Context
In Vietnam, approximately 24% of the population (ca. 20 million) live in urban areas. This is one of the lowest rates in East Asia. However, this number is expected to increase to approximately 33% by 2010. On average, 50% of the urban population has access to piped water, with higher percentages in the largest cities and much smaller percentages in provincial cities and district towns. The availability of waste water disposal systems lags far behind this level. At present, there are only few municipal sewage treatment plants in operation; so far, simple domestic cesspits are in use.
Vietnam’s development goals formulate ambitious targets for urban infrastructure development and public services. Among others, 90% of the urban population shall have access to safe drinking water, 100% of the urban waste water shall be collected and treated and 100% of domestic solid waste is disposed in accordance to the prevailing environmental standards by 2020. According to Decree 56/CP of 1996, state enterprises at the provincial and commune level are responsible for the operation and maintenance of water supply and waste disposal plants (assigned operators). Decree 56, 88 and 117 of 2007 are setting out the management standards for the three sectors.

Desired Development Results
Environmental conditions are improved through the rehabilitation and augmentation of the wastewater and drainage networks and the construction of new waste water plants and more efficient waste water management. Specific public relations and community participation activities will improve the environmental awareness of the population in the project areas.

Main Activities
Within the framework of German Financial Cooperation (FC), the German Development Bank (KfW) is investing approximately 45 million Euros to support the extension of existing drainage works, waster water collection and treatment plants in six provincial cities. In addition to the FC, the German Government, through GTZ, finances a component of technical cooperation (TC) with the goal to prepare the operators concerned for their new tasks in waste water management, to strengthen institutional capacities and to improve the quality of service delivery.
The TA activities of the first phase are supporting the set-up of a conducive administrative and operational environment, through the establishment of individual corporate development plans (CDP) for each of the participating wastewater companies.
The CDPs are addressing, in principle, five corporate perspectives, namely: (i) Institutional and Organizational Development (ii) Financial Management, (iii) Customer Relations and Community Participation, (vi) Asset Manage¬ment, and (v) Human Resources Management.
The CDP reports are developed in close cooperation with each of the six participating provincial companies for a four to five years planning horizon.  A comprehensive institutional assessment was prepared in each province for supporting the formulation of institutional, organizational, technical and financial requirements and actions, which were set out in each CDP individually.  In addition, each CDP will be complemented be a financial plan and wastewater tariff study.
The identified needs and action plans are guiding, on one hand, the waste water companies in their corporate development process and, on the other hand, identify the project interventions and training activities during the project implementation cycle. 
Institutional strengthening will enable managers to understand factors that effect the efficiency and effectiveness of the organizations performance.. The project analyses the operators’ strengths and weaknesses and promotes the participatory development and implementation of demand-oriented corporate development plans for each participating waste water operator.
Financial management will always be a priority area for sustainable operations and management of public service facilities and infrastructure. Computer supported accounting systems and the introduction of cost centres will enable the operators to provide more comprehensive analyses to the decision makers in a timely manner. Covering the costs of services is a further important goal and will require the introduction of appropriate local regulations in order to (gradually) introduce customer tariffs, which will cover operational costs and the depreciation of the mechanical and electrical parts of the plants.
Customer relations are playing an increasingly important role in public organisations and service providers. Good customer relations and customer satisfaction is an important indicator for the future success of the operator. In particular, households with low incomes should be enabled to improve their living conditions through affordable waste water services.
Community participation is an important component of waste water management.. It is necessary to inform the community regularly about services provided by the operator. Education campaigns should improve the environmental awareness of the population to induce changes in behaviour.
Asset management is the biggest challenge the operators are facing. Operational handbooks and standard procedures for operations and maintenance, in combination with extensive on-the-job training, will help improving the staffs competence. .
Human resources management are strategic factors for the operators. Recruiting and training additional staff is one of the priority areas of the TC component. In a service-oriented organisation, staff competence is the main resource. Further training measures for the special requirements of the operators are therefore compulsory elements for sustainable capacity development.
Horizontal and vertical exchange of experience is promoted through the establishment of an information network between operators and relevant institutions of the Government, donors and professional organisations. The exchange of experience in the sector of waste water management, which is relatively new for Vietnam, is a fundamental requirement for the future development of the sector.

Fact sheet: Waste Water Disposal in Provincial Cities

Address of the Project Office:
7th Floor, Consulting Association Building
Ministry of Construction
37 Le Dai Hanh, Hanoi, Vietnam
Tel: (+84) 4 39 74 09 38
Fax: (+84) 4 39 74 09 39
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