Implementation Status & Results Vietnam Customs Modernization Project (P085071)

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized The World Bank Implementation Status & Results Vietnam Customs Modernization Project (P085071) Operation Name: Customs Modernization Project (P085071) Project Stage: Implementation Seq.No: 8 Status: ARCHIVED Last Modified : 27-May-2011 Country: Vietnam Approval FY: 2006 Product Line: IBRD/IDA Region: EAST ASIA AND PACIFIC Lending Instrument: Specific Investment Loan Implementing Agency(ies): Ministry of Finance, General Department of Taxation Key s Board Approval 10-Nov-2005 Original Closing Planned Mid Term Review 25-Mar-2008 Last Archived ISR 19-May-2010 Effectiveness 31-Jul-2006 Revised Closing Actual Mid Term Review 06-Oct-2010 Project Development Objectives Project Development Objective (from Project Appraisal Document) The Project Development Objective is to facilitate trade, increase revenue collection, improve the production o f foreign trade statistics, and enhance community protection and national security by improving the effectiveness, efficiency, accountability and transparency of the Customs Administration. Has the Project Development Objective been changed since Board Approval of the Project? Yes No Component(s) losure Authorized Public Disclosure Authorized Component Name Component Cost Customs Systems and Procedures 4.20 Organizational Restructuring and Management Information and Communications Technology Project Implementation Support 4.60 Overall Ratings Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Unsatisfactory Overall Implementation Progress (IP) Moderately Unsatisfactory Moderately Unsatisfactory Overall Risk Rating High Implementation Status Overview The Customs Modernization Project (CMP) was terminated on April 4, 2011 at the client#s request having disbursed US$1.8 million, or 2.6 percent of the allocated credit amount. In contrast to slow disbursement due to significant consultant recruitment delays leading to procurement delays for Vietnam Customs Information System (VCIS) and control equipment components, the institutional development components of the project showed good implementation progress. Results achieved against institutional development performance indicators have been extremely positive. All covenants and conditions had been complied with, except for one covenant (out of 22 covenants and conditions) that had been partially Page 1 of 11

2 fulfilled. A significant portion of the technical assistance included in the project design has been delivered to good effect. Importantly, a comprehensive analysis and re-engineering of business processes (BPR) based on the implementation of globally agreed standards has been completed and draft bidding documents for the procurement of the VCIS prepared. Initial progress in operational modernization was strengthened by a completed legal assessment and project activities focused on organizational restructuring and strengthening. The preparation of a comprehensive training strategy was completed and is being used to good effect by the GDVC. The Mid-term Review (MTR) mission held during September 6-16, 2010 assessed that the bidding for procurements amounting to approximately US$ 52 million (or about 75% of the credit proceeds) was on schedule to proceed within six months but that full implementation would require a project extension. However, around the time of the MTR key counterparts including GDVC and MOF became concerned about the possibility that the GDVC could not complete the procurement and achieve full implementation process for the VCIS within an allowable extension of the closing date and began exploring alternative options that could accelerate VCIS implementation and increase long term sustainability. The GDVC informally advised that it was considering a number of options including the possibility of directly acquiring a suitable operational VCIS from a neighboring country as part of a possible bilateral cooperation arrangement. The MTR mission advised the GDVC that the Bank#s procurement rules would not allow the IDA credit to be used to support direct contracting of a major IT system such as the VCIS. The mission also stressed that experience elsewhere suggested such an approach might take considerable time to finalize and could incur a number of other risks that might ultimately delay implementation significantly. Results Project Development Objective Indicators Page 2 of 11

3 Client perception of Customs# performance 33.9 % 20-Apr-2005 Customs administration is considered slow, unresponsive, inconsistent, and vulnerable to corruption 53.5% 30-Jun-2010 However perceptions of widespread corruption are high and half of the companies surveyed in June 2010 indicated that always, often or sometimes had such experience during customs and export/import activities. 55% Majority of the clients surveyed in Significant improvement in client June 2010 agreed that: perceptions a) customs and import export rules and regulations are clear and transparent; b) Implementation of customs procedures is clear and simple; c) Time for customs procedures completion is quick; d) Customs staff has adequate capacity to meet job requirements; and e) Customs staff attitude is reasonable; and costs are reasonable. Total revenue collection cost over revenue collected 1.11 % 31-Dec % (22% decrease) 31-Dec percent decrease 31-Dec-2010 Page 3 of 11

4 Declarations per number of staff Dec (35% increase) 31-Dec-2009 GDVC statistics for This data was collected in 2009, three years after the project was in implementation and its indicative of a positive trend. 25 percent increase 31-Dec-2010 Mean import clearance times for commercial shipments at ports, roads and airports days of overall processing time at ports (2.3 days for Customs clearance tim - 2:23 hrs overall processing time at land borders (2.0 hrs for Customs clea rance time). 12-Apr days of overall processing time at ports (0.6 days for customs clearance time) (7% reduction of overall time and 75% reduction of customs time at ports) - 7:09 hrs of overall processing time at one land border (1:50 hrs for customs clearance time) (39% increased overall time and 32% reduction of customs time at one land border) 29-Jul-2010 Improvements are achieved mainly as a result of the GDVC modernization efforts which include: introduction of e- declaration, introduction of risk management and improvement of business processes. 45% reduction at airports and ports; 25% reduction at road. 30-Jun-2010 Page 4 of 11

5 Percentage of consignments subjected to physical inspections 94 percent at ports and 92 percent 51 percent at ports and 13 percent At least 50% reduction. at land borders (as surveyed in at one land border (as surveyed in 2004) Jul 2010) (46% reduction at ports and 78% 30-Jun-2010 reduction at one land border) 12-Apr Dec-2009 GDVC baseline statistics for 2006 shows 28% for Import and 18% for Export GDVC statistics for Jan-Jul 2010 shows 23.17% for Import and 8.95% for Export (17.25% reduction for Import and 50.23% reduction forexport) Revenue generated and/or infringements detected as a results of Customs# intervention pre or post clearance. VND 29.8 billion (for the first six months of 2005) VND (for 2006) 31-Dec-2006 VND 344,55 billion (194% increase) 31-Dec-2009 GDVC statistics for Total revenue collected as a corresponding to total number of post clearance audit. This indicator has exceeded the expected target value. 50% increase Intermediate Results Indicators Improved customs systems and procedures Draft customs law being prepared and reviewed 20-Apr-2005 Page 5 of 11

6 Timely development of easily accessible legislation to support modernization Draft customs law being prepared and reviewed 20-Apr-2005 VCMP consultant report with detailed recommendations towards changes in laws and legislation approved for gradual implementation. Important legislative changes pending finalization of BPR and VCIS solutions. Number of decrees and decisions with intention to simplify customs procedures developed inhouse (e.g. Circular 116/2008/TT- BTC of MOF for customs procedures applicable to inward and outward goods; Circular 79/2009/TT-BTC of MOF for customs procedures, customs inspection and controls etc). full set of customs laws and legislation implemented; website developed; Simplified procedures with reduced documentation requirements Draft customs law being prepared and reviewed 20-Apr-2005 BPR review in progress; review of review of customs procedures 44 administrative procedures, completed and implementation of simplification of 22 procedures and simplified procedures started; cancellation of two of them. Page 6 of 11

7 Introduction of risk management and post-clearance audits Draft customs law being prepared and reviewed 20-Apr-2005 risk management and PCA Risk Management and Postimplemented (JICA assisted) Clearance Audits introduced; Legal basis for RM and PCA introduced and corresponding organizational structure established. RM criteria for risk assessment and selectivity developed and applied. Databases and operational manuals developed. Development of customs broking industry with DTI capacity Draft customs law being prepared and reviewed 19-Jun firms and 224 persons licensed as brokers/agents; procedures in development; MOF asset management system applied Brokerage registration system set; training courses developed; improved revenue report capacity. A more effective and organizational and management structure N/a 30-Jul-2011 Page 7 of 11

8 Restructuring of city/regional offices and HQ including assessment of staff needs under new organizational structure and retrainingand redeployment of staff MOF accounting and internal auditing rules implemented 19-Jun-2010 a) strategy and action plan for organizational restructuring prepared; institutional framework for change management unit set b &c) staff training & redeployment; d) change management report 30-Jul-2011 Management accounting and internal auditing unit created MOF accounting and internal auditing rules implemented 19-Jun-2010 internal audit function created; Improved information collection and management N/A MTR findings Page 8 of 11

9 Improve the capacity of GDVC to manage the new system and ICT infrastructure N/A Software maintenance and improvement Nationwide rollout and the training of customs officials at all levels Pilot e-declaration system implemented at 5 ports 19-Jun-2010 VCIS pilot commenced; staged implementation to regions Procurement of telecommunications equipment and infrastructure N/A Broadband network upgrading under implement-ation 19-Jun-2010 Centralized automated connectivity established Development and implementation of an MIS to support redesigned customs processes, the collection of data for management, planning and statistics purposes, and improve access to information for pu N/A Business process reengineering ongoing; 19-Jun-2010 Customs procedures reengineered; Page 9 of 11

10 Procurement of hardware necessary to support the national rollout of the new system Data on Financial Performance (as of 06-Apr-2011) Financial Agreement(s) Key s ICT system bid document preparation in progress bidding documents prepared for VCIS and software; Project Loan No. Status Approval Signing Effectiveness Closing P IDA Effective 10-Nov Mar Jul-2006 Disbursements (in Millions) Project Loan No. Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P IDA Effective XDR Disbursement Graph Key Decisions Regarding Implementation Page 10 of 11

11 Given the above context, and based on a review of various project restructuring options with key counterparts, the MTR mission recommended that counterparts consider two options for the project's future: (a) continuing implementation through extending the project by another 3-5 years to ensure sufficient time for full and effective deployment by either (i) direct acquisition using state budget or bilateral donor funds of an operational VCIS as part of or separately from CMP; or (ii) procuring VCIS through an International Competitive Bidding process as part of a simplified CMP; or (b) terminating the project as implemented to date. In the event that the Borrower opted to finance the VCIS separately from CMP, a further option involved restructuring the project to apply the resulting savings to alternative productive activities was considered but rejected due to insufficient work being completed on the identification and development of well articulated and prioritized alternative investment options.. On December 6, 2010, the State Bank of Vietnam (SBV), on behalf of the Borrower, notified the Bank of its intention to terminate the project. Following the SBV's formal request dated March 15, 2011, the remaining credit was cancelled through the Bank's Cancellation Notice dated April 4, The termination occurred before the due credit closing date of June 30, 2011 thus allowing the cancelled funds to revert to the Vietnam IDA program. Restructuring History There has been no restructuring to date. Related Projects Page 11 of 11