The World Bank Vietnam New Model University Project (P110693) REPORT NO.: RES46442 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF VIETNAM NEW MODEL UNIVERSITY PROJECT APPROVED ON JUNE 24, 2010 TO SOCIALIST REPUBLIC OF VIETNAM EDUCATION EAST ASIA AND PACIFIC Regional Vice President: Victoria Kwakwa Country Director: Carolyn Turk Regional Director: Daniel Dulitzky Practice Manager/Manager: Tobias Linden Task Team Leader(s): Dung Kieu Vo, Dilip Parajuli The World Bank Vietnam New Model University Project (P110693) ABBREVIATIONS AND ACRONYMS FSP Financial Sustainability Plan IDA International Development Association IP Implementation Progress IR Intermediate Result ISI Institute for Scientific Information ISM Implementation Support Mission ISR Implementation Status and Results Report MOET Ministry of Education and Training MS Moderately Satisfactory NMUP New Model University Project PB Presidential Board PDO Project Development Objective RF Results Framework S Satisfactory SFR Special Financing Regime UC University Council VGU Vietnamese German University The World Bank Vietnam New Model University Project (P110693) BASIC DATA Product Information Project ID Financing Instrument P110693 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 24-Jun-2010 31-May-2021 Organizations Borrower Responsible Agency Socialist Republic of Vietnam Ministry of Education and Training Project Development Objective (PDO) Original PDO The project aims to develop an autonomous research-based university to demonstrate a new policy framework on governance, financing, and quality in Vietnam's higher education system. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-47860 24-Jun-2010 13-Aug-2010 27-Dec-2010 31-May-2021 180.40 149.87 17.80 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank Vietnam New Model University Project (P110693) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING 1. This paper seeks approval to restructure the Vietnam New Model University Project (P110693) ("the project"), by cancelling US$ 15,300,000 million (equivalent to SDR 10,680,031.831) from the original International Development Association (IDA) credit amount of US$ 180.4 million (equivalent to SDR 119.4 million). 2. This is the fifth proposed restructuring. The first restructuring in May 2016 was part of a portfolio-wide restructuring affecting 13 projects to remove the result framework (RF) from the financing agreement. The second restructuring in November 2017 extended the project for an additional 36 months to November 30, 2020, revised the RF and revised categories of expenditures and changed component cost, changed institutional implementation arrangements, updated the procurement procedures, and changed the frequency and due date of interim unaudited financial reports. The third restructuring in August 2019 revised the RF to better reflect Vietnamese German University (VGU) research development trend, better align with the Government of Vietnam’s prevailing regulations on Student Employability Survey, and VGU strategic development. The revised RF also provides clearer and more consistent interpretation and description of the indicators. No changes to the credit amount were made during these restructurings. The fourth restructuring in November 2020 extended the project closing date by six months from November 30, 2020 to May 31, 2021 to make up for the implementation time lost due to COVID-19 pandemic. 3. The project was approved on June 24, 2010, and became effective on December 27, 2010. The project development objective (PDO) is to develop an autonomous research-based university to demonstrate a new policy framework on governance, financing, and quality in Vietnam’s higher education system. 4. The first 30 months of project implementation encountered a delay because the preparatory work for civil work and university development was more complex than anticipated during project design. A 2-year action plan was put in place to remedy the situation. Accordingly, the project was upgraded in June 2015 following progress made in the previous six months period and until June 2017 could maintain Moderately Satisfactory ratings for both progress towards achievement of the PDO and overall implementation. After the 36-month extension in 2017, however, the project implementation did not progress as was expected during June 2018-June 2019, mainly due to the lack of agreement with the German government (both Federal Ministry of Education and Research of the Federal Republic Germany and the State Ministry of Higher Education, Research and the Arts of the Land Hessen) over financing and academic program development, inadequate and ineffective staffing in the Project Management Unit (PMU), unavailability of counterpart funding, and slow procurement. By June 2019, given the continuous efforts by all stakeholders, the project made a turn-around with signing of a Joint Declaration of Intent on VGU development and expansion in April 2019, between the Ministry of Education and Training (MOET) and Federal Ministry of Education and Research of the Federal Republic of Germany and the State Ministry of Higher Education, Research, and the Arts of the Land Hessen. In April 2020, the Government of Vietnam by Resolution 52 approved the Tripartite Partnership Agreement (the Agreement) and delegated MOET to sign. This was a major step forward that led to the signing of the Agreement on September 23, 2020, increasing the likelihood of the project fully achieving its development objectives by the project closure. 5. Since June 2019, the project has maintained a positive momentum of progress toward the achievement of the PDO: the achievement of the PDO and overall implementation progress (IP) are both rated moderately satisfactory. Other project ratings2 are either satisfactory or moderately satisfactory, including implementing agency performance. By April 2021, out of four PDO indicators, PDO indicators 1 and 4 have been fully achieved, and PDO indicators 2 and 3 1Client connection exchange rate dated May 5, 2021 2Only the procurement rating for the June 2019 implementation status and results report (ISR) was rated Moderately Unsatisfactory, but subsequently upgraded to Moderately Satisfactory in December 2019, June 2020, and November 2020 ISRs. The World Bank Vietnam New Model University Project (P110693) have been partially achieved. For intermediate result (IR) indicators, the targets of seven out of ten IR indicators have been fully met, and three IR indicators are partially met3. 6. Key achievement since the last restructuring and implementation status and results report (ISR) and towards successful closure includes: One, based on the Tripartite Partnership Agreement (TPA) 4, which framed the long-term commitment made by both Governments to guarantee the VGU international standards in teaching and research and to set it on a path towards financially sustainable development, the final draft Special Financing Regime (SFR) was approved by the University Council (UC) in January 2021 and then submitted to the MOET on January 27, 2021, for MOET’s comments. The SFR is expected to be submitted to the Prime Minister for his approval by May 2021 to operationalize the Financial Sustainability Plan (FSP). Two, the campus construction has been completed with the campus handover progress on track to be finalized by May 28, 2021. In addition, since the last ISR, the project has achieved an additional 25 Institute for Scientific Information (ISI) indexed publications, hence 192 ISI publications as PDO indicator 4 results, far exceeding the end-line target of 132. 7. As a result of the afore-mentioned progress, disbursements have reached 89 percent of the IDA credit, leaving an undisbursed amount of US$ 17.80 million by April 22, 2021. 5 Out of this undisbursed amount, the Government of Vietnam confirmed only US$ 2.5 million shall be needed from April 22 to the project closure on May 31, 2021, thanks to the savings mainly from the campus construction. Accordingly, the US$ 15.3 million of unused funding is to be cancelled and expected to be recommitted to other projects in Vietnam before the current project closing date. 8. The project has no unresolved legal, safeguard or fiduciary issues or overdue audits. All legal covenants are complied with. II. DESCRIPTION OF PROPOSED CHANGES 9. On May 05, 2021, the Association received a request from the Ministry of Finance (MOF) to cancel US$ 15,300,000 (SDR 10,680,031.83 equivalent) from the originally committed credit amount, as these funds will not be required to be used for eligible expenditures incurred prior to the closing date. The request was made on the basis that only US$ 2.5 million was required for the remaining project activities. 10. The total amount of SDR 10,680,031.83 will be cancelled in an amount equal to: (i) SDR 3,954,670.62 from Category (3) on Consultants’ Services and Training, (ii) SDR 85,196.67 from Category (4) on Research Grants and Scholarship Grants, and (iii) SDR 6,640,164.54 from Category (6) on Goods and Works . Detailed revisions to costs allocated to components and to disbursement categories are elaborated under part IV. 3 Fully met IR indicators 1, 5, 6, 7, 8, 9,10. Partially met: IR indicators 2, 3, 4. 4 TPA between the Government of Vietnam, Federal Ministry of Education and Research of the Federal Republic Germany and the State Ministry of Higher Education, Research and the Arts of the Land Hessen on the development and expansion of the Vietnamese German University was signed in September 2020. 5 Operation Portal data on April 22, 2021. The World Bank Vietnam New Model University Project (P110693) III. SUMMARY OF CHANGES Changed Not Changed Components and Cost ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ Results Framework ✔ Loan Closing Date(s) ✔ 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 New Model University Project (P110693) OPS_DETAILEDCHANGES_COMPONENTS_TABLE COMPONENTS Current Current Proposed Proposed Cost Action Component Name Component Name Cost (US$M) (US$M) Policy and governance Policy and governance 6.50 Revised 5.50 development development Academic and Research Academic and Research 33.00 Revised 32.00 development development Campus and facilities Campus and facilities 110.00 Revised 98.00 development development Project management, monitoring Project management, 7.00 Revised 6.00 and evaluation monitoring and evaluation TOTAL 156.50 141.50 OPS_DETAILEDCHANGES_CANCELLATIONS_TABLE CANCELLATIONS Value Reason Current Cancellation New Ln/Cr/Tf Status Currency Date of for Amount Amount Amount Cancellation Cancellation Disburs UNDISBURSE IDA-47860- 119,400,000.0 108,719,968.1 ing&Re XDR 10,680,031.83 05-May-2021 D BALANCE 001 0 7 paying AT CLOSING OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed IDA-47860-001 | Currency: XDR iLap Category Sequence No: 1 Current Expenditure Category: IDA 47860 - Goods 4,099,073.00 4,099,072.39 4,099,073.00 90.00 90.00 iLap Category Sequence No: 2 Current Expenditure Category: IDA 47860 - Works 2,499,725.00 2,499,724.95 2,499,725.00 90.00 90.00 The World Bank Vietnam New Model University Project (P110693) iLap Category Sequence No: 3 Current Expenditure Category: IDA 47860 - CS and Trng 14,931,753.00 10,977,082.38 10,977,082.38 100.00 100.00 iLap Category Sequence No: 4 Current Expenditure Category: IDA 47860 - Research&Scho Grants 285,915.00 200,718.33 200,718.33 90.00 90.00 iLap Category Sequence No: 5 Current Expenditure Category: IDA 47860 - UNALLOCATED 0.00 0.00 0.00 iLap Category Sequence No: 6 Current Expenditure Category: IDA 47860 - GOODS AND WORKS 97,583,534.00 82,469,181.07 90,943,369.46 90.00 90.00 Total 119,400,000.00 100,245,779.12 108,719,968.17 .