RIDEFExec

FOREWORD
The partnership of the United Nations Capital Development Fund (UNCDF) and the United
Nations Development Programme (UNDP) with Viet Nam dates back to 1978 when UNCDF
began to provide support to the country to develop its rural infrastructure. As the socio-
economic development of Viet Nam evolved with the doi moi reform process, UNDP and
UNCDF joined efforts to help foster grassroots democracy. In line with the national
commitment of “development for people, by people and of people”, the development projects
of UNDP/UNCDF have explicitly focused on the building of capacity at village, commune,
district and provincial levels.
The subject of this document is the Rural Infrastructure Development Fund (RIDEF), an
important initiative aimed at piloting a new approach to the planning, financing and delivery
of public goods and services in Viet Nam. RIDEF is based on the concept of empowerment of
local governments and communities. With the support of Quang Nam Province and Da
Nang City and with the generous contribution of the Australian Agency for International
Development (AusAID), 122 communes and 15 districts have proved that they are fully
capable of managing their own development, including determining their specific needs as
well as planning, implementing and maintaining rural infrastructure.
This report captures the best practices that have emerged from the RIDEF experience in
Viet Nam. It also highlights the many valuable lessons learned over the course of RIDEF’s
implementation, while candidly discussing issues of remaining concern that – in the light of
experience both in Viet Nam and elsewhere – would merit further attention in the design
and implementation of any future programmes of support for decentralized development.
We trust this review of RIDEF efforts will be of value to the Government of Viet Nam as it
focuses attention on achieving the Millennium Development Goals and further reducing
poverty throughout the nation.
We also hope that donors, both bilaterals and multilaterals, who are now developing new
programmes in Viet Nam will draw on the RIDEF experience. Our intent in providing this
review is for the RIDEF model to have a life beyond its immediate developmental impact. It
will do so to the extent Viet Nam and its development partners integrate and adapt the
RIDEF lessons in the continuing efforts to improve living conditions for the poor of Viet Nam
and build greater participation of the poor in decisions that affect their lives.
Normand Lauzon Jordan Ryan

Executive Secretary UN Resident Coordinator
UNCDF UNDP Resident Representative
ACRONYMS
AusAID Australian Agency for International Development

CDB Commune Development Board
CERUPAD Centre for Rural-Urban Planning and Development
CIDA Canadian International Development Agency
CPC Commune People’s Committee
DDB District Development Board
DPC District People’s Committee
DPCo District People’s Council
DPI Department of Planning and Investment
FINNIDA Finnish International Development Agency
IPF Indicative Planning Figure
IR Investment Report
LPP Local Planning Process
MIS Management Information System
O&M Operations and Maintenance
PMB Project Management Board
PPC Provincial People’s Committee
PRA Participatory Rapid Appraisal
PSG Planning Support Group
PSW Project Selection Workshop
RIDEF Rural Infrastructure Development Fund
RIDU Rural Infrastructure Development Unit
RRA Rapid Rural Appraisal
TSG Technical Support Group
UNCDF United Nations Capital Development Fund
UNDP United Nations Development Programme
VND Viet Nam Dong
CONTENTS
1. INTRODUCTION
2. RIDEF BACKGROUND
3. RIDEF’S APPROACH TO LOCAL DEVELOPMENT
3.1. Institutional framework

3.2. Funding facility
3.3. The local planning process (LPP)
(1) The 9 steps of the LPP
(2) IPF 1 and IPF 2 planning
(3) District level planning
(4) LPP evolution
3.4. Capacity-building
4. RIDEF OUTCOMES AND ACHIEVEMENTS
4.1. Grassroots democracy in practice

4.2. Capacity-building
4.3. Infrastructure delivery
4.4. Transparent selection of contractors
4.5. Management Information System (MIS)
4.6. Policy impact and replication
5. LESSONS AND ISSUES
5.1. Lessons learned

5.2. Issues
6. CONCLUSIONS
RIDEF- LESSONS FOR DECENTRALISED PLANNING, FINANCING AND DELIVERY OF PUBLIC
INFRASTRUCTURE IN VIET NAM
1. INTRODUCTION
The purpose of this document is to provide interested parties with
an overview of the Rural Infrastructure Development Fund (RIDEF)
project, implemented in Quang Nam and Da Nang Provinces and
funded by the Government of Vietnam, UNCDF, AusAID and UNDP.
Over the course of project implementation, a number of valuable
lessons were learned about a range of issues of increasing importance
in Viet Nam, including:
• local and participatory planning at commune and district

levels;
• capacity-building and institutional development;
• information management;
• decentralisation in general.
This executive brief, then, also aims to provide the Government of

Vietnam and its development partners with a succinct description of
the policy relevant lessons that have been learnt during
implementation of the RIDEF project.
1
2. RIDEF: BACKGROUND
The RIDEF project was explicitly designed by UNCDF as a pilot for testing
out a decentralised planning process for the delivery of small-scale,
pro-poor infrastructure in Quang Nam and Da Nang Provinces. RIDEF is
therefore a local governance project, and not just an infrastructure
development facility. As such, RIDEF’s policy relevance has increased
over time – not only because of continued public administration reform
in Vietnam, but also because of the Government’s recent attempts to
foster “grassroots democracy” through increased transparency and
accountability1. Today, the lessons learned during the course of RIDEF’s
implementation are particularly relevant given the Government’s
stated commitment2 to the formulation of a regulatory framework for
decentralisation in Vietnam.
RIDEF started up in 1996 and is scheduled to be completed in

September 2002. The project has been operational in all 14 districts of
Quang Nam Province and in the one rural district of Da Nang Province3,
and has provided funding for infrastructure construction in 122 of the
poorest communes (out of a total of 217 rural communes) of those
districts, with a total population of about 800,000 people.
The project has been implemented by the Provincial People’s

Committee (PPC) of Quang Nam Province through the Department of
Planning and Investment (DPI). A special technical unit, RIDU (Rural
Infrastructure Development Unit), has been responsible for day-to-day
management of the project and for facilitating the implementation of
the local planning process (LPP).
1
see Decree No. 29/1998/ND-CP.
2
as expressed in Sub-programme 2 of the Public Administration Reform Master Programme.
3
at project start-up, Da Nang and Quang Nam were part of a single Province – Quang Nam Da Nang.
2
3. RIDEF’S APPROACH TO LOCAL DEVELOPMENT
3.1. INSTITUTIONAL FRAMEWORK

The following table provides an
overview of the institutional framework
within which RIDEF supports local
infrastructure development.
At provincial level, RIDEF reports to the

PPC. This, in itself, was innovative – RIDEF
was one of the first donor-funded
projects in Vietnam to be implemented
at the provincial level, rather than by a
central line agency.The special unit
established to manage the project,
RIDU, consists of technical staff (rural
planners, engineers, accountants).
Table 1: local institutional framework
Level Institution Membership Function RIDEF

innovation
Province Provincial People’s Elected Chairman (from Provincial administration No
Committee (PPC) Provincial People’s approval of sub-projects
Council) and government
representatives
Rural Infrastructure Technical staff Financial and technical Yes
Development Unit (RIDU support for local planning
– part of Department of process; appraisal of sub-
Planning & Investment) projects.
District District People’s Elected Chairman (from District administration; No
Committee (DPC) District People’s Council) approval of some sub-
and government project design/costing
representatives
District People’s Council Elected members Selection of district level No
(DPCo) projects
District Development Some DPC members, Selection of district level Yes
Board (DDB) technical service projects
representatives
Project Management Some DDB members + Management of Yes
Board (PMB) community implementation of
representatives district-level sub-projects
Planning Support Group Representatives of mass Support for LPP Yes
(PSG) organisations, technical (facilitation)
services
Technical Support Group Technical services Support for LPP (technical Yes
(TSG) backstopping)
Commune Commune People’s Elected Chairman, No
Committee (CPC) government
representatives
Commune Development Some CPC members, Selection of commune- Yes
Board (CDB) representatives of mass level projects
organisations, government
representatives
Project Management Some CDB members + Management of Yes
Board (PMB) community implementation of
representatives commune level sub-
projects
Village Village Villagers Selection of priority No
village projects
3
District level planning is the responsibility of the DDB and the DPCo,
which designate Project Management Boards for each scheme that
is funded out of the district allocation.
RIDEF has pioneered the establishment of Planning Support Groups

(PSGs) and Technical Support Groups (TSGs) at the district level. PSGs
are mainly made up of mass organisation members along with a
few technicians from district line departments; TSGs are made up of
technical staff (engineers, agronomists, etc.). District TSGs and PSGs
provide communes with facilitation for planning and technical
inputs for initial appraisal and design/costing of sub-projects.
At commune level, the principal actor is the Commune

Development Board (CDB), usually chaired by the CPC Chairman,
with other members drawn from the local mass organisations and
administrative personnel. CDBs were established by RIDEF and are
thus an institutional innovation. CDBs are the owners of all sub-
projects that are implemented in the commune, but delegate their
responsibility for overseeing sub-project implementation to
Project Management Boards (PMBs). At the time, commune level
“ownership” of projects was a significant innovation in Vietnam.
The vast majority of RIDEF-funded infrastructure is identified at the

village level, through a participatory process of consultation, carried
out by the CDB with TSG/PSG support.
3.2. FUNDING FACILITY

RIDEF’s funding facility is made up of contributions from UNCDF
(75%) and from the PPCs of Quang Nam and Da Nang (25%). The
entire fund (of nearly US$ 8 million) is managed by RIDU on behalf
of the PPCs.
RIDEF funding is only made available to the poorest communes.

These are identified by using a commune database, including data
on incomes and infrastructure endowments. The database was
originally established by CERUPAD (Centre for Rural-Urban Planning
and Development) and is managed by RIDU.
Eligible communes have access to RIDEF funding through indicative

planning figures (IPFs), calculated by using a population-based
formula that also takes into account income and infrastructure
endowments. Poorer communes therefore have larger per capita
IPF allocations than less poor communes. RIDEF’s per capita IPF
allocations have varied from a maximum of roughly US$ 32 (in the
remote and mountainous district of Hien) to a minimum of about
US$ 6 (in the lowland district of Dien Ban). The RIDEF funding facility
allocates two multi-year IPFs to each participating commune; these
IPFs thus operate as predictable, hard budget ceilings within which
communes are able to select and implement prioritised
infrastructure projects over a period of three to five years. 20% of
IPF allocations to the communes of a given district are also
earmarked for district-level investments in that district.
4
The following table provides a summary of the IPF allocations to

districts.
Table 2: IPF 1 and 2 allocations
DISTRICT IPF 1 (US $) IPF 2 (US $) TOTAL IPF ALLOCATION

(US $)
Thiang Binh 403,732 373,042 776,774
Duy Xuyen 252,730 215,653 468,383
Nui Thanh 386,784 396,791 783,575
Hoa Vang 199,480 163,070 362,550
Que Son 368,006 400,605 768,611
Dien Ban 316,397 292,540 608,937
Tien Phuoc 293,056 217,091 510,147
Hien 275,920 379,829 655,749
Hiep Duc 221,090 227,065 448,155
Tam Ky 252,984 235,084 488,068
Tra My14 217,640 220,721 438,361
Nam Giang 125,585 166,329 291,914
Dai Loc 217,739 217,739 434,758
Hoi An 168,795 168,795 337,590
Phuoc Son 190,478 190,478 380,956
TOTALS 3,890,056 3,864,472 7,754,528
It is important to note that the contribution (of almost US$ 2 million)

by Quang Nam and Da Nang Provinces to RIDEF has been significant
and represents a vital degree of buy-in on the part of provincial
authorities. Of equal importance is the fact that the two Provinces
have thus proved themselves able to allocate substantial un-
earmarked funds for district and commune level development
planning. In addition, local communities have also made significant
contributions to infrastructure construction – either in kind (through
labour) or in cash.
3.3. THE LOCAL PLANNING PROCESS (LPP)

The “heart” of the RIDEF approach is the local planning process. RIDEF’s
LPP was designed with the following considerations in mind:
• the LPP should be technically sound but sufficiently simple

for rapid implementation;
• the LPP should maximise local participation at all stages;
• the LPP should be sustainable in the sense that it can
continue to be carried out by commune, district and
provincial authorities in the absence of an externally-
funded project like RIDEF.
RIDEF’s current LPP is largely based on a model designed in early

1997. Between 1997 and 1998, the LPP was applied in 9 districts.
Since 1999, the LPP has been applied in 122 communes in 15
districts.
4
this does not include IPF allocations funded by AusAID (US $ 344,000 for communes and US $ 557,000 for the district).
5
3.3. THE LOCAL PLANNING PROCESS (LPP)
The following table summarises RIDEF’s LPP as it applies to

communes
Table 3: Summary of RIDEF LPP

Process Step Output
A. Problem and project identification 1. Commune selection and IPF IPF announcements to selected
allocation communes
2. Village problem and project Information and data obtained
identification through participatory feasibility study
for possible investment reports for
prioritised projects
3. Commune project selection Selected projects for investment
B. Project assessment 4. Formulation, appraisal and approval Approved investment reports;
of investment reports (IRs); design and approved designs and cost estimates
costing
5. Tendering and contracting Signed construction contracts
C. Project implementation 6. Construction and handover Final inspection and handover

7. Operations and maintenance Operated and maintained
infrastructure
8. Disbursement Payment of contractors
D. Evaluation 9. Monitoring and evaluation Lessons learnt & impact assessment
(1) The 9 steps of the LPP
The different steps in the LPP are described in more detail below5.
Step 1: commune selection and IPF allocation
This step has already been described above – formula-based IPF

allocations are made to poorer communes, selected on the basis of
a database. Communes are informed of their IPFs right at the start of
the planning process. Although IPF allocations have been significant
in per capita terms (particularly in the poorer and more remote
mountainous areas of Quang Nam Province), they are clearly not
sufficient to cover all local needs – implying therefore that hard
choices must be made locally about which needs to meet and which
projects to fund.
Step 2: village problem and project identification
This step in the LPP begins with a preparatory commune-level

meeting, attended by CDB members, TSG and PSG personnel, and
representatives of all the commune’s villages. At the meeting, the
commune is informed of its IPF allocation, the LPP is presented and
discussed, the development programmes of other agencies
reported on, and preparations made for village-level consultations.
Village representatives are asked to report back to their
5
a companion document and CD-ROM (“Giving Life to Grassroots Democracy in Viet Nam”) provides much
greater detail on the LPP, along with examples of the forms and formats used.
6
communities, informing them of the LPP

and the date set for the village
consultation meeting. Each village is
also asked to designate 10-20
representatives for the consultation
meeting.
In each and every village of a given

commune, CDB representatives and
TSG/PSG facilitators organise a 1-day
meeting. In the morning, working with
a group of village representatives, the
commune team, using modified and
simplified Rapid Rural Appraisal
techniques:
• update the village database;

• rank all the commune’s villages in terms of their poverty;
• discuss and analyse problems-causes-solutions, finally
identifying a series of project options;
• conduct a brief review of the history of existing
infrastructure in the village;
• prioritise 2 or 3 candidate projects (which should exclude
those already earmarked for funding by non-RIDEF
agencies);
• carry out initial feasibility studies for the prioritised
projects (sites, scope of work, technical specifications,
beneficiaries, benefits, operations and maintenance, rough
costs, local contributions, etc.).
Standard forms for recording such information are used by the CDB/
TSG/PSG facilitation teams.
Following the morning session in the village, an afternoon meeting

is organised with as many villagers as possible. The objective is to
present the outcomes of the morning meeting and to reach
agreement on:
• priority projects;
• the form and size of community contributions to priority
projects;
• the persons to be appointed as members of Project
Management Boards (PMBs) in the event that projects are
selected;
• operations and maintenance arrangements following
project completion.
The CDB/TSG/PSG facilitation team then reports back to the CDB.
The amount of time needed to carry out step 2 in a commune

obviously varies according to the number of villages in the commune
and the number of PSG/TSG personnel that are available. Three PSG/
7
TSG teams can, for example, complete step 2 in three villages per
day.
Step 3: commune sub-project selection
This is in many respects the crucial stage in the planning process –

it is during step 3 that the CDB must decide which village priority
projects will be funded out of the commune’s IPF. This means making
hard decisions about inevitably scarce resources. The process of
selection therefore needs to be transparent and based on clear
criteria. In RIDEF’s LPP this is done during a one-day project selection
workshop (PSW), held at the commune’s headquarters.
The PSW brings together CDB members and representatives from

all the commune’s villages; it is facilitated by TSG/PSG personnel.
All villagers are free to attend this workshop. The CDB, with TSG/PSG
facilitation, consolidates village-identified priority sub-projects on
a single form and then proceeds to assess them on the basis of
agreed criteria – (i) “spread” or equity, whereby the sub-projects
accorded the highest priority by villages are pre-selected; (ii)
“poverty”, whereby sub-projects prioritised by the poorest villages
are given commune-level priority; and (iii) “local contribution”,
whereby those sub-projects characterised by high levels of
proposed local contributions (in kind or cash) receive commune-
level priority. A standardised multi-criteria matrix is used for this. A
final, and obviously important, consideration is the extent to which
the commune’s IPF is able to cover priority projects.
Step 4: Formulation, appraisal and approval of

investment reports; design and costing of projects
In this step, CDBs prepare investment reports (IRs) for submission

to RIDU (for appraisal) and to the DPI for approval. IRs for relatively
simple projects are prepared with TSG support, using information
from the step 2 feasibility studies; the vast majority (95%) of sub-
projects are prepared by TSGs. More complex projects (e.g.
electrification) or larger projects (costing more than 1 billion VND)
require further feasibility studies, usually conducted by consultants
(paid for by RIDEF) – such feasibility studies are integrated into
finalised IRs.
All IRs are submitted to RIDU for appraisal; relevant technical

departments of the Provinces are also involved in the appraisal of
IRs for projects costing more than 1 billion VND. Following appraisal,
IRs are submitted to the Provincial DPI for approval, in line with
Government regulations.
Following IR approval, full design and costing for sub-projects takes

place. Project owners (i.e. the CDBs) contract the services of
consultants for design and costing and can call upon RIDU or local
TSGs for technical assistance in managing this phase. For “off-the-
shelf” infrastructure (e.g. kindergartens, health posts), RIDEF has
developed standardised sample designs to facilitate the process of
8
design and costing. Appraisal and approval of finalised designs and

costings depends on the size of the sub-project:
• design/costings of sub-projects valued at less than 500

million VND are appraised by the DP Committee and
approved by its Chairman;
• design/costings of sub-projects valued at between 500
million and 1 billion VND are appraised by consultants and
approved by the provincial Construction Department;
• design/costings of sub-projects valued at more than 1
billion VND are appraised by consultants and approved by
the PPC.
For relatively small and simple projects, RIDU staff estimate that
completing step 4 requires – on average – one month.
Step 5: tendering and contracting
Under RIDEF arrangements, and even though most sub-projects are

small-scale, the vast majority of them are contracted out through a
process of tendering and competitive bidding.
On the basis of approved designs and costings, CDBs prepare

tendering documents, often with RIDU and district level support and
occasionally by hiring consultants. RIDEF has developed standardised,
sample formats for tender documents. Finalised tender documents
are subject to RIDU appraisal and DPI/PPC approval.
In most cases, invitations to bidders are made public

through the mass media. However, for small sub-projects,
CDBs can invite specialised contractors (approved by RIDU)
to bid. Bid opening and evaluation are carried out under
the chairmanship of the CDB Chairman. Bid evaluations
take into account not only the price but also the technical
quality of bids.
After selecting successful bidders, the CDB then submits

the minutes of the bid evaluation process and the bid
analysis record to DPI (at provincial level) for approval.
Following DPI approval, the CDB then informs the
successful bidder and negotiates a contract, duly signed
by the two parties.
For the majority of projects, the process of tendering and

contracting can be completed in about two months.
Step 6: construction and handover
CDBs as project owners recruit technical supervisors to

oversee all construction works. Such consultants ensure
that contractors build infrastructures according to
specification and, in the event of any complications, advise
the CDBs on possible solutions. In addition to technical
9
supervisors, PMBs and CBDs also appoint local site superintendents

(from the concerned community), responsible for day-to-day
oversight of contractor activities. PMBs are also responsible for
mobilising local community contributions – either in kind or in cash.
At completion, newly constructed infrastructure is inspected by
the project-owner (CDB and PMB), the contractor, the technical
supervisor, the superintendent and RIDU.
Step 7: operations and maintenance (O&M)
O&M issues are appraised during steps 2 and 4. CDBs are responsible
for ensuring that schemes are correctly operated and regularly
maintained. CDBs are expected to formulate annual maintenance
plans for the infrastructure projects financed by RIDEF. Where
appropriate (e,g, for markets), committees are put in place to
manage user fees and day-to-day operations.
Step 8: disbursement
Disbursements to contractors and consultants by RIDEF are

requested by project owners (CDBs or DDBs). Requests for payments
need to be accompanied by relevant documentation (e.g. technical
supervisors’ certificates, etc.) proving that the services paid for have
been delivered. For construction contracts, RIDEF retains 15% of
the value of the contract as a retention, paid twelve months after
project completion and on condition
that the infrastructure in question shows
no signs of defect.
RIDEF disbursements are either made

directly by RIDU or, wherever possible,
by district State Treasury branches. In
either case, the same disbursement
procedures are used, with the exception
that State Treasury disbursements must
first be approved by the Provincial State
Treasury and RIDU. RIDU transfers funds
to CDB and DDB accounts at the district
State Treasury branches according to a
quarterly disbursement plan.
Step 9: monitoring and evaluation
In this, the final step of the LPP, CDBs facilitate public reviews of the
process leading up to sub-project completion. This is usually done
as a prelude to planning for the use of the commune’s second IPF
allocation.
(2) IPF 1 and IPF 2 planning
The 9 steps described above applied to the planning process for

the first multi-year IPF allocation to communes. Planning for the
use of IPF 2, however, has been somewhat simpler – and has usually
10
only involved holding a new commune-level project selection

workshop (step 3) on the basis of information made available through
the LPP for IPF 1. Because circumstances may have changed in
between original project identification and project selection for IPF
2 funding, the CDB/TSG updates the participatory feasibility studies
for selected projects.
RIDEF originally intended that IPF 2 planning in a commune would

only take place once the sub-projects funded under the commune’s
IPF 1 allocation had been completed. However, because there had
been significant delays in sub-project implementation, this was
changed in 1999, thus enabling communes to plan for use of their IPF
2 allocations before IPF 1 sub-projects had been completed.
(3) District level planning
District level planning has not been as formalised as commune level

planning. At the district level, selection of sub-projects has been the
responsibility of the District People’s Councils, with final approval
from the DDB. The extent to which the project selection process at
district level has been “opened up” appears to vary from one district
to another. Some districts have consulted commune leaders about
the selection of district level projects; others have been less
“participatory”. Following project selection, the LPP for district level
projects is identical to that for commune level projects.
District level projects tend to be infrastructures that serve more than 1

commune – in Que Son district, for example, two small hospitals (one in
the east of the district, the other in the west) have been funded as well as
four bridges (all improving links between communes and the district).
(4) LPP evolution
RIDEF’s LPP has been progressively improved over time, both in order
to reduce the time-lag between project identification and project
completion and in order to tailor procedures to local capacities. The
most important changes made to the original LPP model have been
(i) the simplification of the project selection matrix (step 3), in order
to make it more appropriate for use at the commune level; and (ii)
including “raw” feasibility studies for and appraisal of projects in step
2 (rather than later on), in order to reduce the time-lag between
project selection and implementation.
3.4. CAPACITY-BUILDING
From the outset, RIDEF invested in human resource capacity-building.
Over the life of the project, training has been provided to a wide
range of local actors in the following areas:
• the LPP as a whole, particularly for steps 2 and 3, aimed

primarily at TSGs and PSGs at district level;
• implementation arrangements (steps 4-8), aimed at CDB
representatives and officials, TSGs and PSGs, as well as for
State Treasury officers and CDB/DDB accountants;
11
• infrastructure maintenance, aimed primarily at CDB and

community representatives;
• monitoring and evaluation, aimed at district level TSGs and
PSGs;
• “master” training, aimed at establishing a core provincial
team of trainers. This “core” team is now capable of
providing continued training, both in Quang Nam and Da
Nang Provinces, as well as elsewhere.
However, it is important to note that a good deal of RIDEF’s capacity-

building took the form of “on-the-job” training – i.e. in the actual
process of implementing the LPP at commune and district levels.
Learning by doing has been a key aspect of RIDEF.
12
4. RIDEF OUTCOMES AND ACHIEVEMENTS
4.1. “GRASSROOTS DEMOCRACY” IN PRACTICE

Perhaps the most significant
achievement of RIDEF has been the
extent to which the project – through
its LPP – has given real meaning to
“grassroots democracy” at the local
level. Although the Government of
Vietnam, through its 1998 Decree 29
on “grassroots democracy”, has clearly
signalled its commitment to making
local government more transparent,
participatory and accountable,
implementation of this policy has not
been easy – largely because local
officials are often unaccustomed to
such principles and do not know how
to translate them into actual practice.
RIDEF’s LPP, which stresses community participation in the

identification of needs and projects and commune-level ownership
of project management, has provided a practical example of how
to democratise the development process at the local level. The
different steps of the LPP provide a concrete way of increasing
community participation and of ensuring commune-level
management of infrastructure design and delivery. The LPP is a
significant step away from “top-down” planning and has
demonstrated the feasibility of a more “bottom-up” approach.
4.2. CAPACITY-BUILDING
At the local level, almost everybody is unanimous in their
appreciation of RIDEF’s capacity-building efforts. Several hundred
commune and district level officials and staff have benefited from
the various training courses organised by RIDEF. Commune officials
claim that they now know how to manage the implementation of
small-scale infrastructure projects. In districts, PSGs and TSGs –
through training and learning-by-doing – have learnt how to
facilitate village level needs assessments and project identification
exercises and have gained new skills in the areas of project
feasibility assessments and design/costing. There is a palpable
sense of being more competent (and increasingly self-confident)
among most local actors. The extent to which local capacities to
manage development projects have been strengthened is reflected
in the progressively reduced time-lag between sub-project
selection and sub-project completion.
4.3. INFRASTRUCTURE DELIVERY

Although there is a sometimes surprising tendency for local officials
to point to the local planning process as being the most important
13
Table 4: infrastructure delivery by RIDEF (1996-2002)
Type of infrastructure No. of projects Estimated project costs % of total costs

(VND ,000s)
Bridge culverts 234 36,212,837 23.9
Electricity 57 12,078,886 8.0
Health stations 9 2,338,422 1.5
Irrigation schemes 50 8,056,102 5.3
Kindergartens 169 12,609,872 8.4
Markets 24 12,535,724 8.3
Primary schools 141 23,194,808 15.3
Roads 79 30,235,995 20.0
Suspension bridges 13 8,238,271 5.5
Drinking water 78 5,733,263 3.8
Totals 854 151,224,181 100.0

(± US$ 10 million)
aspect of RIDEF, infrastructure delivery has been significant and

impressive. Table 4 provides a summary of the types of infrastructure
project that have been delivered (or are in the course of delivery) in
the 122 communes and 15 districts covered by RIDEF.
These infrastructure projects were all identified through the

participatory planning process and their implementation has been
managed by commune and district authorities. Although no formal
impact assessment has been carried out, it seems reasonable to
assume that many of these small-scale schemes have contributed
towards reducing poverty.
4.4. TRANSPARENT SELECTION OF CONTRACTORS

The tendering process introduced by RIDEF has been successful in
making the selection of contractors more transparent. Bid opening
has been public and the criteria used for contractor selection have
ensured both technical capacity and lower prices. Although no
tendering system is entirely able to avoid some degree of mal-
practice, RIDEF’s tendering and competitive bidding procedures
represent a great improvement over regular contracting methods
for small-scale infrastructure construction.
4.5. MANAGEMENT INFORMATION SYSTEM (MIS)

During the course of RIDEF’s implementation, RIDU staff have
developed a highly sophisticated MIS (based on Microsoft Access, a
readily available software programme) to enable monitoring of LPP
implementation, infrastructure projects, training courses,
management of the commune database, and financial operations.
The MIS allows RIDEF to track all infrastructure projects, from
identification, through to tendering and on to final completion. It
provides a unified tool for following commune and district planning.
14
4.6. POLICY IMPACT AND REPLICATION

The RIDEF “model” of local development appears to have had some
impact on national policy and on other projects. At national level,
policy-makers were influenced by RIDEF in their design of the National
Programme 135 of “Support to the Poorest Communes”. Several
jointly funded Government and donor projects have also been
influenced by the RIDEF experience – notably FINNIDA’s Thua Thien-
Hue Rural Development Programme and CIDA’s programme in Soc
Trang Province. It is clear that RIDEF has exerted an influence well
beyond Quang Nam and Da Nang Provinces.
15
5. LESSONS AND ISSUES
5.1. LESSONS LEARNED

A number of important, policy-relevant,
lessons have been learnt through the
implementation of RIDEF.
(1) Most importantly, RIDEF has clearly

demonstrated that with appropriate
support, communes and districts are
capable of identifying, planning and
delivering small-scale infrastructure of
potential benefit to the poor. Whilst this
should be in no way surprising, in the
context of Vietnam it is a vital lesson. In
the light of the “RIDEF experience”,
continued reluctance of central
government and provincial authorities to delegate planning,
budgeting and implementation functions to lower tiers of local
government appears unjustified.
(2) Because the LPP is community-based, with villages identifying

their infrastructure projects, infrastructure delivery has been
demand-driven and thus more appropriate to local needs. As
expressed by the General Secretary of the Provincial Communist
Party of Quang Nam “.. the people know what their needs are, more
so than us [the Government]”. The lesson from RIDEF is that an
appropriately designed LPP can enable local needs to emerge and
be met at a geographically significant scale.
(3) RIDEF has also demonstrated that for participatory

methodologies (such as PRA or RRA) to be used on a widespread
and cost effective basis they need to be adapted and made less
intensive. RIDEF did use RRA techniques, but did so in a modified
way. There is obviously a trade-off in the “quality” of participation –
but this must be seen as inevitable given the need to have a planning
process which delivers benefits to a large number of people in a
relatively timely manner. This is a key lesson, underlining the need
to understand that “participation” is costly – a widely-used planning
system that uses elaborate participatory methods is likely to do so
to the detriment of sustainability and real service delivery.
(4) The use of IPFs for commune and district capital investment has
provided local authorities with a predictable source of funding
and has simulated a realistic hard budget ceiling within which
difficult choices have had to be made about project selection. The
IPF system of financing used by RIDEF not only provides local
authorities with resources with which to satisfy locally identified
needs, but it also encourages them to move away from a “wish-list”
approach to planning and towards a more clearly prioritised focus
on planning. At the same time, the project selection process at
16
commune level has been made as transparent as possible, without

becoming too complex. There are obvious lessons here for central-
local fiscal transfer mechanisms in Vietnam.
(5) RIDEF has also shown that intrinsically and necessarily limited
capacities at commune level can be made up for by timely and
appropriate backstopping and mentoring from district and
provincial level staff, as well as from consultants. The TSGs and PSGs,
for example, who themselves have benefited from RIDEF-sponsored
training, have provided communes with valuable support in
conducting the LPP. For more technical activities (such as design and
costing), communes have been able to call upon the services of
consultants. This points to the need to think about “local capacity” in
a rather different way and to look for ways of harnessing capacities
which exist at all levels of local government and elsewhere. While it
is clearly unrealistic to expect communes to have all the capacities
necessary to manage local development, RIDEF has shown that it is
possible to harness capacities situated elsewhere to support
commune ownership of the development process. This has clear
implications for the reluctance (of both Government and some
donors) to devolve responsibilities to lower level authorities because
they are seen to have limited capacities.
(6) The tendering and competitive bidding system introduced by

RIDEF for small-scale infrastructure projects has proved itself to be
cost effective. Evidence from RIDEF indicates that competitive
bidding can lead to substantial savings, and thus a more efficient use
of limited financial resources. The mid-term evaluation of RIDEF, for
example, concluded that the average successful bid has been more
than 10% lower than the initially estimated costing; in some cases,
successful bids have been as much as 25% lower than the estimated
costing. This has enabled communes and districts to plan “additional”
projects, funded out of savings made on earlier projects.
(7) Another lesson from RIDEF is that commune level investments

can be complemented by more strategic investments at district
level. RIDEF allocated 20% of commune IPFs for funding district level
infrastructure – and this was often used to fund the kinds of project (a
larger health centre, for example) that might not figure highly in a
village selection process, but which might be a priority for a larger
“community”. In other words, not all needs are likely to be identified
at the lowest levels – and this needs to be taken into account when
designing a system of local level planning and financing.
(8) Finally, RIDEF has shown that local development can be financed
by using regular State Treasury branches in districts. During the first
phase of RIDEF, disbursement to contractors was done by RIDU, acting
as “cashier” for the CDBs and DDBs. Later on, and whenever possible,
disbursements were handled by district State Treasury branches,
receiving advances from RIDU. This indicates that, in many cases,
existing disbursement arrangements can be adapted to support the
process of decentralised planning and budgeting.
17
5.2. ISSUES
There are a number of issues that arise out of the RIDEF experience.
(1) The LPP model used by RIDEF has had special difficulties in being
adopted and implemented in the more remote, mountainous
districts and communes of Quang Nam Province. The lower
population densities, greater communication and travel constraints,
and much lower overall human resource capacities of such areas
(compared to the coastal zone) have made local ownership and
management of the development process problematic. Lower
literacy rates in mountainous areas have meant that the initial stages
of the LPP have had to be considerably more “visual” and time-
consuming. Contractors, few of whom are based in such areas, have
proved unwilling to bid on small projects, for which the profit
margins are slim – this has resulted in the need to lump together
sub-projects. Engineering consultants, who are paid a fixed
percentage of construction costs, are even less willing to work in
these communes. State Treasury branches in mountainous districts
are also weak – and, indeed, RIDEF’s decentralised disbursement
model has not been used in any of the 5 mountainous districts of
Quang Nam Province. The challenges of promoting decentralised
planning in mountainous areas should not be under-estimated.
(2) Although somewhat obvious, it is clear that promoting and

facilitating a local development process implies added costs,
certainly in the first stages of piloting and establishing procedures.
In addition to capital investment funds (representing approximately
two-thirds of RIDEF’s total budget), considerable resources must be
set aside for methodological inputs (provided by consultants and
specialised national staff), for training, and for general administrative
costs. These costs should not be under-estimated by the
Government or by donor agencies.
(3) Even though performance has improved over time (as capacities
have increased and as LPP procedures have been streamlined in
the light of experience), the time-lag between sub-project
identification and final implementation has remained an issue. In
some cases, for example, the period between sub-project selection
and contractor selection (before implementation even begins) can
be as long as 12 months. Some sub-projects are completed two to
three years after they were initially selected. Understandably, this
can be frustrating for local people. In retrospect, RIDEF should have
built in time-bound benchmarks for the LPP. In addition, it seems
clear that some of the procedures in the LPP, particularly those
related to appraisal and approval in steps 4 and 5, are cumbersome
and time-consuming, requiring (as they do) provincial level approval
for even the smallest projects.
(4) Despite being seen as an innovative and appropriate model for

decentralised planning and development, the extent to which
RIDEF’s key features have been institutionalised remains limited.
This can be partly attributed to “external” factors such as the overall
18
policy environment (which remains somewhat austere as far as

decentralisation is concerned). However, it is also likely that RIDEF’s
LPP, which is not tailored to fit into an annual planning and budgeting
cycle, does not easily lend itself to adoption and institutionalisation.
Planning and budgeting in Vietnam (as in most countries) take place
within an annual framework. The lesson here is that pilots for
decentralised planning should try, as far as possible, to “imitate” the
overall framework for the planning and budgeting systems that they
are expected to influence.
(5) Now that some infrastructure funded by RIDEF has been in place
for several years, lack of adequate maintenance is emerging as an
issue. Some markets funded by RIDEF, for example, are in poor physical
shape, despite having been completed only a few years ago. This is a
significant problem and highlights the need for greater efforts to
encourage proper maintenance of infrastructure. There is little point
in building new schemes if subsequent poor maintenance drastically
reduces their planned lifetime. The RIDEF project did, in fact, try hard
to promote proper maintenance of infrastructure – indeed, it is one
of the few projects of its kind to provide training on maintenance
issues. Despite this, maintenance has not always been adequate –
and this points, perhaps, to a specifically Vietnamese problem.
19
6. CONCLUSIONS
Although many features of RIDEF now appear to be “orthodox”, it
was very clearly a highly innovative project when it started in 1996.
RIDEF has shown how to decentralise the planning, financing and
delivery of public infrastructure and how to ensure community
participation. Although RIDEF should not be seen as an “off-the-
shelf” blueprint for local development, it does represent a valuable
model upon which to base similar projects and wider reforms aimed
at further devolving planning and budgeting responsibilities to local
authorities in Vietnam.
20
7. CONTACTS
Further information on the RIDEF project can be obtained from
the following contacts:
UNCDF/NY (info@uncdf.org)
UNCDF/UNDP Hanoi (registry@undp.org.vn)
PPC Quang Nam Province
DPI Quang Nam Province
AIT Bangkok (webteam@ait.ac.th)
Previous RIDU staff:
- bichchinh@vol.vnn.vn (Ms. Bich Chinh, National Project
Coordinator)
- kbinh@dng.vnn.vn (Mr. Nguyen Khanh Binh, Senior
Rural Planner)
- nguyenhiep@pmail.vnn.vn (Mr. Nguyen Hiep, Senior
Accountant)
- nguyentanan@dng.vnn.vn (Mr. Nguyen Tan An, Senior
Engineer)
21

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RIDEFExec

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FOREWORD

Normand Lauzon Jordan Ryan

AusAID Australian Agency for International Development

3. RIDEF’S APPROACH TO LOCAL DEVELOPMENT

3.1. Institutional framework

4. RIDEF OUTCOMES AND ACHIEVEMENTS

4.1. Grassroots democracy in practice

5. LESSONS AND ISSUES

5.1. Lessons learned

• local and participatory planning at commune and district

This executive brief, then, also aims to provide the Government of

RIDEF started up in 1996 and is scheduled to be completed in

The project has been implemented by the Provincial People’s

3. RIDEF’S APPROACH TO LOCAL DEVELOPMENT

3.1. INSTITUTIONAL FRAMEWORK

At provincial level, RIDEF reports to the

Table 1: local institutional framework

Level Institution Membership Function RIDEF

RIDEF has pioneered the establishment of Planning Support Groups

At commune level, the principal actor is the Commune

The vast majority of RIDEF-funded infrastructure is identified at the

3.2. FUNDING FACILITY

RIDEF funding is only made available to the poorest communes.

Eligible communes have access to RIDEF funding through indicative

The following table provides a summary of the IPF allocations to

Table 2: IPF 1 and 2 allocations

DISTRICT IPF 1 (US $) IPF 2 (US $) TOTAL IPF ALLOCATION

It is important to note that the contribution (of almost US$ 2 million)

3.3. THE LOCAL PLANNING PROCESS (LPP)

• the LPP should be technically sound but sufficiently simple

RIDEF’s current LPP is largely based on a model designed in early

The following table summarises RIDEF’s LPP as it applies to

Table 3: Summary of RIDEF LPP

C. Project implementation 6. Construction and handover Final inspection and handover

D. Evaluation 9. Monitoring and evaluation Lessons learnt & impact assessment

(1) The 9 steps of the LPP

Step 1: commune selection and IPF allocation

This step has already been described above – formula-based IPF

Step 2: village problem and project identification

This step in the LPP begins with a preparatory commune-level

communities, informing them of the LPP

In each and every village of a given

• update the village database;

Following the morning session in the village, an afternoon meeting

The CDB/TSG/PSG facilitation team then reports back to the CDB.

The amount of time needed to carry out step 2 in a commune

Step 3: commune sub-project selection

This is in many respects the crucial stage in the planning process –

The PSW brings together CDB members and representatives from

Step 4: Formulation, appraisal and approval of

In this step, CDBs prepare investment reports (IRs) for submission

All IRs are submitted to RIDU for appraisal; relevant technical

Following IR approval, full design and costing for sub-projects takes

design and costing. Appraisal and approval of finalised designs and

• design/costings of sub-projects valued at less than 500

Step 5: tendering and contracting

Under RIDEF arrangements, and even though most sub-projects are

On the basis of approved designs and costings, CDBs prepare

In most cases, invitations to bidders are made public

After selecting successful bidders, the CDB then submits

For the majority of projects, the process of tendering and

Step 6: construction and handover

CDBs as project owners recruit technical supervisors to

supervisors, PMBs and CBDs also appoint local site superintendents