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Study on the Revolving Fund for Household Sewerage Connection in Binh Duong and Vinh Phuc Provinces

Country: Vietnam

Period: 2010

Client: Japan International Cooperation Agency (JICA)

Donor: JICA

ICEM was commissioned by the Japan International Cooperation Agency(JICA) to undertake an assessment of the sewerage systems and connections in two important regions in Vietnam. The overall objective of this study is to propose an appropriate revolving fund mechanism for promoting household sewerage connection in the Thu Dau Mot Town and Vinh Yen Town where separate sewerage systems are being developed.

Thestudy aimed to assess:

  • Household willingness-to-pay to access (connect) to the sewerage system and the socio-economic characteristics which may explain the extent of this willingness-to-pay; and
  • The design and feasibility of institutional and financial mechanisms to promote access to the sewerage system. More specifically, the proposal of appropriate revolving fund mechanisms for promoting household sewerage connection in the Thu Dau Mot Town (Binh Duong Province) and (Vinh Yen Town) Vinh Phuc Province where separate sewerage systems are being developed with the assistance of JICA.

To achieve the study objectives, two important activities were conducted in the context of the existing study. First, household surveys were conducted in both Thu Dau Mot Town and Vinh Yen Town to assess the willingness to pay of households in the target area to connect to the sewerage system currently being developed. The study shows a willingness-to-pay ranging approximately between 105,000 VND in Thu Dau Mot, and 150,000 in Vinh Yen Town per month, for a period of two years. These results indicate that a small proportion of households would be willing to pay an amount sufficient to cover the complete estimated average cost of a connection to the sewerage system, estimated to be approximately 5 million VND in 2010. However, poor and less-poor households would need financial support to do so.

Second, existing revolving fund mechanisms in Viet Nam were identified and assessed with the view of formulating recommendations for Thu Dau Mot and Vinh Yen Town. For this purpose, in addition to a detailed literature review, interviews were conducted with key individuals closely involve with these experiences in the cities of Dalat, Hai Phong, and Buon Ma Thuot. The following parameters directed the nature of the review and discussions with stakeholders in the course of one-on-one interviews and in the course of review workshops which were held in September 2010 in both Thu Dau Mot and Vinh Yen Town.

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