Water Resources Management Financing in Vietnam


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Water Resources Management Financing in Vietnam

  1. 1. Dr. Dao Trong Tu VNWP Yangon- Myanmar 3/10/2013
  2. 2. CONTENTS 1. Water of Vietnam 2. Legal and Institutional Framework for Water Resources in Vietnam 3. Financial Policy in Water Resources Management in Vietnam 4. Identification of Financial Needs for Sectors in IWRM 5. Recommendations
  3. 3. Vietnam and SEA countries
  5. 5.  Country Area: 331.690 km2  Population: 90 million people (2012)  River system: 2,372 rivers/watersheds with length > 10 km, 13 river basins with area > 10,000 km2  Water resources: 830 - 840 Billion m3/year (63% of which from neighbour countries)  Actual annual renewable water resources per capita: 9,700 m3 (Asia: 3.970 m3, World: 7.650m3)
  6. 6. 106º00' 104º 00' 110º00' 108º00' Hµ Giang Cao B»ng Tr ung q uè c m G© ng S« Lµo Cai 22º 00' B¾ K¹ n c S« ng L« S« ng Hå ng Lai Ch©u S «ng CÇ u Tuyª n Quang Hå Th¸ c Bµ S« ng § Yª n B¸ i µ S« ng Hå ng S¬n la S« ng § S« ng M · River basins in Vietnam úC ï ng Th¸ i Nguyª n VÜ Yª n nh ViÖ Tr× t µ 22º 00' L¹ S«ng KS¬n ng Hßa B× nh H- ng ng Luéc S«Yª n Phñ Lý S«ng S« ng § S« ng M· ¸y Nam § Þ nh l µ o H¹ Long H¶i Phßng Cö aT h¸ i Trµ Lý Th¸ i B× nh Cö aB aL Ninh B× nh 20º 00' B» n g Gi a n g -Kú Cï n g Fl v = 12.880 k m2 W = 8,92 k m3 am L B¾ ôc N c Giang S«ng B¾ Ninh c Hµ Néi S«ng § uèng Hµ § «ng H¶i B×nh S«ng Th¸ iD- ¬ng B× nh Hå n g v µ Th ¸ i B× h n Fl v = 168.700 k m2 W = 137 k m3 ¹t S«ng Chu Thanh Ho¸ 20º 00' S«ng Yªn M· -Ch u Fl v = 28.490 k m2 W = 20,1 k m3 S« ng C¶ Vinh i Ó Hµ TÜ nh Th ¹ c h H· n Fl v = 2.660 k m2 W = 4,68 k m3 n § « 18º 00' Lam B S«ng C¶ Fl v = 27.200 k m2 W = 24,2 k m3 18º 00' n S«ng Gia nh g § ång Hí i N S«ng LÖ hËt GIANH FLV = 4.680 KM2 W = 8,14 KM3 H- ¬ n g Fl v =2.830 k m2 W = 5,64 k m3 § «ng Hµ S«ng Th¹ ch H· n QuÇ ® Hoµng Sa n ¶o S« ng Bå HuÕ ¬ng H ng S« Vông CÇ Hai u § µ N½ ng Th u Bå n Fl v = 10.496 k m2 W = 19,3 k m3 16º 00' 16º 00' Tr µ Kh ó c Fl v = 4.680 k m2 W = 8,14 k m3 S«ng Hµn S«ng Thu Bån Tam Kú S«ng Tam Kú Qu¶ng Ng· i S«ng Trµ Khóc S£ SAN FLV = KM2 W = KM3 14º 00' Ko n e Fl v = 2.980 k m2 W = 2,58 k m3 Kon Tum ng S« Ch ó d Én n Sa Sª Plei Ku 14º 00' S«ng Kon Qui Nh¬n Hå Nói Mét Ia Flv : DiÖ tÝ l- u vùc n ch Ay un W : Tæ l- î ng dßng ch¶y ng S«ng C¸ i S« ng Ba Sr ª Pè k Fl v = k m2 W = k m3 Tuy Hoµ §µ S«ng R»ng h Hin S«ng Bu«n Ma Thuét re k S po S«ng Ba Fl v = 13.900 k m2 W = 2,58 k m3 Nha Trang 12º 00' 12º 00' § µ L¹ t Hå § ¬n D- ¬ng S«ng BÐ Hå DÇ TiÕ u ng m p u T©y Ninh c h i a S«n gB Ð m Vµ ng S« ai § å n g Na i Fl v = 42.655 k m2 W = 30,6 k m3 ai 10º 00' Phan ThiÕ t gN ån g «n n Ti Ò Sg. S«n gV µm Cá T© y T©n An T©n An Cao L· nh S«n Long Xuyª ng TiÒn VÜ Long nh R¹ ch Gi¸ S Th¬ CÇn«n S«ng La Ngµ Thñ DÇu Mét Hå TrÞAn Biª n Hoµ Hå ChÝMinh § ng S« § Cá Cöu Lo n g Fl v = 795.00 k m2 W = 520,3 k m3 S«ng § c ¨ Phan Rang Th¸ p Chµm ång N § ång Xoµi S«ng Vµm Cá Vòng Tµu Mü Tho S«ng Cöa TiÓ S« u ng S«ng Hµ BÕöa Tre C n §¹ m Lu i «n g Trµ Vinh gH Ëu u HË Sg Sãc Tr¨ ng B¹ c Liª u Cµ Mau 10º 00' Cö aC un gH Çu Cö a§ Cö Þh n aT An ra nh §Ò S«ng Chµm Chim Nguån: Hå s¬ Tµi nguyªn n- í c ViÖ Nam t N¨ m: 2003 104º 00' QuÇ ® Tr- êng Sa n ¶o 106º00' 108º00' 110º00'
  7. 7. WATER OF VIETNAM Long-term average annual precipitation Long-term average actual renewable water resources 1.980 mm/year 830-840 billion m3/year Actual annual renewable water resources per capita % of total actual renewable freshwater resources withdrawn (MDG Water Indicator) (FAO AQUASTAT) Groundwater withdrawal as % of total freshwater withdrawal (FAO AQUASTAT) 9 220 m3/inhabitant Total area equipped for irrigation (FAO FAOSTAT and AQUASTAT) 4 600 000 ha 9.3 % 1.7 % % of the cultivated area equipped for irrigation (FAO FAOSTAT and AQUASTAT) 45 % % of irrigation potential equipped for irrigation (FAO AQUASTAT) 49%
  9. 9. Laws and Under Law Documents:  Law on Water Resources 1998 and revised in 2012;  Law on Environmental Protection (2005)  Law on Land (2003)  Law on Fisheries (2004)  Law on forest protection and development (2004)  Decree on River Basin Management (2008)  Decree on Dykes (2006)  Ordinance on Exploitation and Protection of Irrigation Works (2001)  Law on Inland Waterway Navigation 2004,
  10. 10. LEGAL REFORM (Cont’)  Decree 120/2008/ND-TTG: River Basin Management (12/2008)  Decision No. 277/2006/QD-TTg dated 11/12/2006: National Target Program for clean water supply and sanitation in the 2006-2010 period.  Decree No. 149/2004/ND-CP dated 27/07/2004: Permits for water resource exploration, exploitation and use, or for discharge of wastewater into water sources.  Decision No. 05-2003/QD-BTNMT dated 04/09/2003: Licensing of surveying, exploiting of under ground Water Resources  Decision No. 104/2000/QD-Ttg dated 25/08/2000: National Strategy on Rural Water and Sanitation Strategy up to 2020
  11. 11. Institutional Arrangements  National Level  National Water Resources Council (2000): National Policy Advisory Body: apex body  MONRE (2002): National Water Resources Policy and Management (Surface & Ground W)  MARD (1995): Irrigation, Water related Disaster Management (Flood, Drought), Rural Water Supply:
  12. 12. Institutional Arrangements (cont.)  MoIT (2002): Hydropower Development:  MoT: Inland Water Transportation  MoC: Urban Water Supply  MoH: Water Hygiene  MPI: National Water Investment Planning and Policy  MoF: state Budget control
  13. 13. Institutional Arrangements (Cont.)  Provincial Level:  DONRE: Provincial Water Resources Management  DARD: Irrigation, Water related Disaster Management, Rural Water Supply in province.  DoIT: Hydropower Development (small hydropower <30 MW):  DoT: Provincial Inland Water Transportation  DoC: Provincial Urban Water Supply  DoH: Water Hygiene  DPI: National Water Investment Planning and Policy  DoF: Provincial Budget Control
  14. 14. Functions and Task of Institutions Relating to WRM Ministry Ministry of Natural Resource and Environment (MONRE) Ministry of Agriculture and Rural Development (MARD) Functions and tasks of water resources management State management of water resources, meteorology and hydrology, synthesis and unification of sea and island management State management of agriculture, salt production, aquaculture, irrigation, rural development, dyke management, flood control Ministry of Industry and Trade (MOIT) Development of hydropower, construction and operation of hydropower dams/plants Ministry of Science and Technology (MOST) Ministry of Construction (MOC) Ministry of Transport (MOT) Ministry of Health (MOH) Ministry of Finance (MOF) Ministry of Planning and Investment (MPI) Development and provision of guidance on the application of water related criteria Implementation of water supply and drainage plan in urban areas, industry zones and residential areas. Management and development of navigation, waterway structure and harbors. Management of criteria relating to clean water, sanitation and food safety Provision of guidance on water related fees and taxes. Synthesis of investment projects on water resources and submission of plans, cost estimate of water resources projects and water related damage mitigation projects
  16. 16. Financial Principles in WRM Vietnam also applies principles to finance WRM: 1. Polluter Pays: creates conditions to make pollution a costly activity and to either influence behavior (and reduce pollution) or generate revenues to alleviate pollution and compensate for welfare loss. 2. Beneficiary Pays: allows sharing the financial burden of water resources management. It takes account of the high opportunity cost related to using public funds for the provision of private goods that users can afford. 3. Equity: a feature of many policy frameworks for water management. It is often invoked to address affordability or competitiveness issues, when water bills, driven by the first two principles, may be disproportionate with users' capacity to pay. 4. Diversification of budgets for water investments (Irrigation, hydropower, water supply, environment protection etc)
  17. 17. Financial Policy in WRM Law on Water Resources 2012: Financial sources:  Water resources tax and fees and charges  Licensing for granting the water resources rights  Compensation and fined for the State due to violation on the field of water under regulation of laws. Who pay:  Organizations and individuals to exploit the water have to pay for granting the water exploitation in following cases:  Water exploitation for business hydropower generation  Water exploitation for business activities, services and nonagricultural production  Groundwater exploitation for industrial trees growing, livestock, fishery cultivation with large scale.
  19. 19. What Kinds of Investment for WRM ?  Non-Structure/Software  Administrative system  Building capacity  Public awareness  Structure Irrigation Water supply Hydropower River Training Environmental protection Recreation Water related disaster
  20. 20.  Water Administrative Financing:  Water resources policy and administrative management: Water sector policy, planning and programmes;  Water legislation and management;  Institution capacity building and advice;  Water supply assessments and studies;  Ground- water, water quality and watershed studies;  Hydrogeology. Excluding agricultural water resources.  Water disaster: developing knowledge, natural risks cartography, legal norms for construction; early warning systems; emergency contingency stocks and
  21. 21.  Infrastructures  Agricultural water resources: Irrigation, reservoirs, hydraulic structures, groundwater exploitation for agricultural use.  Hydropower: Hydroelectric power plants  Water resources protection: surface waters (rivers, lakes, etc.); conservation and rehabilitation of groundwater; prevention of water contamination from agrochemicals, industrial effluents.  Inland transportation:
  22. 22. Water for Uses – Domestic Water Supply (Urban and Rural) – Agriculture – Hydropower – Navigation – Recreation – Ecosystem and Environment – Other needs Protection and Mitigation of Water Related Hazards: – Water Drainage in urban and rural ares - Water quality Control – Flood and Inundation – Water born Diseases – Others
  23. 23. Money Stream of Investment in Water Resources (2002-2011) No. Users Annual average government expenditure (million constant 2010 US$)* Percentage (%) Annual average official development assistance gross disbursements (million constant 2010 US$) Percentage (%) 1 Hydroelectric power plants 577.63 50.6 29.54 12.3 2 Agricultural water resources 197.54 17.3 37.29 15.5 3 Basic drinking water supply and basic sanitation 172.12 15.1 31.92 13.3 4 Water supply and sanitation in large systems 144.97 12.7 80.54 33.5 5 Disaster prevention and preparedness 31.00 2.7 24.36 10.1 6 Water resources policy and administrative management 11.15 1.0 12.79 5.3 7 Water resources protection 6.16 0.6 9.02 3.7 8 River development 0.00 0.0 15.06 6.3 1140.57 100 240.52 100 Total annual average
  24. 24. Water Related Investment in Brief During 2002 to 2011: Water related investment: 22.9 % of total Gov,’s expenditures 1) National budget: o o o o 2) ODA: US$ 1, 140.57 million/year Hydropower: Irrigation: Water supply & sanitation: Others 50.6% 17.3 % 27.8% 14.3% US$ 240.52 million/year o Water supply & sanitation 46.8%
  25. 25. Main Activities of Water Investment
  26. 26. Water Supply  2006 – 2010 Programme: mobilized budget US$ 1.4 billion, (91.6% of planned budget), 3 times higher than mobilized budget in the period of 1999-2005. Objectives of program has met.  Capital mobilization diversified in comparison to many other programs, Gov.; Private, people and International one  International support: around US$ 200 million (14.3% of the total mobilized fund).  Soft credit: US$ 450 million (32.6%).  Private and people: US$ 170 million (12%)  Government and others: US$: 580 million (41,1%)
  27. 27. Agriculture Water Finance policy in future Targets to 2015:  Policies on water pricing and responsibilities to ensure quality of water service :  70% of O&M fully recovered by 70% of urban service providers;  25% of O&M fully recovered by 50% of irrigation service providers;  A resource management charging regime developed and implemented for equitable recovery of costs of water resource management activities. Orientation to 2020:  100% of O&M fully recovered by all urban service providers.  50% of capital and infrastructure replacement costs fully recovered by all major urban service providers  50% of O&M fully recovered by 75% of irrigation service providers.  100% of attributable resource management costs being met through water resource use charges.
  28. 28. Expected … 2012-2015: US$ 1.35 billion - State budget: US$ 210 million 4.100 tỷ đồng (15%); - Local governments: US$ 155 million (11%); - International aids: US$ 410 million (30%); - Credit fund US$ 450 million (33%), - People contribution: US$ 155 million (11%).
  29. 29. Information…. Vietnam has 753 urban areas (2011): 2 Special urban areas: Hanoi & Ho Chi Minh City  3 Cities urban categories I: Hai Phong, Da Nang & Can Tho.  8 Provincial cities categories I: Hue, Da Lat, Nha Trang, Quy Nhon, Buon Ma Thuot, Thai Nguyen and Nam Dinh.  11 Provincial cities categories II: Bien Hoa, Ha Long, Vung Tau, Viet Tri, Hai Duong, Thanh Hoa, My Tho, Long Xuyen, Pleiku, Phan Thiet and Ca Mau.  47 Urban areas categories III: towns or provincial city  42 Urban areas categories IV: towns, township, &townlets  640 Urban areas are categories V that are townlets
  30. 30. Information… • 2006-2010 : Rural people enjoyed clean water about 52 million (or 75% of total rural people in Country) increasing 13,2 % in comparison in 2005... Where budget come from?     State budget: 12%, Soft credit: 40%; International fund: 20%; and People: 28%
  31. 31. Drinking Water Supply and Sanitation
  32. 32. Investment in Irrigation  4 decades (80’s up to 2010): Investment for highly intensified cropland systems: 6125 trillion VND ( about US$ 3.2 billion)  100 large to medium scale hydraulic works. More than 8000 other irrigation systems used mainly for paddy field irrigation.     2005: US$ 120 million 2008: US$ 240 million) ; Irrigation subsided budget:: US$ 82 million Up to 2010: > US$ 850 million) (48% of budget for agriculture sector) -7 times increased.  For Mekong Delta 2012-2050: VND 171.700 billion (USD
  33. 33. Investment for Agriculture in Mekong Delta (Irrigation and DRM in Climate Change) 2006-2012: 14,870 billion VND (USD 700 million) under MARD’s management and about 4,970 billion VND (USD 2,485), under local authorities. Averagely, investment for Mekong delta about USD 110 -120 million/year. • Under climate change, in period of 2012-2020 and vision to 2050: 171,000 billion VND (USD 8.59 billion) of that, • Sea dike construction: USD 248 million; • Improvement of river dyke of USD 588 million; • Irrigation canal system of USD 249 million, • Flood control projects of USD 249 million
  34. 34. Irrigated Agriculture
  35. 35. Investment for Hydropower Up to 2013: - Contribution of hydropower to state budget: Annual: VN 6.500 billion (US$ 330 million) by tax, fees etc. - Estmated investment ranging from US$ 20.5 billions to US$ 27 (1 MW x US$ 1.5 - 2 million)  Annual investment abount US$ 1 to 1.3 billion/year.
  36. 36. Hydropower Potential  Range of among 14 richest potential of hydropower in the world.  Total theory potential : 30-35 thousand MW install capacity.  Technical potential: 18-20 thousand, now, 85 % exploited. Install Capacity (2013): - 2013: 13.694 MW
  37. 37. Investment for Environment Protection Estimated investment demand for solid waste treatment in the various periods TT Content Unit By 2015 By 2020 Municipal Hazard ous Municipal Hazardo us solid waste solid waste solid waste solid waste 1 2 3 Demand for treatment Demand for investment in treatment Total demand for investment tone/day 35,990 2,860 39.196 2.726 VND billion 7,200 31.300 6.800 VND billion 28,800 36,000 About US$ 1.8 billion 38,100 About US$ 1.9 billion
  38. 38. Areas Flood Trans-boundary may occur
  39. 39. Water Disaster Investment 1996-2000 Region Government International Total Red River 2730 1643 4373 North Moutain 1362 192 1554 North Central Part 1739 718 2457 Central Coasatal Part 1093 122 1215 338 37 375 9 2 11 2749 77 2826 10020 2791 12811 Central Highland South East Cuu Long Delta Total
  40. 40. Investment for Urban Drainage Last 10 years: drainage system in urban areas has had large investments for upgrade and expand the drainage systems; reduce local flood and improve sanitation conditions. Out of 100 cities and towns, 32 urban areas had ODA projects that have been implemented with different progresses. Total investment: VND 32,000 billion (US$ 1.6-1.8 billion); However, still many shortcomings in drainage systems in urban areas.
  41. 41. Mitigating Floods and Droughts
  42. 42. Investment for Urban Drainage in Future Total investment demand for drainage (including committed projects) by 2015 is around: VND 85,000 billion (US $ 4.3 billion) focusing on addressing main tasks: In 2011 – 2015: – Developing master plan for drainage in urban areas from categories III to higher ones that have not got master plan yet. – Continuing implementation of the approved urban drainage projects with the funds committed by donors. Total investment demand for development of drainage: VND 70,000 billion (US$ 3.5), focusing main tasks: In 2015 -2020: – Investing in completion of wastewater treatment stations and sewer routes for collection in large cities such as Hanoi, HCM City, Da Nang (VND 30,000 billion or US$ 1.6 million). – Continuing to invest in drainage system for urban areas of categories from IV to higher. (VND 40,000 billion or US$ 2.0 billion)
  43. 43. Water – related Disasters Note:*Water-related disasters’ within the scope of this WCB study do not include droughts.
  44. 44. Water Intensity in Industry
  45. 45. Conclusions and Reconmendations  Large investment but more focusing on source generating rather than distributing  Waste and pollution control weak  Self-sufficiency improved but far from the target  Irrigation fee backing and confusing Study constrains  Assess to data difficult  Data are managed/stored by different agencies/sectors and not consistent