Document of
The World Bank
Report No: 68891-VN
RESTRUCTURING PAPER
ON A
PROPOSED RESTRUCTURING
OF
VIETNAM PROCUREMENT THRESHOLD FOR SELECTED PROJECTS
(SEE ANNEX 1)
MAY 9, 2012
ABBREVIATIONS AND ACRONYMS
EAP East Asia and Pacific Region
FY Fiscal Year
GEF Global Environment Facility
IBRD International Bank for Reconstruction and Development
IDA International Development Association
MT Montreal Protocol
WB World Bank
RE Recipient-Executed Grant
Regional Vice President: Pamela Cox
Country Director: Victoria Kwakwa
Sector Managers / Directors: Luis Benveniste, Toomas Palu, Doyle Gallegos,
Sudhir Shetty, Hormoz Aghdaey, Jennifer Sara
Task Team Leader: TTLs of 22 projects
2
VIETNAM PROCUREMENT THRESHOLDS
P066149
CONTENTS
Page
A. SUMMARY ........................................................................................................................... 4
B. CURRENT STATUS ............................................................................................................ 4
C. PROPOSED CHANGES ...................................................................................................... 4
ANNEX 1: LIST OF PROJECTS SUBJECT TO RESTRUCTURING .................................... 6
3
VIETNAM PROCUREMENT THRESHOLDS
RESTRUCTURING PAPER
A. SUMMARY
1. The purpose of this Restructuring Paper is to seek the approval of the Country
Director to proceed with an umbrella restructuring to change the provisions for the
Bank’s review thresholds specified in the respective Development Credit Agreement
(DCA) or Financing Agreement (FA) for the projects in the Vietnam portfolio listed in
Annex 1 (see Section C).
2. Vietnam’s procurement thresholds were increased in March 2012 for the whole
portfolio (see Table 1). For new projects under preparation and on-going projects for
which the Financing Agreements do not specify the procurement thresholds, the new
thresholds are already being applied or will be reflected in the procurement plans. For
ongoing projects for which the Financing Agreements indicate specific procurement
thresholds, a restructuring is necessary to amend the procurement prior review
provisions.
3. In line with guidance received from OPCS, this Restructuring Paper, due to its
“umbrella�? nature, will go through all the necessary clearances and approval via email
rather than through the portal, and will not include datasheets. Once approved, it will be
recorded in WBdocs under each project file. OPCS will be notified shortly after, to
ensure that a Level 2 restructuring is appropriately recorded in the system for each of the
affected operations.
Table 1: Vietnam’s Revised Procurement Thresholds
4
B. CURRENT STATUS
4. As of end-March 2012, the Vietnam portfolio consists of 55 active operations,
consisting of the following:
- 47 IDA
- 3 IBRD
- 2 GEF Operations
- 1 Montreal Protocol Operation
- 2 Recipient Executed Large Trust Funds
5. The Vietnam portfolio has generally been performing in line with, or better than the
EAP region and the World Bank as a whole. This is reflected in key performance
indicators, such as the incidence of problem projects and projects at risk of not achieving
their development objectives, and proactivity index (see Figure 1).
Figure 1: Vietnam Portfolio Key Performance Indicators FY10-12
Source: Business Warehouse. FY12 data as of 04/03/2012
6. With regards to disbursement ratio, however, the Vietnam portfolio has lagged behind
both the EAP region and the Bank (see Figure 2). Consequently, disbursement ratio has
become an area of attention, with the ultimate objective of increasing the impact of the
Vietnam program through more funds reaching its beneficiaries in an accelerated manner.
To do so, the Country Management Unit, in close cooperation with Sector Units, has
undertaken an effort to identify existing bottlenecks and specific solutions to this issue.
One of them was identified in Vietnam’s low procurement thresholds, which were found
to significantly and unnecessarily increase the duration and complexity of the
procurement process, with evident costs to the client, the Bank, and ultimately the
beneficiaries.
5
Figure 2: Vietnam Disbursement Ratio vs. EAP Region and World Bank
Source: Business Warehouse. FY12 data as of 04/03/2012
C. PROPOSED CHANGES
The specific change for which approval is sought through this Project Paper is to
change the provisions for “Review by the Association of Procurement Decisions�? of
DCA or FA to reflect the new thresholds as defined in Table 1 of this restructuring
paper.
6
ANNEX 1: List of projects subject to restructuring
Credit
P code Legal Agreement SM
No.
4608 P091747 Financing Agreement dated August 21, 2009 for ‘School Education Quality Assurance Program’ Luis Benveniste
4786 P110693 Financing Agreement dated August 13, 2010 for ‘New Model University Project’ Luis Benveniste
4398 P082672 Financing Agreement dated July 10, 2008 for ‘Northern Upland Health Support Project’ Toomas Palu
4688 P095275 Financing Agreement dated May 25, 2010 for ‘Central North Health Support’ Toomas Palu
Development Credit Agreement dated June 1, 2006 for ‘Vietnam Information and Communication
4116 P079344 Doyle Gallegos
Technology Development Project’
3767
P075399 Financing Agreement dated April 7, 2011 for ‘Public Financial Management Reform Project’ Sudhir Shetty
4863
4361 P099376 Financing Agreement dated March 28, 2008 for ‘Tax Administration Modernization Project’ Sudhir Shetty
Financing Agreement dated April 21, 2009 for ‘Financial Sector Modernization and Information
4505 P088759 Hormoz Aghdaey
Management Project’
4407 P096418 Financing Agreement dated June 16, 2008 for ‘Vietnam Land Administration Project’ Jennifer Sara
4518 P108885 Financing Agreement dated December 9, 2008 for ‘Agriculture Competitiveness Project’ Jennifer Sara
Financing Agreement dated December 10, 2009 for ‘Livestock Competitiveness and Food Safety
4649 P090723 Jennifer Sara
Project’
Financing Agreement dated May 25, 2010 for ‘Second Northern Mountains Poverty Reduction
4698 P113493 Jennifer Sara
Project’
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5032 P075407 Development Credit Agreement dated May 17, 2007 for ‘Third Rural Transport Project’ Jennifer Sara
Financing Agreement dated November 22, 2007 for ‘Mekong Delta Transport Infrastructure
4306 P083588 Jennifer Sara
Development Project’
4347 P083581 Financing Agreement dated November 22, 2007 for ‘Hanoi Urban Transport Development Project’ Jennifer Sara
Financing Agreement dated November 10, 2008 for ‘Northern Delta Transport Development
4474 P095129 Jennifer Sara
Project’
3887
P070197 Financing Agreement dated September 10, 2009 for ‘Urban Upgrading Project’ Jennifer Sara
4604
Development Credit Agreement dated March 19, 2007 for ‘Coastal Cities Environmental Sanitation
4253 P082295 Jennifer Sara
Project’
Financing Agreement dated August 28, 2008 for ‘Da Nang Priority Infrastructure Investment
4402 P086508 Jennifer Sara
Project’
4609 P094055 Financing Agreement dated August 12, 2009 for ‘Local Development Investment Funds Project’ Jennifer Sara
Development Credit Agreement dated March 2, 2006 for ‘Red River Delta Rural Water Supply and
4115 P077287 Jennifer Sara
Sanitation Project’
Financing Agreement dated May 25, 2010 for ‘Additional Financing for Red River Delta Rural
4710 P113496 Jennifer Sara
Water Supply and Sanitation Project’
8