SOCIOECONOMIC ANALYSIS OF INVESTMENT PROJECTS TO BUILD URBAN DRAINAGE WORKS WITH ODA OF THE WORLD BANK IN VIETNAM

Abstract

Government capital and funding and World Bank (WB) donors account for most urban drainage projects in Vietnam. Selecting the most effective investment project is crucial to increase investment efficiency, which is considerably supported by choosing the suitable analysis approach. Due to the unique characteristics of donor-funded urban drainage projects compared to other types of projects, the content of the financial effectiveness study is less important than the socioeconomic analysis. The Socioeconomic Net Present Value, the Socio-Economic Internal Rate of Return (EIRR), and the Socioeconomic Benefit-Cost Ratio are now utilized in Vietnam for comparing and evaluating projects in terms of their socioeconomic impact (EBCR). When researching and evaluating urban drainage investment projects, consulting firms prioritize financial analysis above socioeconomic evaluation. One of the reasons is that the benefits and expenses are difficult to assess and quantify (in economic terms). This article employs qualitative research methods based on secondary data collected from reports, overview documents, and projects that have been and are being implemented in Vietnam and identifies the benefits and drawbacks of the current integrated criteria used for the socioeconomic analysis of urban water supply and drainage projects. It is then proposed to add three additional criteria: the socioeconomic net annual value (ENAV), the socioeconomic life cycle cost (ELCC), and the socioeconomic annual life cycle cost (EALCC). The paper combines the use of quantitative analysis based on primary survey data from a real project in Quy Nhon, Vietnam, with three general criteria (given by the authors) to demonstrate the applicability of the authors' solutions. This expands the alternatives for analyzing investment projects from the Vietnamese government's perspective and helps assess and evaluate projects more quickly and precisely.