CaoLanh2017Authors: Mekong Development Research Institute (MDRI) research team, Adam Smith International and The Australian Department of Foreign Affairs and Trade (DFAT). Published: August 2017

Background

The Cao Lanh Bridge is part of the Central Mekong Delta Connectivity Project (CMDCP) in the Mekong Delta region of southern Vietnam. The project is located on the boundaries of Dong Thap province and Can Tho city. The Cao Lanh Bridge is one of the two major bridges (Cao Lanh and Vam Cong) that make up the CMDCP and is scheduled for completion in December 2017. The Project will improve road travel across and within the Central Mekong Delta, connecting Ho Chi Minh City (HCMC) to the Southern Coastal region. It will bring inclusive development to areas that are poorly connected to major population centres, improve access to social and health services, increase national food security by stimulating local agro-industry and boosting exports, facilitate private sector investment, and extend regional connectivity to neighbouring Cambodia and the Greater Mekong Sub-region, as well as to Vietnam’s major inland ports in the Mekong Delta. An estimated 170,000 road users will benefit daily from the new bridges and the 5 million residents of An Giang, Can Tho, and Dong Thap provinces are expected to benefit from an improvement in living standards. The expected outcomes will be shorter road travel distances and increased average travel speeds across and within the Central Mekong Delta.

The Australian Department of Foreign Affairs and Trade (DFAT) has provided AUD 168 million for the Cao Lanh Bridge and related investments, this includes the design and construction of the bridge and approach roads. This builds on a history of Australian government support for road and bridge infrastructure in Vietnam. Through this evaluation, DFAT seeks to quantify the socio-economic impact of this project on beneficiaries in the target area. This is one of the largest and most complex impact evaluations undertaken by DFAT.

Objective

The objective of the impact evaluation is to estimate Cao Lanh Bridge’s socio-economic impacts (both intended and unintended) on selected sub-populations in the impacted areas. It seeks to establish whether the bridge has made a difference in the lives of people in the target area by assessing the direct and indirect causal contribution of the Cao Lanh Bridge Project (CLBP) to change in people’s lives. This includes an assessment of the positive and negative, intended and unintended, primary and secondary long-term impacts that result from the bridge.

This evaluation is designed to test the primary hypothesis that the CLBP:

  1. Will generate accessibility and mobility improvements that lead to wider socio-economic development benefits within and among the three provinces.

There are seven additional hypotheses, which together inform the primary hypothesis, these are:

  1. The CLBP will generate additional socio-economic benefits for Cao Lãnh urban residents (including improved access to health, education and cultural facilities)
  1. The CLBP will expand and deepen the labour market areas for Cao Lãnh residents, with improved road access to other provincial centres for additional employment opportunities
  1. The CLBP will lead to growth in containerised road freight across all three provinces (achieving economies of scale, reduced numbers of individual small truck movements, and lower costs per unit of freight)
  1. The CLBP will stimulate the development of Cao Lãnh as an intra-provincial and inter-provincial bus passenger transit centre, with increased tourism visitation and quicker access to/from HCMC
  1. The CLBP will stimulate growth in transport and storage-related enterprise facilities and employment within all three provinces
  1. The CLBP will strengthen the Dong Thap provincial economy, with the creation of demand for bridge/road building materials and the acquisition of additional building skills and opportunities
  1. The CLBP is expected to improve the social welfare of the population within the three provinces and in relative road corridors, and be assessed as being an effective aid investment, yielding positive results and value for money.

The primary hypothesis is an amalgamation of the above subsidiary hypotheses (2-8). The impact evaluation has been designed to test each of the hypotheses.

In order to test the above hypotheses a mixed-method evaluation was designed that integrates a range of evaluation methods at every stage of the evaluation process, drawing on both qualitative and quantitative data for contribution and attribution analyses. The evaluation design is based on the use of conventional benefit-cost analysis (BCA) and statistical techniques based on causal modelling (Diminishing Effects approach). Both approaches have been prepared as discrete forms of analysis. Time-series and Panel data will also be used to measure socio-economic benefits to which the Bridge contributes in the project’s area of influence. Case studies and Focus Group Discussions are designed to obtain qualitative evidence and success/failure stories to facilitate learning about enabling and disabling factors to development as well as for public diplomacy. To assess impact a before and after approach was adopted. This includes the collection of benchmark data before the completion of the CLBP and associated Vam Cong Bridge and approach and connecting roads, with the subsequent collection of data in 2019 and 2021.

This baseline survey and qualitative research was conducted in March and April 2017. The aim was to collect data well in advance of the opening of the Cao Lanh and Vam Cong Bridges. In March 2019 a mid-line survey will be conducted that will collect data on the impacts of the bridges, this will be further supported by an end-line survey in March 2021.

Context

The Mekong Delta plays a key role not just within the wider national and regional economic context but also within the demographic fabric of Vietnam. Spreading over 12 provinces and one municipal city, the Delta is home to more than 17.5 million inhabitants, accounting for 19.2 percent of Vietnam’s total population. With a total area of 40,576 square kilometres, the delta has a comparatively high population density of 434 inhabitants per square kilometre – compared to national average of 277.

64.3 percent of the Mekong Delta land area is used for agricultural production, compared to 30.9 percent for the whole country and 36.5 percent in the Red River Delta. The region contributes 19 percent of Vietnam’s total GDP, of which GDP in agriculture constitutes 38.1 percent of the national GDP in agriculture. Industry is by far the least developed sector in the Mekong Delta; the regional GDP in industry only represents 15.6 percent of the national figure. The majority of employment is in the agricultural sector. According to the Labour Force Survey 2015, 47.8 percent of the work force support agricultural production, only 19.9 percent of the regional labour force participated in the industry sector.

Traditionally known as the rice bowl of Vietnam, the Mekong Delta is the country’s largest rice producer with 4.3 million hectares of cultivable paddy area. In 2015, its rice production reached 25.7 million tonnes, making up 56.8 percent of the country’s total rice production. Beside rice, the Mekong Delta is a major production area of aquaculture and fruits such as mango, longan, pineapple, and banana. According to the latest official statistics reported by the GSO, aquaculture production in the Mekong Delta accounts for 56.2 percent of the total country’s production.

One of the central contradictions of socio-economic development in the Mekong Delta is that even though the Delta contributes one-fifth of the nation’s GDP, it is lagging behind Vietnam’s other regions in important socio-economic achievements like education, skills and poverty reduction. Poverty remains high in the region with 6.5% of total households living below the poverty line. The Mekong Delta region has failed to keep pace with the development of the country. As reported by the GSO, monthly average income per capita in the Mekong Delta in 2014 was 2,327 thousand VND, lower than the national average of 2,637 thousand VND. Between 1999 and 2014, average income per capita in Vietnam increased by 8.9 times, in the Mekong Delta it increased 6.8 times, only slightly higher than the Central Highland region.

Against this background, the Prime Minster has established a steering committee devoted to developing new ideas for strengthening the Delta’s economic and social performance. The steering committee belongs to the party central committee and is supported by the Central Institute for Economic Management (CIEM). This institute was assigned by the Prime Minister to design a regional development plan. The assessment of development opportunities identified the weaknesses and strengths of the Mekong Delta. Together with issues to do with education and strong regulation of the agricultural sector, transport infrastructure is seen as a major impediment to socio-economic development, which makes this connectivity initiative highly relevant to development in the Delta.

Characteristics of the Beneficiaries

Commune and household level surveys were undertaken to better understand the socio-economic conditions of the targeted beneficiaries in the provinces of Don Thap, An Giang and Can Tho. 117 communes were surveyed, of which 48 are in Dong Thap, 35 are in An Giang and 34 are in Can Tho. On average, the population of each commune is 16,000 people and the average number of households per commune is 3790.

2,011 households were sampled across the three provinces. The total number of household members in these households was 7,824. Household heads are predominantly male, and accounted for around two-thirds of those households surveyed. The average age of a household head is 54.4, and the average income per household is VND 26,988,000 per year (AUD 1,572). Most people do not receive unemployment subsidies or social pensions and 98.7% of people are in the labour force; 22% of those are self-employed in the agricultural sector. The richest 20% of people tend to have a larger income share from non-farm business, while low income households have a larger share of income from remittances and social allowances.

Access to infrastructure plays an important role in improving living standards and the social welfare of people in each of the provinces. Markets are the places people visit most frequently. People visit markets around 20 times per month in Dong Thap, 15 times in An Giang and 17 times in Can Tho. Primary schools are the places with the second highest frequency of visits. Hospitals at district levels also constitute a particularly important type of infrastructure. Projects which facilitate greater access to this type of infrastructure have the potential to significantly benefit households.

The average distance from the surveyed households to the nearest road to Cao Lanh Bridge and Highway is 28.7 km in Dong Thap, 96.3 km in An Giang and 67.1 km in Can Tho. Motorbike is by far the most popular means of transportation. The regression analysis conducted in Section four shows that households who live further from the Cao Lanh Bridge are less likely to be poor. In other words, poor households tend to live closer to the bridge. As a result, in the impact evaluation, this difference in the distance to the bridge between households must be taken into account and will be when conducting the Diminishing Effects analysis. It is likely that those poorer people living closer to the Cao Lanh Bridge may derive greater benefit from its construction than the richer people who live further away, which is a positive result from an inclusive development perspective but one that needs to be confirmed.

Efficiently crossing the Tien and Hau Rivers is of paramount importance to the local and regional economy. At present 28,266 people per day use the Cao Lanh ferry to cross the Tien River and 52,395 people use the Vam Cong ferry to cross the Hau River. After the construction of the Cao Lanh and Vam Cong Bridges, the Cao Lanh ferry services will be drastically reduced and the Vam Cong ferry service will be cancelled. Millions of pedestrians, motorcyclists, cars and trucks will then use these bridges.

There will be widespread benefits for the different populations of beneficiaries, the nature and degree of which will be confirmed after the collection of mid-line and end-line data. Waiting times, which are up to 20 minutes will be cut, which will enable people to travel to work, and to access education and health facilities more efficiently. The waiting times for trucks and buses will be drastically cut as well, which will support local and regional economic productivity. Those who cross the two rivers will benefit the most, these include large trucks, who are transporting goods long distances and local people who have to cross the rivers to travel to work. Benefits may also accrue to bus companies and this may stimulate local tourism. Women, who are typically undertaking more local but frequent travel across the Tien River are also likely to benefit significantly.

However, the effects of the two bridges will be quite different. As the results of the user surveys show, the Cao Lanh ferry, with around half of the passengers and a sixth of the freight volume of the Vam Cong ferry, plays a more local role than the latter. As a result one may expect the impact of the Cao Lanh Bridge to be much more local in nature. Since the Vam Cong ferry caters to longer distance car, bus and truck traffic it can be expected that the completion of the entire Connectivity Project, of which the Cao Lanh Bridge is a part, would provide significant regional connectivity benefits as planned. The impact of the project as a whole will be quantified after future surveys are conducted.

Provisional analysis of the impact hypotheses

The evaluation design proffers a number of hypotheses regarding the potential impact of the connectivity project on the lives of beneficiaries, the discussion below provides an overview of what the qualitative research has uncovered with regards to the validity of those hypotheses. These provisional insights must be corroborated through additional data collection at later phases but it points to some interesting issues which will be followed up in later research.

Hypothesis 1: The Project investment will generate accessibility and mobility improvements, leading to wider socio-economic development benefits within and among the three provinces

The Cao Lanh Bridge is seen by transport industry stakeholders as a crucial part of the forthcoming new route to Ho Chi Minh City (HCMC). This new route is regarded as a better traveling option and supplements the nearly overloaded route through My Thuan Bridge to HCMC, by connecting Cao Lanh Bridge to the N2 NR. While reduced travel time and travel costs are widely perceived as the main benefits of Cao Lanh Bridge, transport operators noted that the magnitude of those benefits will depend on whether or not a toll will be collected from using the bridge, and how much that toll will be. This has yet to be determined.

From the viewpoint of manufacturing enterprises in industrial parks, the impact of Cao Lanh Bridge, and whole Connectivity Project, may be felt in two important phases of their operations, namely the transport of raw materials and the transport of the finished product. Similar to the transport operators, manufacturing enterprises reap the benefits of infrastructure projects when those projects are linked to their operations. Driving higher performance in the agriculture sector is clearly important from an economic perspective and can help improve local competiveness and productivity. However, some manufacturing enterprises in industrial zones were cautious about the presumed benefits suggesting that due to the fact the majority of their finished goods are transported by inland waterway, which has the advantages of low cost and high loading capacity, the benefits will be minimal. Further investment into the road network from Cao Lanh to N2 NR is crucial to bring about more significant impact for the manufacturing enterprises in industrial zones.

Householders identified decreased travel as the most important outcome of the Cao Lanh Bridge construction. The bridge is expected to enable greater flexibility in terms of travel time than using the ferry. Given their multiple gender roles and time poverty, reduced travel time and greater flexibility in travel time will certainly bring significant benefits for women. Although some of those surveyed (particular local shopkeepers) highlighted that the ferry may reduce their business turnover and increase travel time across the river.

Hypothesis 2: The Project will generate additional socio-economic benefits for Cao Lanh urban residents (improved access to health, education and cultural facilities).

Upwards of 80,000 people use the ferries to travel to work and to access health and education facilities on a daily basis, once both bridges are complete accessing these facilities is expected to become much easier. According to the affected households, improvements are expected to be felt in the access to healthcare, education, cultural facilities and other public services. These benefits are not limited to Cao Lanh urban residents. Rather, residents in Dong Thap districts who are located on the far bank of the Tien River are also expected to enjoy similar benefits. In the area of healthcare there is expected to be a number of benefits including: access to a broader range of healthcare facilities, reduced travel time to healthcare facilities, which has implications for maternal and infant mortality rates, and ease in transporting patients between hospitals in the region. With regards to education, householders were broadly in agreeance that the Cao Lang Bridge will improve access, except those who travel to Don Thap University which is located quite close to the Cao Lanh ferry. If that ferry is cancelled then there will be longer travel times for these people.

Hypothesis 3: The Project will expand and deepen the labor market areas for Cao Lanh residents, with improved road access to other provincial centres for additional employment opportunities.

Householders had mixed feelings regarding whether the project would expand labor markets and lead to employment benefits for Cao Lanh residents. Most beneficiaries were of the view that improved mobility will lead to increased trade between locations, improve transportation system efficiency, boost competitiveness, and attract new businesses. It was thought that the Cao Lanh Bridge will only promote labour market expansion under two conditions, namely: increased investment and a more developed tourism sector. Local shopkeepers remained pessimistic about the employment benefits. The income levels of shopkeepers and hawkers near the Cao Lanh Ferry is expected to significantly decrease, even if the Cao Lanh Ferry remains under operation. Shopkeepers and hawkers are expected to receive some support from the project once the bridges are opened, the effect of this support will be assessed during subsequent research. Some beneficiaries noted that the bridge may open up more job opportunities by bringing back workers who have migrated to industrial zones in Binh Duong (many of whom are women who have left their family behind). Providing local women with more local job opportunities may improve their position in the family and reduce their vulnerability.

Industrial enterprises were sceptical that the bridge would facilitate a level of reverse migration away from the larger industrial zones such as Binh Duong. These zones are renowned labour hubs and offer higher salaries than local zones. They did suggest however that the Cao Lanh bridge would facilitate more efficient access for workers to the Sa Dec industrial zone which may expand labor market opportunities for local residents but this needs to be confirmed in subsequent research. In general, those in industrial zones were of the view that Cao Lang Bridge serves as a premise for increased local infrastructure investment and once that further investment is forthcoming Don Thap will attract more investment.

Hypothesis 4: The Project will lead to the growth in containerized road freight across the three provinces

Transport operators were of the view that, while important, the Cao Lanh Bridge will do little to address the significant constraints to containerized road transport in the region. There are a number of reasons for this including the fierce competition transport operators face from inland waterway transport companies, the comparative advantage of logistics companies from HCMC, and the low authorized loading capacity which sees local companies always running below capacity. Rather than a project that sets out to promote growth in containerized road freight, transport operators instead believe that Cao Lanh Bridge and the Connectivity Project will promote growth in the number of trucks.

Even though containerized road freight remains limited across all three provinces, manufacturing enterprises believe that Cao Lanh and Vam Cong Bridges are important elements to the improvement of the transport network to HCMC. The Cao Lanh – My An project connecting to N2 NR will be the next step, and is expected to promote growth in containerized road freight. Having this system in place will lead to lower under-capacity rates, which is about 40 percent as currently reported. In other words, the system will enable containerize freight to achieve economy of scale, which may lead to lower costs per unit of freight.

Hypothesis 5: The Project will stimulate the development of Cao Lanh as an intra-provincial and inter-provincial bus passenger transit centre, with increased tourism visitation and quicker access to/from HCMC

The survey results from the transport operators suggest that Cao Lanh has a low potential to become an inter-provincial bus passenger transit centre. Instead, Cao Lanh Bridge might facilitate more travel demand for intra-provincial bus passengers. There are many prerequisites to be met in order to turn Cao Lanh into an inter-provincial bus passenger transit centre. At the present time, even An Giang and Kien Giang, which are the more developed provinces, hardly meet the prerequisites to become inter-provincial bus passenger transit centres themselves. Tourism development and improved infrastructure stand out as two critical conditions. Land allocation and investment attraction policies are important preconditions to be met. Cao Lanh Bridge nonetheless plays a very important role in connecting the two parts of the province itself, which has long been separated by the Tien River. There are currently very limited bus routes running between the two parts of Dong Thap. Therefore, Cao Lanh Bridge is literally “bridging” these two parts.

Hypothesis 6: The Project will stimulate the growth in transport facility and employment in transport sector within all three provinces

Can Tho transport operators do not support this hypothesis. They believe that the project does not affect their operations because the preferred route to Dong Thap or An Giang currently does not bypass Vam Cong or Cao Lanh Bridge. An Giang transport operators remain uncertain about the impact of Cao Lanh Bridge and the Connectivity Project. In their view, the Connectivity Project will ease the travel through the Vam Cong Ferry, and facilitate quicker access to HCMC through the “traditional” route – Vam Cong – My Thuan Bridge to Trung Luong. However, its impact on their operations remains unknown. Dong Thap transport operators, on the other hand, have a clearer idea about how Cao Lanh Bridge and the Connectivity Project will promote growth in the transport sector. For passenger transport services, the shortening of waiting time at Cao Lanh and Vam Cong Ferry is expected to boost travel demands to An Giang and Kien Giang.

Growth in freight transport operations related to combined consignment will be stimulated once Cao Lanh Bridge is completed. Freight transport services are very competitive and sensitive to transport price levels. Being more cost-efficient, transport operators will have a competitive advantage in approaching new customers who are willing to cooperate if the offered freight transport price is relatively low. Combined consignment freight services can also be provided for fruit, often viewed as the “less traditional commodity” for containers. This is because fruits require a tight schedule and short travel duration. This could be one very positive benefit for freight transport providers.

Hypothesis 7: The Project will strengthen the Dong Thap provincial economy, with the creation of demand for bridge/road building materials and the acquisition of additional building skills and opportunities.

Manufacturing enterprises agreed that Cao Lanh Bridge will stimulate the development of the Dong Thap provincial economy. However, the reason was not seen to be the creation of demand for bridge/road building materials and the acquisition of additional building skills and opportunities, as suggested in the hypothesis. Rather, the development of the Dong Thap provincial economy is expected to be attributed to increased trade and further potential investment attraction. Increased trade and lower transportation costs will lead to lower production costs. In turn, lower production costs may promote the comparative advantage of the province and attract more investment.

Hypothesis 8: The proposed project can be expected to improve the social welfare of the population within the three provinces and in relative road corridors, and be assessed as being an effective aid component, yielding positive results and value for money

The potential social welfare effects of the Bridge are many and varied. Key perceived positive social welfare-related outcomes from the Bridge identified by stakeholders, include: improved access and integration with north bank and south bank schools and education facilities, including cultural assets potential for time savings for ambulances/paramedics to bring patients to hospitals/medical facilities opportunities to rationalise various health facilities located on both sides of the river, and to allow for improved staff flexibility in rostering of staff possible increase in school enrolments from locations outside Cao Lãnh, stimulated by the commencement of new bus services connecting the north and south banks.

Making travel more convenient is one way to bring about social benefits. According to the affected households, improvements are expected to be felt in the access to healthcare, education, cultural facilities and other public services. These benefits are not limited to Cao Lanh urban residents. Rather, residents in Dong Thap districts who are located on the other bank of Tien River are also expected to enjoy similar benefits.

The results from the focus group discussions also show that improved access to healthcare was seen as the most significant benefit of Cao Lanh Bridge. Meanwhile, many people remained in doubt about the potential impact of Cao Lanh Bridge on improving access to cultural facilities and other public services.

While this may be the case, there was concern amongst some groups regarding the impact of the project on their livelihoods. The most affected household group includes businesses that operate in the immediate vicinity of each existing ferry terminal. Among the three severely affected household groups, this group seems to be the most vulnerable. This group faces a significant risk of losing their livelihood, as it relies heavily on activities of traffic embarking or disembarking from the ferries. Once Cao Lanh Bridge comes into operation, the traffic volume in Cao Lanh Ferry is expected to decrease drastically as a consequence.

At the present time, the income restoration program for this group has just been recently initiated following extensive consultations with shopkeepers and hawkers at the ferry terminal in Tan My commune and Ward 6, and after an assessments of their needs. According to focus group discussions with those from Ward 6, supporting activities for them will include a lending program (with a cap of 30 million VND), and the opening of a new market place nearby where they will be prioritized if they plan to move their business activities there. Shopkeepers and hawkers of Tan My commune were consulted on the lending program. However, both groups said that they did not know when they would receive the support.

As emphasized in the Project’s Social Action Plan, the timing of the implementation of mitigation measures will be crucial. It has been suggested that the planning process of support measures for this group needs to be accelerated and extended further by additional assistance. Currently, the interviewed shopkeepers appear to have little idea about how they can use their loans effectively.

For the groups of households who have lost their agricultural and residential lands, the income restoration program has already been implemented. Measures in the form of in-kind support have been implemented based on the assessment of needs conducted for this group. The majority of the interviewed households either received in-kind support for their agricultural activities or small business activities. The support measures have proven to be highly effective for small business operations, as the in-kind support has brought more value-added to these operations.

Beside the recommendations made above on improving the support measures for affected households, more attention should be placed on improving information provision about the Bridge to the public including information on the location of the approach road to Cao Lanh Bridge, the master development plan that further promotes the efficiency of transport system connecting to HCMC, and the future of ferry services.

Conclusion

Overarching hypothesis: The Connectivity project will generate accessibility and mobility improvements that lead to wider socio-economic development benefits within and among the three provinces

The connectivity project will no doubt generate improvements that will lead to wider socio-economic development benefits, but the nature and level of these benefits needs to be determined by future research. As noted above, the Mekong delta lags behind other parts of Vietnam in socio-economic terms. This project has the potential to address some of these issues if augmented by other sensible policy and investment decisions. For example, it may improve agricultural sector efficiency, which may contribute to increasing local competitiveness. This may induce investment provided other enabling environment issues are addressed. The project may also improve access to health services which, if realised, could improve maternal and child health statistics and other general health measurements. The discussion above suggests that women may benefit from this project in various areas, including reducing time poverty and increasing mobility. Growth in local economies may be stimulated through increased intra-provincial transport, and intra-provincial economic opportunities may be increased. Most importantly, as will be examined further through future surveys and the Diminishing effects analysis, it seems that poorer people, who happen to live closer to the Cao Lanh Bridge, may benefit disproportionally from the project, again this will be confirmed via subsequent analysis.

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