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Reversing the stagnation of secondary cities in Viet Nam

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December 2017

Cities overflowing with rural to urban migrants and beleaguered with congestion, aging infrastructure, and other associated social and environmental problems are fast becoming the new normal in metropolitan areas worldwide. Meanwhile, smaller cities are left neglected.  


Viet Nam is no different, and the government wants to change this with its decentralization policy. Diverting the influx of people away from the main cities of Ha Noi and Ho Chi Minh could foster growth in secondary cities and result in a more balanced development around the country.


A recently completed ADB project has been supporting this agenda, upgrading urban infrastructure and strengthening local governments’ capacities in the northern cities of Viet Tri, Hung Yen, and Dong Dang. It is the first ADB urban development project in the country that did not need any time extension. All outputs, excluding a cofinancing component, were accomplished within the original five-year time frame. Approved in December 2011, the project took effect from July 2012 to June 2017. This Comprehensive Socioeconomic Urban Development Project in Viet Tri, Hung Yen, and Dong Dang belongs to the first batch of projects that now uses a decentralized approach. A similar project in Thanh Hoa City also used this method. According to principal urban development specialist Eri Honda, who processed the loan: “Before this project, we normally worked with the Ministry of Construction as the executing agency, while municipal governments are the implementing agencies. But for this project, we worked directly with the provincial government.”


“The central government believed that we shouldn’t implement through the ministry, instead we should directly work with the provincial government since they can respond quickly during project design and implementation, which will allow the project to materialize faster,” added Hoang Nhat Do, Viet Nam Resident Mission senior project officer (urban development).


This decentralized approach is a key reason why the project was completed in time. And developing these three secondary cities will complement Ha Noi and boost economic growth in these areas, raising overall development and livability in the country.


Because of the new border gate facility, the time required for the clearance of goods at customs will be reduced from five hours (2010) to two hours. Trade is also expected to increase from $859 million (2010) to $2.78 billion by 2020.

High hopes for a regional logistics hub in Viet Tri

In Viet Tri, which is about 84 kilometers northwest of Ha Noi, the project was able to construct and improve urban roads, including 6.5 kilometers from the Thuy Van industrial zone to the southern dike road and an approximately four-kilometer stretch between the Noi Bai–Lao Cai expressway and the city center, thereby enhancing the capacity of the national highway network. The expressway connects the Noi Ba international airport and Lao Cai, a city on the border with the People’s Republic of China (PRC).


Since the city is well positioned with an expressway (and an airport), three rivers, and a railway, the goal was not only to reduce heavy traffic jams but moreover to help Viet Tri become a regional logistics hub. Like Hung Yen and Dong Dang, Viet Tri is located along the North–South Economic Corridor of the Greater Mekong Subregion (GMS). It has significant potential to facilitate the efficient flow of goods and people. And once the corridor becomes a full-fledged economic lifeline for the GMS, Viet Tri is expected to benefit from the growth.


As it is, the completion of the urban roads has already started to improve the economic status of the city, said Hoang. “According to history, the country’s first king was born in Viet Tri, and so this historic place is very popular with the tourists. The new and improved roads will contribute to increasing the number of visitors every year,” he explained.   

Dong Dang’s new gateway to the east

Another highlight of the project, said Hoang, is the Huu Nghi border gate facility built in Dong Dang, a city sharing a border with PRC. “A modern building with a symbolic design – it is based on the red star of the Vietnamese flag – it will boost trade between the two countries.”


The previous building was very old and heavy trucks and containers had to pass by on the same road with passenger traffic. In this new facility, which aims to improve the immigration and emigration of visitors and custom clearance of goods for import and export, the design accommodated a separate road or section for trucks and containers from that of the visitors.


The new building, completed in June, is still connected with the old building. Once all the customs equipment and activities are set in place in the new building, the plan is to lease the old building to a private sector operator, noted Hoang. “The income from leasing will be used for operations and maintenance in the future of the entire facility. This will be a kind of public-private partnership arrangement,” he explained.


Along with the main building and offices, footbridges, retail space, a car park, and roads were built under the project, including construction of the Vietnamese section of the road connecting to the Chinese side for transportation of goods. Additionally, drainage was upgraded and the river embankment near the market area was raised for flood protection, since flooding is a usual occurrence in Dong Dang during heavy rainfall.


Because of these enhancements, the time required for the clearance of goods at customs will be reduced from five hours (based on 2010 data) to two hours. Trade is also expected to increase from $859 million (2010) to $2.78 billion by 2020, said Honda. Both ADB officers mentioned that had the previous capacity of the Huu Nghi border gate been retained, the gate would not be able to handle the forecasted increase.


This border area with PRC is “becoming the epicenter of regional and global trade as multinationals shift manufacturing from South China to lower-cost Southeast Asia countries,” according to the American Journal of Transportation.

Heritage preservation in Hung Yen

While also a provincial capital like Viet Tri, Hung Yen is the smallest among the three project sites, with a population of about 80,000 residents only. Situated southeast from Ha Noi, the city used to be a trading port in the 15th and 16th centuries. Currently, it is well known for its pagodas and historical sites. The local government aims to develop the city as both a tourist and university town, and as such has already started preserving several old buildings.


The comprehensive project complemented this effort through the improvement of narrow and unpaved roads, with provision for water supply and utility ducts for electricity and telecommunications, at Hung Yen’s old town. Over three kilometers of road was also built to serve three universities that will be relocating to Hung Yen from Ha Noi—a move emphasizing decentralization from the country’s capital.

Secrets to success


All ADB original outputs are complete, according to Hoang. As the first project to accomplish this feat in Viet Nam, he said: “The local recipients feel a strong sense of ownership. They highly appreciate the assistance of ADB.” The customs building in Dong Dang even has a plaque commemorating ADB’s notable contribution.


“Our team also has a high feeling of efficiency and effectiveness,” he added.

Applying a decentralized approach in implementing the project was the principal reason for this on-time delivery. Hoang detailed how the provincial government used their own fund to contribute to the detailed design, minimizing start-up delay.

“So when the consultants were hired, the detailed design was ready. The consultants didn’t have to prepare the design. They just reviewed it,” Honda added. In addition, hiring consultants on time is critical, since this prevents a chain reaction of delays, such as a feasibility study that becomes outdated and then needs updating.

Another recommendation is minimizing the number of components to only what is essential for the project’s goals, said Honda.


Overall, “good project design links to good project delivery,” stressed Hoang.


Currently, the team is incorporating lessons from the project to the next project. The decentralized approach, dealing directly with the municipal or provincial government, will be applied for succeeding urban projects.


Eri Honda
Principal Urban Development Specialist, SEUW
Hoang Nhat Do
Senior Project Officer (Urban Development), VRM
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