Vietnam is facing a combination of environmental problems including air, water, and solid waste pollution. Major factors contributing to these problems include high population growth, rapid urbanization, accelerating industrialization, and weak enforcement of the Law on Environmental Protection and Development.
The lack of clean water is one of Vietnam’s most pressing environmental concerns. At present, it is estimated that only about 70 percent of the Vietnamese population has access to potable water. A high rate of water loss, averaging 32 percent, further aggravates the problem. In order to improve upon this situation, the government has devised a water supply development plan with the objective of providing clean water for 80 percent of the population by 2015. The Government of Vietnam (GVN) expects to reach an average water loss rate of 20 percent by 2025 and to effectively manage water distribution networks and water fee collections.
To this end, the GVN uses Official Development Assistance (ODA) funding to develop water distribution networks. The ODA funds are used for three major water supply programs: (i) World Bank water supply projects for small and medium cities, (ii) Finland water supply projects for the northern mountainous areas, and (iii) AFD (Agence Francaise de Developpement) water supply projects for Mekong Delta provinces. However, it is estimated that ODA will be gradually reduced, since GDP per capita surpassed $1,000 by the end 2010. In that context and in view of the enormous required demand, the Government strongly encourages private participation in the development of water supply facilities and has created favorable policies to entice business. This policy stance is clearly stated in a number of GVN’s decrees including decree No. 117 on Water Supply and Environmental Sanitation; decree No. 88 on Drainage System Management; and decree No. 59 on Solid Waste Management.
Currently there are over 240 water treatment plants in Vietnam, producing over 4.7 million cubic meters per day for urban consumption, but these plants currently only meet about 70 percent of demand.
In addition to water supply, one of the most pressing environmental concerns and a top government priority is drainage and sewage. Due to rapid and ongoing urbanization and industrialization, improved municipal and industrial wastewater treatment has emerged as a critical need. The total investment required to meet sewage and drainage system needs throughout the country is estimated to be two to three times the total investment for water supply projects.
Most of the cities and provinces have no centralized wastewater treatment plants. Both storm water and household wastewater are commonly discharged through combined and outdated drainage systems into canals and rivers without treatment. The development of wastewater treatment facilities in industrial parks has also become a pressing need. Currently, only about ten percent of industrial parks have centralized wastewater treatment plants.
Municipal Waste Water
According to the Hanoi Drainage Company, the city discharges 450,000 to 510,000 cubic meters of wastewater per day into lakes and rivers. Over 90 percent of the city's wastewater is discharged directly into lakes and rivers without treatment, making these watercourses seriously polluted. Currently, Hanoi has only one wastewater treatment plant (Bac Thang Long - Van Tri) and two small wastewater treatment units (Kim Lien and Truc Bach).
Ho Chi Minh City discharges 1,200,000 cubic meter of wastewater per day. Similar to Hanoi, the City’ wastewater is mainly poured into rivers. In 2008, a wastewater treatment plant with capacity of 141,000 cubic meters per day (phase 1) and 500,000 cubic meters per day (phase 2) was built in Binh Chanh district, and became operational in 2009. According to HCMC’s master plan for wastewater drainage toward 2020 approved by the Prime Minister, the City will need an additional eight wastewater treatment plants of the same size with total investment of up to $4 billion to solve its wastewater drainage problem. These projects are under the management of HCMC Steering Center for Urban Flood Control. (http://ttcn.hochiminhcity.gov.vn/web/guest/gioi-thieu1) In Prime Minister's decision No. 1336 dated September 2008 on the development of the drainage system and wastewater treatment for economic development zones, total investment requirement for implementation, excluding resettlement costs, was estimated at $3.4 billion. In the decision, the Prime Minister made it mandatory for new urban residential areas and industrial parks to develop a plan and construct separate drainage systems for storm water and wastewater. Municipal and industrial wastewaters are further required to be pre-treated to ensure compliance with environmental standards before being discharged into the city's drainage systems. In this regard, the Government is encouraging cost-effective and environmental friendly wastewater treatment technologies.
Industrial Waste Water
Pollution violations by industrial manufacturers have drawn much media, government and public attention in recent past. Public interest groups have begun to highlight the impact of polluting manufacturers on the environment and economy. Violating manufacturers are beginning to feel the negative impacts of boycotts by their partners and customers. Polluting companies have also had some difficulty in accessing bank funds, as more banks are adjusting their policies to reject lending to clients on the environment black list. Highly visible cases were discussed at National Assembly meetings in Q4 2008 and in 2009. These recent developments have triggered an intensification of monitoring and inspection of industrial environmental pollution.
Industrial parks (IPs) represent an attractive market for wastewater treatment plants since the government is pushing harder on environmental compliance by industry. There are many centralized wastewater treatment facilities under construction or were put into operation in industrial parks including the Vinh Loc, Tan Binh IPs, High-Tech Park in the south, and the Pho Noi IP in the north. For instance, a wastewater treatment plant with a capacity of 5,000 cubic meters per day in High-Tech Park was put into operation on September 10, 2009; another wastewater treatment plant with a capacity of 10,000 cubic meters per day is under construction in Long Giang IP in Long An province.
Vietnam's waste amounts to over 15 million metric tons each year, with municipal waste from households, restaurants, markets, and business sources accounting for over 80 percent of the total. For the most part, municipal waste is concentrated in urban areas, while industrial waste- concentrated in economic zones, industrial parks, and urban areas- accounts for much of the remainder. Hazardous waste from industries and hazardous healthcare waste from hospitals, while much smaller in terms of quantity, are also burning issues because they pose high health and environmental risks if not properly handled and disposed.
Given a growing population, rapid urbanization and increased consumption, municipal waste generation is expanding considerably. With this growth, it is anticipated that waste generation will increase to over 23 million metric tons by 2010, and that the types of waste produced will continue to undergo a change from more degradable to less degradable and more hazardous.
Growth in hazardous-waste-intensive industries such as chemical and electronic products is already increasing the proportion of hazardous waste generated in Vietnam. There is an urgent need to establish industrial hazardous waste management systems, including both factory-based handling, treatment, and disposal systems, and centralized hazardous waste treatment facilities. Hazardous healthcare waste is increasing more rapidly as a result of the adoption of new medical techniques, greater use of disposable medical equipment such as plastic syringes, and an increase in tests, therapies, and operations undertaken.
Waste handling in Vietnam- including collection, treatment and disposal- is mainly carried out by Public Urban Environment Companies (URENCOs), which are responsible for the collection and disposal of municipal waste, including domestic, institutional, and in most cases also industrial and healthcare waste. Although there have been significant improvements by URENCOs in handling waste, most of the municipal waste in Vietnam is not safely disposed of. The dominant form of disposal of municipal waste remains open dumping. In many areas, self-disposal methods – such as burning or burying waste, or dumping in rivers, canals, and open fields – is common. Out of the 91 disposal sites in the country, only 17 are sanitary landfills. New landfill facilities are needed across the country. The development of waste treatment and disposal systems, including landfills, has become a priority of the government. Due to the lack of financial resources the government is constructing most sanitary landfills with ODA funding and also encourages private sector’s participation in the areas of recycling and re-use. A decree on Public Private Partnership (PPP) is under preparation by the Ministry of Planning and Investment (MPI) with the assistance provided by the World Bank.
Funding for water supply and wastewater projects comes from various sources within the state budget, as well as ODA (Official Development Assistance) loans and grants. ODA financing plays a key role, with major donors being the World Bank, the Asia Development Bank and bilateral contributors such as Japan, France, Denmark, the Netherlands, Finland, Germany, and Australia. The World Bank (WB) leads the group of multilateral donors with a commitment of $2.498 billion for Vietnam in 2010. The Asian Development Bank (ADB) has committed $1.479 billion in 2010. Whether funded multilaterally or bilaterally, projects funded by ODA offer numerous opportunities for foreign equipment suppliers, engineering and consulting firms.
Local production of environmental equipment does not meet market demand, especially the requirements of ODA-funded projects. Technical conditions/requirements governing many ODA projects dictate that many materials must be imported. For instance, equipment for water supply (water meters, valves, pumps, motors, water treatment chemicals, water filtration systems, water control and monitoring equipment, etc.) and most wastewater treatment equipment must be imported. Vietnam also has to import several waste treatment equipment and technologies including landfill equipment, incinerators, and composting technologies. Among imports, U.S. products and technologies are highly regarded for their high quality.
In addition to municipal and donor-funded projects, market demand is also being driven by certain industrial users. Industrial parks represent an attractive market for wastewater treatment systems, because Vietnam has to import nearly all of the key components of these systems. The market for water and wastewater treatment services currently centers on consultant contracts for ODA funded projects.