Chapter 4. Bringing development strategies and infrastructure planning into closer alignment: A special focus on the case of Viet Nam

The quality of infrastructure cannot be judged entirely in isolation, and also requires that projects complement broader development strategies where they are implemented. However, weak public investment management systems can lead to investments that are less fiscally sustainable and unlikely to make effective contributions to growth and development. Similarly, appraisal systems are critical in identifying quality infrastructure projects, as are institutions for infrastructure governance. Viet Nam, which has adopted many principles of quality infrastructure through its planning system, offers an interesting case study, though further work could be done to strengthen the connections between socio-economic development plans and transport planning. Detailed budgeting, time-specific targets, and clearer criteria, could be helpful in addressing these challenges.



By co-ordinating and directing action, and setting expectations for investors and other actors, well-aligned development strategies and infrastructure plans are important in pursuing infrastructure investments that have positive social and economic impacts. Many Asian countries could improve the outcomes of their infrastructure investments with complementary development and infrastructure planning. Three important issues to be addressed in this chapter in fostering improved alignment between national development strategy and infrastructure planning are the development of efficient public investment management mechanisms, effective processes of project appraisal and institutions for infrastructure governance.

Viet Nam’s progress in developing infrastructure is partly due to its effective planning for the sector. Multiple socioeconomic and transport development plans are used in Viet Nam to diver infrastructure development. Despite the strengths of this arrangement, more could be done to strengthen the connections between plans, improve targets set in the plans and reduce uncertainties in financing infrastructure projects.

Implementing efficient public investment management mechanisms

In the absence of efficient management, investment spending is unlikely to be fiscally sustainable or to promote growth or development. Systems for the management of public investment (PIM), which are either weak or non-existent in many developing economies, can foster effective investment in infrastructure. The lack of good PIM capacities can lead to political influence in project planning and selection, delays in designing and completing projects, waste due to corruption, cost overruns and delayed or incomplete projects, lower-quality results, and less effective or efficient operation. In turn, all of these issues have negative impacts on a country’s overall economic and development strategies.

Rajaram et al. (2010[1]) identified eight critical areas for developing an efficient PIM system. These cover the clarity and transparency of investment processes, the use of appraisal processes with clearly-defined criteria, the use of independent reviews in appraisals, the responsible review of funding options, defined roles of implementing agencies in awarding and monitoring projects, clear processes for managing adjustments to projects during their implementation, monitoring and responsibility during projects’ operational periods, and what procedures are in place for auditing projects after their implementation and how are lessons learned identified and acted upon in future.

A subsequent study builds on this diagnostic approach in reviewing PIM systems in several countries, including Asian countries: China, Viet Nam, Korea and Timor-Leste (Rajaram et al., 2014[2]). China’s investment on public infrastructure transitioned from the government giving full support to investing throughout the economy in 1979–83. This was followed by a series of incremental steps to decentralise control and create funding sources (state banks) to replace budget funding of investment over 1983–2003 and a number of clarifying reforms in 2004. Viet Nam also decentralised its investment, and modernised public investment through legislation in 2005. Additionally, significant efforts were placed to regulate appraisal, monitoring and evaluation in 2014 and reform procurements. In Korea, the Total Project Cost Management (TPCM) system was introduced in 1994 and the planning and budgeting ministries were merged in 1999, the same year that a cross-ministerial task force designed an action plan to strengthen PIM. Preliminary feasibility studies and an ex-post performance evaluation system were also introduced. The TPCM system was strengthened by addition of Reassessment Study of Feasibility mechanism and under the National Finance Act in 2006. Reforms in Timor-Leste have helped to improve transparency by clarifying the relationship between the Petroleum Fund and the annual budget, preventing off-budget public investment and including most donor-funded projects in which the government is a partner in the budget.

Short-term political dynamics can create challenges for the long-term perspective needed in infrastructure investment. These challenges arise through multiple channels; political pressures may distort infrastructure planning, such as through the prioritisation of projects to fit electoral cycles, or project costs may be increased because of the risks to investors and developers arising from political uncertainty. Projects affecting politically sensitive issues such as equity, environmental and land use or national security considerations often entail further challenges. Among OECD countries with overall shortlists of priority projects, political interests and agendas are often the most important criteria in prioritising projects within shortlists (OECD, 2016[3]). The institutionalisation of infrastructure management can help to overcome or mitigate some of the challenges associated with political pressures in the infrastructure sector. Stable regulatory frameworks are important in supporting the credibility of long-term infrastructure planning. National strategic visions for infrastructure may exceed the periods of normal political mandates, and should be anchored in central agencies of government, with input from policy departments, other levels of government and other stakeholders (OECD, 2017[4]).

Improving project appraisal

The effective appraisal of projects is critical to ensuring that a planned piece of infrastructure will support a country’s economic and development strategies. Project appraisal can help to screen out white elephant projects that draw heavily on a country's capital and current budgets without providing any significant social and economic benefits; ensure the financial viability of the project, proper costing and financing of the investment phase, and appropriate risk diversification; and help to ensure that economic gains are realised and broadly shared with consideration of environmental impacts and appropriate compensation for negatively-affected groups. Thus, project appraisals can improve the matching of infrastructure planning and economic and development strategies.

Effective project appraisals require clear institutional arrangements between fiscal management and economic planning. In many countries, these two functions are under different ministries. Institutional arrangements can also be complicated in countries with greater decentralisation, and in which sub-national governments have roles to play in economic planning. Similarly, clear and transparent guidelines are needed to help prevent political interference and capture of projects. In 2005, Ireland's Department of Finance published its Guidelines for the Appraisal and Management of Capital and Expenditure Proposals in the Public Sector, for example. These guidelines set out a range of appraisal methods to match the scale of potential projects. It classifies five groups of project proposals based on estimated costs and other criteria, with unique appraisal methods applied to each. Transparent processes and the publishing of appraisals results help to provide some checks and balances on officials involved in infrastructure decision making. Appraisals may also need to be continued during the operational phase of a project.

Capacity limitations may diminish the efficiency of process of project appraisals, though the outsourcing of some appraisal work may help to overcome this if governments retain oversight and decision-making responsibilities. The Gateway review process used in the United Kingdom provides an example of independent peer reviews of project appraisals and monitoring. In the United Kingdom, once the business case for a project is approved, HM Treasury makes the final decision on whether to go ahead with the plan, as part of its spending review process. In its Green Book, HM Treasury sets out a framework for appraising all of the central government's projects and programmes. These guidelines clearly state that public bodies need to carefully consider which implementation method is likely to be the most effective. They also contain guidance for decision makers on how to undertake a project, including the degree of involvement from private sector. To achieve better value for money for public spending, HM Treasury has revised the project approval process, and the results of this revision have been effective since April 2011. The United Kingdom government has established the Major Projects Authority within the Cabinet Office’s Efficiency and Reform Group to replace the Major Projects Directorate in the Office of Government Commerce.

Donors can also play a more active role in overcoming the insufficient appraisal of projects, and many are already demanding satisfactory project appraisals before they will release funds for projects. In addition, donors are increasingly demanding that projects be monitored and appraised after their construction.

Case study: Viet Nam

Viet Nam offers an interesting case study because officials have accepted many quality infrastructure principles, incorporating these in the development of infrastructure projects. Socioeconomic and transport development plans are used to set goals and plan future actions, though these two types of plans are not as complementary as they could be. Policy challenges to be addressed in strengthening development and infrastructure planning include the connection between these planning processes, infrastructure targets and financial plans.

Development strategies and infrastructure planning

Planning infrastructure investment in Viet Nam is affected by the five-year and annual Socio-economic Development Plans (SEDPs) based on the ten-year Socio-economic Development Strategy (SEDS), transport development strategies and plannings (Table 4.1).

Table 4.1. Summary of documents on SEDS, SEDPS and transport plans

Document type and name


Issued/approved by


National Socioeconomic Development Strategy

Ten years

Central Party Executive Committee


Five-year SEDP

Five years

Drafted by the government and approved by the National Assembly

Annual national SEDP

One year

Drafted by the Ministry of Planning and Investment and approved by the National Assembly

Annual provincial SEDP

One year

Provincial People's Council

Planning or master plan

Master plan for the socio-economic development of special territories

Ten to fifteen years and beyond

Drafted by the Ministry of Planning and Investment and approved by the Prime Minister

National or provincial planning for the development of sectors and products

Ten to fifteen years and beyond

Line ministries approve national plans and Provincial People's Council approves provincial plans

Transport development plans by key economic region, province and district

Ten to fifteen years and beyond

Prime Minister approves national plans and the chairperson of the People's Committee approves plans at the provincial or district level

National/provincial plans for roads, railways, inland waterways, aviation, seaports and highways

Ten to fifteen years and beyond

Prime Minister approves national plans.

Source: OECD Development Centre’s compilation based on national sources.

Socio-economic development plans in Viet Nam

Viet Nam’s planned investments in transport infrastructure are detailed in its five-year and annual SEDPs, as approved in the country's ten-year SEDS. The SEDS is approved and enacted by the country's national assembly. It acts as a framework for the development of the shorter-term SEDPs.

In the 1990s, in the wake of Viet Nam's economic reforms of the late 1980s, the nature of the country's SEDPs evolved from bureaucratic plans into something more directive. From the late 1990s to the early 2000s, Viet Nam continued to transform its SEDPs into medium-term action plans for government, similar to the plans that new governments in other nations tend to put in place upon taking office. Based on the ten-year SEDS, the government charges the Ministry of Planning and Investment with the responsibility of developing the five-year national SEDP for submission to the national assembly for approval. The ministry chairs the process and plays a co-ordinating role with other parts of government and with local authorities. After two to three years, a mid-term evaluation of the five-year plan is conducted. Based on the results of this evaluation, policy makers may adjust the original objectives and indicators of the five-year plan to better suit the circumstances in the country, as well as the international economic context.

Local governments elaborate their own SEDPs, which they base on the SEDPs from higher levels of government, and which require approval from higher levels of government. At the level of the commune or ward, public servants prepare only annual plans instead of five-year programmes. Annual SEDPs flesh out in detail the objectives from the five-year plan of the locality or sector in question, with consideration of changes in the socio-economic situation of the country.

In practice, the design of the SEDPs and the process of their implementation can limit their usefulness as tools for development planning generally and infrastructure planning in particular. Rather than quantitative targets, SEDPs tend to include subjective goals on topics without formal methods of measurement, and do not go into detail on how goals are to be achieved. This is particularly problematic in local government planning.

SEDP’s goals are also not necessarily aligned with the adequate budget and resources, and do not have an adequate order of priority in budget allocations. Moreover, because Viet Nam has not yet fully applied a medium-term financial plan to the budget process, the five-year SEDPs of local authorities can only ensure funding for projects that policy makers deem to be especially important. In addition, more effective monitoring of SEDPs is needed; evaluation takes place primarily at the beginning of the new plan period, with little consequences in place when SEDP’s goals are not achieved at the end of the plan period.

Transport development plan in Viet Nam

Transport development strategies in Viet Nam often encompass a ten-year period in covering the development for transport networks and a broad twenty-year vision. Viet Nam developed its first strategy of this kind in 2004, and has revised it every five years. Although there is this overall strategy for developing transport, there is no master plan on the issue. Instead, there are many different types of transport development plans, both at the central and the local level. Unlike the ten-year SEDSs and five-year SEDPs, they differ in their timeframe depending on the level of government and on the sector to which it relates, with periodic re-examination by policy makers.

There are two main types of transport development plans in Viet Nam. The first of these is plans related to special territories, such as key economic regions in the north, centre and south of the country, as well as in the Mekong Delta, and at the level of provinces, cities and districts. The second group consists of plans focusing on a particular mode of transport, such as road, rail, aviation, seaports, inland waterways or highways. For each mode of transport, plans are developed at different levels: nationwide; for specific regions such as key economic zones; for provinces, cities and districts.

The Prime Minister approves transport development plans at the level of the central government, proposed by the Minister of Transport. The presidents of Viet Nam's People's Committees approve plans for provinces and cities, following proposals by the directors of provincial or municipal transport departments. At the commune level, the presidents of the Provincial People's Committees are responsible for approving plans proposed by the transport department. Authorities responsible for transport development plans and policies also differ by the mode of transport and type of infrastructure (Table 4.2).

Table 4.2. Responsibilities for transport development plans and policies in Viet Nam

Type of infrastructure

Responsible authority

Regulations on functions and duties

Regulations governing multi-modal initiatives


Directorate for Roads of Viet Nam (DRVN), reporting to the Ministry of Transport

Decision No. 60/2013 / QD-TTg dated 21/10/2013

Ministry of Transport, as stipulated in Decree No. 12/2017/ ND-CP


Generally, the Ministry of Transport, although sometimes unclear


Railway authority, reporting to the Ministry of Transport;

Viet Nam Railways, reporting to the Prime Minister

Inland waterways

Vietnam Inland Waterways Administration, reporting to the Ministry of Transport

Decision No.27/2008/ QD-BGTVT dated 2 September 2008


Vietnam Maritime Administration, reporting to the Ministry of Transport and Vietnam National Shipping Lines (Vinalines), reporting to the Prime Minister

Decision No.1155/QD-BGTVT dated 3 April 2015


Civil Aviation Administration of Vietnam, reporting to the Ministry of Transport

Decision No.121/QD-BGTVT dated 14 January 2016

Source: OECD Development Centre’s compilation based on JICA (2010[5]).

Although national transport development plans are approved by the Prime Minister, they are not guaranteed the budgetary support from the National Assembly and are not binding. The division of responsibilities in planning and budgeting can further complicate matters; Ministry of Transport and the Ministry of Planning and Investment take the lead in planning new road projects and also plan funding for road maintenance with the Ministry of Finance as a third partner, with financing provided by both the transport and finance ministries. As a result of this arrangement, trade-offs between new roads and road maintenance may not be fully taken into account.

Transport infrastructure planning is further complicated by the spread of other responsibilities across multiple areas and levels of government, though the Ministry of Transport has a co-ordinating role in formulating transport development plans. More specifically, the ministry handles five key aspects of infrastructure development: formulating policy, planning and management of the national transport infrastructure, assisting local authorities in developing their own transport plans, developing medium and long-term plans for the sector, and prioritising among subsidiary departments focusing on individual sectors. Infrastructure projects that require a more multi-sectoral approach to planning are often broken down into sub-projects and assigned to relevant parts of the Ministry of Transport. This type of fragmented planning has led to bottlenecks such as the approach roads to new ports not being ready for the opening of the facility to cargo, or newly-built bridges slowing inland waterway traffic. Relatedly, the process of infrastructure planning does not always account for interactions and complementaries with other sector-wide and territorial plans in the country. Viet Nam currently has dozens of sectoral plans signed and issued by the prime minister, and hundreds issued by local authorities.

Data limitations and a lack of forecasts also pose challenges for infrastructure planning by increasing uncertainty. Reliable information on the country’s road system, for example, would support future development and the maintenance of existing assets in a way that better matches the country's transport needs and keeps costs to a minimum (JICA, 2010[5]). Improved indicators would also allow plans to be developed with clearer targets.

Relationships between development and transport infrastructure plans

A seven-step process defines the relationships between SEDSs, SEDPs and transport development plans in Viet Nam (Figure 4.1). In the first step, the SEDS is reformulated for the coming period. Based on the SEDS, ministries and certain industrial and trade sectors, formulate and adjust the sector-wide development strategies for which they are responsible. In this way, the Ministry of Transportation develops transport infrastructure development strategy with the participation of ministries, sectors and provinces, though the extent of their participation is often limited. In the second step, sectoral plans at the national level are produced. The transport planning is one example.

Figure 4.1. Relationships between SEDSs, SEDPs and transport planning

Note: Bold lines signify strong connections, while dotted lines signify a weak connection.

Source: OECD Development Centre's compilation based on national sources.

In the third step, local authorities develop sectoral plans for the local level, along with local socio-economic development master plans, taking account of local development needs to estimate required investment capital. Socio-economic development master plans at the provincial level include infrastructure plans for transport, industry, agriculture, and services, though there is often a lack of complementarity in planning between provinces. This fragmentation has been exacerbated since 2008, when, according to Decree 04/2008/ND-CP, ministries, other branches of the government, and Provincial People's Committees have no longer had to report to the ministry on the implementation of the plans.

In the fourth step, investment policies and project plans are approved or rejected by responsible authorities. The National Assembly is responsible for approving projects of national importance, typically meaning that it would require more than VND 10 trillion of public investment, could substantially impact the environment, would use a large parcel of land or one that currently hosts wet rice agriculture with more than two crops, and would displace large numbers of residents. The necessary level of approval for other projects is determined by the type and amount of capital involved (Table 4.3). The Prime Minister is responsible for making decisions on group A projects, while heads of ministries and central agencies and People’s Councils at all administrative levels have the authority to decide on projects under their administration in groups B and C.

Table 4.3. Project categorisation by type and amount of capital involved


Group A

Group B

Group C

Traffic infrastructure (includes wharfs in the sea or in rivers, airports, railroads, and national highways); power generation; oil and gas extraction; industrial projects in chemicals, fertilisers and cement; mechanical engineering and metallurgy; mineral extraction and processing; and residential construction

More than VND 2.3 trillion

From VND 120 billion to VND 2.3 trillion

Less than VND 120 billion

Traffic infrastructure; irrigation; water supply and drainage, plus technical infrastructure; electrical engineering; communication and electronic-device manufacturing; pharmaceutical chemistry; material production; mechanical construction; and post and telecommunications

More than VND 1.5 trillion

From VND 80 billion to VND 1.5 trillion

Less than VND 80 billion

Agriculture, forestry and aquaculture; national parks and wildlife sanctuaries; and technical infrastructure for new urban zones

More than VND 1 trillion

From VND 60 billion to VND 1 trillion

Less than VND 60 billion

Health care, culture and education; scientific research; information science; radio and television broadcasting; tourism and sport; and civil construction

More than VND 800 billion

From VND 45 billion to VND 800 billion

Less than VND 45 billion

Source: OECD Development Centre’s compilation based on Law on Public Investment 2014.

In the fifth step, five-year SEDPs are developed on the basis of the SEDS, national and local sectoral plannings, and an estimation of the resources available for implementing the plan. Five-year SEDPs tend to list only the large and important projects that have won approval in the national assembly, along with allocations of investment capital for construction, due to limitations in estimating available budgets and the lack of a list of priority investment projects.

In the sixth step, officials decide on a list of projects that will receive investment resources, moving selected projects from investment policy to investment decisions. Following Directive 1972/CT-TTg of 2011, projects are required to have the backing of firm funding commitments before approval, though the decision-making process can still encourage rent-seeking and non-transparent lobbying. In the seventh step, policy makers build an annual SEDP, taking account of the five-year SEDP and existing investment decisions (Table 4.4).

Table 4.4. Examples of objectives for transport infrastructure development in five-year and annual SEDPs

Five-year SEDP

Annual SEDP


Objectives for infrastructure development


Objectives for infrastructure development


  • Making a breakthrough in infrastructure construction


  • Concentrating resources and ensuring the progress of important national projects and national target programmes.


  • Reviewing and evaluating projects on transport infrastructure development, especially in key economic regions

  • Prioritising a timely allocation of investment capital to ensure complete construction

  • Quickly developing urban transport systems, especially public transport

  • Step by step, and at the same time, developing and modernising the infrastructure systems of large urban areas, while restructuring production and distributing population.

  • Improving the integrated-services capacity of the three major seaports in the three regions


  • Reviewing and evaluating projects on transport infrastructure development, especially in key economic regions, in order to allocate investment capital in a timely fashion to projects to be completed and put into use in 2012-13.

  • Effectively exploiting the land fund for transport infrastructure development, linking up land-use planning and transport-infrastructure planning to increase non-budget capital.

Source: OECD Development Centre’s compilation based on Resolution No. 75/2006/NQ-QH11, dated 29 November 2006, on the 2007 SEDP; Resolution No. 11/2011/QH13, dated 9 November 2011, on the 2012 SEDP.

Ideally, SEDPs should align with strategies and plannings including in transport infrastructure, by detailing their contents into specific objectives, including tasks, timeframes, sources of funding, implementers, and measures to monitor and evaluate projects. However, the implementation of the socio-economic development plan depends on resource availability, making plannings directive rather than implementary and SEDPs tend not to contain much detail on transport infrastructure.

Policy challenges and recommendations

Socio-economic development plans and infrastructure planning in Viet Nam help to direct future projects, set priorities and manage expectations about future developments. Improvements can be made to the planning process in Viet Nam, however, to make planning a more effective tool in infrastructure investment. In particular, additional work would be done in strengthening the connections between socio-economic development plans and transport plannings, formulating plans with more specific targets, and addressing uncertainties in financing.

Strengthening connections between socio-economic development plans and transport plannings

Disconnections between SEDPs and infrastructure plannings have consequences for the effectiveness of transport projects. Insufficient consideration is often paid to the economic interaction between projects, leading to situations such as the completion of an industrial park before connecting transport infrastructure. Furthermore, the five-year SEDPs that have been implemented for the periods 2001-05, 2006-10 and 2011-15 included little detail on transport infrastructure including its mode (Table 4.5).

Table 4.5. Specific modes of transport in Viet Nam's SEDPs

Type of infrastructure

2001-05 SEDP

2006-10 SEDP

2011-15 SEDP

Roads, highways, railways, aviation and inland waterways




Sea ports



Improving the capacity of the integrated services of the three major sea ports in three regions

Transport infrastructure in general


Transport infrastructure is not clearly defined but only referred to as "infrastructure" or "economic infrastructure".

“Transport infrastructure of the key economic region”; “Urban transport infrastructure”

Source: OECD Development Centre’s compilation based on legal documents on plans and SEDPs

Transport infrastructure planning should be comprehensive, clear and achievable. A complete and up-to-date database of modes of transport infrastructure would allow planners better forecast future demand and respond accordingly. The Ministry of Transport and line ministries could also consider co-operating closely to formulate a national transport master plan to ensure the consistency and uniformity of the planning system throughout the country. Such an approach would allow for planning on connectivity between economic centres, provinces and regions, as well as between modes of transport. Policy makers should aim to create a unified development space, and to overcome conflicts between national-level plans on the one hand, and regional, sectoral and provincial plans on the other. Infrastructure project management should be linked to the overall institutional system and to economic management policies.

An improved process of assessment for infrastructure projects would support the alignment of projects that feature in infrastructure plans and SEDPs. Currently, projects are appraised in an eight-stage process (Box 4.1). The competency and capacity of project appraisal could instead be centralised into one agency, with international standards applied in evaluating all projects. Specialised staffs could manage this process. The development of guidelines and regulations for economic analysis would allow for the assessment and measurement of the social and economic costs and benefits of transport infrastructure projects.

Box 4.1. The assessment process of new transport infrastructure projects in Viet Nam

New transport infrastructure projects in Viet Nam should ideally go through an eight-stage process, all of which are important in projects’ successful implementation (Figure 4.2). Following the determination of the major policies, guidelines, and socio-economic development strategies for each period in question, ministries and municipalities develop their development plans, and their five-year and annual plans, which are the basis for carrying out transport infrastructure projects. Pre-assessments are then conducted by authorities including the national assembly, the planning and investment ministry and others. The capacity of the private sector to take part in the project is also evaluated at this stage. In the third phase, the socio-economic efficiency of the project is reviewed by a state appraisal council. In order to strengthen the evaluation results concerning the socio-economic efficiency of the project, in the fourth stage of the process, an independent agency to review and revaluate the results of the assessment previously carried out. In the fifth stage, the project and contractor are selected. The Ministry of Transport assists local governments in selecting projects, in establishing five-year public investment programmes, and in obtaining annual budget allocations from the state budget. The Ministry of Finance is responsible for assisting provincial People’s Committees in setting the budget estimate and funding for activities of road management and maintenance, as well as the forecasts of road-traffic demand. Project implementation is monitored in the sixth stage and any necessary changes to the project are proposed. In the seventh stage of Viet Nam's process, the project is finalised and brought into use. In the eighth and final stage, the project’s effectiveness is monitored and evaluated, with its socio-economic efficiency in reality compared with the expectations of the assessment. When a project does not meet expectations, a committee reviews the process through which it was initially appraised and implemented, in order to find out the cause of this discrepancy.

Figure 4.2. Investment process for infrastructural development projects using public investment capital, according to good international practices

Source: OECD Development Centre's compilation based on national sources.

Financial considerations should be among the criteria used to evaluate proposed projects. This, in turn, requires cost estimations and consideration of financing availability and allocations. The use of a medium-term budget plan framework both at central and local levels may be helpful in this regard. The Ministry of Finance may also have a role, in collaboration with the other relevant departments of government, in appraising the availability of capital to invest in infrastructure projects. Estimated costs could be compared with other domestic and international transport infrastructure projects in judging their accuracy, with proposers responsible for explaining any large discrepancies. In addition, Viet Nam could strive for greater transparency and accountability in selecting contractors and minimise the number of projects requiring direct contracting.

Developing plans with more specific targets

Details on the financial cost of planned infrastructure projects are not included in the five-year SEDP, which also lacks a timeline for progress in implementing these projects. Including greater specificity in development plans would help to enhance their relevance to infrastructure planning.

SEDPs could be strengthened by incorporating details on the size of infrastructure projects present in infrastructure planning, while setting out development plans for each mode of transport infrastructure. Specificity could be increased by including measurable objectives and eliminate immeasurable indicators in SEDPs. Relatedly, these plans could also note the development objectives that particular projects aim to achieve. Using information such as this, infrastructure projects could then be ranked in terms of priority.

Addressing uncertainty in financing

Providing measurable targets for checking the progress of SEDPS and infrastructure planning is complicated by the lack of details on budgeting for implementing projects. The national five-year SEDP does not include most approved transport infrastructure projects, except for some major transport projects of national importance, such as the Long Thanh Airport, though even these may not have specific details about investment capital. Uncertainty about the availability of necessary financing and its allocation among projects make it impossible to be more specific in plans other than annual SEDPs.

The five-year SEDP could include time-specific targets for infrastructure projects, as well as other details on the funding for meeting targets and implementing actors from the government or private sector. Clearer criteria could also be used in selecting the projects to be included in annual SEDPs, rather than relying on the ask-give mechanism between the agencies that request a project and those that approve it. In addition, required investments have not been included in recent infrastructure plans as they were in the past; both the railway plan from 2009 the seaports plan from 2013 mentioned in detail the scale of investment capital but the 2013 railways plan and the 2015 seaports plan did not.

Domestic and foreign private investors and partners also have a role to play in improving the delivery of infrastructure projects in Viet Nam, particularly given the extent of infrastructure investment needed. However, the private sector is not heavily involved in the infrastructure sector, and projects that receive full funding from the state tend to use state-owned contractors. Viet Nam lacks a strategy for attracting these investors to participate in public investment in general and in infrastructure in particular and SEDPs do not include details about potential investors and contractors (Table 4.6).

Table 4.6. Participation of private and foreign contractors in developing infrastructure




Sea ports

The plan from 2009 does not list the contractors

No content concerning the contractor


The plan from 2015 lists all projects in the category of “public/private” capital

The 2009 plan does not specify state or private capital other than saying it is “90% state, 10% private”

No content concerning the contractor


There is data on total capital, but none concerning each project’s capital in terms of whether it is state-budget capital, official development assistance (ODA) in the form of loans, enterprises' capital (including equity capital), mobilised capital (loans, project bonds), or capital from domestic and foreign investors.

There is no content on the contractor, though the conditions for the contractor are usually attached to the loan agreement with the partner in ODA loans

Source: OECD Development Centre’s compilation based on national sources.

Viet Nam has taken steps, notably through Decree No. 30/2015/ND-CP and Decree No. 15/2015/ND-CP, towards attracting private domestic and foreign investors into public-private partnerships. More work is needed in making these efforts effective, however. Legislative changes could help to provide the stable regulatory arrangements expected by investors. Strong investment commitments from government on complementary infrastructure may also be needed where successful outcomes are dependent on other projects. Clearer goals and more effective implementation of SEDPs would increase the strength of government commitments.


The case of Viet Nam offers interesting lessons for the opportunities and challenges present in formulating socio-economic development plans and infrastructure plannings that are complementary and mutually supportive. Consideration of the efficiency of financing arrangements – such as through the use of PIM systems – and the use of effective means of project appraisal and infrastructure governance are, in general, likely to be useful in improving the prospects of planned infrastructure projects. As illustrated by Viet Nam’s experience, improving the financing and appraisal of planning can require that other aspects be addressed as well, including the connections between different plans, the targets and measurements included in these plans, and the certainty of financial arrangements for proposed projects.


[5] JICA (2010), Annual report 2010, Japan International Cooperation Agency, Tokyo,

[4] OECD (2017), Getting Infrastructure Right: A framework for better governance, OECD Publishing, Paris,

[3] OECD (2016), OECD survey of infrastructure governance, OECD Publishing, Paris,

[1] Rajaram, A. et al. (2010), “A Diagnostic Framework for Assessing Public Investment Management”, World Bank, Washington D.C.,

[2] Rajaram, A. et al. (2014), The Power of Public Investment Management: Transforming Resources into Assets for Growth, World Bank, Washington D.C.,

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