Netherlands’ $1.26 billion plan for Ho Chi Minh City flood effort

10:00 | 25/06/2020
Experts from the Netherlands have proposed an innovative public-private partnership project for sustainable flood prevention for the southern economic hub, featuring entire investment capital of approximately $1.26 billion. VIR’s Bich Ngoc talked with Carel Richter, consul general of the Netherlands in Ho Chi Minh City, to elaborate on this new concept for flood prevention and understand its financial design.
1497p23 netherlands 126 billion plan for ho chi minh city flood effort
Carel Richter, consul general of the Netherlands in Ho Chi Minh City

How is this initiative going to solve flood issues in a city as large as Ho Chi Minh City?

In order to deal with the flooding of Ho Chi Minh City today and in the future we were asked to help solve this challenge from a design and financial point of view. In brief, the project proposal contains several components.

The first component contains needed infrastructure such as multifunctional dykes and drainage canals in hotspots that are usually flooded or at risk of future flooding. The proposal is to design the anti-flooding infrastructure in such a way that it generates income to pay for itself.

Multifunctional dykes and canal facilities are combined or integrated with commercial properties, parking areas, stores, and entertainment centres that generate incomes that pay for initial investment, operation, and maintenance costs.

The second component is to build a 200-hectare rainwater reservoir capturing rainwater from the whole region. This reservoir is a natural water container preventing floods and creating an eco-system for flora and fauna.

From an income-generating point of view, leisure and tourism will be incorporated to cover the cost of protecting and maintaining the basin.

The proposal aims at enhancing environmental sustainability and protecting people from the harsh effects of flooding. At the same time, we want all people in the area of the project to benefit from the social and economic growth it will generate.

How much will this scheme cost, and how should finances be mobilised for it?

The proposal is estimated to cost around $1.26 billion.

We propose to utilise the public-private partnership (PPP) model. The private sector will carry out the design, construction, operation, and maintenance of flood prevention facilities while the government will issue policies and mechanisms to ensure the investors’ incomes for their operations are secured in a fair and transparent manner.

Both a private investor and the government will contribute financially to make this a success. As a result of the partnership, the city will have a sustainable system at a reasonable cost.

We are all aware that PPP methods are not easy but the Netherlands has partnership experience in various countries such as Malaysia, Philippines, Indonesia, and now in Vietnam.

We are making progress because of the strong partnership and support of the Vietnamese government. The Law on PPP is expected to be adopted soon and will create the legal framework for this project implementation.

What processes have been carried out thus far?

The Dutch government has expressed its co-operation in sustainable flood prevention for Ho Chi Minh City since February 2018 when Dutch Minister for Foreign Trade and Development Cooperation Sigrid Kaag made an official visit to Ho Chi Minh City together with Hans de Boer, President of the Confederation of Netherlands Industry, along with a large trade delegation.

In November that same year Henk Ovink, Special Envoy for International Water Affairs, visited Ho Chi Minh City for a dialogue with the People’s Committee and water experts to discuss the project details and available funds.

During the visit of Dutch Prime Minister Mark Rutte and Minister of Infrastructure and Water Management Cora van Nieuwenhuizen in April 2019, an MoU on the Public-Private Partnership for a Sustainable Greater Ho Chi Minh City Flood Protection Scheme was signed between the Netherlands Consul General and Ho Chi Minh City Department of Construction.

A month later, the city’s Party Secretary Nguyen Thien Nhan and a high-level official delegation visited the Netherlands to assess how multi-functional dykes worked and to sign a joint statement between people’s committees. This was represented by the Department of Construction and the Dutch Ministry of Infrastructure and Water Management on the implementation of the aforementioned Ho Chi Minh City PPP flood prevention scheme.

Upon returning to the city from the official visit, Party Secretary Nhan showed his full support to the co-operation by assigning a working group of relevant departments to work with the Dutch Consortium.

In August last year, Party Secretary Nhan and delegates had a fruitful discussion in Jakarta with Dutch experts regarding the co-operation model between Indonesia and the Netherlands in an anti-flood project in that city – one which has similar characteristics to Ho Chi Minh City in regards to this issue.

The project thereafter received funding from both the Netherlands Enterprises Agency and Netherlands in Business organisation to conduct a comparative study on the potential solutions for Ho Chi Minh City’s flood protection.

As of now, we are ready to move forward with the partnership to carry out the pre-feasibility study by the end of this year. The next stage of the project, the feasibility study, would take another two years to complete.

By Bich Ngoc

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