Effectiveness: MFA should not engage in long-term financial commitments that extend beyond its approved engagement and as a minimum have an agreed exit strategy with the competent authority before any funds are committed.
consideration of the difficulty of efficient management by the TA when the MFA agreed with the political suggestion from MOC to expand WSPST to eight provinces. The problem lay with the design of the WSPST, or more specifically its failure to adapt to a new paradigm that arose over 14 years. GOV did not need DS schemes in small towns, but it did need trusted TA to support its equitization process, including the establishment of a water regulatory agency.
Design, Build Contracts
The Design-Build (DB) model was criticised for the poor construction quality and other problems faced in the implementation of the WS and DS schemes. The DB model is an effective agreement if properly made, safeguarding the interest of the client. Breach of contract was not properly formulated in the contract, as there was no incentive for contractors to correct the construction errors. However, the Design-Build-Operate or Design-Build-Lease models would have been a better option, as the contractor would require better construction quality to save in future O&M costs. The Design-Build-Lease WS scheme implemented in Minh Duc by the World Bank, with financial support from MFA under WSPST Phase I, is an excellent example of how WSPST could have been implemented. With the lease already expired the scheme was handed over to the Haiphong Water Supply Company, who confirmed to the evaluation team that the assets received were in good order.
Financial Management and Reporting
Financial reporting differs in each phase of WSPST (each phase was implemented by a different consulting company). Financial reporting is also inadequate, as it is missing budgeted and actual data separately for WS and DS. Some reports are in VND and it is impossible to track how expenditures in VND are converted into EURO. Various summary financial reports do not match with each other. Computerised accounting software was introduced in the Programme accounting as late as at the end of 2014. Previously accounting was based on excel sheets where figures can easily be modified later on. WSPST has many transactions annually and thus requires double entry bookkeeping and use of a computerised accounting system.
Finnish Revolving Water Fund
Every country has its own monetary policy, internal money flows and existing financing instruments. Outsiders may lack knowledge and consequently run risks when becoming involved in financing arrangements and money transfers. It is recommended to use the existing financing instruments of the recipient country where possible, rather than establish something new and untested.
Human Rights Based Approach
The Human Rights Based Approach (HRBA) should be understood also from the perspective of programme beneficiaries’ having access to a formal and accessible grievance redress mechanism, and that the expressed grievances are addressed adequately. WSPST Phase III responded to MFA’s policy guidance by hiring a team of external consultants to raise awareness among the programme stakeholders on the topic of the right to water and sanitation. In addition, the Phase III allocated human resources for strengthening the HRBA aspects in the intervention, and specific activities and analysis related to consumer rights and responsibilities of service providers were implemented. These actions are positive as such. When the programme ran into challenges especially with the DS scheme’s functionality, the need for a complaints’ mechanism became relevant from the point of view of town residents. However, MFA does not specify in any of its guidelines that such systems should be put in place at programme level. The main channel for complaints is the corruption hotline established in 2014 and which is managed directly by the MFA headquarters. However, it might not be relevant for the hotline to process very project- specific issue that arises locally. Filing a complaint to a Finland-based unit might also represent too big a challenge for residents living in the small towns in Vietnam. Further, the systems should
ensure that when grievances are received, there are mechanisms in place to also address them adequately. Ideally, setting up programme grievance redress mechanisms should be part of the
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