The World Bank Vietnam: Project for Improved Land Governance and Databases (VILG) (P154387) REPORT NO.: RES56733 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF VIETNAM: PROJECT FOR IMPROVED LAND GOVERNANCE AND DATABASES (VILG) PROJECT APPROVED ON JULY 5, 2016 TO SOCIALIST REPUBLIC OF VIETNAM URBAN, RESILIENCE AND LAND EAST ASIA AND PACIFIC Regional Vice President: Manuela V. Ferro Country Director: Carolyn Turk Regional Director: Benoit Bosquet Practice Manager: Francis Ghesquiere Task Team Leader: Kathrine M. Kelm The World Bank Vietnam: Project for Improved Land Governance and Databases (VILG) (P154387) ABBREVIATIONS AND ACRONYMS EMDP Ethnic Minority Development Plan FA Financing Agreement GDLA General Department of Land Administration IDA International Development Association IT Information Technology MOF Ministry of Finance MONRE Ministry of Natural Resources and Environment MPLIS Multi-Purpose Land Information System MTIP Mid-Term Investment Plan PDO Project Development Objective The World Bank Vietnam: Project for Improved Land Governance and Databases (VILG) (P154387) BASIC DATA Product Information Project ID Financing Instrument P154387 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 05-Jul-2016 30-Jun-2023 Organizations Borrower Responsible Agency Socialist Republic of Vietnam Project Development Objective (PDO) Original PDO The Project Development Objective (PDO) is to improve the efficiency and transparency of land administration services in the Project Provinces, through the development and implementation of the national Multipurpose Land Information System (MPLIS). OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-58870 05-Jul-2016 23-Dec-2016 23-Mar-2017 30-Jun-2023 60.41 42.70 14.85 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank Vietnam: Project for Improved Land Governance and Databases (VILG) (P154387) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Background 1. This Level 2 restructuring paper seeks approval for a third restructuring of the Vietnam Improved Land Governance and Database Project (Credit No. 5887-VN) in response to a letter from the Ministry of Finance (MOF) dated May 29, 2023, requesting certain amendments to the Financing Agreement. The first restructuring was approved on December 31, 2021, (i) extending the project closing date from December 31, 2021 to June 30, 2023, (ii) cancelling SDR 34,937,383 (US$49.152 million equivalent) of International Development Association (IDA) credit proceeds, (iii) making changes to components and costs, (iv) reallocating proceeds between disbursement categories, and (v) adjusting the project’s disbursement estimate. The second restructuring was approved on May 30, 2023, (i) cancelling additional SDR 30,437,104 ( US$ 40.691 equivalent) of IDA credit proceeds, (ii) making changes to the project’s institutional arrangements, (iii) revising the results framework, (iv) making changes to components and costs; and (v) reallocating proceeds between disbursement categories. This third restructuring seeks Country Director’s approval to make further changes to the project’s scope arising from the cancellation of IDA credit proceeds in December 2021 and May 2023, and government changes to the eligibility of expenditures and financing of taxes. 2. An IDA credit in the amount of SDR 107 million (US$150 million equivalent) for the Vietnam Improved Land Governance and Database Project was approved on July 5, 2016, and the financing agreement (FA) became effective on March 23, 2017. The project development objective (PDO) is to improve the efficiency and transparency of land administration services in the Project Provinces, through the development and implementation of the national Multipurpose Land Information System (MPLIS). The project has three components: Component 1: Strengthening the Quality of Land Service Delivery; Component 2: Establishment of the Multi-Purpose Land Information System and Land Database; and Component 3: Project Management. As a result of the restructurings, the IDA credit amount is SDR 41,625,513, the project closing date is June 30, 2023. The project supports provinces which do not have resources to digitize their land information and provide related services with provinces’ own budget resources. 3. Although the project was declared effective on March 23, 2017, project implementation was delayed by two years due to complex government procedures for including the project in the country’s Mid-Term Investment Plan (MTIP) and the associated approval of the related budget allocation. The delay impacted the readiness of the project provinces since regulations did not allow them to proceed with signing on-lending arrangements until the project was included in the MTIP with budget allocated. These delays seriously impacted on the project’s implementation schedule, requiring revisions to the project plan, procurement plan, and disbursement estimates. Due to the complexity of the project-financed information technology (IT) system (the MPLIS) and software review, including cyber security requirements for land information, it took the government additional time to make the final decision on which software/system should be used. In early 2021, the Ministry of Natural Resources and Environment (MONRE) approved the new software and the IDA-financed contracts to digitize land data and create a land database were scaled up. The General Department of Land Administration (GDLA) was re-organized in late 2022 and MONRE assigned a new project owner – its Department of Registration and Land Information Database, with the same central Project Management Unit and personnel. 4. The first restructuring cancelled IDA credit proceeds because of MONRE’s decision to finance the MPLIS infrastructure through other government sources and a decision to reduce the coverage of the project from 33 to 30 provinces. The 18-month extension was authorized to ensure the completion of the digital land database The World Bank Vietnam: Project for Improved Land Governance and Databases (VILG) (P154387) development and data digitization for the new MPLIS, as well as to integrate it with the public service portal to provide land-related services. The second restructuring canceled additional unspent IDA credit proceeds, formalized an updated Results Framework (RF) and recognized the internal MONRE restructuring which assigned the project to a new department. At the time of the two restructurings, the government had not completed the internal process for requesting an amendment to the FA to reflect these changes. B. Project Status 5. The project has achieved the followings main results to meet the project PDO and is on track to meet the overall objectives: - land office structures have been unified with standardized procedures, staff have been trained to use the system and are using the digital environment for their daily work which facilitates more efficient and transparent land service delivery. - the massive data digitization process funded by IDA provides the data basis for MONRE to meet the Resolution 18 requirement for a National Land Database. - database integration with several government agencies continues, with the tax authority, provincial level one-stop-shops (OSS), the public service portal, and the national citizen ID registry. 6. The project implementation since project restructuring in December 2021 shows significant effort from 28/30 provinces (except Kien Giang and Bac Ninh). Despite hands-on support from both MONRE and the WB Task team, Kien Giang and Bac Ninh were not able to engage timely in project activities and ultimately decided not to continue with project activities. They spent some counterpart funds but no IDA funds. 7. There are 3 PDO indicators to be monitored, and 2 out of 3 indicators have achieved the end target as follows: Indicator 1: Number of accesses to the MPLIS has surpasses the end target with 2.3 million hits out of a target of 2 million hits (106%) and is estimated to reach 120% by the closing date. Indicator 2: Average time to register a simple land transfer: the end target of 10 days has been achieved. Indicator 3: The status of Customer satisfaction with land services in project areas is awaiting the results of the independent assessment. However, field visits and interviews by the task team in April-June 2023 show anecdotally that stakeholders’ satisfaction of the land services in project areas is high. 8. For the three project components and 12/14 indicators have already achieved their end targets, as follows: IRI 1.1: Percentage of LROs and branches comply with agreed procedures and standards in public land service delivery: The actual result is 96%, higher than the end target of 90% and will reach 100% by the closing date. IRI 1.2: (was deleted) IRI 1.3 Number of provinces that established a centralized provincial LRO with uniform structure: The actual target is achieved at 100%. IRI 1.4 Percentage of managers and officers of LROs, branches, and cadastral officers of Commune People's Committees trained on land administration service delivery in digitized environment: The actual result is 100%, higher than the end target of 90%. IRI 1.5 Number of EMDPs implemented in project areas: The actual target is achieved at 100%. The World Bank Vietnam: Project for Improved Land Governance and Databases (VILG) (P154387) IRI 1.6 Percentage of ethnic minority communities in the project areas engaged in EMDP implementation: The actual target is achieved at 100%. IRI 2.1 Percentage of LROs/branches that have installed and implemented MPLIS: The actual result is 100%, higher than the end target of 90%. IRI 2.3 Percentage of LROs and branches connected with other sectors and data accessed by the user- entities: The actual result is 96%, higher than the end target of 90%. IRI 2.4: Percentage of LROs providing land information (through website, sms): land database and information are available in the system for access by different user groups through the DONRE's website as well as the NLIS national land portal. The project is waiting for the specific regulations from MONRE on the right to access land information. The actual result is percentages of LRO with database and information available. But the database and information can only be accessed by the public once MONRE issues specific regulation. IRI 2.5 Percentage of provinces in which an integrated land database is operational and available for public access: The actual result is 98%, higher than the end target of 90%. IRI 2.6 Percentage of end users trained on MPLIS: The actual result is 100%, higher than the end target of 90 %. IRI 2.7 Percentage of provinces with an established connection and regular data exchanges between LROs/branches and other public service providers: The actual result is 95,5%, higher than the end target of 90%. IRI 3.1 M&E system operational: The M&E system is fully operational. The end target is achieved. 9. There are 2 remaining component activities/IRIs that are expected to be completed by the closing date are: IRI 2.2: Percentage of all land parcels (with LURCs and without it) that are geo-referenced and registered: This indicator will be compiled from the land database using software tools by the closing date. It is anticipated that the target will be achieved by the closing date. IRI 3.2 Impact assessment: Independent assessment must use counterpart funds and is delayed, but it will be finished by September 2023. 10. Procurement and FM ratings are MS and the overall risk rating in the last ISR was Moderate and will likely be lowered in the final ISR. The project triggers OP/BP 4.01 (Environmental Assessment) and OP/BP 4.10 (Indigenous Peoples) and is in compliance with these safeguards policies, including the implementation of Ethnic Minority Development Plans (EMDPs) in 20 project provinces with ethnic minorities. The borrower is also operating a local level Grievance Redress Mechanism. The environmental safeguards performance has been rated Satisfactory while the social safeguard performance has been rated Moderately Satisfactory pending completion of the EMDP implementation, and will be upgraded in the final ISR because the EMDPs have now been completed. The project is in compliance with all other legal covenants and there is no outstanding audit and interim financial reports. There are no residual safeguards issues as a result of the changes in project scope. II. DESCRIPTION OF PROPOSED CHANGES 11. The MoF letter requested certain amendments to the FA to ensure that the project description focuses only on The World Bank Vietnam: Project for Improved Land Governance and Databases (VILG) (P154387) project-financed activities as agreed in the restructurings, the names of the 30 Project Provinces are those authorized by the restructurings, and the Withdrawal Table reflects changes to eligible expenditures and financing of taxes. Change to components 12. Component 1: According to domestic regulations, issued after the approval of the IDA credit, non-investment activities are not eligible for financing by Official Development Assistance resources like the IDA credit. Thus, several activities designed under Component 1 (Part 1 of the FA), such as public awareness raising and monitoring and evaluation of land use management, have been implemented using other government funding sources mobilized under separate projects. The project instead has only financed activities in support of the unified land service delivery by developing and applying a Land Services Manual, providing equipment to the land registration offices, and implementing the EMDPs. The restructuring and amendment reflect this scope change. 13. Component 2: The establishment of the MPLIS IT system (providing the national-level datacenters, upgrading and maintenance of MPLIS software, training, and capacity building for MPILS operations) will be removed from Component 2 (Part 2 of the FA) because the government decided to independently develop the software and provide the IT system infrastructure through an IT service provider rather than develop and maintain the system in-house as envisioned at project preparation. This system is currently referred to as an ‘interim MPLIS’ as it undergoes the official review and approval processes by the government. Part 2 will instead focus on a more limited set of activities, such as the preliminary design of the MPLIS, provision of equipment for operation, and data digitization for the land database (i.e., the data for the MPLIS) in the project provinces. The restructuring and amendment reflect this scope change. 14. In summary, the following activities will not be financed by the project: i. Component 1: Program of public awareness raising and civic engagement on the MPLIS; and monitoring and evaluation of land use management. ii. Component 2: Development of the MPLIS, including the provision of support for national-level virtual data centers, upgrading and maintenance of MPLIS software, carrying out of training and capacity building activities for central and subnational level staff on MPLIS operations management and a national land database; and development and piloting of electronic transactions at selected land registration offices; and enabling public and inter-agency engagement in land information services, including the establishment of an MPLIS land portal with different interface for the government, private sector and general public to facilitate access to and sharing of land information. 15. Accordingly, the revised project scope noted in the FA, which is formalized through this restructuring, is as follows: Part 1. Strengthening the Quality of Land Service Delivery: Supporting quality enhancement of land service delivery and public awareness raising for ethnic minority, including: A. Modernizing and strengthening the quality of land service delivery, including: the development of a handbook for land service delivery to ensure the availability of land-related information to all stakeholders, and provision of equipment to facilitate the carrying-out of administrative procedures in the land sector. B. Implementation of Ethnic Minority Development Plans. The World Bank Vietnam: Project for Improved Land Governance and Databases (VILG) (P154387) Part 2. Development and Operation of Land Database on the MPLIS: Developing and operating the land database of the Project Provinces based on centralized and unified technical infrastructure for land governance, supporting land services and land information sharing, including: A. Development of the primary design of the MPLIS and provision of equipment for operation of land database of the Project Provinces. B. Development and implementation of land database for the Project Provinces. Part 3. Project Management: Provision of support for project implementation, reporting and monitoring and evaluation activities. Change to Project Provinces 16. The reduction in the number of provinces from 33 to 30, authorized in the December 2021 restructuring, is now formalized contractually through the corresponding government request to amend the FA. Project Provinces include Bac Giang, Lang Son, Cao Bang, Son La, Yen Bai, Quang Tri, Tra Vinh, Thai Binh, Nam Dinh, Lao Cai, Nghe An, Ha Tinh, Phu Yen, Ben Tre, Thai Nguyen, Ninh Binh, Ha Nam, Thua Thien Hue, Quang Ngai, Dak Lak, Tien Giang, Long An, Tay Ninh, An Giang, Vinh Long, Kien Giang, Bac Ninh, Hai Phong, Khanh Hoa, and Can Tho. Changes to Eligible Expenditures and financing of taxes 17. Due to abovementioned limitations on the use of IDA credit proceeds for non-investment activities and taxes, the FA will have a revised Withdrawal Table as follows: Category Amount of the Financing Percentage of Expenditures to Allocated (expressed in SDR) be Financed (1) Goods, Works, Consulting Services, 41,625,513 90% for Technical Services and Non-Consulting Services, Training and 100% for all other Eligible Workshops, Incremental Operating Costs Expenditures (inclusive of Taxes and Technical Services (except that for the Eligible Expenditures Training and Workshops, Non-Consulting incurred before January 1, 2022, Services, and Incremental Operating Costs and exclusive of Taxes for the shall not be financed out of the proceeds Eligible Expenditures incurred on of the Financing if said expenditures have or after January 1, 2022) been incurred on or after January 1, 2022) Amount cancelled as of December 30, 34,937,383 2021 Amount cancelled as of May 22, 2023 30,437,104 TOTAL AMOUNT 107,000,000 The World Bank Vietnam: Project for Improved Land Governance and Databases (VILG) (P154387) III. SUMMARY OF CHANGES Changed Not Changed Components and Cost ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ Results Framework ✔ Loan Closing Date(s) ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursements Arrangements ✔ Disbursement Estimates ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) The World Bank Vietnam: Project for Improved Land Governance and Databases (VILG) (P154387) OPS_DETAILEDCHANGES_COMPONENTS_TABLE COMPONENTS Current Current Proposed Proposed Cost Action Component Name Component Name Cost (US$M) (US$M) Strengthening Quality of Land Strengthening Quality of Land 1.52 No Change 1.52 Service Delivery Service Delivery Establishment and Development of the Multi-Purpose Land Development and Operation of 73.39 Revised 73.39 Information System and Land Land Database on the MPLIS Database Project Management 8.10 No Change Project Management 8.10 TOTAL 83.01 83.01 .