Ho Chi Minh City Water Supply Project to improve water supply coverage-

Ho Chi Minh City (HCMC) of Vietnam is divided into six zones having a population of approximately 8.4 million. The water supply operation in these zones is managed by the Saigon Water Corporation (SAWACO). At present, the water supply system of HCMC consists of five major water treatment plants (WTPs) with a total capacity of 1.34 million cubic metres per day (cu m/day) and distribution pipelines with a length of 3,800 km, connecting 734,000 households in six zones of the city.

Most of the water treatment capacity is concentrated in the northern part of the city with the Saigon and Dong Nai rivers as the intake source. As a result, the southern part of the city gets intermittent water supply, due to low water pressure. Rapid urbanisation and industrialisation have exacerbated water woes. In this backdrop, some population in the city still use water from drilled wells or rainwater harvesting units or buy from small water vendors. To improve the scenario, SAWACO has executed several water supply improvement and network expansion projects over the past few years. For instance, the corporation had developed the Thu Duc WTP having a capacity of 450,000 cu m/day to provide clean water in HCMC and has expanded the existing capacity of the ozone technology-based Tan Hiep WTP from 270,000 cu m/day to 300,000 cu m/day.

Such projects have allowed SAWACO to meet the water demands of a rapidly expanding population and have provided water coverage to around 82 per cent population of the city. However, challenges such as the increasing level of non-revenue water (NRW) owing to old distribution pipelines and the lack of a systematic approach to manage assets continue to adversely affect SAWACO’s services and operational performance. To address these issues, the corporation is executing the ambitious Ho Chi Minh City Water Supply Project, which involves improving water supply coverage from the existing 82 per cent to 90 per cent by 2020 and reducing the level of NRW from 27.83 per cent in 2016 to 25 per cent by 2025.

Project scope

The Ho Chi Minh City Water Supply Project was approved on June 24, 2008, under the Vietnam Water Supply Sector Investment Programme, which proposes to provide water supply to four cities – Da Nang, Haiphong, Hue and HCMC. The Ho Chi Minh City Water Supply Project involves three components. Component I includes the construction of a 10 km transmission pipeline of 2.4 metre diameter on the Thu Duc side of the city. The work under Component II involves reduction of NRW by replacing and extending water supply pipelines in zones 3, 4, 5 and 6 of HCMC. Component III involves the deployment of smart technology such as information and communication technology (ICT) to automate operation and maintain infrastructure.

Once operational, the project is expected to benefit 475,000 people in zones 1 and 3 with improved water pressure and coverage. Besides, 33,872 households in zones 3, 4, 5 and 6 will benefit from the rehabilitation and replacement of distribution pipelines. Another, 13,273 rural households will get access to water supply for the first time and 16,500 rural households will get a household connection. Further, the application of ICT will ensure improved asset and financial management through human resource and staff training. In addition, deployment of advanced tools such as supervisory control and data acquisition (SCADA) and geographic information system (GIS) will provide efficiency in asset management, thus strengthening SAWACO’s operations.

Project financing

The Ho Chi Minh City Water Supply Project, expected to cost $154 million, is being funded under a multi-tranche financing (MFF) facility of the Asian Development Bank (ADB). The project and loan agreements between ADB and SAWACO were signed on June 8, 2011. Accordingly, 90 per cent of the project cost ($138 million) has been provided by ADB in the form of a loan. The remaining funds ($16 million) will be provided by SAWACO. ADB’s loan will be utilised for different components of the project.  About $57.5 million will be utilised for various works under Component I; $6 million has been earmarked for NRW pipe extension and replacement and $26 million for the ICT system, while the remaining has been allocated for consultancy services and physical contingencies, among others requirements. Apart from this, the US Trade and Development Agency had also signed a grant agreement on September 7, 2012, to provide technical assistance of $0.59 million for the ICT system (Component III) under the project.

The ADB loan has a repayment period of 25 years and disbursement of loan has been extended until December 31, 2020, before which all works under the project are expected to be completed.

Project progress

The bids for Component I of the Ho Chi Minh City Water Supply Project were invited in October 2016. Later, in August 2017, SAWACO awarded the contract for Component I worth $70 million to a France-based consortium of VINCI Construction Grands Projets and Bessac. The scope of work includes the construction of the 10 km transmission pipeline, which will pass through the Saigon river, Rach Chiec and Nhieu Loc-Thi Nghe canals towards the intersection of Dien Bien Phu and Nguyen Binh Khiem Streets. Further, the consortium is responsible for detailed project design, production of prefabricated reinforced concrete pipe sections, drilling of 16 shafts, and construction of 11 connections and five stubs for providing future connections to the transmission network. The consortium will deploy the pipe jacking technology for pipeline installation. At present, the survey and design work has commenced and work on the pipeline is expected to begin by early 2018 with an implementation period of more than three and a half years.

Component II of the project involves four packages. Package I involves the construction of a water supply network in the Ba Diem Commune in Hoc Mon district, Package II involves the development of a water supply network in the Ba Diem and Tan Hiep Communes in Hoc Mon district; Package III involves the construction of a water supply network in Vinh Loc A, Vinh Loc B and Phong phu in Binh Chanh district and Package IV involves the installation of smart meters. Work on Packages I, II and III was completed by December 2016. However, information on Package IV is not available. The contracts for Packages I and II were awarded to Hai Dang JSC, while that for Package III was awarded to a joint venture  (JV) of the Tuan Loc Group and Minh Thong. The consultancy contracts for Packages I, II and III were awarded to CDM International, Inc. and Vitens Evides International.

The contract for Component III of the project, which involved deployment of ICT technology, has also been awarded to Zurich-based ABB and installation of SCADA is currently in progress.

Future plans

SAWACO has been striving to improve and modernise its water services and the Vietnam Water Sector Investment Programme is one such initiative. Going forward, water supply projects in three other pilot cities – Da Nang, Haiphong, and Hue – which have been identified under the project will be taken up for execution. Besides, SAWACO is considering building five new reservoirs in Go Vap and Binh Chanh districts and in the central, southern and western parts of the city with a cumulative capacity to store up to 373,000 cum of water to curb the problem of salt water intrusion from the Saigon and Dong Nai rivers. Another agreement was signed with the Ho Chi Minh City Finance and Investment Company and the Vietcombank on August 9, 2017 to provide funds for the development of 11 water supply projects in the city.

Going forward, the Ho Chi Minh City Water Supply Project is expected to play a key role in improving the quality of water supply services provided by SAWACO. To secure the benefits of the project, SAWACO will have to take appropriate steps to ensure judicious use of water and extend networks to keep up with the demand for new connections.