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World Bank freezes $10mn funding for sustainable environment project in Vietnam

World Bank freezes $10mn funding for sustainable environment project in Vietnam

Monday, December 25, 2023, 12:59 GMT+7
World Bank freezes $10mn funding for sustainable environment project in Vietnam
The World Bank cancels its financial support for Khanh Hoa Province in south-central Vietnam to build dykes along the Cai River. Photo: Phan Song Ngan / Tuoi Tre

The World Bank has withdrawn its US$10 million funding for two investment contracts linked to a sustainable environmental project in Nha Trang City, Khanh Hoa Province, south-central Vietnam due to failure to compensate residents whose land is affected in accordance with the WB's resettlement policy framework.

The project in Nha Trang City is part of the Coastal Cities Sustainable Environment Project (CCSEP) funded by the WB. 

CCSEP has been implemented in Dong Hoi in the north-central province of Quang Binh, Quy Nhon in south-central Binh Dinh Province, Phan Rang - Thap Cham in Ninh Thuan Province, and Nha Trang in Khanh Hoa since 2017.

The Nha Trang City Sub-project of CCSEP was passed for investment by the then-prime minister in 2016 at a total cost of $72 million.

The sub-project, which encompasses four components, was aimed at improving environmental sanitation, enhancing residents' health and spiritual life, creating cityscapes, and supporting institutional reform.

The sub-project’s total cost for site clearance, compensation, and reclamation was set to reach VND184.18 billion ($8.25 million).

In September 2016, the municipal People’s Committee announced its plan to reclaim residents’ affected land and build a 13.45-hectare resettlement area in Ngoc Hiep Ward for these residents.

However, the city subsequently lowered the area of the resettlement blocks to 8.62 hectares.

A total of 593 households and a pagoda were impacted by the sub-project. Among them, 215 families had to relocate and resettle.

Yet, as of August 30, 2018, just 118 households had received compensation and handed over their land plots, according to a report made by the Khanh Hoa development project management board.

Meanwhile, only 11 land lots at the Ngoc Hiep resettlement area were given to stricken households.

The Nha Trang City sub-project is planned to be completed at the end of June next year.

As committed, compensation and resettlement for impacted residents must be based on the WB’s resettlement policy framework for the sub-project.

A representative of the management board said on Saturday that several affected households had refused to receive compensation, while the compensation level in accordance with the WB’s resettlement policy framework was higher than others of previous projects in the city.

A mere 26.2 percent of all impacted households have accepted compensation and handed over their land for the sub-project.

Due to a land handover process that progressed slower than anticipated and residents expressing dissatisfaction with the compensation offered, the WB dispatched a team to Nha Trang to assess, scrutinize, and oversee the land reclamation and compensation efforts associated with one of its project components.

The component consists of building dykes along the Cai River and a road in the Ponagar Tower area.

As a result, the WB working team identified 76 households affected by the project that received compensation. However, it was found that 50 of these households received compensation below the stipulated level in the framework.

In addition, work on the component lagged behind schedule.

As such, Carolyn Turk, WB country director for Vietnam, in early October wrote to the chairman of Khanh Hoa Province announcing that the bank could not keep funding the two contracts of the component of the Nha Trang CCSEP sub-project.

The component carries a price tag of $10 million, and its funding was withdrawn by the WB.

A source of Tuoi Tre (Youth) newspaper said on Sunday that the provincial administration had sent a dispatch to the WB representative, proposing using the province’s budget to finance the component of the sub-project instead of the WB funding.

The administration affirmed that the province is capable of financing he component to proceed with the sub-project. 

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Tieu Bac - Phan Song Ngan / Tuoi Tre News

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