are paid for
retroactively over several years.
• Nationwide, Program 135 has generally
been slower in transferring Investment
Ownership authority to the communes. By
2003, only 385 out of 2,362 communes
(16%) in 20 out of the 49 provinces in

27

• NMPRP is more representative of the range
of different types of investment that may
• Under Program 135 less than 1% of the
be required to comprehensively support
socio-economic development of the poor
communes. In this respect, NMPRP is also
closer in design to Program 135.
• Both CBRIP and NMPRP are making a
substantial investment in commune
capacity building and training (of between
7.5% to 9% of the project budget).
• The higher level of resources put into
training, has gone together with more
attention to introducing methods for
community participation in sub-project
selection, and community supervision of
investment activities.
• Project ‘procedures’ are seen to be more
complicated as compared to Program 135,
including the procedures for preparation
and approval of annual procurement plans,
sub-project approval steps, and
procurement methods and regulations.
• With respect to procurement, CBRIP and
NMPRP are mainly using Small Works
(SWs) contracts and Community
Participation Contracts for commune and
village infrastructure works (see Section
5.2). These methods are more time
consuming at first. However, project
leaders also refer to the stricter
management they allow.
10
MOLISA & UNDP. 2004. Taking Stock, Planning Ahead: Evaluation of the national Target Program on Hunger
Eradication and Poverty Reduction and Program 135. Ministry of Labour, Invalids and Social Affairs, United
Nations Development Program, Ha Noi.
Program 135 were made the investment
owners 10 .
program budget was used for commune
capacity building and training. This figure
needs to be viewed in light of the cadre
training provided by the regular
government training system and other
programs. Still, this figure is low compared
with the two projects, and a training
program has not been executed widely
especially for commune and village levels.
• The level of community participation in
sub-project selection, and community
supervision of works etc. varies from place
to place. Some provinces under Program
135 have paid much more attention to this
than others.
• Program 135 procedures are more simple,
and the number of documents and steps
required for the approval and
implementation of sub-projects are fewer.
• Program 135 was granted a relaxation of
the Government’s public procurement
regulations to allow for ‘direct
appointment’ of contractors for the
construction of works (valued under VND
1 billion). This can speed up program
implementation, but it can also reduce
transparency in procurement management,
and it can limit effective supervision by the
community.
28
 Part B: Lessons and Experience

3. Overall progress and disbursement

Review question: How effective are the overall investment and fund flow mechanisms of the
projects in transferring funds to the local level, and what factors influence the rate and
effectiveness of disbursements?

3.1 Disbursement rates and patterns

Overall disbursement can be considered on two levels: (i) disbursement from IDA to the project
Special Accounts; and (ii) disbursements from the Special Accounts to the Project Accounts and
through the various investment activities to the point of final liquidation. Based on MIS data
provided by the CPMUs, Figure 3 shows overall disbursement from IDA to the Special
Accounts in relation to the planned disbursement rate over the full project period (Financial Year
2002 to 2008). Using the same data, Figure 4 shows the quarterly disbursement rate and pattern
in the period from 2002 to the end of Quarter 1 in 2005.

Figure 3. Planned and actual disbursement under the projects

CBRIP (Total: 102.8 m USD) NMPRP (Total: 110 m USD)

40 30
M illio n U S D
M illio n U S D

30
Planned 20
20 Planned
Actual 10
10 Actual
0 0
2002 2003 2004 2005 2006 2007 2008 2002 2003 2004 2005 2006 2007 2008

Project year Project year

Figure 4. Quarterly disbursement patterns

CBRIP: Quarterly NMPRP: quarterly

disbursement disbursement

8 12
Million USD

Million USD

10
6
8
4 6
2 4
2
0 0
2

5
02

03

04

05

0
20

20

20

20
20

20

20

20

Year / quarter Year / quarter

29
It should be noted that: (i) these data are based on the original project figures which do not take
into account the increase in available funds due to changes in the USD exchange rate (in the
order of a 10% increase); (ii) although both projects finish at end of 2007, some disbursement is
planned in the following Financial Year to complete liquidation on activities; and (iii) the peak
in quarterly disbursement to NMPRP in Quarter 3 of 2002 (see Figure 4) represents the first
transfer of funds to the 7 Special Accounts under this project.

With respect to disbursement from the Project Accounts, under both projects there is currently a
pipeline of approved sub-projects and contract packages carried over from the 2003 and 2004 for
which procurement plans have yet to be completed, as well as schemes that have been completed
and are awaiting final liquidation. Figure 5 shows this pattern of implementation progress under
NMPRP from year to year. This is a positive situation in that there are many sub-projects that
have already been approved – and which are expected to account for the majority of physical
outputs for the remaining project period. At the same time, this reflects the reality that the length
of time required to complete the sub-project procurement and construction cycle frequently
results in final disbursements having to be made in the year following the planned investment
expenditure.

Figure 5. NMPRP Implementation Progress

900

800

700
No. contracts/ packages

600

500

400

Sub-project packages not yet implemented

300
Sub-project packages under construction
Sub-project packages completed
200

Source: NMPRP Supervision

100
Mission Aide Memoir, April 2005

0
2002 2003 2004 2005

Year of Procurement Plan

3.2 Factors influencing overall progress and disbursement

Initial disbursement was slow under both projects; which is a situation encountered by many
loan-financed projects in Vietnam. Under both NMPRP and CBRIP there was generally slow
disbursement in 2002 and 2003. However, it is notable that after 1-2 cycles, the overall rates of
disbursement have speeded up considerably in 2004 and 2005. It is recognized that these two
projects are now amongst the better-performing projects in the portfolio of World Bank
investment projects in Vietnam in terms of disbursement rate. This performance can be
attributed to three main factors:

30
 • Clear definition of the appropriate levels at which different types of procurement
should be best managed (e.g. small commune and village works managed by the
communes, larger and inter-commune works managed by the district, and packaged
schemes for National Competitive Bidding managed by the provinces);
• Generally effective decentralization of the responsibilities for management to the
lower levels (including decision-making and administrative responsibilities);
• The provision of adequate training and refresher training for local staff in
procurement procedures and financial management.

Slow initial disbursement was primarily because the Project Management Units at all levels were
getting-to-grips with the World Bank’s regulations for the preparation of procurement plans,
procurement procedures, prior review and reporting requirements etc. The assessment of overall
progress should take into account the fact that these regulations and procedures were new for a
majority of districts and for all the communes involved in the projects. This is in the context of
the newly introduced decentralized management systems.

In response to the slow initial rate of disbursement, steps were taken by both projects in 2003
and 2004 to clarify management responsibilities and to streamline procedures. Under NMPRP,
this included clarifying the respective responsibilities of the CPMU, PPMUs and the World
Bank in processing procurement under the Province Special Accounts, and quicker delegation of
responsibilities for managing Small Works procurement to the districts. Under CBRIP, steps
were also taken to simplify bidding and procurement, and financial management and accounting
procedures based on recommendations given by the Process Monitoring Study 11 . More intensive
training provided by both projects for the local Project Management Units has also contributed
to the recent increase in the rate of disbursement.

One particular difficulty encountered by the local Project Management Units, and which has
caused delays and bottlenecks, is in the coordination and synchronization between ‘local
government procedures’ and ‘project procedures’. This is with respect to: (i) approval
procedures for procurement; (ii) infrastructure design steps and procurement for design; (iii)
final appraisal and liquidation; and (iv) insufficient allocation of counterpart funds or delays in
counterpart fund allocation in some provinces. One outcome of this has been long sub-project
cycles for infrastructure schemes that frequently take more than one year to complete.

This is compounded by the huge volume of sub-projects that are being processed through the
system, weak cross-sector coordination in some places, and by limitations on staff time
especially at district level. At this point of time in the project cycle – as many works are being
completed and handed over, there are some delays in final appraisal and liquidation. However,
provided there is good coordination and information flow between the management units, the
district Treasury, financial section and other concerned agencies, it is to be anticipated that
mechanisms can be introduced to resolve and speed-up the process of final liquidation.

In summary, the experience from NMPRP and CBRIP suggests that disbursement rates can be
quite rapid under this type of decentralized program – provided there are simple, effective and
harmonized procedures. Now that the local Project Management Units have become acquainted
with the procurement methods, the majority of districts (under NMPRP) and communes (under
CBRIP) appear to be working effectively as the Investment Owners for small-works under the

11
CBRIP. 2004. Project Process Monitoring: first annual report (November 2003 to October 2004).The Louis
Berger Group Inc. and VICA Consultants Ltd.

31
projects. The transfer of funds to local management is also welcomed by communes and districts
for ease of management control and reduced risk (see also Section 6).

This experience suggests a number of factors that need to be taken into account in the design of
future programs, for which a number of specific recommendations can be made:

1) Projected disbursement rates over the whole program period should be carefully
modulated to take into account the critical capacity building phase at the beginning.

2) Essential financial management regulations and procedures should be agreed and issued
as early as possible. Currently, financial management regulations are often issued several
months after project start-up. For example, the guidelines on the Commune Development
Budget Component under NMPRP were not issued until September 2003 (1.5 years after
the project started) which caused delays in this component. Full involvement of the
Ministry of Finance and the State Treasury in the early program design and preparation
process is necessary to ensure this.

3) It needs to be ensured that a phased program of management training begins as early as

possible – in the final stages of program preparation. It has to be ensured that training is
provided one-step in advance of implementation of activities, and that adequate funds are
allocated in the program to provide refresher training. Experience has shown that
building commune capacity in investment management and procurement methods, for
example, requires at least two-rounds of training courses.

4) In particular, more specialized and practical training is required for staff at district and
commune level on a range of procurement methods, combined with more intensive
training for the commune accountants. It is suggested that provinces and districts should
consider creating staff positions of specialized Procurement Officers who could oversee
procurement activities under a range of projects and programs.

5) Adequate training needs to provided not only for staff of the Project Management Units
at different levels, but also to fully involve other concerned agencies that have a critical
role in sub-project approval procedures and financial management etc. This includes the
province and district State Treasury, financial departments and sections, and the
commercial banks.

6) Regarding the schedule of procurement steps for small-scale infrastructure works, it has
to be ensured that Annual Procurement Plans are finalized and approved, and that
procurement for design contracts is completed in Quarter IV of the year prior to the
planned construction expenditure. Only then will sufficient time be available for the
design and construction to be completed and final disbursements made in the planned
financial year. This is critical to ensure that the projects remain on track, to avoid a back-
log of disbursements carried over from one year to the next, and complete withdrawal of
counterpart funds within the specified financial year.

7) Lastly, experience has shown that these processing issues (relating to procurement and
disbursement) are time-consuming at first, but can be resolved with good direction from
the Province and District People’s Committees. It is clear that in those localities where
the People’s Committees have taken an active role in providing leadership for the
projects (including issuing local decisions to resolve constraints and to improve inter-
departmental coordination), the projects are progressing more quickly and smoothly.

32
3.3 Comparison of the models for decentralized management

As indicated in Section 2.4 (and Figures 1 & 2) above, the CBRIP and NMPRP have adopted
somewhat different models for decentralized management and implementation. The main
differences between them can be briefly recapitulated as follows:

CBRIP
• One Special Account under CPMU
receiving IDA loan funds;
• Communes the Investment Owners for all
Small Works from the beginning of the
project (apart from inter-commune
works);
• Direct transfer of IDA funds from the
CPMU Special Account to the commune
project accounts;
• CPMU maintains an administrative role in
some procurement, overseeing the
commune accounts and capacity building.
NMPRP
• Six separate province Special Accounts and
one under CPMU receiving IDA loan funds;
• Districts the Investment Owners for a
majority of Small Works, combined with a
phased introduction of Investment
Ownership by the communes through the
CDBC;
• Transfer of funds from the province Special
Accounts to district second-generation
accounts and commune sub-accounts;
• CPMU only has a coordination and capacity
building role.

In assessing how effective these different models have been, it is important to consider both the
‘delegation of administrative responsibility’ (Trao trách nhiệm hành chính) and the ‘transfer
of decision-making authority’ (Chuyển giao trao quyền quyết định). In this respect, the
comparative strengths and weaknesses of the two projects can be analyzed as follows:

CBRIP
The project has achieved effective transfer of
the authority for Investment Ownership of sub-
projects to the commune level on a large scale.
This experience shows that it is best to make
the communes the Investment Owners from
beginning of project, and to adopt a ‘learning-
by-doing approach’, while accepting that some
mistakes will be made in early stages of
program implementation.
The transfer of administrative responsibilities
to lower levels (centre to province, province to
district, district to commune), however, has not
been fully achieved, particularly for financial
management. This can result in time-delays
and bottlenecks in communication between
levels, as higher levels are still undertaking
administrative tasks that should be delegated.
NMPRP
The project has achieved effective transfer of
decision-making authority and responsibilities
for project management and coordination to
province and district levels (through the 6
province Special Accounts). This is in line
with the objectives of the Government’s
program on Public Administration Reform,
and decentralized financial management by
provinces in their area of jurisdiction as
specified in the Budget Law from 2002.
The project has been slower to achieve a
transfer of authority for Investment Ownership
to the communes. A phased introduction of the
Commune Development Budget Component is
built into the project design – but it needs to be
ensured that this is achieved in the remaining
project period up to 2007.

The direct transfer of funds from the CPMU The project has achieved effective transfer of
Special Account to the commune project both the decision-making authority and
accounts has advantages – because it ensures responsibilities for the procurement of Small

33
funding reaches this level, and allows for Works contracts to the district level. This is
continued oversight of the new process by possibly the main reason for the significant
central agencies. However, it also runs the risk increase in the disbursement rate under this
of partially ‘by-passing’ the province and project in 2004 to 2005.
district administrations, and the
responsibilities they have in regular financial Commune involvement in procurement
management and checking disbursements. decisions is, however, still limited in many
places which can have an adverse impact on
Giving communes the responsibility for Small the extent of local consultation in the design
Works contracts has had positive impacts, not and construction process.
only on commune capacity but also in the
quality of works. However, communes are still In summary, NMPRP has been more effective
reliant on the districts for advice and supportin decentralizing project management
on assessment and selection of contractors. responsibilities to the province and district
authorities, but hitherto has been slower in
In summary, CBRIP has been more effective in building-up commune capacity for investment
decentralizing investment ownership and ownership and management.
management responsibility to the communes,
but less effective in achieving an appropriate
degree of decentralized management to
provinces and districts to support this.

It can be concluded, therefore, that there are strong points to both these models that can be
incorporated into the design of future programs.

Both NMPRP and CBRIP have shown that strong decentralization of investment ownership and
management responsibilities to provinces, districts and communes (as appropriate for different
sizes of investment expenditure and procurement methods and thresholds) can improve program
effectiveness and the speed of disbursements. However, it has to be ensured that decentralization
of both ‘decision-making authority’ and ‘administration responsibilities’ goes hand-in-hand.
Simply transferring administrative responsibilities to lower levels (thereby increasing the work
load at lower levels), while retaining approval and decision-making authority at higher levels,
will not result in the expected improvements in program efficiency and effectiveness.

34
4. Participation mechanisms and reaching poor groups

Review question: How effective are the projects in encouraging local participation in
schemes and activities, and in reaching the intended beneficiaries (including poor
communities and poor social groups)?

Project objectives and performance indicators:

• CBRIP: increased capacity of communes for decentralized and participatory planning
and management of development activities; degree of participation of stakeholder groups
in planning and selection of infrastructure.
• NMPRP: poor villagers in the northern mountains use a variety of improved and
sustainable infrastructure and social services; access to, and use of, transport, market,
water, health and education infrastructure and services.

A principle objective of both NMPRP and CBRIP is to help reduce rural poverty by increasing
the capacity of communes and districts with more participation from local people. Although the
components of the two projects vary, community participation is considered as the key factor to
ensure project success. This requires clear objectives and practical processes for encouraging
people’s participation, inclusive community organizations, good quality training, and effective
targeting to ensure that the needs of poor communities and social groups are taken into account
in the selection of schemes and activities and their implementation.

4.1 Representation on commune management organizations

The Commune Project Coordinating Committees (CPCCs) under CBRIP generally consist of
at least 20 people (depending of the number of villages in a commune) including the Chair /
Vice-chair of the Commune People’s Committee, representatives of the mass associations, and
two people from each village (including 1 man and 1 woman selected by villagers). As
compared to the smaller ‘Project Management or Development Boards’ under many other
projects, the CPCC structure is broader and more inclusive. In particular, CBRIP is to be
commended on the extent to which it has encouraged the involvement of women on the CPCCs
(as well as in recruitment to the Community Facilitator positions). Evidence of this was found in
the very active contribution of women in many of the meetings held during this review.

Under NMPRP the Commune Development Boards (CDB) have a different composition,
generally including the Chair / Vice-chair of the Commune People’s Committee, the commune
accountant, transport and irrigation officer, land administration officer, the head of the Women’s
Union, and in some places representatives of other mass associations and the Village Heads. As
compared to CBRIP, however, representation of women on the CDBs is limited, with usually
only one woman out of 12 to 24 members on the CDB 12 . Ethnic diversity varies considerably
between provinces in the NMPRP project area, but ethnic diversity within communes is
generally well represented in the composition of the CDBs.

Under both projects Commune Supervision Boards have been established which are
responsible for daily supervision at construction sites, and specific training courses has been
provided for these boards in supervision of infrastructure works, as well as for supervision of

12
NMPRP. 2005. Construction Experience Lesson Learning Study: summary report. WSP International.

35
agriculture demonstrations under NMPRP. Membership of the Commune Supervision Boards
varies from place to place, but they are commonly headed by the Chairman of the People’s
Council, with representatives from the mass associations, the Village Heads, and other villagers
with good experience that are selected and assigned to work on the board. The Government has
recently issued Decision No.80 13 on the mechanism for community supervision of investment
activities, and in this respect it is evident the experience from both projects has contributed to the
content of this decision.

From a gender perspective, as noted above the ratio of men to women on the CPCCs (under
CBRIP) is generally good, but less so under the CDBs (NMPRP) and on the Commune
Supervision Boards. It is recommended that in future programs steps should be taken to ensure a
more balanced ratio of men and women on these management and supervision boards, so that
women are more fully and actively involved in all project activities, and so that women’s
opinions can affect decisions.

4.2 Consultation and planning steps

Both projects follow the steps for Local Democracy in consulting with local people on the
selection and planning infrastructure works and other activities, and the selection of village
representatives for the CPCCs and CDBs etc. For example, the CBRIP follows a clearly laid-out
sequence of steps for sub-project selection, planning and implementation, as follows:

¾ Step 1 Establishing the • Introduction of the project through leaflets and posting
local • Guidance meeting for selection of 2 village representatives
organization • Village meeting to select 2 representatives (1 man and 1
woman)
• Establish Commune Project Coordinating Committee
• Training for CPCC
¾ Step 2 Selection of • Village meeting to select infrastructure sub-projects
investment • Making cost-estimate for sub-projects
schemes • Commune meeting for final selection of sub-projects
• Village meeting to inform on the accepted sub-projects
¾ Step 3 Preparation and • CPCC prepares Investment Report and Approval Request
approval • Submits to district and province for approval
• PPMUs and CPCCs sign Investment Agreement for
commune sub-projects
• Village meeting to inform about sub-project approved by
PPMU
• Advance allocation of 50% to Commune Accounts
¾ Step 4 Sub-project • Request for price quotations from contractors
implementation • CPCC selects the contractor
• CPCC signs contract with the Contractor
• Construction of sub-projects by contractors and local
people
• Districts, technical consultants, and Commune Supervision
Boards supervise and check quality of the sub-projects

13
Decision No.80/2005/QD-TTg (dated 18 April 2005) of the Prime Minister on the mechanism for community
investment supervision.

36
¾ Step 5 Acceptance and • CPCC prepares Acceptance Report and puts the
operations infrastructure works into operation
• CPCC liquidates the investment fund
• Management by Operations and Maintenance (O&M)
groups

In NMPRP, a different approach was taken, whereby commune and villages planning exercises
were undertaken during the project preparation period (1998 to 2000) in order to select priority
schemes that were included in the project Appraisal Reports. Each commune therefore had a
Commune Development Plan at the beginning of the project, including maps identifying the
location of different activities.

In order to prepare the Annual Plans for the NMPRP, a series of village and commune meetings
are held in order to: (i) for the main project components – select priority infrastructure schemes
and agricultural demonstration models (type of model and participating households) to be
implemented during the year; (ii) discussion, prioritization and selection of activities for the
Commune Development Budget Component; and (iii) establish regulations for operations and
maintenance of infrastructure in the village.

Box 1. Local viewpoints on village meetings for selection of activities

“The village now meets in a new way, meeting several times, analyzing what needs to be
done in advance. But it is sometimes difficult to unite ideas because each person likes one
thing, and in poor areas everything is needed” (Head of Village 6, Huong Do Commune,
Huong Khe District, Ha Tinh).

“Even we meet several times we still have to meet because it takes time at the beginning, but
after that it is easy and people do not raise questions and complaints” (Group of participants
in the NMPRP training course on supervision of agriculture models, Yen Bai).

“At the beginning of the meetings, the men said that we women know nothing to vote about,
so let us do it”. “In the village meetings, women selected kindergartens, but men selected
electricity line rehabilitation. We persuaded the men that electricity supply in our village is
adequate to use, but we are lacking a kindergarten, so why should parents make a good
living but let children stay stupid...” (Women’s representatives from Huong Do Commune,
Huong Khe District, Ha Tinh).

Village meetings are used as the basis for these local decisions. In CBRIP it is specified that at
least 80% of households must attend these meetings, of which women should constitute 50%.
Methods used in the village meetings include voting by hand, recording minutes and the quota
and names of participants.

Experience has shown there is a generally high level of participation of local people in the start-
up village meetings. However, it can be difficult to sustain this over the full sub-project cycle,
and in achieving full participation from the poorest households. The Process Monitoring Study
undertaken for CBRIP recorded a number of common constraints, including:

• The low attendance rate in meeting in larger-sized villages and communes;

• Large village meetings often have low quality;

37
 • Little attention is given to really ensuring participation of the poorest households;
• The content of village meetings is not made public before the meeting so that people can
arrange their time and think about it before they go to the meeting;
• While women do attend village meetings, their participation in discussions is still often
limited, especially in some ethnic minority groups;
• Posters with project information are not permanently displayed in many villages;
• Many ethnic minority people cannot read or do not have a reading habit which limits
awareness on project activities;
• When posters and leaflets are not sufficient, there is a lack of effective dissemination
methods to ensure every household has access to project information;
• People are not well aware about the content of important project policies, especially on
land compensation and environmental issues;
• People participate less in project activities after the meetings to select sub-projects;
• In particular, people are often not consulted in construction design.

Guidelines exist under CBRIP for the percentage of women who should attend and vote in
village meetings for sub-project selection. However in reality, as compared to men, women often
need more time to catch and respond to information and to defend their opinions at meetings. It
is important therefore to find ways of informing women in advance of the content and purpose of
village meetings so they can prepare their ideas.

It should be noted that these types of constraint are faced by many projects and programs, and
that enhancing local participation takes time to achieve. The Lesson Learning Study undertaken
for NMPRP concludes, however, that the decision-making processes under this project are
sufficiently democratic and generally represent the best interests of the community as a whole.
The capacity of commune cadres and village heads is also strengthened, so they can organize
meetings with local people for selection of sub-projects and making plans. And the People’s
Councils and mass associations are actively involved in information dissemination, getting
feedback from members, and supervision of activities.

4.3 Information dissemination and awareness raising

The dissemination of project information and awareness raising is a most important factor
determining people’s participation and project success. Both projects have been using a variety
of methods for this including: posters with project information at Commune offices and in
villages, leaflets, newsletters, village meetings, loudspeakers etc. There is generally good
awareness amongst local people on the basic objectives and activities of the projects, and this
has stimulated more interest in the projects. At the same time, there are some aspects for which
information flow is limited, for example: information on project policies on land compensation
and environment, and on paid labour opportunities on construction works.

4.4 Reaching poor communes and ethnic minority areas

NMPRP and CBRIP are primarily ‘commune investment projects’ that are designed to improve
access to basic infrastructure and services for the local population – including both poorer and
comparatively better-off households in these communes. The selection of communes is based on
the Government classification of poor and difficult communes, with a majority of project
communes also included in Program 135. The formula for commune fund allocation based on

38
population – as applied in CBRIP – is a specific criteria which is easy to calculate and rarely
results in controversy. The construction works are identified on the basis of local demand and/or
commune and district socio-economic development plans, which contributes to achieving
broader local development objectives.

4.5 From poor communes to poor villages

While targeting commune level is comparatively straight-forward, targeting poorer villages and
hamlets within these communes is more complicated for a number of reasons. For example,
these poorer villages often have a small population size, but are located in remotest parts of the
commune or at high altitude – situations in which infrastructure for basic access is not well
developed; and hence where there is a need for proportionally higher levels of investment per
capita. Similarly, agricultural demonstrations tend to be evenly distributed between villages, or
established close to roads for visibility effect, which often does not meet the situation and needs
of people in poor hamlets who have remote and scattered fields.

It is noticeable from maps and MIS data provided by both projects that there is a tendency to
concentrate investments in and around the commune centers and in nearby villages. There is a
logic to this – which is to concentrate on providing essential infrastructure and services close to
the commune centre to begin with, which will have benefits for a larger number of people. At
the same time, it is recommended that both projects should monitor more closely the distribution
of investments between villages within the communes.

Consideration of ethnic minority issues also requires looking below commune level. There is
considerable ethnic diversity within many of the NMPRP and CBRIP communes. For example,
many communes in Lao Cai Province contain several ethnic groups living side-by-side (in
separate villages or in mixed communities). Similarly, many communes in the Central Region
contain villages and hamlets of smaller ethnic groups amongst a larger majority population. In
each commune, certain ethnic groups tend to live in the remotest villages lacking information
and infrastructure. And in each ethnic minority community – women, the old, and the poor may
not read, listen and speak in Kinh. Attracting the participation of these groups is a challenge that
requires specific measures and forms of communication, for example engaging in cultural
activities related to project activities, and increasingly working through the Village Heads.

The allocation of resources between villages also depends on local decision-making priorities
and processes, which vary from place to place. It is frequently stated by commune leaders that
project funds are not sufficient to meet all the demands of people in all villages. Therefore, the
distribution of resources needs to be modulated in the interest of fairness. The following
example illustrates this point:

In the plan of one commune in CBRIP, community houses were built in 6 out of the 7
villages in the commune as the only investment in Year 1, while in Years 2 and 3 there
was a wider range of different types of infrastructure in different villages. To an outside
observer, this may raise concerns about how and why the decision was made to only
invest in community houses in the first year, and that this decision may have been pre-
determined with limited consultation with local people. When asked about this, the
Commune Chairman replied that this decision was unanimously made to give an equal
share to all villages to begin with. When asked why only 1 village did not receive a
community house, he replied that this was because it was his own village.

39
4.6 From poor villages to poor households and social groups

Sub-project selection in village meetings is usually based on the number of beneficiaries and
majority voting methods. However, the poorest households, who may represent a minority in the
village, often do not have enough capability to make their opinions known in these decision-
making events. Specific measures are required to ensure their needs are taken into account in
sub-project selection.

Increasing the benefits for the poorest households also often necessitates complementary actions
to basic infrastructure and service provision. For example, construction of commune primary and
secondary schools helps to increase the enrollment of children continuing in education.
However, for children from the remotest villages, boarding facilities may be needed so they can
attend school regularly at the commune centre (e.g. semi-boarding schools with people’s
support), and additional support may be required to encourage girls continued schooling.

Similarly, domestic water supply systems generally benefit women and children; however, a lack
of sanitation systems may result in sanitary problems, especially for households located at the
end of flows, and the margins of villages. Agricultural demonstration models enable people to
see and know how to carry out agricultural intensification, and how to apply new varieties and
technologies etc. However, the poorest households often cannot maintain the high levels of
investment in these new varieties and agriculture inputs in following years. Therefore, it needs to
be ensured that demonstration models are of a suitable size, and use levels of affordable inputs
that are replicable by the poorest households.

40
5. Infrastructure investment process, quality and sustainability

Review question: How effective are the implementation processes and procedures for
investment in commune and village infrastructure, and how cost-effective and sustainable are
these infrastructure investments?

Project objectives and performance indicators:

• CBRIP: to provide essential small-scale, community-based infrastructure; generating
direct income for the poor through construction employment; number of civil works
contracts signed by communes and application of competitive contracting procedures;
number of households with improved access to essential infrastructure; number of O&M
groups established; number of local labor days generated and income earned.
• NMPRP: access to, and use of, transport, market, water, health and education
infrastructure and services; changes in service quality as assessed by villages and groups;
sustainability of operations and maintenance systems.

Investments in commune and village infrastructure represent the major expenditure under both
projects. This section examines the process and procedures for these investments at different
stages in the ‘infrastructure cycle’. In particular, it identifies factors that impact upon the quality
of infrastructure works; the extent of community participation and supervision; the provision of
paid labour opportunities for local people on construction; and the sustainability of these
investments.

Stages in the infrastructure cycle

Scheme Detailed Construction Scheme Operations
selection and design and and approval and and
planning procurement supervision handover maintenance

5.1 Scheme selection, planning and design

As indicated in the previous section, local people are generally satisfied with the level of
consultation that is made with villagers to identify infrastructure priorities and to select schemes.
The participation level depends very much on the dedication of commune and village leaders to
inform local people and to hold village meetings properly. This can be developed in a positive
way over time as confidence and experience is gained during implementation of the project.
Experience also shows, however, that in many places the level of consultation with local people
and with infrastructure ‘user-groups’ declines after the initial scheme selection stage.

The detailed design stage is in many respect the most critical and difficult step, which has a
major impact on the quality of works, their suitability to local conditions, and sustainability. The
Lesson Learning Study on Infrastructure Construction carried out for NMPRP found that the
level of participation during survey and design varies. Examples are given of where good
cooperation between communities and technical staff occurred that resulted in better quality
works, and where poor cooperation had occurred resulting in problems with the final product.
Involvement of local people also depends on the type of infrastructure, with consultation being
higher for water supply and irrigation sub-projects.

41
There are a number of factors that contribute to the difficulty of the survey and design stage.
These difficulties are not only faced by NMPRP and CBRIP, but also by a majority of other
programs working in these geographical areas:

• The logistical difficulties of survey and design of a large number of small-scale and
geographically scattered works in difficult mountainous terrain;
• The difficulty of recruiting high quality design and technical supervision consultants to
work on numerous low-cost schemes in the uplands;
• Current levels of cost-norms for survey and design which do not allow for effective
consultation with infrastructure user-groups and necessary travel to remote communities;
• Limited technical capacity and skills of commune and village cadres to support and
understand detailed design aspects (although through training and experience with the
projects, cadres are increasingly able to understand designs more easily);
• Communes therefore require technical assistance from district staff if they are to execute
this stage, but there are severe limitations on district staff time to support the process.

With respect to the procedures for sub-project approval, many local staff working with the
projects have complained about the number of ‘steps’ and ‘papers’ that need to be completed,
and have suggested that some of these are redundant or could be merged. As indicated in Section
3.2 above, coordination and synchronization between ‘local government procedures’ and ‘donor
project procedures’ for approval has also caused delays. In response to this situation, CBRIP has
recently simplified and streamlined the procedures to speed up approval of sub-projects.

5.2 Procurement methods

A comparison of the procurement methods and thresholds for infrastructure construction under
the World Bank projects and Program 135 is given in Table 6 below.

Table 6. Procurement methods and thresholds for infrastructure construction

under the World Bank projects and Program 135
CBRIP and NMPRP
National Competitive Bidding (NCB)
For larger and inter-commune works valued over
USD 50,000 (CBRIP) and 75,000 (NMPRP)
Small Works (SW) with 3 quotations
For the majority of commune and village
infrastructure valued under USD 50,000 (CBRIP)
and 75,000 (NMPRP)
Community Participation Contracts
For small-scale village works owned by the
communes and procured locally under both
NMPRP and CBRIP
Program 135
Limited competitive bidding
For contracts above VND 1 billion with price
quotations (broadly equivalent to the World Bank
SW method)
Direct contracting
For contracts up to VND 1 billion (around US
$60,000 equivalent) with no requirement for
competitive bidding
Community Participation Contracts
Applied in a few provinces under Program 135
and in the irrigation canal concretization program

Procurement for small-scale infrastructure under World Bank supported CDD projects normally
follows the Small Works (SW) method, requiring a comparison of at least three price quotations.
Above the Small Works threshold National Competitive Bidding (NCB) applies. Under the
Government’s public procurement procedures as applied to Program 135, direct contracting is
used for contracts up to VND 1 billion (around USD 60,000 equivalent), with no requirement for

42
competitive bidding or a comparison of quotations. Above VND 1 billion ‘limited competitive
bidding’ applies, which is broadly equivalent to the SW method.

Increasingly, under both NMPRP and CBRIP, Community Participation Contract methods are
being used for small-scale village sub-projects for which outside contractors are not required.
For example, this method may be used to up-grade small-scale irrigation schemes through
contracting to local cooperatives or village ‘production groups’. This method is also applied
under Program 135 in a few provinces (such as Tuyen Quang Province) and in the Government
program for concretization of irrigation canals.

Experience has shown that while the project (World Bank) procurement procedures are time
consuming at first, once local managers become acquainted with these procedures the
advantages are increasingly recognized. This is frequently spoken about in terms of the ‘stricter
management’ that can be applied through introducing more competitive procurement methods
(such as Small Works). At the same time, this needs to be matched by simplifying the steps
involved in procurement managed by the communes as Investment Owners.

Experience from CBRIP has shown that the capacity of the communes to conduct bid evaluation
and selection of competent bidders is limited, so in many cases they require support to do this
and contractors are often selected on the basis of recommendations from the districts. In this
respect, information flow between the commune management units, the districts and other
concerned agencies on the evaluation and selection of contractor companies is limited in some
places. Improved information flow on these aspects is critical in order to bring into play and
reinforce the community’s sense of ownership and responsibility for schemes.

Further discussion and specific recommendations on appropriate procurement policies, methods

and regulations for this type of program are given in Sections 7 and 8.

5.3 Technical supervision and community supervision

Supervision of all construction works is made by: (i) the Investment Owner (Party A) including
commune and/or district technical officers or contracted technical supervisors; (ii) by the
contractors themselves (Party B); and (ii) by the Commune Supervision Boards. The commune
and district Project Management Units have responsibility for making final checks and
acceptance of works before handover by the contractors. The level of effective technical
supervision is one of the main factors influencing the quality of works. However, experience
from both projects has shown that it is difficult to recruit competent technical supervisors who
are willing to work on numerous small-scale schemes in these remote communes and villages.

All project communes have established Commune Supervision Boards, and have been provided
training in supervision skills as well as in operations and maintenance. In general, these
Commune Supervision Boards appear to be working actively and enthusiastically. The
community supervision role is highly evaluated by local communities, even though the types of
supervision provided are still relatively simple (checking the quality and quantity of materials
such as soil, sand, cement, height and depth etc.). However, there are many examples of
situations in which the Commune Supervision Boards have identified problems in construction
and have brought these to the attention of the CPCCs/CDBs and contractors.

“Supervision is seeing how they make the construction, mix cement, whether they sell
construction materials outside the site. If we don’t come to supervise they may make
faulty construction, cutting down construction materials, but when we come they don’t

43
 dare to. So construction will have better quality and funds will be used with more
practicality, because the contractors say ten but may only do seven” (Head of La Ha
Panh Village, Nam Muoi Commune, Van Chan District, Yen Bai).

“Supervision is seeing if extensionists do the right thing, how fertilizer is used, and
whether delivered sufficiently. We know that in order to make them do right, do good”
(Group of participants in the NMPRP training course on supervision of agriculture
models, Yen Bai).

Technical supervision capability of the communes will be strengthened over time – this was
clearly shown in communes that have gone through several construction cycles. However, it is
recommended that the effectiveness of the Commune Supervision Boards could be enhanced by
involving them more fully in the infrastructure design process, as well as by providing more
intensive training in technical design and supervision skills.

Given the large number of schemes in many communes, the work-load of the Commune
Supervision Board members is quite high. Some local staff suggest that it is necessary to have
allowances to enable them to do their work more effectively, while other people assert that this
is a public responsibility. At present there are no guidelines provided by the provinces on
allowances to the supervision boards (although Bac Giang Province under NMPRP has set aside
0.05% of the cost of each scheme for community supervision). It is recommended that in the
design of future programs this should be considered as a way of strengthening the essential tasks
and functions of the Commune Supervision Boards in order to improve quality of works.

5.4 Operations and maintenance

Now that an increasing number of construction works are being completed and handed over,
both projects are giving more attention to O&M. This includes establishing O&M groups,
formulating plans and regulations for these groups, and providing training.

In communes visited during this review, responsibilities for O&M of small-scale works for
which the communes are Investment Owners is generally clear, and is implemented by the
beneficiaries (in coordination with local authorities). For example:

Village 5, in Huong Do Commune, has set up an O&M group for kindergartens which
includes five members. The O&M plan is as follows: members frequently check the
buildings to prevent termites, fix leaks, avoid water accumulation in puddles etc;
thoroughly cleaning the buildings 3 times a year on international women’s day, the mid-
year lunar festival, and at Tet new year; re-liming once a year; re-arranging roof-tiles as
required. The O&M fund is collected from local people at VND 1,000 per person per
year which is mainly used for materials. Labour required for maintenance is voluntary.
(Head of O&M group, Village 5, Huong Do Commune, Huong Khe District, Ha Tinh).

In general, however, O&M has not yet been put into a systematic procedure in either project 14 .
This is especially for maintenance of larger and more complicated infrastructure that requires a

14
See also: Hai, Nguyen Thanh and Nguyen Kim Long. 2004. Operations and maintenance of commune and village
infrastructure, commissioned paper by VICA Consultants Ltd. In: Proceedings of the National Conference on
Socio-economic Development of Poor Communes; Ministry of Planning and Investment & the Partnership to Assist
the Poorest Communes (PAC), Ha Noi, November 24 – 26, 2004.

44
higher degree of technical maintenance, and/or more costly maintenance. This is an important
issue that requires in-depth assessment to develop sustainable management and financing
systems for O&M, for the large amounts of new infrastructure that is being built in these poor
communes and villages.

Important issues relating to O&M have also been highlighted in the recent Public Expenditure
Review (PER) 15 , which suggests that O&M problems appear in two main ways: (a) through a
frequent failure to maintain completed projects – so that they fail to function as planned, assets
deteriorate and costly rehabilitation becomes necessary; and (b) general shortages of O&M funds
in recurrent budgets. The PER indicates that these issues are particularly pressing for O&M of
irrigation schemes (PER Chapter 13 / page 93).

From a financing perspective, at present it is expected that nearly all the costs for O&M will be
covered by community contributions for all types of infrastructure. It is unlikely that this will be
a viable and sustainable financing mechanism in the long-term. Consideration needs to be given
to ensuring that at least part of the costs for O&M of public infrastructure are met through the
recurrent budgets of the commune or of the concerned sector departments (in the case of health
and education for the O&M of commune schools and clinics). From a technical perspective,
sustainability depends heavily on the quality of design and construction, so this should be
addressed through ensuring high quality technical supervision. And from an institutional
perspective, sustainability depends on clarifying the roles and responsibilities of the concerned
agencies (province, district, commune) and infrastructure user-groups at community level.

5.5 Paid labour opportunities for local people

One of the three main objectives of CBRIP is to generate income for the poor by providing
employment opportunities for local people on construction schemes. This is also expected under
NMPRP. However, people’s opinions on the extent to which this objective is being achieved
vary from place to place. The general impression is that there is a lack of clarity on this issue in
many localities, and in particular some confusion between the provision of paid labour
opportunities on the one hand, and voluntary community contributions on the other (this point is
discussed further in Section 8 below).

With respect to CBRIP, at the beginning of the project responsibility for labour recruitment was
largely unorganized and left to the construction companies, with the result that it was not fully
implemented. The CBRIP Process Monitoring Study found that: (i) hiring of local people for
construction is happening but at a rate that is much less than expected to impact on poverty; and
(ii) contractors feel that hiring local people is constrained by a lack of skills and timing of
availability of villagers to work on sub-projects. The study recommended that monitoring of
local paid labour is important to achieving the CBRIP objective of increasing local incomes, and
that CPMU / PPMUs should enforce hiring of a minimum percentage of local workers as a
standard clause in all construction contracts.

The latter recommendation has been acted upon by CBRIP by inserting a clause in all
construction contracts on requirements for local labour; and people say the rate of local
employment has increased. However, there is still a need for closer monitoring of paid labour,

15
SRV. 2005. Vietnam – managing public expenditure for poverty reduction and growth: public expenditure review
and integrated fiduciary risk assessment. Joint report of the Socialist Republic of Viet Nam and the World Bank,
prepared with support of the Like Minded Donor Group. Financial Publishing House, Ha Noi.

45
including the number of people employed (disaggregated by gender and poverty), wage rates,
person-days worked, and type of work done.

With respect to NMPRP, five out of the six project provinces have chosen to pay the 5% local
contribution (in whole or in part) from province funds to support local people to benefit from
paid employment during construction (rather than expecting community contributions). The
table below shows the current division of 5% counterpart funding for infrastructure works:

Province Province Budget Community

Lao Cai 100% 0%
Son La 100% 0%
Hoa Binh 0% 100%
Bac Giang 50% 50%
Phu Tho 100% 0%
Yen Bai Approx. 40% Approx. 60%
Source: NMPRP Lesson Learning Study

The NMPRP Lesson Learning Study found that where provinces have paid the counterpart funds,
either in whole or in part, local people have benefited from paid employment opportunities, and
in general these have been managed fairly. Employment in construction is negotiated between
individuals and the contractors, outside of the control of the CDB. However, in a few cases there
have been disputes over payment, which are difficult to resolve, and information about
employment opportunities within villages is generally weak.

For both projects, it is suggested that the role of the commune management units (CPCCs and
CDBs) in disseminating information about labour opportunities and in monitoring could be
strengthened. As noted by the Lesson Learning Study, in order to protect villagers employed by
contractors, and the contractors themselves in some cases, the CDB or village heads should have
a formal responsibility to monitor closely the local inputs on contracts as part of their
supervision activities. For example, employment opportunities and agreed rates for different
activities could be agreed between the contractor and the village and put on display, making the
process more transparent, which also supports public audit of payments.

As indicated above, contractors often complain that either local people do not have the necessary
skills to work on construction (other than for basic manual tasks), or are not available at the time
of construction. The first of these difficulties could be solved in future programs by increasing
vocational skills training provided to local people on design and construction skills (see Section
8 below). The second problem may, in fact, be a diversion, since the main construction season in
the uplands (over the winter months) does coincide with periods of low labour for agriculture.

During this review, it was also mentioned by some province and district staff that local (ethnic
minority) people are often not willing or interested to work on construction. In fact, we found the
opposite to be the case. The reason is that there has not been a well organized system for
providing information on labour opportunities and for organizing recruitment. In the future,
more effort is required to facilitate communication between local people and contractors on the
terms of employment. Infrastructure for poor, difficult communes is necessary but not yet

46
sufficient – attention should also be given to final impacts which are reducing poverty for
households by creating job opportunities and increasing incomes to the greatest possible extent.

5.6 Quality and cost-effectiveness of construction works

Evidence from this review, and from other studies carried out for the projects, suggests that the
overall quality of construction works is satisfactory and at least as good as other projects
working in similar areas. With respect to CBRIP, this review found that the implementation
approach taken by the project can lead to higher quality and more cost-effective infrastructure
construction. Examples are available of similar types of infrastructure funded by CBRIP and
from other sources (in particular kindergartens and school buildings), for which the construction
costs under the project are considerably lower than those under other programs but of
comparable standard. However, cost savings always need to be matched by good technical and
community supervision to ensure quality.

The Lesson Learning Study on Infrastructure Construction undertaken for NMPRP found that
survey participants expressed general satisfaction with the sub-projects and said they’re in good
working order. These viewpoints were supported by an engineering survey, and the report
suggests that NMPRP has been successful in satisfying the criterion of meeting the needs of
intended beneficiaries. The report proposes some changes that could be introduced to improve
infrastructure quality, cost-effectiveness and sustainability at little extra cost. These issues do not
necessarily reflect poor performance of NMPRP, but are in fact generic problems that are found
in most rural infrastructure projects throughout Vietnam:

• Rural roads. The survey found that some roads were considered of inadequate quality, in
particular relating to problems of slope stability. In most places the roads were in adequate
condition, but stabilization problems on one part of a road affect the use of the entire length
of the road. Adequate funding is critical to ensure effective slope stabilization and
environmental protection in these upland areas.

• Schools and clinics. The structures for both schools and clinics are generally built to an
acceptable standard together with auxiliary facilities where provided. One of the strengths of
school construction under NMPRP is that a complete package is usually provided including
the classrooms plus auxiliary facilities such as water supply, sanitation, furniture and
accommodation for teachers, and from the second year this included electricity. These
auxiliary facilities greatly increase the effective use of the schools and are greatly
appreciated by the local communities.

• Irrigation and water supply. Generally the construction standard for irrigation and water
supply systems is satisfactory. The participation survey respondents suggested that
sometimes irrigation channels don’t supply sufficient water. It is not clear whether this is a
shortcoming in the assessment of local water supply and demand, or in the design or
construction of the irrigation system. But this highlights the need for effective consultation
with water user-groups in the design stage.

The Lesson Learning Study also assessed ‘value for money’ by comparing construction costs
against planned budgets and quantities, as well as comparing NMPRP structures against other
projects. The study found that costs are acceptable and in line with other projects, however there
is some concern that contract values are being capped at amounts below engineer’s estimates and
that this may affect quality of construction. This is because the ‘cost-estimates’ in the Project

47
Feasibility Studies have been interpreted as ‘cost-ceiling’ and hence the province and district
Treasuries will not approve payments over these estimates, even if schemes are implemented
several years after the Feasibility Studies were approved and construction costs have been risen
in the intervening period. In some cases, and particularly for road construction, this situation can
lead to a reduction in quality that can seriously affect operational performance and sustainability.
Typical cost cutting measures on roads include omitting drainage facilities, reduced pavement
thickness and less slope stabilization.

48
6. Commune management capacity and institutional impacts

Review question: How effective have the projects been in building local capacities for project
management and investment ownership, and what are the institutional impacts of this?

Project objective and performance indicators:

• CBRIP: increased capacity of communes for decentralized and participatory planning and
management of development activities.
• NMPRP: institutional capacity of upland communes and districts is increased;
improvements in management capacity.

6.1 Considerations of scale and intensity of impacts

To assess the effectiveness of the projects in building commune management capacity, and the
institutional impacts of this at the local level, it is necessary to bear in mind the large-scale on
which the two projects are operating. The challenge this poses can be expressed in a number of
ways. For example, if we assume an average of 8 villages per commune – and with CBRIP and
NMPRP working in 979 communes – this gives around 8,000 villages in the area covered by the
projects. Delivering cost-effective and high quality management and technical training for
commune and village cadres in all these locations is a major undertaking.

It is also a huge task to actively involve people from all these villages in village planning
meetings and other activities; as well as the many hundreds of infrastructure ‘user-groups’ that
should ideally be consulted in the design of construction works, and provided technical training
in operations and maintenance. Added to this is the fact that many upland communes are equal
in size to lowland districts, and the logistical challenge of undertaking effective consultation
with local communities in these areas becomes apparent.

Taking these points into consideration – it is evident that under both projects a strong foundation
is now beginning to emerge for improved Commune investment management capacity, and for
increasing community participation in the selection and supervision of local development
activities. Obviously, these projects will not be able to achieve the intensity of capacity building
or levels of local participation that can be achieved in projects working on a smaller scale. But it
is possible to suggest that it is because CBRIP and NMPRP are working on such a large-scale,
and have comparatively high levels of investment per commune, that the institutional
innovations being made the projects will have more lasting impact.

For instance, the approach to transferring Investment Ownership to the communes under CBRIP,
combined with the direct transfer of funds to from central level to Commune Project Accounts,
can be regarded as ambitious given the large scale of the project (611 poor communes in 98
districts). However, this model is now seen by many province and district officials and project
management staff to be yielding positive results and impacts. These are primarily with respect
to: (i) building the skills base of the communes for investment management through a ‘learning
by doing’ approach; and (ii) indications that the project approach can contribute to greater cost-
effectiveness and quality of the infrastructure schemes.

49
6.2 Main institutional innovations

It can be concluded that the main aspects in which the two projects are developing and
introducing important institutional innovations are as follows:

• Firstly, by widely introducing the principles, mechanisms and procedures for Commune
Investment Ownership and management of infrastructure and other types of activities.

• Second, by developing practical approaches to encouraging people’s participation, that are

closely aligned to the steps for Local Democracy, and which may be cost-effectively
replicated on a large-scale in the future.

• Third, by developing and introducing practical approaches and more systematic contents for
training programs for commune and village cadres that may also be applied on a large scale.

• Fourth, by developing and introducing practical approaches to community supervision of

works and activities. The Prime Minister has issued Decision No.80/2005/QD-TTg (dated 18
April 2005) on the mechanism for community investment supervision; and in this respect
both NMPRP and CBRIP have valuable practical experience in training methods and the
activities of the Commune Supervision Boards that can be widely applied in future programs.

6.3 Increasing confidence in commune management

One of the most important and interesting findings from this review is the extent to which
respondents at different levels spoke about the “increased confidence in commune management”
that is resulting from working on the projects. ‘Confidence’ is distinct from ‘capacity’ to the
extent that it implies greater levels of ‘trust’ by other people, and ‘self-trust’ on the part of
commune and village cadres (CPCC and CDB members) to do their work effectively.

This was frequently spoken about by commune cadres. For example, in statements to the effect
that “villagers now have greater confidence in our ability to manage” and that “the most
important thing for success is to get full agreement of local people in the selection of schemes”.
Initially, some difficulties may be encountered, but after 1 to 3 cycles commune cadres are
capable to fulfill their tasks in a more efficient and sustainable way. There is some evidence to
suggest that this is resulting in a shift to more pro-active planning by communes, which may
have wider impacts. For example, it was mentioned in two CBRIP communes in this review, that
they are now using the planning methods introduced by CBRIP for planning and consulting with
local people for other infrastructure projects. This provides a good basis and understanding of
new ways of working at the local level that can be built on in future programs.

This was also mentioned by some province and district leaders and project staff, for example in
statements that increasing delegation to commune level “is the right direction to go in the
future”. This appears to be indicative of changing perceptions about the ability of communes
and local people to manage and implement small-scale projects, and the importance of the
participatory approach. At the same time, district staff (in particular under NMRP) talk about
their own improved level of confidence (for example in bid invitation and evaluation,
community mobilization, and supervision skills).

50
6.4 Training in technical, management and supervision skills

Training for commune and village cadres, for the Community Facilitators, and for staff at district
level is an important component of both projects 16 . Training courses have been developed and
delivered in various topics essential for management work, including: community facilitation
skills; capital investment and procurement procedures; financial management and accounting;
community supervision; operations and maintenance of infrastructure; and agriculture extension.

It is clear from all the meetings held during this review that the training provided by the projects
is generally considered to be of high quality, and has made a significant and substantial impact
on improving both technical and management capacities for communes and districts. In
particular, people speak about the practicality of the training, and there have been impacts on
improving institutional training capacity at province level. Commune staff under both projects
unanimously say that in addition to the physical benefits of the projects, they have also learnt
new knowledge and skills.

Experience shows, however, there are a number of factors that influence the quality and
effectiveness of the training provided for commune and village cadres:

• The trainees have unequal qualifications (ranging from 2nd Grade to 12th Grade) and different
abilities of expression, which can make training difficult to deliver. For example, in Lao Cai,
Son La and Hoa Binh provinces, on average only 10% of Village Heads have finished
secondary school (to Grade 9) as compared to 70% in Yen Bai, Phu Tho and Bac Giang. The
education level of commune and village cadres appears to impact upon their ability to absorb
the technical aspects of training, and their ability to implement the project unaided.

• Limited Kinh language ability is a difficulty for many ethnic minority learners, which
highlights the need for functional literacy training that is integrated with technical and
management training.

• The teachers from the Province Training Schools and technical departments often have good
practical experience and local knowledge, but usually have not received enough training
methodology (Training-of-Trainers), especially on participatory training methods.

• The two projects have developed a set of general training documents for each topic, but for
some courses these do not meet specific local requirements, and are not sufficiently simple
or practical. Both projects need to evaluate the quality and content of the training materials,
as a basis for improving and up-dating them in the future.

• Commune and district staff frequently state that the duration of training is too short (2 or 3
days for each course). Such viewpoints need to be interpreted cautiously. Statements to the
effect that ‘training is insufficient’ can also imply that there is a ‘growing demand’ for more
and better quality training. Regarding course-duration, adult education experience from
around the world shows that training is most effectively delivered in short units (through
‘start-up’ and ‘refresher’ training) interspersed by periods when people practice the skills in
their day-to-day work.

16
See PAC/MPI. 2005. Studies on Commune and Village Cadre Training: Experience from the Community Based
Rural Infrastructure Project; the Northern Mountains Poverty Reduction Project; and the Economic and Technical
Training School of Hoa Binh. Partnership to Assist the Poorest Communes (PAC), Ministry of Planning and
Investment, Ha Noi.

51
• NMPRP and CBRIP also need to achieve a difficult balance between providing training of
sufficient depth and duration, while at the same time scaling-up this training to cover the
large number of communes and villages included in the projects.

• Guidelines exist for the ratio of men to women that should attend training courses. Women
are well represented on the training provided by NMPRP on agriculture extension, village
health worker training, and village teacher up-grading. However, there is a need for closer
monitoring of participation of women on the management and technical training courses
provided by the projects.

• The turnover of elected commune officials can hinder application and sustainability of learnt
knowledge in the work place. This necessitates giving equal attention to training for
commune technical officers who work on a permanent basis, as well as to elected officials.

• There are some aspects of commune management capacity that are still generally weak,
however, and for which further refresher training will be required. In particular, these include
financial management, accounting, procurement and technical supervision skills. This clearly
indicates that for this type of decentralized program that is transferring Investment
Ownership to the communes, a systematic and phased program of capacity building and
training is required in order to progressively and sustainably build up these capacities over
several years. Adequate funding is required for this.

6.5 Institutional training capacity

The two projects apply different models for training commune and village cadres, both of which
have some advantages. Under CBRIP, training is provided mainly by relevant province
departments and district technical sections (for example, training on financial management is
provided by the Finance Department). This allows the project to bring in specific knowledge and
technical expertise, and has the advantage of increasing awareness about the project amongst
staff of these other departments. Weaknesses with this approach are that it is not a permanent
system, and these technical staff usually do not have professional training skills.

Under NMPRP, training is provided through the Province Training Schools (including the
Economic and Technical Secondary Training Schools and the Agriculture and Forestry Training
Schools), with technical inputs and support for the development of courses provided by national
education organizations (such as the Construction University of Ha Noi). This approach has the
advantage of helping to build institutional training capacity, which may be more sustainable in
the long term. Staff of the Province Training Schools consulted during this review clearly
appreciate these linkages. They state that there are beneficial impacts on the schools through: (i)
increasing staff knowledge and competency to provide training in new topics; (ii) strengthening
the links between the schools and the district and commune authorities; (iii) the practical nature
of the project-related training which provides opportunities for staff to learn from local
experience; and (iv) increased income and material benefits for the schools.

The integration of the training courses provided by the projects into the regular curricula of the
Province Training Schools system should be strongly encouraged, as well as providing these
courses for other projects and programs working in the area (see Section 7 below).

52
6.6 Community facilitation

The experience from CBRIP shows that Community Facilitators (CFs) can play an
essential role in providing support for the communes, and this role is widely appreciated by
commune staff. The essential task of the CFs is to provide ‘on-the-job training and coaching’ for
the CPCCs (to augment the training courses provided by the project), as well as to provide
administrative back-up, and to serve as a bridge between the CPCCs and the Districts.

Questions have been raised about the sustainability of the CF positions. There are different ways
of looking at this issue. It can be argued that they are only required for a number of years until
the communes have gained the necessary management capacity. However, a considerable
investment has been made in building up the skills-base of the CFs, so it needs to be ensured that
these facilitation skills are not lost to the system, and that future employment opportunities are
created. For the CFs to work effectively, it is necessary to have an appropriate ‘support package’
(including and conducive salary and insurance, adequate allowances for the extensive travel they
have to undertake, and necessary equipment). In the recruitment of the CFs, particular attention
should be given to the selection of women, local people, and to ethnic minority people.

53
 Part C: Recommendations for the SEDEMA Program
and P-CLIP
Based on the analysis made in the preceding sections, this part of the report draws-out broader
policy conclusions and operational recommendations for the design of the Socio-Economic
Development Program for Communes with Extreme Difficulties in Ethnic Minority and
Mountainous Areas for the period 2006 to 2010 (see Box 2 for the main components of the
SEDEMA Program) 17 , and the proposed investment support to be provided through the World
Bank financed Poor Communes Livelihoods and Infrastructure Program (P-CLIP).

Box 2. Main components and types of activity in the SEDEMA program

Component 1: Production development projects

• Training of village extension workers and vocational training for youth;
• Agriculture, forestry, and fisheries extension activities;
• Development of effective production models;
• Development of product processing enterprises;
• Production development (forestry, high value crops and livestock production);
• Household production support policies.

Component 2: Infrastructure development projects

Poor commune and village infrastructure sub-projects:

• Commune to village and inter-village roads;
• Small-scale irrigation works;
• Low-voltage power systems to villages, or alternative sources of electricity supply;
• Clean water supply facilities for the community and in residential quarters;
• Student accommodation and facilities at semi-boarding schools in the commune centers;
• Village or inter-village classrooms for primary education and kindergartens;
• Communal houses with facilities according to ethnic traditions;
• Commune clinics and supply of necessary facilities and equipment;
• Commune markets where required;
• Extension stations in inter-commune centers.

Infrastructure sub-projects in difficult villages in Zone II:

• Access roads from villages to commune centers;
• Small-scale irrigation works, concretizing irrigation works;
• Low-voltage power systems to villages, or alternative sources of electricity supply;
• Clean water supply facilities for the community and in residential quarters;
• Classrooms and kindergartens with equipment, teacher accommodation and sanitation;
• Communal houses in villages in accordance with ethnic traditions and customs.

Component 4: Strengthening capacity of grassroots cadres and the community

Component 3: Support in improving people’s living conditions

• Housing and land use support for poor households according to Decision No.134.
• Increase access to clean water supply according to targets set forth by Decision No.134;
• To assist in addressing urgent environmental and sanitation issues
• To improve access to public healthcare services, medical insurance, and preferential policies to assign
commune healthcare workers;
• To assist ethnic minority people in information and culture;
• To assist in improving education and people’s educational level.

17
Reference is made to the Third Draft SEDEMA Program Document presented by the State Committee on Ethnic
Minority Affairs in June 2005.

54
7. Building capacity for commune investment ownership

Review question: What measures need to be taken to effectively and sustainably build
capacity for investment ownership by the poor communes, and what are the necessary
conditions for this?

It is the broad intention of the SEDEMA Program that the commune authorities should be the
Investment Owners and managers in the future for both production development and
infrastructure components of the program (see Box 3 below).

Box 3. Commune Investment Ownership under the SEDEMA Program

For production development activities:

• Scenario 1: The Commune authority will define operational content and targets, and
manage investment funds in accordance with fund management mechanisms to be guided
by central agencies. The Government will provide an average of VND X million to the
communes in order to fund activities according to a proposed portfolio (which will be
specified under the Program). Selection of activities will based on actual conditions and
conducted at village level to exercise grassroots democracy. Annual and multi-year
objectives and activities will be identified using this approach, for example cultivation,
livestock, training, assistance in crop varieties and animal breeds, etc.
• Scenario 2: District authority will establish project management apparatus. Provincial and
district authorities will guide the preparation of commune production planning,
formulation of production development projects, identification of activities and investment
needs through democratic discussion at grassroots level.
• For extremely difficult villages In Zone II areas. The project implementation and
management will be assigned to commune authorities and villages according to the plans.
Villages will be involved in planning and implementing, while commune authorities
assume the role of state administration according to existing provisions.

For commune and village infrastructure investments:

• For extremely difficult communes. Infrastructure development will be implemented
through investment projects in accordance with Construction Law. Most projects,
however, will be simple and small-scale with not large investment capital. Therefore,
management of most of projects will be assigned to commune authorities based on actual
conditions. The proposed mechanism will be simple and easy to adopt.
• For extremely difficult villages In Zone II areas. Management of infrastructure
development projects will be assigned to commune authorities, which are legitimate
administration bodies, and projects will be implemented in named villages as planned.
Source: Third Draft SEDEMA Program Document

The experience from CBRIP and NMPRP, as well as from other projects working in these areas,
clearly shows that poor communes can act as the Investment Owners. However, there are a
number of basic requirements and necessary conditions for building local capacity that need to be
fulfilled in order to achieve this.

55
Capacity-building at commune and village level demands very practical approaches and adequate
support and guidance from higher levels. We can refer to this as a ‘guided approach to
decentralization’ the main elements of which are as follows:

1) Appropriate phasing in the levels of investment ownership and management assigned

to the communes. It is necessary to progressively build-up the capacity and confidence of
the communes over time – by moving step-by-step from smaller to larger-scale works and
activities, from lower to higher levels of investment, and from simple to more complex
sets of procedures.

2) Establishing effective organizations at commune level. These organizations should

clearly delineated respective ‘management’ and ‘supervision’ tasks and functions; they
serve to coordinate and integrate the resources made available by different projects and
programs; and they should be as fully inclusive as possible of village representatives,
including both men and women, and poor groups.

3) Introducing a systematic and comprehensive training program. Providing adequate

high-quality training over several years for commune elected officials, civil servant
officers, and the village heads etc. is essential, including both ‘start-up’ and ‘re-fresher’
training courses delivered over the program period.

4) Building-up effective support capacity at district level. Capacity-building at commune

level needs to be complemented by capacity building of the ‘support agencies’ at district
and province levels, so that higher level agencies will be able to effectively advise and
support the communes, rather than directly managing commune investment activities.

7.1 Phasing in the levels of investment ownership and management

Previous experience from CBRIP clearly shows that is best to make the communes the Investment
Owners from beginning of program, and to adopt a ‘learning-by-doing approach’. However, in
order to ensure that communes are not overloaded in the early stages of the program, there should
be a manageable size of investment and a manageable number of activities assigned to them. The
experience from NMPRP shows that many poor communes cannot take on full investment
ownership responsibilities immediately.

It is recommended that the future program should be designed around a ‘Growth-path for
commune capacity building’ that provides a framework for: (a) decision-making about the size
and types of investment a commune can manage at a given point in time; and (b) for progressively
building-up the required management and technical skills-base and confidence of the communes
over the program period (see Figure 6 below).

The main features of this proposed Growth-path are as follows:

• At the beginning of the program the communes would be grouped into three categories
according to current capacity (on the basis of an agreed set of Capacity Indicators), and
during program period they would be expected to progressively move from a lower to
higher level of investment management (from Category I to III).

• Formulating an overall Capacity Building Target for the program would have the
advantage of creating ‘positive incentives’ for communes, districts and provinces to be
seen to be performing well in terms of developing commune capacity.

56
 Figure 6. Growth-path for commune capacity building
Overall capacity building target for the Program:
For example – By the end of 2010:
all communes that start the program in Category II will achieve Category III status;
80% of communes that start the program in Category I will achieve Category II status,
and 20% Category III status

Category I communes Category II communes Category III communes

Commune categories Capacity indicators: Capacity indicators: Capacity indicators:
and capacity indicators 1. Communes with no 1. Communes with some 1. Communes with good
previous experience previous experience experience managing
managing investment managing investment investment projects;
projects; projects; 2. Commune accountants
2. Commune 2. Commune with formal ‘Trung
accountants with accountants have Cap’ qualifications
limited training or received training and good experience;
experience; and/or with several 3. Commune supervision
3. Commune supervision years experience; boards have received
boards not yet 3. Commune supervision more advanced
established or in- boards are established training in technical
active; and have received supervision skills;
4. Commune officers basic training; 4. Commune officers
with no previous 4. Commune officers have obtained a high
experience in have received level of practical
procurement, design training in experience and
and construction procurement, and qualifications in
skills; design and investment
5. Some especially construction skills. management.
Type and level of
investment activity difficult communes.

A. Production A.I A.II A.III

development support Commune and/or Commune Investment Commune Investment
(Agro-forestry extension, District the Investment Owner Owner
activities etc.) Owner
B. Small village B.I B.II B.III
infrastructure Commune Investment Commune Investment Commune Investment
(Simple design, Owner Owner Owner
construction and O&M)
Procurement methods: Community Participation Contracts – for small-works that can be 100% locally
constructed and managed
C. Commune and village C.I C.II C.III
infrastructure (I) District Investment Commune Investment Commune Investment
(Low technical design, Owner Owner Owner
construction and O&M)
Procurement methods: Either Community Participation Contracts or Limited Competitive Bidding / Small
Works procedure (with 3 price quotations)
D. Commune and village D.I D.II D.III
infrastructure (II) District Investment District Investment Commune the
(Medium technical design, Owner Owner Investment Owner
construction and O&M)
Procurement methods: Limited Competitive Bidding / Small Works procedure (with 3 price quotations)

E. Large commune and E.I E.II E.III

inter-commune works District Investment District Investment District Investment
(Complex technical design, Owner Owner Owner
construction and O&M)
Procurement methods: Small Works or full competitive bidding procedures as required.

57
 • Another advantage of this framework is that it would allow communes to make a self-
assessment of the position they are at in the framework (both at the beginning of the
program and annually).

• The framework would allow for an appropriate division of responsibilities, for levels of
investment management and procurement, between the communes and districts, but with a
phased transfer of these responsibilities to the commune level 18 . The types of procurement
managed by the communes would be clearly linked to the size and complexity of the
investment, and the commune skills-base and position in the three categories.

• It should be recognized that not all types of infrastructure are suitable for decentralized
commune management. Inter-commune works, complex schemes that require a high level
of technical inputs to design and construction, and the involvement of specialized service
agencies for operations and maintenance, are generally not suitable for full commune
management. These should continue to be under the districts as Investment Owners. As a
rule-of-thumb, only those schemes that are comparatively small and simple in design,
which can be locally constructed, and for which the community itself will be primarily
responsible for operations and maintenance should be included.

• The Capacity Indicators would also be used as a basis for monitoring: (a) the physical
progress and outputs of the program (for example, in terms of training courses delivered);
and (b) overall performance and achievements (for example, in terms of the number of
communes moving from one Category to the next, or the number of Commune
Supervision Boards fully trained and working effectively etc.).

• The framework would also be used as a basis for planning the sequence of training courses
to be provided to commune cadres according to their existing managerial and technical
skills-base and their position in the framework (see Section 9.3).

7.2 Establishing effective organizations at commune level

As indicated in sections above, one of the strongest aspects of both NMPRP and CBRIP is the
attention that has been given to the formation and training of the Commune Management Boards
and Commune Supervision Boards. This has been critical to the performance of both projects.
CBRIP has been effective at achieving broadly inclusive Commune Management Boards (the
CPCCs), with the participation of both men and women from all villages. This creates a large
organization (with over 20 members in some locations) which can be cumbersome, indicting there
may be a need to distinguish between ‘core management staff’ and a wider pool of ‘board
members’ involved in decision-making. Under NMPRP, a clearer distinction is made between
technical officers (appointed to the Commune Management Boards) and the mass association
representatives (on the Commune Supervision Boards). The Commune Supervision Boards under
both projects are now beginning to enhance the ‘horizontal’ and ‘downward’ accountability of
program management and implementation at the local level.

18
According to Decision No.16/2005/ND-CP (dated 7 February 2005) of the Government on management of
investment projects for the construction of works, it is stated that (depending on the practical conditions of each
locality) the Province People’s Committees may assign the Commune People’s Committees with projects with an
investment capital up to VND 3 billion. Clearly, most of the poor communes cannot be expected to take on this level
of investment management for individual schemes, and in any case the majority of works in the upland communes
and villages require lower levels of capital investment.

58
It is recommended that in the future program a clearer distinction should be made between the
membership, and respective tasks and functions of these board structures. It is also recommended
that steps should be taken to ensure a more balanced ratio of men and women on these
management and supervision boards, so that women are more fully and actively involved in all
project activities, and so that women’s opinions can affect decisions.

For this, the following proposal can be made:

Commune Management Boards Commune Supervision Boards

Responsible for investment ownership,
management and administrative aspects
• Chairman / Vice-chairman of the
Commune People’s Committee;
• Core technical and administrative staff
including the commune accountant,
cadastral officer, statistics officer, roads /
irrigation officer, extension worker, (and
representatives from the mass
organizations if required);
• Board members for decision-making: the
village heads and one woman from each
village selected by villagers.
Responsible for supervision and monitoring of
activities on behalf of the local community
• Chairman of the Commune People’s
Council;
• Representatives from the Fatherland Front
and the other mass associations;
• Village members including one woman and
one man elected by villages to undertake
supervision of activities in their village;
• Other experienced local people as
identified by the commune.

7.3 Introducing a systematic and comprehensive training program

The objective for commune and village cadre training under the SEDEMA Program (Component
No.3) has been defined as follows:

“To provide training and fostering for commune and village grassroots cadre according
with position and classification, provide and supplement professional and managerial
knowledge and skills in order to create good conditions for capacity building of grassroots
cadre so that they will accomplish state administration and social management duties. To
strengthen the community’s capacity in all aspects, to create enabling conditions for
effective participation and supervision of management in the area”19 .

This will be the key to success of the SEDEMA Program. Providing more intensive and better
quality technical and management training for local cadres is essential in order to bring about
successful empowerment of communes. As such, investment in training for grassroots cadres and
the community should be seen as an investment in the future, especially in the remote areas where
ethnic minorities live.

For this, it will be necessary to introduce a phased, systematic and comprehensive program of
capacity building over several years (i.e. over the program period from 2006 to 2010). Start-up
training needs to be followed by periods of practicing skills and re-fresher training to build-up the
required skills-base. Based on the experience from CBRIP and NMPRP, it is recommended that a
budget allocation of around 8% of the total is required and appropriate for this type of capacity
building and training component for the poor communes.

19
Third Draft SEDEMA Program Document – Part II / Section 3.1.

59
The legislative framework for capacity building of commune cadres

In 2002 the Central Committee of the Communist Party of Vietnam (CPV) adopted Resolution
No.17 on renovation and raising the quality of the political systems in communes, wards and
townships. This was followed by Decision No.85 of the Prime Minister that set out the following
objectives for reform of the grassroots administrations for the period to 2005 20 :

1. To clearly determine the functions and tasks of grassroots administrations, and to

renovate and raise the efficiency of the People’s Councils and People’s Committees
(including provisions on areas such as budget management, capital mobilization,
personnel arrangements and management, and taxation etc.);

2. To build the contingent of, as well as regimes and policies for, grassroots cadres
(including salary and incentive regimes for elected and appointed local officials, required
qualifications and capacity building);

3. To assign the right to financial autonomy to the grassroots administrations and step by
step to ensure material foundations in service of various bodies in the grassroots political
systems (including provisions related to revenue collection, formulation of investment
projects, telecommunications and administrative infrastructure);

4. To finalize the regulation on the exercise of local democracy and step by step to perfect
the organization of local communities (based on the principle of democratic centralism by
promoting people’s rights with respect to direct and representative democracy);

5. To renew the superior authorities’ direction of the grassroots administrations (including

the need to enhance direct working sessions with the grassroots and people, together with
grassroots administrations settle people’s troubles, and organize the review of fine models
of grassroots and people’s initiatives).

It is stated in the SEDEMA Program Document that this training component should conform to
the objectives and targets set-out for commune cadre training under Decision No.03 of the Prime
Minister (dated January 6 2004). This decision relates to one of the main sub-programs under the
overall Public Administration Reform (PAR) Program, which is under the administration of the
Ministry of Home Affairs (Box 5) 21 .

Although the CPV and the Government have set-out ambitious targets for capacity building and
training of commune cadres, especially for these remote and ethnic minority areas, it has been
noted in a number of reports that implementation has often been slower and less effective than
expected. There are a number of main constraints, including the limited capacity of the Province
Training Schools (PTIs) to design and deliver this training, weak coordination at province level,

20
Decision No.85/2002/QD-TTg of the Prime Minister (dated 28/06/2002) Promulgating the plan on renovating, and
raising the quality of political systems in communes, wards and townships.
21
Decision No.03/2004/QD-TTg (dated January 6, 2004) approving the orientation of planning for training officials
and public employees of communes, wards and district townships to 2010.

60
and shortages of funding for such an ambitious program 22 , and in some localities a lack of vigor
and continuity in implementing the program by the local authorities 23 .

It is recommended that close linkages should be created between the PAR cadre training program
under the Ministry of Home Affairs and the training component of the SEDEMA Program – and
this should be a core design feature of the component. In this respect, the SEDEMA Program
provides the applied and practical context for application of the broader training under the PAR
Program, and closely linking these programs will enhance their overall effectiveness and
integration into the provincial training systems..

Box 5. Objectives and targets for commune cadre training

Decision No.03 sets-out the short and long-term objectives and targets for cadre training. These
are differentiated for the poor communes. The immediate objectives to end-2005 are as follows:
• 70-80% of elected officials will receive training and have improved skills in political theory,
State administration, and professional management skills;
• 80% of public employees in more favorable regions will have qualifications to technical
diploma level (trung cÊp) or above;
• 100% of key staff and people entering office in upland, remote and ethnic minority regions
will receive training and have improved skills in State administration and professional skills
to certificate level (s¬ cÊp); with plans for training 25% of these officials to technical
diploma level.

Decision No.03 also sets out some of the intended features of the training content and approach,
including:
• It should be in line with Party policies, Government Laws, and orientation of the Program on
Administration Reform;
• Relevant to the specific circumstances found in each region and locality;
• Close to reality, clearly specifying responsibilities and tasks for each position;
• Combining theoretical and practical training, and formal and non-formal training methods;
• Combined with basic education and literacy training for cadres in remote, upland and ethnic
minority areas;
• Combined with the introduction of information technology for the local administrations.

Training content and approach

Based on the experience from CBRIP and NMPRP, and from other projects, it is possible to
recommend a set of Core Training Courses for commune and village cadres on technical and
managerial topics that should be included in the program (see Table 6).

1. Commune investment management

2. Procurement methods, procedures and management

22
PAC. 2004. Socio-economic Development of the Poorest Communes: community perspectives and future prospects.
Final Synthesis Report (2002 to 2004). Partnership to Assist the Poorest Communes, Ministry of Planning and
Investment, Ha Noi.
23
Dinh Van An et.al. 2003. Developing the socialist-oriented market economy in Vietnam. Central Institute for
Economic Management (CIEM). Statistical Publishing House, Hanoi.

61
 3. Commune accountant training
4. Community consultation and participatory planning methods
5. Community supervision of infrastructure works
6. Community Supervision of production development activities
7. Infrastructure design skills and construction management
8. Operations and maintenance of infrastructure
9. Adult education and literacy training
10. Program Monitoring and evaluation.

Practical training materials have already been developed for many of these Core Training
Courses, which could be adapted and used for wider application in the future. This is from
CBRIP, NMPRP and other projects and programs. It is strongly recommended that as part of the
preparation of the new program a concerted effort is made to collect these materials, to review
their content and quality, and adapt them accordingly.

With respect to training methods, given the fact that participants (commune cadres and village
heads) vary so much in terms of their basic education and literacy levels (from Grade 2 to Grade
12), it is important to pay attention to the following factors in the training approach:

• The training process – preparation one step in advance, repeating training, on-site
instruction, drawing lessons from each activity;
• The training content – which should be practical, understandable and in simple
language and formats;
• The training materials – which should be adapted or tailor-made for each area
(district); and
• The training methods – participatory training, building on the initiatives and
experience of participants;
• Integrated with effective information provision – utilizing mass media channels
(television and radio) and audio-visual materials (such as DVD), in ethnic minority
languages.

62
Table 7. Core Training Courses for commune and village cadres

Commune
Core Training Courses Main Participants Main Contents Category Sources / comments
I II III
1 Commune People’s Committee, Divided into courses on: state management 3 3 3 Some of these topics are
investment People’s Council, policies and regulations, program guidelines, covered under Decision 03,
management Commune Management planning methods, preparation of investment but this needs to be
Board members (as reports, approvals steps, construction complemented by applied
required for different management, account management, financial and program specific
positions & sub-topics) management and reporting etc. training courses.
2 Procurement Commune Management Level 1 (Basic): Community Participation 3 3 3 Phased introduction of
methods, Board members, technical Contracts, Single Source selection for extension procurement training
procedures and officers, community activities, local shopping for the procurement of according to Commune
management facilitators goods etc. Category. Materials
available from NMPRP,
Level 2 (Advanced): managing Small Works 3 3
CBRIP and some other
contracts (including aspects relating to
projects, but more work is
preparation of biddings documents, assessment
needed to improve and
and selection of contractors), environmental
refine the training content.
safeguards, land acquisition.
3 Commune Commune accountants Level 1 (Basic): Upgrading commune 3 3 3 Materials for basic training
accountant accountant training in program-related financial available from NMPRP,
training management and accounting procedures, basic CBRIP and other projects.
account management (application and Certificate training following
withdrawal steps) etc. the regular government
training system.
Level 2 (Advanced): formal certificate training 3 3
(Trung Cap) for the commune accountants.

4 Community Village Heads, Commune Village development planning (VDP), 3 3 3 Many materials available
consultation and Management Boards, mass undertaking needs assessments (for from donor / INGO projects
participatory association infrastructure and livelihood activities), methods and programs. Need to
planning methods representatives, for holding village meetings (voting methods, integrate these with regular
Community Facilitators writing minutes etc.). government training on
Local Democracy methods.
5 Community Commune Supervision Level 1 (Basic): Commune Supervision Board 3 3 3 Phased introduction of
supervision of Boards, Village Heads, formation, roles and responsibilities, basic supervision training
infrastructure commune technical officers supervision of quality and quantity of materials, according to Commune
works (e.g. roads and irrigation supervision of paid labour and community Category. Materials for Level
officers) contributions, referral mechanisms etc. 1 from NMPRP & CBRIP.

63
 Level 2 (Advanced): More advanced technical 3 3
supervision skills, understanding of
infrastructure designs, and supervising quality
of works according to technical specifications.
6 Community Commune Supervision Selection and planning of agriculture extension 3 3 3 Materials for community
Supervision of Boards, Village Heads, and other production related activities, supervision of agriculture
production commune/village extension monitoring the quality and quantity of inputs demonstrations already
development workers and supplies, training-of-trainers, progress developed by NMPRP. Many
activities monitoring etc. materials on extension n
methods from donor / INGO
projects and programs.
7 Infrastructure Commune technical Survey techniques and preparation of designs 3 3 For communes managing
design skills and officers, local cooperatives, for simple construction, skills in reading higher levels of investment.
construction production groups etc. complex technical designs, calculating cost Very few materials for this
management estimates, and related mathematical skills etc. type of training for
commune staff are
available.
8 Operations and Commune management • User-group management training including 3 3 3 Materials for O&M training
maintenance of Boards and technical user-group formation, rules and regulations, available from NMPRP,
infrastructure officers as required, financing of O&M etc; CBRIP and other projects.
infrastructure user-groups • User-group maintenance training (provided Also on Participatory
on completion of each scheme). Irrigation Management
(PIM) from some projects
and INGOs (e.g. Oxfam).
9 Adult education Commune staff, Village To upgrade the basic educational qualifications 3 3 3 As provided by MOET
and literacy Heads, mass association of commune and village cadres, especially in through the regular
training representatives ethnic minority areas government training
system.
10 Program Commune Management According to program design 3
Monitoring and Boards
evaluation

64
Training service providers

It is recommended that the model introduced by NMPRP for integrating such a training program
within the provincial training systems to provide large-scale training for commune and village
cadres should be adopted in new program (see Section 6.5 above). The Province Training Schools
can contribute significantly to improving local capacity, and these institutions should be paid due
attention in the design and implementation of the program. Additional training topics need to be
introduced by involving trainers from sector institutions.

It is further recommended that this should include funding and Technical Assistance to increase
the capacity of the Province Training Schools themselves, particularly with respect to training
needs assessment, learner-centered teaching methods, new course content, and the evaluation of
training quality and impacts.

7.4 District support capacity and community facilitation

As indicated in sections above, the transfer of Investment Ownership responsibility to lower

levels (from province to district, and from district to commune) raises an important set of issues
relating to the provision of effective and timely support from higher levels. To promote commune
investment ownership, the role of the districts is more to provide technical and administrative
assistance to the communes, rather than direct project management. This does not reduce district
staff time spent on the program, at least in the early stages. However, it does require new ways of
working for district staff, and improved information flow and communication between commune
and district level, and horizontally between district agencies.

It needs to be ensured that district staff have the necessary skills and motivation to fulfill this role
adequately, and that there is effective cross-sector coordination between district agencies.
Training for district cadres should focus on awareness-raising and introducing new methods
including facilitation skills to assist commune and village cadres.

Experience has shown that Commune Facilitators can play an essential role in providing this
‘training and coaching’ support for the communes and in strengthening linkages with the districts.
In this respect, a large contingent of Community Facilitators has been trained by CBRIP, NMPRP
and by several other projects working in the poor communes. This is an extremely valuable
human resource that should not be lost to the system in the future – and it is recommended that the
future program should actively seek to build on these existing community facilitation skills.

7.5 Covering the real costs of capacity building and training

At several points in this review, it has been noted that the existing levels of cost-norms in the
Government system are not sufficient to cover the costs of managing and implementing this type
of decentralized program in the remote, upland communes. It is suggested that there is a need for
up-dated and geographically differentiated cost-norm systems that more accurately reflect the real
costs of operating in these remote and difficult areas.

In particular, more intensive capacity building is possible under donor-assisted projects (such as
CBRIP and NMPRP) because of higher cost-norms and more flexible budget allocations afforded
to these projects. Current levels of cost-norms under the Government system (for travel and daily
allowances, training course preparation, training costs etc.) makes it difficult to achieve this more
intensive level of capacity building, especially in the remote upland areas. This is a critical
constraint that needs to be addressed in the future program.

65
8. Procurement strategy and maximizing local economic benefits
from program investments

Review question: How can the effectiveness of program investment activities be enhanced, in
order to increase the direct economic benefits going to poor people and poor communities,
and to create multiplier effects in the local economy that will maximize impacts on socio-
economic development?

The range of activities and sub-projects that will included under the four main components of the
SEDEMA Program are listed in Box 2 above. In this section we do not go into the detail of these
components and activities. Rather, the aim here is to examine a number of broader policy
questions about the distribution of economic benefits from these public sector investments.

A stated aim of the Government’s national target programs is to allocate investment capital for
public works according to the principle: “The works are built for use of the commune, local
people have jobs and earn payment from building the works, thereby gradually reducing poverty
in the whole commune and in each village”.

The main question asked in this section is – what mechanisms can be put in place to make this
principle become more and more of a reality in the SEDEMA Program in the future? In particular,
this question is examined in relation to: (i) how can public investment activities help to create
better long-term employment opportunities for local people; (ii) how to more actively and fully
engage local economic units such as small-scale enterprises (SMEs) and cooperatives in bidding
for and undertaking small public works; and (ii) the procurement strategy, methods and
regulations that will be included in the new program.

8.1 The distribution of economic benefits under current programs

Under many existing projects and programs operating in the poor communes, a substantial
proportion of the economic benefit of the investment activities does not go directly into the local
economy at commune or district level. For example, a majority of infrastructure works are
awarded to contractors from the province capital or outside the province. A majority of paid
labour on construction schemes in the uplands continues to be given to external laborers, rather
than to local villagers. And agriculture extension programs focus on introduced crop varieties and
animal breeds that generally favor external material suppliers and seed suppliers, rather than local
producers and suppliers.

At the same time, generally high levels of voluntary community contributions are required under
these investment projects for infrastructure construction and operations and maintenance. This is
in addition to the other types of contributions that people have to make. A number of reports in
recent years have indicated this can place a heavy burden on these poor communities and
households, and that these contributions should be kept to a reasonable level 24 .

Under both CBRIP and NMPRP there has been a shift towards hiring private contractor
companies that are based in the provinces and districts for Small Works, and more emphasis is
being put on hiring local labour within the villages. Both projects are also introducing Community
Participation Contracts for smaller-scale works, that are directed towards local cooperatives,

24
PAC. 2004. Socio-economic Development of the Poorest Communes: community perspectives and future prospects.
Final Synthesis Report (2002 to 2004). Partnership to Assist the Poorest Communes, Ministry of Planning and
Investment, Ha Noi.

66
small-scale enterprises (SMEs) and village production groups – however, this is still on a rather
limited scale.

A survey and cost-benefit analysis has not been undertaken on the distribution of economic
benefits from investment activities under current programs vis-à-vis the level of community
contributions and paid labour opportunities – so the above observations are made on the basis of
our informed understanding. It is recommended that a detailed analysis of this could usefully be
made as part of the preparation of the future program (P-CLIP).

8.2 Short-term paid labour or longer-term employment opportunities

It is the stated objective of the Government to prioritize and maximize paid labour opportunities
for local people on commune and village infrastructure schemes. As noted in Section 5.5 this is
also one of the objectives of CBRIP and NMPRP; and some provinces in NMPRP have decided to
cover the cost community contributions with counterpart funds from the province budget, and to
use these funds to provide additional employment. Experience shows that this needs to be
supported by: (i) enforcing contractor obligations in this regard; (ii) facilitating better
communication between the poor and ethnic minority communities and the contractor companies
on the terms and conditions of employment; and (iii) adequately covering the costs of training and
administration that are incurred to maximize these local paid-labour opportunities.

Looking more broadly at this issue – a number of recent international studies have critically
questioned the extend to which the provision of short-term or ‘casual’ employment on
construction of public works can significantly contribute to poverty reduction 25 . These studies
suggest that such programs often result in lower quality of the works, they are often not good at
‘targeting’ (i.e. the poorest households are likely to be at the “end of the queue” for casual jobs),
and they have to be massive schemes if they are to have much impact on poverty26 .

In particular, there is concern about the provision of short-term paid labour in isolation from other
development interventions designed to create longer-term employment and income generation
opportunities. These studies suggest that if public works are to be used constructively in situations
of long-term poverty, it is necessary to address the following points in program design:
• Creating sustained public-works related employment (i.e. not just short-term casual labour
on construction sites, but longer-term employment related to the on-going operations and
maintenance of infrastructure);
• Integration of public works programs with other development interventions;
• Creating linkages with small-scale enterprise development and micro-finance activities;
• Introducing flexible or piece-based employment, enabling local people to combine public
works employment with other responsibilities and income earning opportunities;
• Introducing higher wages to make it worthwhile for people to allocate their valuable time
to public works;
• Better poverty targeting measures to ensure these opportunities are afforded to the poorest
people.

25
Anna McCord. 2005. Win-win or lose-lose? An Examination of the Use of Public Works as a Social Protection
Instrument in Situations of Chronic Poverty. Paper for the Conference on Social Protection for Chronic Poverty.
Institute for Development Policy and Management , University of Manchester, 23-24 February 2005
26
ILO. 2004. Economic Security for a Better World. International Labour Office, Socio-Economic Security Program,
Geneva.

67
8.3 Re-examining cost-effectiveness in public procurement methods

It is clear that finding ways to increase the amount of cash going directly into the local economy
(i.e. at commune and district level) from program investments could substantially increase the
impacts on poverty reduction in these areas. Put simply: the more money that is spent on
businesses in the local area, the more income is generated for people in that local economy. This
would be through an increase in direct benefits to SMEs and households, as well as secondary
benefits and multiplier effects in the local economy.

Recent research undertaken by the New Economics Foundation (NEF) in the UK identifies a
number of options for how this could be achieved 27 . The NEF study proposes ways of developing
local solutions to public service delivery that keeps money circulating in the local economy by
fostering local economic linkages, which are critical to long-term development. The process of
developing local solutions also raises the capacity and expertise of local people and enterprises,
thereby making them more competitive.

In particular, the NEF research suggests this means re-examining the way in which public
procurement policies and regulations are designed so that they can help deliver these local
economic benefits, while at the same time remaining cost-effective, competitive and transparent.

Economic efficiency in procurement is usually assessed in terms of short-term costs (i.e. the total
price of a contract or tender and the unit-costs), and savings (with ‘lowest-cost’ selection criteria
being heavily weighted in the appointment of contractors). Another way of achieving shorter-term
gains is through the ‘packaging of schemes’ and the aggregation of supply contracts by issuing a
contract to larger contractors, rather than allowing separate contractors to bid for different parts of
a scheme. This often involves shifting to higher-order procurement methods (such as National
Competitive Bidding). This can bring administrative cost-savings for the contracting authorities,
but it can also increase the diversion of investment capital and of economic benefits away from
the local communities.

An example of this situation is in the procurement of furniture for schools, village classrooms and
kindergartens. In all communes in Viet Nam, there are local SMEs, household enterprises and
artisans (formally registered as enterprises or un-registered) that have the skills to produce
furniture of basically acceptable standards. Even if they don’t have the skills to produce furniture
to the required specifications, with adequate information and training they could do so. Providing
more equal opportunities to enable these local SMEs and artisans to bid for furniture supply
contracts (for the large number of school buildings and kindergartens now being built in the
uplands) could significantly increase local economic benefits. Linking these ‘suppliers’ to local
‘producers’ of raw materials (farmers engaged in production forestry) and ‘retailers’ and shop-
keepers would further extend the local economic linkages and benefits. However, it is remarkable
that under a number of donor-assisted projects in Viet Nam these types of supply contract for
village school furniture continue to be put-out to National Competitive Bidding 28 .

27
Justin Sachs. 2005. Public Spending for Public Benefit: how the public sector can use its purchasing power to
deliver local economic development. New Economics Foundation, London, UK. www.neweconomics.org. Although
the examples and recommendations given in this report relate to the United Kingdom, many of the principles it
outlines are highly relevant to the current context in Viet Nam, and to the overall aims and objectives of the national
target programs on poverty reduction.
28
A more extreme example of this is an advert placed in the Viet Nam News in March 2005 by a development project
in Cambodia, inviting tenders for the supply of school furniture for a large number of primary schools in Cambodia
using International Competitive Bidding.

68
The research undertaken by the NEF puts forward an alternative approach that emphasizes: (a) the
longer-term economic benefits beyond the price of a contract in assessing procurement
effectiveness and efficiency; (b) the importance of providing information and training to help
build-up the capacity of local SMEs to bid for contracts; and (c) the importance of incentives to
help create and sustain economic-linkages and supply-chains in development of local economies.

8.4 Procurement strategy of the new program and related design aspects

A number of specific recommendations can be made for the SEDEMA Program and for PCLIP.

1) Careful design of the procurement strategy, methods and regulations is required in order to
maximize these local economic benefits, and to increase the competitiveness of local
economic units, while at the same time remaining transparent.

It is strongly recommended that this should be a central focus of the detailed design of the new
program. The Procurement Strategy is in many respects the key aspect – around which other
aspects of program should be designed (see Figure 6 above):

Distribution of economic
benefits from program
investment activities and
building longer-term
economic opportunities
for local people and local
economic units

Mechanisms to Levels of investment

promote transparency, ownership and
accountability and anti- appropriate
corruption management systems
designed around this
Procurement strategy
as the key aspect of
program design

Overall fund flow Community

arrangements, and participation,
financial management consultation and
systems supervision steps and
processes

Su-project planning and

approval steps and
procedures

Presently, in the draft SEDEMA Program Document, little indication is given as to the specific
procurement methods that will be used in the future program. For infrastructure, it is stated only
that sub-projects should be managed in accordance with the Construction Law, while the
proposed mechanisms will be simple and easy to adopt. In the previous phase, Program 135 was
granted a relaxation of the Government’s procurement regulations to allow for directly appointed

69
contracting for infrastructure works (valued under VND 1 billion) 29 . This decision was taken in
2001 in order to speed-up implementation of the program. It is, however, recommended that this
practice should not be continued in the new program. While appointed bidding may speed up
implementation, it can also reduce transparency, and reduce the opportunities for effective
consultation with the local community and supervision by the community.

The experience from both CBRIP and NMPRP has shown that Small Works type-procurement
(i.e. limited competitive bidding with at least 3 price quotations) is viable in these remote upland
areas for commune and village infrastructure works; combined with Community Participation
Contracts for small-scale works and activities that can be locally constructed and managed. It is
recommended that a basically similar model should be applied in the new program – but through
an appropriate adaptation and refinement of the Government’s public procurement regulations and
guidelines in order to promote integration and harmonization between projects and programs.

2) Strengthen the regulations for Community Participation Contracting, and apply this method
more widely in the future program, with benchmarks for the level of expected investment
capital to be channeled through this method.

It is recommended that particular attention should be given to extending the experience with
Community Participation Contracts from NMPRP, CBRIP and other projects that have introduced
this approach – including particularly the experience from Program 135 in some provinces such as
Tuyen Quang. This would be in order to develop simple guidelines and procedures that could be
more widely applied, and associated procurement manuals and training materials.

Under the new program it will also be beneficial to establish benchmarks for the proportion of the
investment capital that would be expected to go through Community Participation Contracts (for
example, 30% of the capital invested in commune and village infrastructure). This would help to
re-enforce the shift to smaller-scale village infrastructure as intended under the SEDEMA
Program, as well as providing a stimulus for these types of procurement that increase the benefits
for local economic units.

This needs to be combined with a clarification of the legal basis for the commune authorities (as
Investment Owners) to contract cooperatives, SMEs, village production groups, and artisans etc.
for the provision of small works, goods and services.

3) Pro-actively engage with the local economic units in order to boost their chances of being able
to compete for public contracts, and increase information flow on these opportunities.

One of the biggest difficulties currently faced by SMEs and cooperatives is that they lack
information on tender opportunities, knowledge about different procurement methods and
regulations, and how to prepare bidding documents etc. There is strong justification for providing
more information and training on these topics (which could be provided through open-access
training courses held at district level). This would be to build-up the capacity of these economic
units to bid for contracts, while not giving them unfair advantage during the procurement process.

4) Build in a wider range of mechanisms to enhance long-term employment opportunities for

local people, beyond the provision of short-term paid labour on construction sites.

29
Inter-Ministerial Circular No.666 (2001) on the guidance for investment management and construction of
infrastructure works under Program 135

70
It is intended that vocational training, for youth in particular, will be an important component of
the SEDEMA Program (under Component 1). This is in-line with the national targets set by the
Government of having 25% of trained workers by 2010 and 50% by 2020.

It is recommended that some of these vocational training courses should be closely linked to the
infrastructure investments made in villages and communes. In order to increase the pool of skilled
local laborers, training should be provided on simple infrastructure design, basic construction
skills and techniques, and operations and maintenance. This training would increase the long-term
opportunities for young people to obtain employment. It would also create a more solid
foundation and local capacity to undertake sustainable operations and maintenance. However, it is
essential that vocational training includes both ‘formal’ and ‘non-formal’ training methods and
courses so that poorer people can also benefit (see Section 9.5).

5) More clearly distinguish between paid labour opportunities and voluntary community
contributions.

Combined with the above, it is recommended that a much clearer distinction should be made
between paid labour and voluntary community contributions according to the level of investment
ownership and the scale of infrastructure schemes. This would be as follows:

• For larger public infrastructure – prioritize paid labor (e.g. for roads and bridges,
secondary schools, large irrigation head-works etc.) and voluntary contributions should
not be required for these types of schemes;

• For small-scale productive infrastructure – prioritize community contributions (e.g.

for works that have economic benefits for households including small-scale irrigation
systems, water supply schemes, village electricity connections, kindergartens etc.).

6) Put limitations on the procurement of goods from outside the province/ that can be sourced
from within the province, districts and communes, and work with contractors and suppliers to
establish local supply-chains to deliver better services.

As indicated in the example of school furniture above – there is a range of associated goods and
services (linked to infrastructure investments) that can often be sourced locally. Priority should be
given in the future program to helping to build up these local supply networks and linkages. This
may require dividing up contract services into a number of packages to achieve wider distribution
of benefits. This could be combined with testing models for contracting-out operations and
maintenance of infrastructure, and the supply of spare-parts to local SMEs and retailers.

7) Reduce the requirements for standard design of small-scale village infrastructure.

Currently, a majority of programs apply standard designs for small-scale buildings (such as
village classrooms, kindergartens and community houses) that require the supply of external
materials. It is suggested that in remote villages, these requirements for standard design for small
buildings should be relaxed. Using traditional building designs and construction techniques, and
the use of locally produced and purchased materials wherever possible, would allow local
communities and artisans to become more directly involved in construction contracts. Basic
requirements for sanitation, however, should always be enforced.

71
9. Targeting strategy and resource allocation to reach remote villages
and poor groups

Review question: How to improve targeting and program implementation mechanisms to

reach remote and poor villages and hamlets, and the poorest social groups and households in
the uplands?

It is intended that the SEDEMA Program will be targeted on around 1,850 mountainous and
ethnic minority communes that experience the greatest difficulties. These will be identified
according to four main criteria: (i) lack of essential infrastructure; (ii) social factors relating to
limited education, training and access to information; (iii) agricultural production constraints; and
(iv) high poverty rate (over 25%) and poor domestic living conditions 30 .

In addition, the program will target around 2,500 villages with greatest difficulties that are located
in generally more prosperous (Zone II) communes and districts. There are three main criteria for
identifying these villages: (i) poor domestic living conditions and high poverty rate; (ii)
agricultural production constraints including below average availability of cultivation land; and
(iii) limited social infrastructure in the village and no road access to the commune centre.

It is also intended the new program will have a stronger focus on supporting smaller-scale
commune and village investments and activities. This shift in focus to village level brings with it a
number of major challenges with respect to effective targeting and resource allocation.

One of the main strengths of Program 135 (in the previous phase) was the transparent criteria for
budget allocation to communes. This principle of transparency should be maintained in the future
program. At the same time, there is a need for more differentiated mechanisms for targeting and
delivering benefits to the poorest communities and social groups in these communes, including:
(i) remote and isolated villages, (ii) smaller ethnic minority groups, (iii) ethnic minority women
and girls, and (iv) the poorest category / chronically poor households.

9.1 Budget allocations to communes and villages

In previous projects and programs, different formula have been used for budget allocations to
communes. Program 135 was based on an equal division (of VND 400 to 500 million per
commune per year), while CBRIP used a simple formula based on commune population size.
Some other projects have introduced more differentiated ratios. In the IFAD supported Rural
Income Diversification Project in Tuyen Quang, the budget allocation per commune is based on a
ratio of (i) the number of villages and households in the commune and (ii) the distance from the
District centre (to reflect the higher transport costs incurred by more remote communes and
villages); and the budget allocated to villages is according to the number of households.

Commune budget allocations. Under the SEDEMA Program it is intended to introduce formula-
based budget allocations to improve commune targeting. In this respect, it is recommended that
the budget allocation to communes (for both infrastructure and production development
components) should be based on the following criteria:
iv) Level of remoteness (distance from the commune centre to district centre, and from
the village to the commune centre);

30
Third Draft SEDEMA Program Document – Annex 2: criteria to identify extremely difficult communes and
villages in 2006 to 2010 period.

72
 v) Population (number of villages and households);
vi) A measure of relative poverty based on either the ‘cumulative poverty-gap’ or
‘poverty rate’ according to the new poverty line introduced by the Government.

Remote and isolated poor villages. The criteria for village budget allocations and distribution of
resources between villages in a commune, and the selection criteria for infrastructure and
livelihood activities, both need to be adjusted and weighted to provide access for the remote
villages to be able to participate and gain benefits from the program. Generally higher levels of
investment per-capita are required for these villages. This is to create favorable conditions for
remote villages, where the poverty rate is high even though the population may be small, but
which have more difficult access to basic social and economic services. For this, a combination of
(i) village population size and (ii) distance from the commune centre, may be sufficient to pick-up
these differences; however, this would need to be tested in the field and modified accordingly.

9.2 Chronically poor households in the uplands

An urgent priority, at this point in time, is to address the situation of the poorest category
households in upland communities (i.e. ‘destitute’ and ‘hungry’ households that fall into
MOLISA Category IV). We would estimate that in many upland communes and villages these
chronically poor households constitute between 5% to 7% of the total households. The long-term
poverty situation of these households derives from a combination of factors, such as: severe
shortages of land and other agriculture resources; loss of assets for various reasons; long-term
health problems in the family; labour constraints due to the loss of family members; and/or
possibly including drug-addiction or alcoholism.

The economic development activities and social welfare mechanisms of the existing poverty
reduction programs (HEPR-PR and Program 135) do not adequately address the situation of these
chronically poor households in the uplands. And because the mass associations, such as the
Women’s Union, are often less active in these upland communes, there are limited alternative
forms of social assistance. One difficulty in addressing the needs of these households is because
of the perceptions regarding their involvement in social-evils (such as laziness, gambling and drug
addiction) which can preclude assistance through the mass associations.

It is strongly recommended that in the design of the new program, a thorough Social Assessment
should be made to quantify the extent of this issue (in terms of the number of households in a
chronically poor situation), and to analyze needs and opportunities for assisting these households.

9.3 Links between the poverty reduction programs and the forestry sector

People’s livelihoods in the poor communes are often heavily dependent on the use of forest land
and forest resources. For instance, in the 3,362 communes currently included in Program 135,
approximately 66% of the land area is legally designated as forest land, and the proportion of
forest land in many poor communes is well over 70%. Therefore, developments in forest sector
strategies and policies (for instance, with regard to forest land allocation, benefit-sharing
arrangements for forest products, and State Forest Enterprise reform) can have a significant
impact on livelihoods and poverty reduction in these communes. In general, these linkages are not
really evident in the National Target programs on Poverty Reduction, and this would be an
important area for closer coordination with the forest sector policies and programs in the future

Strong efforts should also be made to take advantage of the location of these remote villages and
hamlets. For example, many such villages are located in the vicinity of valuable forest resources,

73
and increasing the involvement of the local communities in co-management of these forest
resources is important.

9.4 Specific participation methods to involve poor people and women

The experience from both CBRIP and NMPRP shows that specific methods are required to
encourage the participation of the poorest category households in projects activities, for example,
in the selection of works and other activities at village level (see Section 4.2 above). For example,
selection by voting could be organized for groups of poor households, or by gender groups, and
after that put in general discussion based on satisfying in advance the needs of poorest groups.
The scale of livelihoods activities such as agriculture extension, and credit, also needs to be
appropriate with resource conditions and potentials of poor households.

Specific mechanisms and processes of participation also need to be developed in a practical way
to assure participation of women, in particular poor and ethnic minority women. For support staff
(such as Community Facilitators) it is important to regulate a certain percentage of women and
local people recruited to these positions. Indicators for monitoring gender and ethnic minority
aspects in all project activities need to be developed, and integrated in reporting formats.

9.5 Introducing non-formal vocational skills training methods

In the future Poverty Reduction Target Programs of the Government, it is intended that high
priority will be given to the provision of vocational skills training for poor households. This is a
welcome initiative, that is fully in line with wider policies of the Party and of the Government,
and will be an important component of both programs in the future. However, it is essential to
recognize that vocational skills training opportunities are currently very limited for poor
households. Access to the formal vocational training school system is dependent on secondary
school qualifications and language requirements and is hence prohibitive for a majority of poor
people in the uplands, especially those from ethnic minorities.

It is recommended that priority should be given under the new program to introducing new
approaches to non-formal community-based education and skills training for upland people that
are not dependent on qualification requirements, and that are geared to small-scale income
generation opportunities. The National Education For All (EFA) Action Plan, approved by the
Government in 2003, sets out the framework for improving non-formal education including adult
literacy and vocational training.

9.6 Public information and awareness raising

The experience from CBRIP and NMPRP also shows that it is important to improve the two-way
information flow with local communities, and this should be a high priority for the design of
future programs. There should be more detailed information and specific methods for different
groups: commune and village cadres, men and women, the poorest households, ethnic minority
groups, and people with limited Kinh language abilities. The Village Heads are a particularly
important link in two-way information flow between the Commune and local people, and more
could be done to increase their capacity to fulfill this role.

It is recommended that information and awareness raising activities need to be strengthened in the
future program, by paying particular attention to: (i) the language, format and content of training
and information materials and activities to make them suitable for these poor groups; and (ii)
promoting collaboration with mass media agencies. There should be a diversification of
information channels, by more actively involving the mass associations, and making greater use

74
of mass media (television and radio) and audio-visual methods which are more suitable and
effective for poor communities and ethnic minority households 31 .

One particularly important aspect of information flow is to obtain regular feed-back from local
communities and local people on their perceptions about project progress and quality of activities
etc. This should be integrated into the project M&E systems. The Process Monitoring Study for
CBRIP and Lesson Learning Study for NMPRP are a good basis for the type of ‘public opinion
surveys’ which could be more widely applied in the future.

31
In the remaining project period (2005 to 2007) the NMPRP intends to develop a set of integrated training and
public information materials using DVD, produced in several languages (including Kinh, Hmong and Dao) on topics
such as commune supervision, operations and maintenance etc. This will be combined with the provision of audio-
visual equipment to communes. This should yield valuable experience and materials that could be used in other
programs.

75
10. Integration of programs at the local government levels

Review question: What is implied by the integration of projects and programs at the local
government levels (province, district and commune) and why?

During this review of NMPRP and CBRIP there was much discussion on the need for better
coordination and integration between different projects and programs working in the poor
communes. A situation exists today whereby many poor communes have several Government,
donor and/or NGO supported projects and programs working side-by-side, sometimes with
similar objectives and components, but often with different sets of regulations and procedures.
Promoting mechanisms to increase the coordination, complementarity and integration between
these projects and programs is becoming critical, in order to maximize local impacts and to reduce
the management burden on local staff.

Steps are already being taken by the authorities in several provinces and districts to improve this
situation. At the same time, there is some uncertainty about what ‘integration’ actually means in
this context. Based on the discussions held during this review, we can make the following
observations and suggestions on this important issue:

• The need for improved overall coordination and integration of different sources of capital
investment and programs by the Province People’s Committees, and Department for Planning
and Investment.

• The need to establish more unified Program Management / Coordination Board structures and
systems at district and commune levels. These are already being introduced in some provinces
(such as in Lao Cai). The model of a single ‘Commune Development Board’ or ‘Commune
Program Coordinating Board’ to enhance grassroots initiatives and facilitate effective
integration of resources is an important initiative.

• The integration of different programs in Commune Annual Plans and 5-year planning cycles
(in terms of integrating approaches and resources). This is beginning to take place in some
communes visited in this review, and represents an important step forward. However,
conditions and the possibility for this type of integration depends very much on the awareness
of local leaders and staff capability, as well as active support from program managers at
higher levels to allow and encourage communes to do this.

• This needs to be combined with development of a stable organizational mechanism for

technical staff at the commune level, to ensure consolidation of their skills and experience
(and to avoid too frequent turnover of technical staff).

• The harmonization of essential procedures for procurement under community development

programs (e.g. procurement thresholds and methods), is one of the most urgent aspects for
improved integration.

• This needs to be combined with more consistent financial mechanisms at the local level,
including financial management and reporting systems and requirements, disbursement and
liquidation procedures, and rationalization of cost-norms between programs (but
geographically differentiated to cover actual costs in remote areas).

76
• The integration and institutionalization of capacity building and training activities is also
important, by linking program training activities to cadre training in the Program on Public
Administration Reform, and working through the Province Training Schools.

• Ensuring connectivity in infrastructure investments (e.g. in road area networks) made through
community development and sector investment programs.

• Lastly, by always providing training linked to infrastructure and livelihood activities (e.g.
O&M training with irrigation schemes; veterinary health training with livestock inputs).

77
Annex 1. Review questions

1. Capacity building. How successful have the projects been in building capacity in the
different aspects project management and implementation at the local level (especially at
district and commune levels)?
• The scope, quality and effectiveness of the training provided in project management,
financial management, supervision etc;
• The effectiveness and sustainability of capacity building at the local level to enable
Communes to be the Investment Owners;
• Linkages between the capacity building activities of the projects with the regular
Government training program and training systems for commune cadres;
• The role of Community Facilitators and the quality of the technical support provided by
district level to communes.

2. Implementation mechanisms. How effective are the investment mechanisms and

project procedures in delivering the intended benefits, and how do these investment
mechanisms and procedures compare to other Government programs and donor-assisted
projects?
• Overall delivery mechanisms – how to transfer funds to commune level so that they can be
used effectively to meet different local needs;
• Constraints and solutions in fund flow and disbursement, with respect to different types of
project activity and procurement procedures;
• Comparison of the effectiveness of the procedures under CBRIP and NMPRP with those
of other Government and donor projects and programs;
• Opportunities for increasing the alignment and harmonization between Government and
donor procedures in future programs;
• Comparison of the effectiveness of the infrastructure investments under CBRIP and
NMPRP with those of other Government and donor projects and programs.

3. Ownership and participation. How successful have the projects been in encouraging
local participation in project activities and ownership of project investments, in line with the
Government policies on administrative reform and local democracy?
• The effectiveness of project strategies to promote local participation in infrastructure
investments (selection, design, supervision, operations and maintenance, and provision of
paid labour opportunities to local people);
• The effectiveness of information provision and dissemination by the projects with respect
to people’s participation in project planning, supervision of works, and land acquisition
and compensation (social safeguards);
• The quality of investment supervision at the local level (including technical supervision
and community supervision), and constraints and solutions to improve this aspect in the
future.

78
4. Sustainability. How successful have the projects been in addressing and contributing to
the sustainability of these investments?
• The sustainability of commune and village infrastructure investments with respect to
operations and maintenance (responsibilities and financing for operations and
maintenance);
• The extent to which infrastructure schemes are fully completed, and linkages between
infrastructure investments (e.g. linkages in road networks) to maximize benefits.

5. Targeting and benefits. How successful have the projects been in targeting and
reaching their intended beneficiary groups, and what measures can be taken to improve
targeting in the future?
• The extent to which the projects have responded to the needs and situation of different
ethnic minority groups in the project areas;
• The extent to which the projects have reached the poorest population groups and the most
remote villages and hamlets within the communes;
• The scope of the projects in terms of their different components (relating to infrastructure
and livelihoods), and how these components fit together to deliver comprehensive impacts
and benefits;
• The experience of the projects in generating local employment (e.g. through paid labour
on infrastructure schemes), and how can programs be combined more effectively with
employment and income generation in the future.

6. Management. Are the management structures and systems under the projects
appropriate and effective?
• The clarity of the roles and responsibilities of the management units at different levels;
• The effectiveness of the management units at different levels in supporting each other – in
terms of response mechanisms, timing, technical support, flows of information etc;
• The ‘level of commitment’ among staff and management units at different levels, and
incentives for effective management.

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Annex 2. Fieldwork methods

A) District Review Workshops

Objectives
A one-day review workshop will be held in 1 district in each project area (also to be attended by
the Project Supervision Missions that will take place in April and May).

The objective of the workshops will be to consult with district and commune authorities and
project management staff, to understand their viewpoints and opinions on the effectiveness, and
strengths and weaknesses of the projects.

The workshops will be organized around a number of discussion topics including: local capacity
building; the level of project effectiveness; local participation; and project sustainability. These
topics will be introduced by the Review Team, after which contributions and ideas will be made
by district and commune level participants in turn (see the agenda below).

Note – the district and communes will not be required to prepare and present a written report at
the workshop. However, they should be prepared to respond to the discussion topics introduced at
the workshop (these discussion topics will be sent to the district in advance).

Participants

1 Review Team
2 Project Supervision Mission Team
3 DPI / Province Project Management Unit

District level:
4 District People’s Committee
5 District People’s Council
6 District Planning and Finance Section / District Project Management Unit
7 District Treasury
8 District Bank
9 Other district sections / mass associations as required

Commune level – from all project communes in the district:

10 Commune Peoples Committee / Commune Development Board
11 For CBRIP – Commune Facilitators
12 For NMPRP – Commune Supervision Board representative
13 Head of Women’s Union

Group discussion methods

¾ The participants will be divided into 3 group for the discussions – one group with the district
and province level participants, and two groups of commune participants.
¾ Each group is assigned a facilitator, and one of the other Review Team members will act as a
secretary and note-taker.
¾ The other Review Team members will divide themselves equally between the discussion
groups (and should take a mainly observer status during the discussion sessions).

80
¾ Each group should nominate one or two participants from the group who will report back to
the workshop in the afternoon session.
¾ Each group should try to complete all four Discussion Topics that are listed below.
¾ Please remember that there are some issues, such as gender and ethnicity, that will cut across
all four discussion topics.

Group discussion topics (as for CBRIP Review workshop)

No.1 – The quality and effectiveness of the capacity building and training provided by the
Community Based Rural Infrastructure Project
• What have been the main changes and improvements in local capacity at commune and
district level that have resulted from the project?
• Which training topics have been most effective in terms of providing knowledge and skills
that can be practically applied in your work?
• Which aspects of local capacity are still weak and which need to be improved to enable
communes to fulfill their role as Investment Owners and managers?

No.2 – The effectiveness of project procedures and regulations

• What are the main constraints and difficulties you face (at commune and district level) in
managing and implementing the project at different stages of the infrastructure cycle?
• What solutions would you propose to these constraints and difficulties in terms of
improving project procedures and regulations?

No.3 – The effectiveness of the linkages between the different project management levels
and units and other main agencies involved in the project
• How effective are the linkages between the different project management levels and units
– for example, in terms of technical support, information flows, and timely response to
requests for information?
• Are the roles and responsibilities of the management units at different levels clearly
enough defined?
• What main improvements would you propose for the management system of this type of
decentralized project in the future?

No.4 – Comparison of the Community Based Rural Infrastructure Project with other
Government Programs that work in the same communes and which have similar
components (such as Program 135)
• What are the main strengths and advantages of CBRIP as compared to other Government
programs?
• What are the main weaknesses of CBRIP as compared to other Government programs?
• What changes can be made to improve the coordination and linkages between these
different projects and programs in the future?

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C) Commune Visits
¾ We will have a half-day visit to each commune.
¾ The visit will begin with a short introduction to the objectives of the review mission and
introduction to the team members and local participants.
¾ The commune will then be asked to give a presentation (around 15 to 20 minutes) about
the commune and project activities in the commune, followed by questions.
¾ The review team and local participants will then divide into 3 groups for further
discussions:
• Group one – discussion on project management aspects – with Commune Peoples
Committee, CPCC staff, the Community Facilitator, commune accountant etc;
• Group two – discussion on community participation, project benefits, and targeting
aspects – with local people (men and women), mass association representatives;
• Group three – visits to infrastructure schemes – with Commune People’s Council,
village heads, and commune technicians etc.
¾ The other Review Team members should divide equally between the groups according to
interest.
¾ One of the team members should volunteer to take notes on the discussion.

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Annex 3. Project documentation

CBRIP:

World Bank. 2001. Project Appraisal Document for the Community Based Rural Infrastructure
Project. Rural Development and Natural Resources Sector Unit (EASRD), East Asia and Pacific
Region, World Bank.

CBRIP. 2002. Project Implementation Manual. CPMU / MPI

CBRIP. 2003. Report on Project Implementation Progress to December 31 2003. CPMU / MPI

CBRIP. 2004. Report on Project Implementation Progress to December 31 2004. CPMU / MPI

CBRIP. 2004. Project Process Monitoring: first annual report (November 2003 to October
2004).The Louis Berger Group Inc. and VICA Consultants Ltd.

NMPRP:

World Bank. 2001. Project Appraisal Document for the Northern Mountains Poverty Reduction
Project. Rural Development and Natural Resources Sector Unit (EASRD), East Asia and Pacific
Region, World Bank.

NMPRP. 2002. Project Implementation Manual (Version 1). CPMU / MPI

Circular No. 57/2002/TT-BTC (dated 28 June 2002) of the Ministry of Finance, guiding financial
management mechanism for NMPRP.

Circular No.90/2003/TT-BTC (dated 24 September 2003) of the Ministry of Finance on

guidelines on the mechanism of financial management for the Commune Development Budget
Component under the Northern Mountains Poverty Reduction Project.

NMPRP. 2004. Report for the Mid Term Review. CPMU / MPI

NMPRP. 2005. Construction Experience Lesson Learning Study: summary report. WSP
International.

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Annex 4. Project cost summary tables

Community Based Rural Infrastructure Project

Component Sector Indicative % of Bank % of

Costs Total financing Bank-
(US$M) (US$M) financing
Strengthening planning System reform and 9.05 7.3 5.34 5.2
and implementation capacity building
capacity

Infrastructure Community action 107.57 87.2 94.30 91.7

development program
• commune level
infrastructure
• inter-commune
infrastructure

Project support services Institutional 6.79 5.5 3.14 3.1

development

Total Project Costs 123.41 100.0 102.78 100.0

Total Financing Required 123.41 100.0 102.78 100.0

Northern Mountains Poverty Reduction Project

Component Sector Indicative % of Bank % of

Costs Total financing Bank-
(US$M) (US$M) financing
Rural roads and markets Roads 34.00 25.7 31.00 28.2

Irrigation, water supply Agriculture 36.00 27.2 31.00 28.2

and agriculture

Basic education and Human development 18.00 13.6 16.00 14.5

health

Commune development Community action 17.00 12.8 16.00 14.5

budgets program

Planning and Institutionnel 9.00 6.8 8.0 0 7.3

management development

DFID co-financing Institutionnel 10.50 7.9 0.00 0.00

development

Unallocated Unidentified 8.00 6.0 0.00 7.3

Total Project Costs 132.50 100.0 110.00 100.0

Total Financing Required 132.50 100.0 110.00 100.0

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Annex 5. Financial management and disbursement procedures

1. Community-based Rural Infrastructure Project

1.1 Project financial management structure:

Ministry of Finance World Bank

Central Project
State Viet Nam
Treasury Management Unit (CPMU)
Bank of
system Agriculture
and Rural
Provincial Project Development
Management Unit (PPMU) (VBARD)
system

- Inter-communal Subproject
Management Unit
- Communal Project
Coordinator Committee

District Finance
Division
assists for
internal auditing

1.2 Disbursement procedure into Special Account at VBARD (Ha Noi branch):

Ministry of World Bank

Finance
(3)
(2) (4)
(1)

Central Project Special Account at

Management Unit VBARD -
Nam Ha Noi branch

85
Procedure:
(1) Based on the account limits as stipulated in the Credit Agreements and expenditure estimates
under the plan, the CPMU sends following documents to the Ministry of Finance (MOF):
− A letter requesting capital withdrawal.
− Withdrawal Application.
− Other attached documents.
(2) The MOF respond its opinions in writing to the CPMU and VBARD-Nam Hanoi branch.
(3) Submit the Withdrawal Application to WB.
(4) WB checks and accepts to transfer capital to the CPMU’s special account.

1.3 CPMU’s disbursement procedure from Special Account (SA):

Special Account at
Central State VBARD - Ha Noi
Treasury branch
(4)
(1) (5)
(2)
(3)
Central Project Tenders, suppliers,
Management Units consulting firms

Procedure (Chart 1: Disbursement under the pre-control form (for expenses of equipment
purchasing items):
(1) CPMU draws up the withdrawal documents (yearly, quarterly, monthly withdrawal schedule,
bidding winning agreement, consulting and goods supplying contract... sending to Central
State Treasury).
(2) Central State Treasury responds its opinion in writing to CPMU.
(3) Tender requests the CPMU’s payments
(4) CPMU agree to pay and set up order payment to VBARD-Nam Hanoi branch.
(5) VBARD pays for tenders from CPMU’s special account.

Special Account at
Central State VBARD -
Treasury Ha Noi branch
(2)
(4) (3)
(5)
(1)
Central Project Tenders, suppliers,
Management Unit consulting firms

Procedure (Chart 2: Disbursement under the after-control form (for expenses of consulting and
operation items):
(1) Tenders request the CPMU’s payments.
(2) CPMU agrees to pay and draw up an order payment to send to VBARD.

86
(3) VBARD - Nam Ha Noi branch pay for tenders.
(4) CPMU draw up documents (yearly, quarterly, monthly withdrawal schedule, bidding winning
agreement, consulting and goods supplying contract, relevant documents…sending to Central
State Treasury).
Central State Treasury sends its writing opinion to CPMU.
(5) Central State Treasury responds its opinion in writing to CPMU.

1.4 Disbursement procedure for Provincial Project Management Unit (PPMU):

CPMU Special account at

(4)
VBARD - Ha Noi
branch
(3)

(5)

Provincial PPMU account

State Treasury

(1) (2)

Expenses of training, CF's

salary, field allowances
PPMU
(DTSG included),
communal meeting

Procedure:
(1) PPMU sends the cost voucher, the listing of expense and attached documents to Provincial
State Treasury.
(2) Provincial State Treasury check the allocation fund (if any), sign on the cost voucher (or the
listing of expense) and turn back to PPMU.
(3) PPMU sends the controlled cost vouchers (or the listing of expense) to CPMU to request the
payment.
(4) CPMU requests the VBARD-Nam Ha Noi branch to transfer the retroactive capital into the
PPMU account.
(5) The VBARD-Nam Ha Noi branch transfers the retroactive capital into the PPMU account.

87
1.5 Disbursement procedure for inter-commune sub-projects:

CPMU Special account at

(5)
VBARD - Ha Noi
branch
(4)

PPMU

(6)
(*)

(3) District District Finance

State Division assists
Treasury for internal
auditing
(*)
(2)

District People
Tenders
Committee (DPC) (1)

Procedure: Because inter-commune subprojects are not advanced so the disbursement procedure
will be followed the retroactive form:
(1) Tender requests DPC to pay.
(2) DPC draws up the payments documents under regulation to send to District State Treasury.
(a) Investment Approval Decision, (b) Eligible Bidding Approval Document, (c) Economic
contract between the Owner and the Contractor, (d) Cost voucher schedule, (e) Settlement report
on completed work of subproject with full 4 co-signatures of: DPC Chairman, accountant,
contractor, and construction supervisors. Based on the payment request document, within 5
working days from receiving eligible documents, the District State Treasury will check, confirm
on the cost voucher schedule, make settlement the allocation capital, then turn back confirmed
cost vouchers to DPC (including the management and monitoring cost)
(3) DPC sends the treasury's confirmed cost voucher to the PPMU to request the capital allocation
for subproject.
(4) PPMU will check, summarize and request CPMU to transfer the capital for inter-commune
subproject.
(5) CPMU request VBARD to transfer the capital to contractors.
(6) VBARD pays for contractor.
(*) District Financial Division assists for internal auditing and reports to PPMU.

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1.6 Disbursement procedure for commune sub-projects:

(3)
CPMU Special account at
VBARD Ha Noi
(2) branch

(4)
PPMU

(*) The account of

CPCC at
commercial bank
(1) District State District
Treasury Finance
Division (8) (**)
(*)
(6)
(7)
Advance for
CPCC to
CPCC implement the
Tender
self-acting works
(5)

Procedure:
All of subprojects that approved for investing and listed in planning year will be advanced 50% of
subproject’s IDA capital from special account to the account of subproject opened at District
Bank of Agriculture and Rural Development.
(1) CPCCs propose to PPMUs to advance 50% IDA capital of subproject that approved and listed
in planning year. In the case of final disbursement, it requires the form of subproject completion
with full 4 co-signatures of: Head of CPCC, accountant, tender and construction supervisors.
(2) PPMUs summarize, check and propose for capital advance to send to CPMU.
(3) and (4) CPMU check and transfer the capital from special account to subproject’s account.
(5) The tender request the payment
(6) CPCCs send the following documents to District State Treasury to confirm (Investment
decision, the Bidding wining decision, Economic contract, Settlement report on completion work
of subproject, The complete list of cost voucher to request the payment). Within 5 working days,
District State Treasury should complete the confirming activities and turn back confirmed cost
voucher to CPCCs.
(7) CPCCs request to pay for tender.
(8) The District Bank of Agriculture and Rural Development pay for tender.
(**) For the self-acting works, CPCC make the capital withdrawal schedule in accordance with
the confirming progress of treasury. The District Bank of Agriculture and Rural Development will
advance for CPCC based on the confirmed withdrawal application. CPMU will disburse as
following order: (a) the first advance: 50% value of work, (b) the next advances are implemented
when the previous advance had been eligibly settled.
(*) The District Financial Division will assist for internal auditing activities for subproject’s
expenses, send the report to PPMU, and publicize the auditing result to communal people.

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2. Northern Mountains Poverty Reduction Project (NMPRP):

(Source: Circular No. 57/2002/TT-BTC dated 6/28/2002 of Ministry of Finance, guiding financial
management mechanism for NMPRP)

2.1 Capital withdrawal procedure into Special Account of CPMU:

Ministry of finance
Check and approve the (2)
withdrawal application

(1)

(3)
CPMU VBARD sign WB transfer
Prepare the the withdrawal capital into
withdrawal application application VBARD
(4)
send to IDA

Note: Document flow Capital flow

(1) CPMU sends the capital withdrawal application (Foreign Finance Relationship Department);
(2) MOF will check, respond its opinion in writing to CPMU and VBARD within 5 working days;
(3) Within 2 working days since receive MOF opinion, CPMU and VBARD co-sign into
withdrawal application and send to IDA; (4) WB check application and transfer capital into
CPMU's special account opened at VBARD.

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2.2 Capital withdrawal procedure into PPMU Special Accounts:

Ministry of finance (3)

Approve the withdrawal
application

(2)

(4)
CPMU VBARD sign the IDA transfer
Approve the application then capital into
withdrawal application send to IDA PPMU special
(5) account

(1) (1)

PPMU
Prepare the withdrawal
application

Note: (1) PPMUs prepare the withdrawal application to MOF and CPMU at once; (2) In case of
supplementary withdrawal, after receiving full of eligible documents, CPMU check and send to
MOF within 2 working days; in case of the first withdrawal, stage no.2 would be not occur; (3)
within 5 working days after receiving CPMU's confirming, MOF would have approval to send to
CPMU, PPMUs and provincial VBARD; (4) within 2 working days after receiving MOF'
approval, PPMUs and provincial VBARD co-sign the withdrawal application to send to IDA; (5)
IDA check, approve to transfer capital into special account at provincial VBARD.

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2.3 Withdrawal from the special account of CPMU:

State Treasury verifies, VBARD

approves the completion make payment
work and transfers the (from IDA source)
allocation capital to tender

CPMU check, agree to Tender implement the

send application to State contract and request for
Treasury payment

2.4 Withdrawal from PPMU special accounts:

Provincial State Treasury Provincial VBARD

verifies, approve the make payment
completion work and transfer (IDA source)
allocation capital for tender

PPMU check, approve, send Tender implement the

application to Provincial contract and request for
State Treasury payment

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2.5 Withdrawal from sub-special account (advance and supplementary withdrawal)

PPMU Provincial
(2)
VBARD

(1) (3)

DPMU District state District

treasury VBARD
(4) (4)

(5) (4)
Tender

Note:
(1) DPMUs submit the withdrawal application to PPMU for sub-special account at District
VBARD.
(2) After checking, approving, PPMUs deal with provincial VBARD to make the first or
supplementary transfer capital for special account at district VBARD (sub-special account).
(3) Provincial VBARD transfer IDA fund from its special account to sub-special account at
district VBARD.
(4) DPMUs issue Payment Order to pay IDA fund from district VBARD for tender (after District
State Treasury confirm completion work document)
(5) District State Treasury pays the allocation capital for tenders.

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Annex 6. Activities under the CDBC of NMPRP

List of eligible activities

Sub-project activities are proposed by local people aiming at improving facilities and social life, and
supporting the production of the poorest people, provided these activities do not belong to the main
components of the NMPRP. The CDBC can be used for:

Public infrastructure:
• Investment for upgrading, repairing, building village-infrastructure: latrines, wells, cisterns at the
kindergartens and village classrooms, small bridges, repairing small-scale irrigation works, new or
upgraded village roads which are not over 300 meters long and can be done with 100 % local labor;
• Support for training courses on village management of irrigation schemes;
• Procurement and installation of small hydropower generators or improvement of the exiting ones
shared among households;
• Investment in radios, amplifiers, speakers for information dissemination in the commune or village, or
building of information posting boards in commune or villages.

Production improvement:
• Labour-saving mechanical tools for husking rice and corn, and choppers for animal feed, for the use of
household groups;
• Supports on procurements of small production tools to be shared by household groups or for very poor
households in villages;
• Costs of bringing a qualified veterinarians to the village to provide training in particular topic(s)
requested by villagers (veterinary issues, improvement in cattle feeding);
• Supports fund to procure agricultural, forestry, aquaculture extension documents for the villages;
• Visits to other communes for lesson learning (even to other provinces).

Natural resource management

• Support on training for activities in forest protection, such as preparation of fire protection belts or
reforestation in watershed areas;
• Establishment of communal nurseries;
• Activities to improve communal grazing land.

Healthcare and education:

• Costs of bringing a health professional to instruct villagers on specific health topics (e.g. women’s
health, hygiene, preventive health care);
• Educational materials for literacy classes for adults;
• Costs of hiring teachers to provide literacy lessons to adults;
• Initial inputs and training for development of extra-curricular school activities in agriculture and
animal raising, school vegetable gardens, seed nurseries, poultry and pig raising.

Community facilities:
• Costs of hiring technicians to instruct villagers in the construction of household latrines or improved
stoves;
• Training costs to promote the local production of building materials (tiles, bricks and others);

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• Support to groups of needy households for costs of building materials to improve housing and animal
shelters;
• Support fund to very poor households as to pay for their chidden to go to the school (e.g. clothes,
blankets, mosquito nets, books, rice etc. for poor pupils to go to boarding classes).

List of non-eligible activities

The CDBC cannot be used for:

Public infrastructure:
• New investment or rehabilitation of roads from the district to commune, commune to village, or inter-
village roads;
• New investment or rehabilitation of rural markets;
• New investment or rehabilitation of electricity sub-stations, any kind of electricity lines connected to
national electricity network;
• New investment or rehabilitation of reservoirs, water pump stations, drainage systems, any irrigation
schemes (except small-scale schemes serving groups of households);
• New investment or rehabilitation of culture houses of the commune or village (except small scale
repairs);
• New investment or rehabilitation of offices / gardens for the Commune People’s Committee;
• New investment or rehabilitation of larger water supply schemes (gravity-fed and pumped water
supply schemes);
• Any public infrastructure which need to contract a professional construction company.

Production improvement:
• Support for individuals, and individual households to implement on-farm or off-farm activities (e.g.
handicraft production, small-scale mechanic workshops etc.) except support for groups of households
(see eligible list).

Health and education:

• New investment or rehabilitation of kindergartens, village classrooms, or schools (except small scale
repairs);
• New investment in furniture, teaching equipment and materials;
• New investment or rehabilitation of commune health clinics (except small repair);
• Regular training courses for commune and villages teachers, or commune healthcare staff and village
health workers.

Natural resources, environment protection:

• Investment in exploiting minerals available in the commune area;
• Investment of commercial afforestation (except forestry-related activities mentioned in the eligible
list).

Physical condition improvement:

• Purchasing transportation means (such as motorbikes, bicycles etc) or other equipment for the
Commune People’s Committee.

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